But the green credentials
of the electric car industry deserve further scrutiny, in particular the
environmental impact of the batteries that power these vehicles. The
FT reports:
Mining companies are already positioning themselves to
meet the increased need for raw materials that go into lithium-ion
batteries, but there is growing concerns over their environmental
footprint especially as a host of new mining companies start production
to meet rapid rises in demand.
Lithium is currently extracted from
brines beneath the deserts of South America and evaporated using the
energy of the sun. But an increasing proportion is coming from crushing
rock in Australia and processing the mineral in China, which is more
energy intensive. Goldman Sachs expects capacity addition by hard rock
to be equal to brine by 2020 in order to meet demand from electric
vehicles.
In addition, most of the new supply is coming from
smaller mining companies rather than established players, according to
Francis Condon, an energy and mining analyst at fund manager RobecoSAM.
“We’re starting to see new sources being found and smaller mining
companies and also non-mining companies getting involved,” says Mr
Condon. “Some of these opportunities are arising where environmental
codes are not as strong and social settings not as protective or
inclusive. It’s a combination of risks.”
The last
point raised there is particularly troubling, and it’s one that applies
to many industries with “eco-” or “clean-” prefixes. As demand for a
product grows (in this case the lithium ion batteries), increasing
stress is put on supply chains which raise quality control concerns and,
if you’re in the business of peddling products that are supposed to be
good for the environment, can undermine that eco-friendly marketing.
Calling
electric vehicles green is a great way to move product, but it doesn’t
necessarily make it so. As this industry grows and demand for the
materials that make up batteries ratchets up, companies are going to
start looking to less environmentally friendly sources. This is an
opportunity for unscrupulous firms: attract customers with some snazzy
aspirational eco-marketing without doing any of the work to back those
green claims up. It happens a lot more than the average customer knows,
and electric vehicles are just the latest example."
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