We have touched previously on this site about the increasing importance of high purity manganese to the development of Europe’s electric vehicle industry. This is a trend that is gathering speed and driving demand. Last time we told readers about the Volkswagen Battery Day, and the implications of VW’s plans for battery production in Europe.
This time around it is BASF (ETR:BAS) and the Vienna Motor Symposium, where Peter Schumacher, president of the Catalysts Division at BASF, outlined the company’s plans for Cathode Active Materials (CAMs). These are going to be an important part of the BASF production output as it moves to strengthen its local supply chains. CAMs happen to be rich in manganese too.
Major shake up in vehicle manufacturing
BASF, like other companies in this sector, is gearing up for a major shake up in European vehicle manufacturing, something that is starting to happen right in front of our eyes. It is expanding its local cathode production capacity and has announced new production sites for battery CAMs in both France and Germany which are scheduled to come online next year.
This is exciting stuff, but it all boils down to vital supply chains at the end of the day, and keeping those supply chains localised and fed with a steady stream of battery raw materials. If the Covid pandemic has taught us anything, it is that global supply chains can be easily disrupted. We have also seen how one vessel, aground in the Suez Canal, can also impact these supply chains.
Companies making components for the EV market are painfully aware of this and it comes as no surprise to see Schumacher saying that securing local sources of supply is of vital importance.
“Currently North American and European supply chains rely almost exclusively on battery raw materials being shipped from Asia,” he said last week in Austria. “We in BASF have always believed in having the supply chain of key raw materials in close customer proximity. We believe that local production and local content for battery materials are key to ensure a resilient and sustainable supply chain.”
It is significant that while there is a mushrooming of European cell production capacity, the demand is only being covered by about a third of European CAM capacity. Indeed, there is a growing gap between anticipated demand and projected supply of manganese and other battery metals. According to renowned lithium analyst Joe Lowry, “If you’re a battery maker, or a car maker, you probably ought to put some of your best and brightest on developing a robust supply chain of battery raw materials, because what I see is, quite simply, a crisis coming.”
BASF’s plans only add to the urgency of getting new sources of battery metals onstream. The latest numbers from Cairn Energy Research Advisors and CPM Group show overall demand for high-purity manganese is projected to be thirteen times higher in 2030 than it is today. Local production and local content for battery materials are going to be key considerations for BASF and companies like it.
Sustainable supply chains
BASF has also outlined plans to make large investments into its ability to supply CAMs in a manner which also meets high international standards of sustainability and including keeping a lid on CO2 emissions at the same time. The company is acutely aware of the fact that 40% of the carbon emissions in the manufacturing process of EVs stems from the production of the batteries, and a big chunk of that from the cathode materials.
High purity manganese has a role to play in all this as it helps to de-risk the automotive catalyst industry. It is earth-abundant and also cheaper than nickel and cobalt. Schumacher acknowledged that “metals are “a major cost driver of battery materials and consequently the battery cells.”
“Despite the trend to reduce costs and a the drive for standardisation, in the market for, the CAM materials market will become more differentiated over time, and a strong technology tool box is essential to be in a leading position for of these developments,” Schumacher explained. “One example will be Mn(manganese) -rich products, for which we have a very strong IP position. This a new product family that will play a crucial role in the future for the low cost manganese segment. Manganese is abundantly available at a much lower cost than nickel or cobalt.”
Tracking batteries and ensuring that they are not contributing heavily to global warming is going to be a big part of the EV manufacturing process in a way we simply did not see with conventional fossil fuel burning engines in the past. It looks as if there is going to be increased emphasis on keeping tabs on the metals that go into them, how they get recycled and how they fit into the whole sustainability matrix. BASF is part of the Global Battery Alliance, which has tasked itself with the development of a digital passport that will help to track the lifespan and fate of each battery and the materials inside it, much of which can be recycled.
BASF’s Schumacher has told the motor industry that he expects around 1.5m tonnes of end-of-life batteries are going to be hitting the market in 2030. Batteries represent a significant part of the overall cost of an EV, and these are not something that you will be able to send to landfill. Recycling and re-use of this technology is going to be of critical importance.
New BASF recycling plant in Germany
BASF is going to build a recycling plant next to its CAM plant in Germany that should bring this recycling piece into the overall battery value chain. “Only a sustainable battery value chain will meet global society’s needs and create a true sustainable future,” Schumacher said. “We are all part of this one planet.”
BASF has an established pedigree already in recycling including recycling of precious metals within automotive catalysts. Schumacher says the company has ambitions to run what he calls “large scale urban mines which long term will become the most sustainable metals source for the battery materials industry.”
Keeping things local – including the recycling component – will help BASF and companies like it to keep that carbon footprint low. They have woken up to the very significant implications that long supply chains have for the planet. Schumacher estimates that BASF’s cradle to grave emissions will be less than 10g of CO2 per kilometre of driving range. Its cathode active materials will therefore have a 30% lower impact than EVs currently driving on European roads. And Schumacher reckons that in the future, “we can do even better.”