Greening the Supply Chain
From cleaner manufacturing and energy use to recycling and closed-loop material flows, these companies are making battery production more environmentally friendly and compliant with new regulations.
Cleaner Manufacturing and Carbon-Neutral Goals
Major cell producers are working to shrink the carbon footprint of battery manufacturing. China’s CATL, the world’s largest EV battery maker, has pledged to achieve carbon neutrality in its core operations by 2025 and across its entire battery value chain by 2035. In practice, this means using more renewable energy, improving energy efficiency in gigafactories, and cutting emissions in sourcing of components. In Europe, a landmark project by CATL and automaker Stellantis will invest €4.1 billion in a 50 GWh battery plant in Spain designed to be fully carbon-neutral in operation. Likewise, Korean battery makers are raising the bar – LG Energy Solution, for example, aims for carbon neutrality by 2050 and zero waste to landfill at its facilities, and SK On (through its parent SK innovation) is incorporating advanced recycling to reduce its environmental impact. These targets go hand-in-hand with stringent new rules: under the EU Battery Regulation, manufacturers must report the carbon footprint of each battery model and adhere to due diligence for responsible raw material sourcing starting in 2025.
Equally important is collaboration on transparency. In 2024, the Global Battery Alliance piloted a “battery passport” system with participation from cell makers representing over 80% of global EV battery capacity. This digital passport records key sustainability metrics (carbon footprint, material sourcing, etc.) for each battery. Midstream companies like Umicore have been at the forefront of these efforts – Umicore joined the EU’s Battery Pass project and the Global Battery Alliance to help define data standards and ensure that batteries carry verified information about their materials. By embracing these innovations, battery producers are not only cutting emissions in their own operations but also enabling greater supply chain transparency.
Building a Circular Battery Ecosystem
Midstream players are also spearheading the circular economy for batteries, finding ways to reuse and recycle materials on a large scale. Leading battery manufacturers are partnering to create closed-loop systems that recover metals from production scrap and end-of-life batteries and feed them back into new battery production. LG Energy Solution, for instance, announced a joint venture in 2025 to build a battery recycling plant in northern France, capable of processing over 20,000 tons of battery scrap and end-of-life cells annually. The recycled metals – lithium, nickel, cobalt – will be extracted and then used in LG’s own battery factories, helping meet EU requirements for recycled content in new batteries by 2030. This kind of closed-loop initiative enhances resource security and reduces the need for virgin mining.
Materials companies are equally active. BASF, a major cathode materials supplier, has opened Europe’s first combined battery materials production and recycling facility in Germany, enabling it to recover critical metals from used batteries and production waste. In partnership with commercial vehicle maker Iveco, BASF is collecting and processing lithium-ion batteries from electric trucks and buses, extracting nickel, cobalt, and lithium to be reused in new cathodes. These efforts directly support the EU’s circular economy goals and new policy mandates, showing how industry and regulation are aligning.
Innovators such as Redwood Materials and Fortum Battery Recycling are also making their mark. Redwood Materials in the United States has developed a novel recycling process that can recover over 95% of the lithium, cobalt, nickel, and copper from battery manufacturing waste. The company uses hydrometallurgical technology to produce battery-grade metals from recycled sources, effectively creating a new domestic supply of critical materials with a much lower environmental footprint than traditional mining. In Europe, Finland’s Fortum has built the region’s largest hydrometallurgical battery recycling facility and is partnering with anode producer Vianode to recycle graphite from spent EV batteries, reusing it for new battery anodes. By recovering graphite – the single largest component of an EV battery by weight – Fortum and others are further closing the loop and cutting the carbon impact of battery production.
Together, these midstream advancements paint an encouraging picture: battery production is getting cleaner, and previously linear supply chains are becoming circular. Through green factory initiatives, transparency tools, and robust recycling programs, midstream companies are ensuring that the batteries powering the e-mobility revolution are not only high-performance, but also sustainably and responsibly made.
Sources Consulted:
South China Morning Post (2023/04), ESG News (2024/12/12), LG Energy Solution Press Release (2025/04/29), BASF Battery Materials News (2024/01/23), Umicore News (2025/04/14), Redwood Materials Blog (2024/04/18), ChemAnalyst (2025/05/20), Recycling Today (2024/09/09)
