Carmakers are stepping up pressure on Australian lithium miners to target deeper greenhouse gas emissions cuts across their operations, as the environmental cost of sourcing electric vehicle components faces rising scrutiny.
The pressure is forcing miners to commit to gradually decarbonise their lithium operations while smaller operators are promising to supply materials with a net-zero carbon footprint immediately.
Lithium miners are increasingly working to make their operations cleaner as carmakers race to have fewer emissions in supply chains.
ASX-listed Allkem, valued at $8 billion, said its customers had become increasingly sensitive to the environmental impact of sourcing lithium.
Carmakers, including Toyota with which Allkem has a partnership, have started notifying suppliers of their intention to cut their carbon footprint by as much as 80 per cent by 2030 for their EVs.
“They are already telling us this, we need to lower carbon dioxide intensity,” the miner’s chief sales officer, Christian Cortes, said. “They want to reduce [emissions] in what they give to the consumer by 80 per cent [compared to] where they are today.”
Allkem’s efforts to reduce its carbon footprint are centred on its Argentinian brine and Canadian hard rock mines where it can use renewable energy to power operations and ship a near-pure lithium product with less waste than at its Western Australia-based mine, which has an expected end of life in 2027.
“If we’re not active on ensuring that we’re not just passing carbon credits along the value chain then I don’t think we’re doing enough on effectively standing behind the whole aspect of sustainability,” Cortes said.
Lake Resources chair Stu Crow, who on Monday announced an offtake agreement with Ford Motors sourced from a brine in Argentina, said financing was increasingly connected with a supplier’s environmental social and governance criteria, as investors, off-takers and customers demand projects meet strict standards.
Carmakers committed to manufacturing EV models using net-zero emissions are already signing letters of intention with suppliers they usually wouldn’t deal directly with. Swedish EV brand Polestar’s climate lead Lisa Bolin said the company would pressure suppliers beyond immediate contractors when sourcing for the climate-neutral vehicle it plans to offer by 2030. Polestar is jointly owned by Volvo and the automaker’s Chinese parent company, Geely.
