Charging ahead: impact of battery minerals on avoided emissions

Charging ahead: impact of battery minerals on avoided emissions

Published

May 2025

• Evolving EV battery technology to impact avoided emissions attribution.
• Shifts in battery chemistry imply a change of mineral use.
• Mining sector in focus for avoided emissions.

Introduction

ICE Climate has explored how the changing landscape of electric vehicle (EV) battery technology can be examined from an avoided emissions perspective. Leveraging an attribution-focused approach to analyze the impact of different battery chemistries, we assess the avoided emissions implications.1

Our findings suggest some unexpected areas of EV battery supply chains - such as mineral producers - are likely to come into focus from an avoided emissions perspective.

These findings are consistent with recent ICE research (Avoided emissions: unlikely heroes) which has highlighted how ICE's approach to identifying and quantifying potential avoided emissions can be used to identify climate opportunities in unlikely sectors or deep within supply chains.

Mineral makeover: unpacking avoided emissions from EV batteries

The EV sector2is an obvious candidate for avoided emissions, but using ICE's avoided emissions approach allows for a greater understanding of exactly where the potential avoided emissions could reside, helping to reveal further climate opportunities such as within EV manufacturing supply chains, including an EV's battery supply chain. Indeed, the composition of a battery's chemistry (minerals used) is an important factor for avoided emissions analysis, which in turn brings the mining sector into the equation.

At first glance, the mining sector may seem an unlikely candidate for potential avoided emissions, but many of the minerals produced play an important role in the global transition toward a lower carbon economy.

Mining companies are often overlooked when considering climate opportunities, especially as they tend to have very high Scope 1 and 2 carbon emissions. Analysis of a typical global portfolio using the ICE Climate Analytics Platform (ICE CAP) finds that the minerals sector stands out as being one of the most carbon-intensive sectors.

For example, the Scope 1 and 2 intensity (by revenue) of the extractives and minerals processing sector for the ICE Global Broad Market Index is 447.3 tCO2/$m, more than 20 times the intensity of the Technology and Communications sectors.3This high level of carbon intensity could potentially lead to companies in these sectors being filtered out of an investor's universe when using traditional climate risk analysis and hence overlooked when scanning for climate opportunities.

However, given that many minerals produced are used in technology associated with climate solutions, such as batteries for EVs (and grid storage4), the potential for avoided emissions could exist for the mining sector, warranting further analysis.

Figure 1. Electric vehicle battery supply chain avoided emissions attribution

Battery chemistry: mixing it up

Understanding battery technology and the composition of the minerals used is an important first step to identifying avoided emissions potential both for the battery manufacturer and the mineral producers. While there are numerous different battery compositions, these fall into two main categories when it comes to batteries used in EVs today, although there are several emerging technologies (e.g. solid-state batteries) that could have a significant impact in the future.

The two main categories of batteries currently used in EVs are lithium nickel cobalt manganese mixed oxide (NMC) and lithium iron phosphate (LFP), with the abbreviations referring to the composition of minerals used for the cathode within the battery. These two battery types have different characteristics and hence have historically been favored for different applications. LFP batteries are typically lower cost but have a lower density and hence have a shorter range for EVs. These have tended to be used for smaller EVs. Two other types - lithium nickel cobalt aluminium (NCA) and lithium manganese nickel oxide also currently represent a smaller share of EV batteries. For simplicity, subsequent references to NMC will also include data and analysis of NCA and LMNOs as well.

NMC batteries, on the other hand, are more costly but have a higher density resulting in a longer range for EVs. These have typically been used in larger premium vehicles. There are several variations of NMC batteries with differing mineral ratios.5Figure 2 provides a breakdown of the mineral compositions for the various NMC batteries compared to LFP batteries.

Figure 2. EV battery chemistry

Average 2021 material requirements - cathode and anode

Source: ICE interpretation of data from Transport & Environment Report: From dirty oil to clean batteries - Batteries vs. oil: a systemic comparison of material requirements, March 2021 and ICCT Report - "Electrifying road transport with less mining - A global and regional battery material outlook", December 2024

However, ongoing enhancements within these existing technologies suggest a change in the trend of battery type utilization in the future, implying changing mineral use and avoided emissions potential.

An example of the rapidly changing battery technology is the recent improvements made to LFP batteries which have increased their density and improved their range when used in EVs. This closing of the range gap has seen LFPs becoming more widely used in EVs throughout Asia, a trend that is projected to be extended globally.6

The resulting improved efficiency, longer EV range and shorter charging times, could see the size of the LFP batteries reduce, requiring less minerals, contributing to more potential avoided emissions. Indeed, the International Council on Clean Transport ( ICCT)7projects that the LFP share of the EV market is set to increase from approximately 42% in 2023 to 50% by 2050.

Figure 3. Changing trends in EV battery technology - from NMC to LFP (% of global share by battery type)

Source: ICE interpretation of data from ICCT.8For more details see Appendix.

This potential shift in battery technology usage, moving from nickel-based chemistries to LFP, and the associated change in mineral use will have an impact on mineral producers and the potential avoided emissions apportioned to them. At a high level, the potential impact of a global shift to LFP from nickel-based batteries for EVs could result in reduced use of nickel and cobalt and the potential increased use of iron.

Battery-powered avoided emissions

To assess the avoided emissions impact from a shift in EV battery technology over the coming years, a comparison of current average battery chemistry to how the average EV battery composition could look in 2050 was carried out. To achieve this, a scenario based on current trends and developments using projections and assumptions provided by ICCT, was considered:

As a starting point, we examine the current avoided emissions potential for each of the main minerals used within the two different battery types: NMC and LFP. Given there are several different variations for each battery type, especially within the NMC category, we used a weighted average at the global level.

As well as examining the current avoided emissions potential for NMC and LFP batteries separately, a weighted average of NMC and LFP batteries was taken to give an overall global battery average assessment of avoided emissions. This was then compared to the projected global average battery avoided emissions for 2050 (using ICCT projections/assumptions).

To provide context around the relative importance of each of the minerals from an avoided emissions perspective, we applied an avoided emissions rank to the individual minerals, taking weighting into account. The current relative avoided emissions rank for each of the minerals for 2023 is then compared to the projected avoided emissions rank for 2050 (see Figure 4).

Figure 4. EV battery minerals avoided emissions rankings

Avoided emissions rank - cathode materials (global weighted-average compositions)

Source: ICE analysis, based on ICCT, Transport & Environment and IEA research.

Results: aluminium and iron top avoided emissions rankings

As can been seen in the table, there is a shift in the relative importance (from an avoided emissions perspective) of two of the key minerals used in EV batteries under the 2050 projections/assumptions, compared to the current position. Aluminium remains the most important mineral, with iron gaining in importance. Nickel, on the other hand, losses some of its relative avoided emissions importance. Meanwhile, the avoided emissions importance of cobalt, manganese and lithium remain relatively low.

To express this in real terms, the nickel required in one global weighted-average NMC battery currently within a medium-sized EV, can account for approximately 500kgs of avoided emissions over the estimated vehicle lifetime of 15 years.9This is equivalent to the carbon sequestered by approximately nine tree seedlings grown for 10 years (based on the U.S. EPA Greenhouse Gas Equivalencies Calculator).

Similarly for LFP batteries, the iron and phosphorus required within a medium-sized EV (global weighted average) can account for approximately 700kgs of avoided emissions over the estimated vehicle lifetime of 15 years.

For an overall global weighted-average battery (considering both NMC and LFP), nickel, graphite, copper, iron and cobalt currently account for approximately 1,500 kgs of avoided emissions over 15 years - equivalent to the carbon sequestered by approximately 27 tree seedlings grown for 10 years (based on the U.S. EPA Greenhouse Gas Equivalencies Calculator).

Conclusion: traditional industries playing a role in climate transition

The switch of battery chemistry resulting from a global shift away from NMC toward LFP technology is unlikely to have much impact on the overall avoided emissions associated with EVs. Reductions in battery costs and improvements in efficiency will likely be reflected in the pricing of EVs as the landscape becomes more competitive, also suggesting the share of avoided emissions apportioned to the battery will likely remain roughly steady.

However, there is potential for the changing trends in EV battery technology to have an impact on the avoided emissions apportioned to the mineral producers, as demand for some minerals will increase and others decline.

While large global mining companies with diversified portfolios of mineral production are likely to see only internal shifts in how avoided emissions are allocated to them, smaller specialist producers could see a significant change in the avoided emissions apportioned to them.

There could also be a significant shift in sovereign-level avoided emissions, given that minerals are mined in specific areas and countries. The anticipated shift away from scarcer minerals toward those in more abundant supply could see avoided emissions allocation become focused on traditional mining areas and minerals.

This analysis highlights that avoided emissions resulting from advancements in technologies are not only attributed to the solutions themselves but can also be attributed to the traditional industries often associated with high emission intensities given their role of supplying the raw materials for climate solutions.

1 This analysis focuses on EV batteries and the associated metals and minerals required for their production. Batteries used for energy storage are not within the scope of this analysis. Other sustainability considerations are not examined in this report.

2EV sector analysis in this report includes battery electric vehicles (BEV) and plug-in hybrid vehicles (PHEV).

3 Calculated using ICE Emissions Data (2025 Annual Emissions Dataset for 2023 emissions year).

4In this article we consider just EV battery technology rather than broader uses, such as grid storage.

5See appendix for more details of NMC battery variations.

6See appendix for ICCT (International Council on Clean Transport) projects.

7ICCT Report - "Electrifying road transport with less mining - A global and regional battery material outlook", December 2024

8 ICCT Report - "Electrifying road transport with less mining - A global and regional battery material outlook", December 2024

9This is based on LCA emissions data from the IEA under the STEPS scenario, with a baseline that is composed of the sales mix of vehicles in 2023, globally. ICE's attribution methodology further leverages global mineral production data from USGS and IEA and data on mineral requirements for batteries from Transport & Environment.