Natural and Synthetic Graphite in Battery Manufacturing

Graphite—a key material in battery anodes—is witnessing a significant surge in demand, primarily driven by the electric vehicle (EV) industry and other battery applications. The International Energy Agency (IEA), in its "Global Critical Minerals Outlook 2024" report, provides a comprehensive analysis of the current trends and future projections for both natural and synthetic graphite. This analysis highlights graphite's crucial role in the battery manufacturing sector and its future trajectory.

Expanding demand and market dynamics

According to the IEA, global demand for graphite is expected to double by 2030, reaching 13M tons (Mt) under the Stated Policies Scenario (STEPS). By 2040, this demand could rise to 16 Mt in the Announced Pledges Scenario (APS) and 18 Mt in the Net Zero Emissions by 2050 Scenario (NZE), a fourfold increase from current levels. The EV sector is a significant driver of this demand, projected to consume 5.4 Mt by 2030, surpassing current global production and accounting for 60% of total demand. By 2040, battery-related applications are forecasted to represent 65% of total graphite demand, up from 33% today.

Most battery producers globally rely on China for graphite anodes. Credit: IEA (CC BY 4.0)

Natural graphite: Supply constraints and geographic concentration

The IEA report highlights that natural graphite, predominantly mined in China, faces substantial supply constraints. Currently, China accounts for 80% of global production, but this share is expected to decrease to 70% by 2030 due to emerging producers in Mozambique, Madagascar, Canada, India, Australia, and Tanzania. Despite these developments, supplying suitable grades of natural graphite for battery use remains a challenge. Only medium and fine flakes meet the stringent requirements, and converting these flakes into spherical graphite for batteries involves significant material losses.

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Even though diversification efforts are underway, spherical graphite production remains highly concentrated in China, which controls 99% of the market. The IEA notes that integrated projects in Canada, the United States, and Europe aim to reduce this dependency. Yet, China's dominance is projected to persist, with its share modestly falling to 85% by 2030 and 80% by 2040.

Global graphite demand outlook by sector and scenario. Credit: IEA (CC BY 4.0)

Synthetic graphite: Rising demand with environmental implications

With constraints on natural graphite supply, synthetic graphite is becoming increasingly important. The IEA report indicates that synthetic graphite, produced from petroleum coke through an energy-intensive process, is also predominantly manufactured in China. While synthetic graphite was traditionally used in lower-quality applications like electrodes, its role in battery anodes has surged. Now, it makes up 40% of the synthetic graphite supply and is expected to rise to 55% by 2040.

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However, the IEA highlights that synthetic graphite production involves significantly higher greenhouse gas emissions than natural graphite, due to its electricity-intensive manufacturing process. Despite the existence of surplus capacities of needle coke (a key raw material for synthetic graphite) and the potential for less energy-intensive production methods, the environmental impact remains a critical concern.

Industry perspectives and innovations

Vincent Ledoux-Pedailles, CCO at CarbonScape, underscores the importance of graphite in the global transition to clean transport. He states, "The global transition to clean transport is not just a goal, but a must – and it hinges on the availability of critical minerals. The flow of these materials is already impacting the pace of change the sector needs, and we must act now to ensure the security of supply chains."

Ledoux-Pedailles highlights the IEA's recognition of graphite as a key mineral for this transition: "The IEA's recognition of graphite as a key mineral for this transition is a crucial step forward. As the largest critical element by volume in a lithium-ion battery cell, graphite is a key enabler when it comes to helping nations achieve their climate goals and de-risk their supply chains."

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He advocates for sustainable alternatives like biographite: "The path to a sustainable future lies in onshoring the production of alternative materials made from sustainable feedstocks, such as biographite. This approach offers the most secure and steady way to supply graphite for EV manufacturers, supporting the transition to net zero, creating new green jobs, and bolstering industry."

Diversification efforts, coupled with advancements in production technologies, are crucial to ensuring a stable and sustainable supply of graphite. Vincent Ledoux-Pedailles concludes, "At CarbonScape, our mission is clear: to commercialize our low-cost, climate-positive biographite, a drop-in replacement for traditional graphite. This innovative material will play a pivotal role in securing global graphite supply chains for generations to come. The time for action is now, and we are leading the charge."