The climate economy needs a lot more lithium

Australia, China, and Chile are the world’s top lithium-producing countries, and S&P projects that global supply in 2022 will be 55% higher than in 2020. But according to the International Energy Agency, lithium demand will need to grow 40-fold by 2040 to meet the demands of an economy that will be more dependent on batteries than it is today, both for EVs and for utility-scale energy storage. That supply can likely be met by existing global reserves, and investors in China and elsewhere are plowing billions into new lithium mines.

The trouble is that lithium production today is extremely water-intensive and often entails the same kind of destructive mining practices that have long been used for coal. And although EV batteries are generally falling in price, lithium could push those prices upward if it stays so expensive. Lower-impact mining methods are emerging, but with prices this high, battery developers will have a greater incentive to pursue technologies that bypass lithium altogether.

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