The demand for raw materials used to manufacture rechargeable batteries will grow rapidly as the importance of oil as a source of energy recedes, as highlighted recently by the collapse of prices due to oversupply and weak demand resulting from COVID-19, according to a new UNCTAD report.
The report, Commodities at a glance: Special issue on strategic battery raw materials, documents the growing importance of electric mobility and the main materials used to make rechargeable car batteries.
Ongoing efforts to lower greenhouse gas emissions are expected to spur further investment in green energy production, which has been steady over the years, standing at around $600 billion per year on average.
“Alternative sources of energy such as electric batteries will become even more important as investors grow more wary of the future of the oil industry,” UNCTAD’s director of international trade, Pamela Coke-Hamilton, said while launching the report.
Electric car sales have boomed in recent years, rising 65% in 2018 from the previous year to 5.1 million vehicles, and are expected to reach 23 million in 2030, according to the International Energy Agency.
Rechargeable batteries will play a significant role in the global transition to a low-carbon energy system and help mitigate greenhouse gas emissions if the raw materials used in their manufacture are sourced and produced in a sustainable manner, the report says.
The worldwide market for cathode for lithium ion battery, the most common rechargeable car battery, was estimated at $7 billion in 2018 and is expected to reach $58.8 billion by 2024, according to the report.
“The rise in demand for the strategic raw materials used to manufacture electric car batteries will open more trade opportunities for the countries that supply these materials. It’s important for these countries to develop their capacity to move up the value chain,” Coke-Hamilton said.