How the US plans to transform its lithium supply chain – Utility Dive | NutSocia

Not only do lithium-ion batteries power everyday devices like cell phones and laptops, they’re a crucial part of America’s alternative energy strategy, shifting away from fossil fuels used in everything from electric vehicles to solar panels to energy storage.

The Biden administration has been pushing to boost U.S. lithium battery manufacturing capacity for more than a year. The effort includes funding and resources for domestic lithium mining and the entire supply chain, including processing and manufacturing of batteries for electric vehicles.

The aim is to reduce the country’s dependence on foreign lithium supplies and increase the country’s energy self-sufficiency. But to get there, the US will need to drastically expand its domestic lithium production base.

The National Blueprint for Lithium Batteries 2021-2030, developed by the Federal Consortium for Advanced Batteries (FCAB), outlines the country’s plans to boost investment in the lithium supply chain, beginning with mining and including processing and production.

Aimed at improving processing, procurement and workforce development in the industry, the blueprint lays out the Biden administration’s path toward a more sustainable energy future and the supply and operations that will require it. But with limited access to the world’s lithium supplies right now, it’s going to be an uphill battle.

Sourcing lithium domestically is a ‘huge undertaking’

The US’s only existing lithium producer is in Nevada, and the country holds an estimated 3.6% of the world’s lithium reserves, according to the US Geological Survey. Most of the world’s lithium production is in China, and consultancy Wood Mackenzie estimates that the country accounts for nearly 75% of the world’s lithium-ion battery production capacity, as well as some of its lithium reserves. Other lithium reserves are mostly in Australia, Chile and Argentina.

Foreign power in the industry means the US has to source most of the lithium it needs abroad.

Global demand for lithium-ion batteries is also growing as other nations switch to alternative energies to combat the climate crisis. With this surge in demand, the market is projected to be worth $100 billion in the coming decades, said David Howell, acting director and deputy chief director of the Office of Manufacturing and Energy Supply Chains at the Department of Energy and chairman of the FCAB.

Aerial view of turquoise pools at Silver Peak Lithium Mine, Nevada, California, USA.

An aerial view of the Silver Peak Lithium Mine in Silver Peak, Nevada. The plant is the only lithium producer in the USA.

simonkr via Getty Images

Much of that demand comes from the booming global EV market, whose sales hit historic levels last year and are on track to do so again in 2022, according to the International Energy Agency. The Biden administration last year set a goal for half of the new cars sold in the United States to be zero-emission vehicles by 2030.

The government has also introduced consumer financial incentives for automakers that source critical minerals in North America. But domestic supply is far from meeting demand.

“Where’s the supply? We don’t make electrode materials,” said Venkat Srinivasan, director of the Argonne Collaborative Center for Energy Storage Science at Argonne National Laboratory and associate director of the Joint Center for Energy Storage Research. “We don’t make any materials that flow into the rest of the battery. We do not process the minerals. We don’t even dismantle them.”

Where are the world lithium reserves?

Top ten countries hosting lithium reserves by percentage of total supply.

While trying to source commodities like lithium domestically is a great idea, it’s also a huge undertaking, said Charlie Welch, founder and CEO of battery developer ZapBatt. Starting new mining operations is an expensive and politically sensitive undertaking.

“Even if we flip the switch and say the US will do this overnight,” he said, there are many hurdles, including cost and environmental issues. “It’s not easy to get certain things out of the ground.”

Still, automakers were under pressure to produce at home. The Biden administration is offering a $7,500 electric vehicle tax credit if the battery is made predominantly from materials sourced or processed in the United States

“Every automaker talks about their fleet going to be mostly electric by 2030,” Srinivasan said.

To speed up domestic production, the President has announced a series of investments to shore up manufacturing. The government awarded $2.8 billion in grants last month to boost production of EV components such as lithium materials.

In Numbers: A Snapshot of EV and the Critical Mineral Funding of the Bipartisan Infrastructure Bill

7 billion dollars

The amount set aside to fund improvements in the country’s battery supply chain.

$320 million

The amount of funding for mapping critical minerals.

$140 million

Financing of the first US refinery for the extraction and separation of rare earth elements and critical minerals.

To help carry out more of these plans and investments, the government also established Li-Bridge, a public-private partnership operated by Srinivasan and Argonne National Laboratory, to help achieve the goals set out in the draft. With Li-Bridge, “the goal is to bridge the gap between battery supply and growing demand,” he said.

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