1 00:00:00,920 --> 00:00:05,880 Speaker 1: Hi, Mark, We are here today discussing lithium ion battery 2 00:00:05,880 --> 00:00:08,880 Speaker 1: manufacturing emissions, which is a note that can be found 3 00:00:08,920 --> 00:00:11,400 Speaker 1: on the Bloomberg terminal at benof Go or at benf 4 00:00:11,440 --> 00:00:14,160 Speaker 1: dot com. This particular research note is something I have 5 00:00:14,240 --> 00:00:17,560 Speaker 1: been waiting for some time now. Several months back, I 6 00:00:17,640 --> 00:00:20,560 Speaker 1: was test driving electric vehicles as I was thinking about 7 00:00:20,600 --> 00:00:22,960 Speaker 1: buying one, and I at the same time as being 8 00:00:23,000 --> 00:00:26,520 Speaker 1: teased pretty relentlessly, i might add, by a friend of mine, 9 00:00:26,680 --> 00:00:28,720 Speaker 1: and he kept telling me that I was looking to 10 00:00:28,800 --> 00:00:31,360 Speaker 1: buy a coal car, so like one of those cars 11 00:00:31,400 --> 00:00:34,920 Speaker 1: that's converted from a gasoline to a coal fired car. No, 12 00:00:35,159 --> 00:00:37,279 Speaker 1: not at all, This at a thing. Yeah, yeah, look 13 00:00:37,320 --> 00:00:39,839 Speaker 1: it up on YouTube. Well no, actually he meant that 14 00:00:39,960 --> 00:00:42,640 Speaker 1: because an electric vehicle is actually plugged into the grid, 15 00:00:43,040 --> 00:00:45,360 Speaker 1: and oftentimes you find coal in the grid, that that 16 00:00:45,520 --> 00:00:48,800 Speaker 1: is ultimately what was powering it. There is really a 17 00:00:48,880 --> 00:00:51,800 Speaker 1: lack of information out there regarding electric vehicles and their 18 00:00:51,800 --> 00:00:55,760 Speaker 1: emissions when you're taking the battery manufacturing part into consideration. 19 00:00:56,160 --> 00:00:58,920 Speaker 1: So this is B and F chance to clear everything up. 20 00:00:59,360 --> 00:01:01,400 Speaker 1: And of course all of this is taking place with 21 00:01:01,520 --> 00:01:03,800 Speaker 1: air pollution in cities as a part of the backdrop. 22 00:01:04,080 --> 00:01:06,720 Speaker 1: So what if electric vehicles are actually just moving the 23 00:01:06,720 --> 00:01:09,760 Speaker 1: emissions elsewhere and they're not coming out of your tail pipe, 24 00:01:09,800 --> 00:01:11,959 Speaker 1: but they're still polluting and have the greenhouse gases with 25 00:01:12,000 --> 00:01:15,680 Speaker 1: them as well. Well. Fortunately we have James Frith energy 26 00:01:15,720 --> 00:01:18,600 Speaker 1: storage analysts and Logan Goldie Scott, who is the head 27 00:01:18,720 --> 00:01:22,840 Speaker 1: of the NEF Energy Storage team. They're going to tell 28 00:01:22,959 --> 00:01:26,360 Speaker 1: us more about what is actually happening with battery emissions 29 00:01:26,560 --> 00:01:29,480 Speaker 1: and hopefully demystify a bunch of this for us. Please 30 00:01:29,480 --> 00:01:31,800 Speaker 1: note that benef does not provide investment strategy advice, and 31 00:01:31,840 --> 00:01:33,120 Speaker 1: we can hear a full disclaimer at the end of 32 00:01:33,120 --> 00:01:38,800 Speaker 1: the show. James Logan, thank you for joining us today. 33 00:01:38,840 --> 00:01:41,440 Speaker 1: Thanks for having us. Dana, Thanks Dana. So people that 34 00:01:41,520 --> 00:01:45,440 Speaker 1: own electric vehicles, are they really doing right by the environment? Yeah, definitely. 35 00:01:45,520 --> 00:01:48,320 Speaker 1: We found in this work that electric vehicle produces about 36 00:01:48,320 --> 00:01:51,240 Speaker 1: half the CEO two emissions over its lifetime compared to 37 00:01:51,320 --> 00:01:53,520 Speaker 1: an internal combustion engine VIC when you're looking at the 38 00:01:53,520 --> 00:01:57,040 Speaker 1: same vehicle segments, and that's for vehicles produced and used 39 00:01:57,080 --> 00:01:59,600 Speaker 1: in Germany. If you look at vehicles that are used 40 00:01:59,600 --> 00:02:02,800 Speaker 1: on other grids in the world, actually those emissions dropped massively. 41 00:02:03,240 --> 00:02:07,480 Speaker 1: In Sweden, for example, where the electricity grid there produces 42 00:02:07,520 --> 00:02:10,880 Speaker 1: about sixteen grams of c O two per killor hour 43 00:02:10,919 --> 00:02:14,040 Speaker 1: of energy produced. The lifetime emissions of an electric vehicle 44 00:02:14,120 --> 00:02:16,880 Speaker 1: about fifty three times lower than that of a standard 45 00:02:17,080 --> 00:02:20,320 Speaker 1: small internal combustion engine vehicle in Europe. Okay, let's unpack 46 00:02:20,360 --> 00:02:23,000 Speaker 1: that just a bit. So you're saying that location matters 47 00:02:23,040 --> 00:02:25,440 Speaker 1: for the lifetime emissions of these cars. Yeah, certainly for 48 00:02:25,480 --> 00:02:29,560 Speaker 1: electric vehicles, it's so important you have the emissions associated 49 00:02:29,600 --> 00:02:34,000 Speaker 1: with vehicle manufacturing, with the battery manufacturing, and then crucially 50 00:02:34,000 --> 00:02:36,720 Speaker 1: for electric vehicles, with their use over the lifetime. So 51 00:02:36,720 --> 00:02:39,639 Speaker 1: if you think about an electric vehicle, it charges from 52 00:02:39,639 --> 00:02:42,120 Speaker 1: the grid, so those grid emissions have a big impact. 53 00:02:42,120 --> 00:02:46,080 Speaker 1: Whereas for an internal combustion engine vehicle, you're using petrol 54 00:02:46,160 --> 00:02:48,280 Speaker 1: or diesel, So it doesn't matter where in the world 55 00:02:48,360 --> 00:02:50,079 Speaker 1: you are, those emissions are going to be the same. 56 00:02:50,120 --> 00:02:52,400 Speaker 1: It's just going to change by whatever engine you're using. 57 00:02:52,560 --> 00:02:55,160 Speaker 1: And so just just thinking about about use case and 58 00:02:55,160 --> 00:02:57,440 Speaker 1: just to put some put some numbers on it. If 59 00:02:57,480 --> 00:03:02,040 Speaker 1: you're like, on average, emissions from an electric vehicle will 60 00:03:02,040 --> 00:03:05,480 Speaker 1: be around lower than emissions from an internal combustion engine. 61 00:03:05,680 --> 00:03:07,799 Speaker 1: But if you go to a country. If you're driving 62 00:03:07,800 --> 00:03:10,600 Speaker 1: your car in China, for instance, which is a much 63 00:03:10,600 --> 00:03:15,040 Speaker 1: more coal on the grid that is only around so 64 00:03:15,160 --> 00:03:18,520 Speaker 1: location can be incredibly impactful here. Now, is that just 65 00:03:18,639 --> 00:03:22,320 Speaker 1: taking into consideration when you're actually using the vehicle and 66 00:03:22,400 --> 00:03:25,519 Speaker 1: tailpipe emissions? Because in this note you're really getting into 67 00:03:25,600 --> 00:03:27,680 Speaker 1: a lot of parts of the supply chain in the 68 00:03:27,680 --> 00:03:33,239 Speaker 1: manufacturing process. What does it include there? That's that's only 69 00:03:33,240 --> 00:03:35,640 Speaker 1: when we're using the vehicle. That what stood out with 70 00:03:35,720 --> 00:03:40,040 Speaker 1: this note was really how we could track from extraction 71 00:03:40,080 --> 00:03:43,720 Speaker 1: of the raw materials all the way through to manufacturing, 72 00:03:44,080 --> 00:03:48,119 Speaker 1: manufacturing the components, the logistics associated with that, and then 73 00:03:48,120 --> 00:03:52,640 Speaker 1: manufacturing the batteries themselves. And what we found overall is 74 00:03:52,640 --> 00:03:56,440 Speaker 1: that even once you account for that, battery electric vehicles 75 00:03:56,480 --> 00:04:01,000 Speaker 1: are better from an emission standpoint then are equivalent internal 76 00:04:01,000 --> 00:04:06,320 Speaker 1: combustion engine Let's isolate the manufacturing part, since we've already 77 00:04:06,320 --> 00:04:11,040 Speaker 1: talked about tail pipe emissions in the manufacturing process of 78 00:04:11,080 --> 00:04:15,080 Speaker 1: the battery. How big a part of the overall vehicles 79 00:04:15,160 --> 00:04:19,520 Speaker 1: life cycle emissions is this? It's actually a lot smaller 80 00:04:19,520 --> 00:04:23,120 Speaker 1: than people think. So some people quote it being about 81 00:04:23,640 --> 00:04:26,000 Speaker 1: of the vehicle's lifetime emissions, but actually we found that 82 00:04:26,040 --> 00:04:29,120 Speaker 1: it's closer to ten percent. Ten percent's not a ton, 83 00:04:29,200 --> 00:04:32,200 Speaker 1: but definitely moves the needle. So what's the biggest input 84 00:04:32,320 --> 00:04:35,000 Speaker 1: that's going to make the battery high or low? From 85 00:04:35,040 --> 00:04:37,720 Speaker 1: an emission standpoint, there's a couple of things to look at. 86 00:04:37,760 --> 00:04:40,359 Speaker 1: So the chemistry that's being used has an impact, but 87 00:04:40,400 --> 00:04:43,720 Speaker 1: also the conditions you use during that manufacturing process. They 88 00:04:43,760 --> 00:04:48,040 Speaker 1: can range hugely depending on what outcome you're trying to produce. 89 00:04:48,080 --> 00:04:50,240 Speaker 1: If you want a high power cell, for example, is 90 00:04:50,320 --> 00:04:54,360 Speaker 1: used in hybrid electric vehicles, the emissions associated with that 91 00:04:54,400 --> 00:04:57,200 Speaker 1: are larger than if you're using an energy cell as 92 00:04:57,320 --> 00:05:00,000 Speaker 1: used in a battery electric vehicle. Oh, so the hybrid 93 00:05:00,120 --> 00:05:03,480 Speaker 1: vehicles are actually those batteries themselves are worse because you 94 00:05:03,480 --> 00:05:06,600 Speaker 1: would think they're smaller. So therefore, from an emission standpoint, 95 00:05:06,600 --> 00:05:08,520 Speaker 1: it's a win. You can kind of touched on it there. 96 00:05:08,600 --> 00:05:11,040 Speaker 1: They are smaller, so the total emissions from that is 97 00:05:11,040 --> 00:05:13,279 Speaker 1: going to be less than for a battery electric vehicle. 98 00:05:13,400 --> 00:05:15,160 Speaker 1: But if you look on a on a killer what 99 00:05:15,320 --> 00:05:17,960 Speaker 1: our basis, so a killer what hour of hybrid electric 100 00:05:18,040 --> 00:05:20,200 Speaker 1: vehicle pack is more polluting than a kilo what hour 101 00:05:20,240 --> 00:05:24,360 Speaker 1: of battery electric vehicle pack. There are a lot of 102 00:05:24,440 --> 00:05:31,000 Speaker 1: different battery pack types and compositions, so who's the biggest 103 00:05:31,040 --> 00:05:36,000 Speaker 1: and who's the smallest in terms of emission size. So 104 00:05:36,120 --> 00:05:39,400 Speaker 1: definitely the lowest polluting ones that we came across were 105 00:05:39,600 --> 00:05:43,119 Speaker 1: lithium and phosphate based batteries, and these are the type 106 00:05:43,160 --> 00:05:47,000 Speaker 1: that are commonly used in electric buses, whereas the types 107 00:05:47,040 --> 00:05:51,520 Speaker 1: that used in electric vehicles are increasingly using more nickel 108 00:05:51,720 --> 00:05:54,880 Speaker 1: in those batteries, and some of the emissions associated with 109 00:05:55,000 --> 00:05:58,760 Speaker 1: extracting and processing nickel is quite high, so that increases 110 00:05:58,800 --> 00:06:02,160 Speaker 1: the emissions of those trees. So nickel's the worst offender 111 00:06:02,200 --> 00:06:05,080 Speaker 1: and all of this it's not great for it. There 112 00:06:05,080 --> 00:06:08,440 Speaker 1: are some other considerations around aluminium and copper, but let's 113 00:06:08,440 --> 00:06:11,039 Speaker 1: say nickel for the moment, it isn't nickel demand for 114 00:06:11,080 --> 00:06:14,840 Speaker 1: the battery growing. What's replacing cobalt, right, Yeah, precisely. So 115 00:06:15,040 --> 00:06:17,320 Speaker 1: there is more and more nickel going into these chemistries. 116 00:06:17,720 --> 00:06:20,560 Speaker 1: So the emissions are increasing, but there's also work that's 117 00:06:20,600 --> 00:06:24,200 Speaker 1: being done by the battery manufacturers to reduce those emissions, 118 00:06:24,240 --> 00:06:28,080 Speaker 1: particularly in the manufacturing process. We're seeing companies like north Vault, 119 00:06:28,240 --> 00:06:30,040 Speaker 1: who are based in Sweden. They're trying to become a 120 00:06:30,080 --> 00:06:33,000 Speaker 1: net zero emission manufacturer. Should I know. North Vault there 121 00:06:33,040 --> 00:06:35,400 Speaker 1: are a startup at the moment, but they've been making 122 00:06:35,440 --> 00:06:38,400 Speaker 1: big waves recently in the battery world. So they've signed 123 00:06:38,400 --> 00:06:43,120 Speaker 1: a joint venture with with VW and they recently secured 124 00:06:43,480 --> 00:06:47,200 Speaker 1: a billion in funding from the European Investment Bank amongst 125 00:06:47,320 --> 00:06:50,480 Speaker 1: other people. And they're going to be Europe's first gigga 126 00:06:50,480 --> 00:06:54,839 Speaker 1: scale homegrown battery manufacturer and based in Sweden because of 127 00:06:54,839 --> 00:06:57,800 Speaker 1: the emissions, so their flagship plant will be based in 128 00:06:57,839 --> 00:07:00,599 Speaker 1: Sweden and it's those lower emissions is one of the 129 00:07:00,640 --> 00:07:03,599 Speaker 1: reasons why they chose to base the factory there. They've 130 00:07:03,600 --> 00:07:06,080 Speaker 1: also going to have at least one more plant in 131 00:07:06,160 --> 00:07:08,280 Speaker 1: Germany at the moment and that will be paired up 132 00:07:08,320 --> 00:07:11,880 Speaker 1: with VW. Just on the previous point around looking at 133 00:07:11,960 --> 00:07:15,080 Speaker 1: technologies and how they compare from an emission standpoint, it's 134 00:07:15,160 --> 00:07:17,840 Speaker 1: just so important to look at company strategies as well. 135 00:07:17,960 --> 00:07:23,080 Speaker 1: So automakers, battery manufacturers, they are all investing heavily in 136 00:07:23,400 --> 00:07:28,480 Speaker 1: their supply chain sustainability and so regardless of the technology 137 00:07:28,480 --> 00:07:31,400 Speaker 1: of choice. Actually we're seeing a huge amount of progress 138 00:07:31,400 --> 00:07:34,800 Speaker 1: on this front, but it depends by company. Almost more 139 00:07:34,840 --> 00:07:39,080 Speaker 1: than anything else. Why are they incentive to care about sustainability? 140 00:07:39,200 --> 00:07:43,080 Speaker 1: Is it from a pr and attracting consumer standpoint or 141 00:07:43,520 --> 00:07:47,920 Speaker 1: more attracting investor standpoint? I think probably more more of 142 00:07:47,960 --> 00:07:50,720 Speaker 1: the latter. They're they're looking at sustainability in order to 143 00:07:51,320 --> 00:07:55,600 Speaker 1: improve efficiency UM and mitigate climate and transition risk. And 144 00:07:55,680 --> 00:07:59,440 Speaker 1: this is something that was seeing increasingly at the forefront 145 00:07:59,480 --> 00:08:02,120 Speaker 1: of investor as minds um and coming up on stead 146 00:08:02,120 --> 00:08:06,360 Speaker 1: of on shareholders calls fairly frequently within the automotive and 147 00:08:06,640 --> 00:08:10,160 Speaker 1: battery space, and and and much broader as well. I 148 00:08:10,200 --> 00:08:12,440 Speaker 1: think i'd add to that as well. When we're thinking 149 00:08:12,440 --> 00:08:15,320 Speaker 1: about this from the public perception point of view as well, 150 00:08:15,440 --> 00:08:17,600 Speaker 1: the question that we had at the start, are internal 151 00:08:17,640 --> 00:08:20,520 Speaker 1: combustion engine vehicles more or less polluting than electric vehicles? 152 00:08:21,000 --> 00:08:22,880 Speaker 1: I don't want to buy an electric vehicle if I 153 00:08:22,920 --> 00:08:25,080 Speaker 1: think it's it's not as it's not better for the 154 00:08:25,160 --> 00:08:27,920 Speaker 1: environment than in the internal combustion engine vehicle. And so 155 00:08:28,320 --> 00:08:31,760 Speaker 1: manufacturers are also listening to what the public says, especially 156 00:08:31,760 --> 00:08:34,199 Speaker 1: when at this point in time they are more expensive. 157 00:08:34,360 --> 00:08:37,440 Speaker 1: The cheapest electric vehicle you can get is still way 158 00:08:37,440 --> 00:08:40,240 Speaker 1: more expensive than the cheapest internal combustion engine you can get. 159 00:08:40,280 --> 00:08:42,000 Speaker 1: So if you're paying a premium, you want to pay 160 00:08:42,000 --> 00:08:45,880 Speaker 1: a premium for something that's going to hopefully achieve what 161 00:08:45,920 --> 00:08:48,040 Speaker 1: you think in your mind you're trying to achieve, which 162 00:08:48,120 --> 00:08:51,439 Speaker 1: is lower emissions. Just on that front, though, where at 163 00:08:51,440 --> 00:08:53,600 Speaker 1: the moment that is that is true for most for 164 00:08:53,679 --> 00:08:57,760 Speaker 1: most vehicle segments. The recent success of models such as 165 00:08:57,800 --> 00:09:01,000 Speaker 1: Tesla's Model three, which came out in this sort of 166 00:09:01,040 --> 00:09:06,920 Speaker 1: a second half of eighteen, have demonstrated that appetite for 167 00:09:06,920 --> 00:09:09,800 Speaker 1: for a more competitive, for a more sort of a 168 00:09:10,240 --> 00:09:13,360 Speaker 1: for a more competitive sort of vehicle in consumers minds 169 00:09:13,720 --> 00:09:16,200 Speaker 1: um and when when we look at battery technologies and 170 00:09:16,200 --> 00:09:20,560 Speaker 1: battery prices going forward, actually on an upfront basis, we 171 00:09:20,600 --> 00:09:25,440 Speaker 1: believe that you start seeing electric vehicles actually become more 172 00:09:25,480 --> 00:09:30,240 Speaker 1: attractive and a lower cost option than internal combustion engine 173 00:09:30,320 --> 00:09:33,679 Speaker 1: vehicles depending on country, depending on segment. But by by 174 00:09:33,720 --> 00:09:37,760 Speaker 1: the mid early to mid twenties, and so we're only 175 00:09:37,800 --> 00:09:41,400 Speaker 1: a few years away from that description of yours just 176 00:09:41,400 --> 00:09:44,600 Speaker 1: just no longer no longer being correct. So these batteries 177 00:09:44,600 --> 00:09:47,760 Speaker 1: are getting cheaper and they're getting more range as well, 178 00:09:47,800 --> 00:09:50,360 Speaker 1: which assumes then that the battery packs are getting a 179 00:09:50,400 --> 00:09:53,720 Speaker 1: bit larger. Does that have a big impact on the 180 00:09:53,720 --> 00:09:57,360 Speaker 1: emissions profile. So we'll have an impact on the emissions profile. 181 00:09:57,400 --> 00:09:58,959 Speaker 1: But I think if we're looking for the future. The 182 00:09:59,000 --> 00:10:00,920 Speaker 1: other thing that we've got to bring up here, of course, 183 00:10:01,040 --> 00:10:04,920 Speaker 1: is that actually grids around the world are getting greener. 184 00:10:05,080 --> 00:10:08,920 Speaker 1: There's CEO two emissions pecular hour of energy produced are falling. 185 00:10:09,360 --> 00:10:10,880 Speaker 1: And so when you look at the use of an 186 00:10:10,880 --> 00:10:14,360 Speaker 1: electric vehicle over say a ten year lifetime, actually every 187 00:10:14,360 --> 00:10:17,840 Speaker 1: time you charge it, almost the energy going into charging 188 00:10:17,880 --> 00:10:20,960 Speaker 1: that battery is cleaner. And it's similar for manufacturing. As 189 00:10:20,960 --> 00:10:23,840 Speaker 1: the batteries get bigger again, the grids will have got greener, 190 00:10:23,880 --> 00:10:26,880 Speaker 1: and therefore the emissions associated with the battery and the 191 00:10:26,960 --> 00:10:31,200 Speaker 1: vehicle will have fallen. By we expect wind and solar 192 00:10:31,400 --> 00:10:35,800 Speaker 1: to make up of total generation globally, and that's up 193 00:10:35,800 --> 00:10:38,400 Speaker 1: for less than ten percent or so today, and that 194 00:10:38,520 --> 00:10:43,440 Speaker 1: just speaks to that change. Change to James's outline, my 195 00:10:43,559 --> 00:10:47,920 Speaker 1: question really revolves around recycling. Is it going to end 196 00:10:48,000 --> 00:10:51,240 Speaker 1: up being cheaper or better or worse from an emission 197 00:10:51,280 --> 00:10:54,800 Speaker 1: standpoint to actually look at these existing batteries and do 198 00:10:54,880 --> 00:10:56,679 Speaker 1: something with them at the end of life, or are 199 00:10:56,679 --> 00:10:59,600 Speaker 1: they going to become power walls in our houses. So 200 00:10:59,640 --> 00:11:01,880 Speaker 1: I think that is a really interesting question and the 201 00:11:01,920 --> 00:11:05,480 Speaker 1: answer isn't clear. So recycling battery is clearly going to 202 00:11:05,480 --> 00:11:07,480 Speaker 1: be vital in the future because we don't want to 203 00:11:07,480 --> 00:11:10,200 Speaker 1: put them into landfills. But they might have a second life. 204 00:11:10,200 --> 00:11:12,640 Speaker 1: As you point out, they may be using your house beforehand, 205 00:11:12,679 --> 00:11:14,880 Speaker 1: for example, and if you do that, if you use 206 00:11:14,920 --> 00:11:18,040 Speaker 1: them in the second life application, you're spreading the emissions 207 00:11:18,040 --> 00:11:20,679 Speaker 1: with manufacturing that battery over more years of use, so 208 00:11:20,720 --> 00:11:24,920 Speaker 1: you're reducing the average per cycle energy use. I think 209 00:11:24,960 --> 00:11:29,120 Speaker 1: the honest there is on companies that are developing second 210 00:11:29,120 --> 00:11:32,600 Speaker 1: life second life projects to prove that this really works 211 00:11:32,600 --> 00:11:35,840 Speaker 1: in practice. In theory, this is this is a really 212 00:11:35,920 --> 00:11:38,320 Speaker 1: nice idea, but at the moment we've yet to yet 213 00:11:38,360 --> 00:11:41,720 Speaker 1: to see this deployed commercially. I think the other thing 214 00:11:41,760 --> 00:11:44,320 Speaker 1: to add on that as well, when we look at recycling, 215 00:11:44,800 --> 00:11:47,480 Speaker 1: one of the tricky things there is that actually the 216 00:11:47,520 --> 00:11:50,880 Speaker 1: economics are heavily tied to the price of commodities when 217 00:11:50,880 --> 00:11:54,199 Speaker 1: you're doing that recycling. So if cobalt or lithium is 218 00:11:54,320 --> 00:11:56,400 Speaker 1: very cheap, then actually maybe it doesn't make sense to 219 00:11:56,400 --> 00:11:58,600 Speaker 1: recycle that battery at that time, and so a second 220 00:11:58,600 --> 00:12:02,240 Speaker 1: life application might be more beneficial. My question when I 221 00:12:02,360 --> 00:12:04,960 Speaker 1: looked there at a figure on your exact sum was, Okay, 222 00:12:05,000 --> 00:12:07,640 Speaker 1: so Poland has high graded emissions intensity, but do they 223 00:12:07,679 --> 00:12:11,959 Speaker 1: really manufactured batteries? There really full four electric vehicles for 224 00:12:12,040 --> 00:12:15,240 Speaker 1: electric vehicles because I hear LG and I hear phones 225 00:12:16,600 --> 00:12:20,600 Speaker 1: individual consumer electronics, and actually that's a it's such an 226 00:12:20,600 --> 00:12:22,800 Speaker 1: interesting overlap because I think you guys pointed out at 227 00:12:22,800 --> 00:12:27,800 Speaker 1: a previous summit that there is this intersection between consumer 228 00:12:27,800 --> 00:12:31,000 Speaker 1: electronics and our phones and our computers, and then energy 229 00:12:31,040 --> 00:12:33,400 Speaker 1: storage on the grid and then vehicles. You have all 230 00:12:33,400 --> 00:12:36,040 Speaker 1: of these really big companies who've got skin in the 231 00:12:36,040 --> 00:12:39,200 Speaker 1: game on making this work. So they are really caring 232 00:12:39,440 --> 00:12:42,400 Speaker 1: a about increasing the amount of supply and be on 233 00:12:42,679 --> 00:12:46,080 Speaker 1: decreasing the cost of batteries. But are they playing a 234 00:12:46,120 --> 00:12:48,320 Speaker 1: part in that though as well? Are they driving emissions 235 00:12:48,320 --> 00:12:51,280 Speaker 1: down just by improving their manufacturing process. I think one 236 00:12:51,280 --> 00:12:53,080 Speaker 1: of the things to point out is that they are 237 00:12:53,200 --> 00:12:56,360 Speaker 1: driving emissions down by improving the manufacturing process. But there's 238 00:12:56,480 --> 00:13:00,520 Speaker 1: also the option for manufacturers are perhaps located in areas 239 00:13:00,559 --> 00:13:03,560 Speaker 1: with dirtier grids to use things like p p as 240 00:13:03,640 --> 00:13:07,439 Speaker 1: or unsighte renewable generation to reduce their CEO two emissions. 241 00:13:08,160 --> 00:13:10,880 Speaker 1: So let's say hypothetically you're sitting on a dirty grid 242 00:13:11,080 --> 00:13:14,880 Speaker 1: and you're making this battery, but more of the supply 243 00:13:15,120 --> 00:13:18,720 Speaker 1: is near you, so you don't have emissions as high 244 00:13:19,040 --> 00:13:22,440 Speaker 1: associated from actually transporting things to you. Because I think 245 00:13:22,440 --> 00:13:24,600 Speaker 1: you pointed out and here at one point that seven 246 00:13:24,600 --> 00:13:28,560 Speaker 1: percent of the emissions for batteries manufactured in China can 247 00:13:28,720 --> 00:13:31,960 Speaker 1: just come from physically getting the raw materials to them. 248 00:13:32,360 --> 00:13:36,000 Speaker 1: Are we talking about a delta of enough that it 249 00:13:36,040 --> 00:13:39,240 Speaker 1: would make sense to localize and manufacturing even on a 250 00:13:39,280 --> 00:13:41,560 Speaker 1: dirty grid, or is it better to be on a 251 00:13:41,600 --> 00:13:43,679 Speaker 1: clean grid and then have to transport things to you? 252 00:13:44,320 --> 00:13:46,720 Speaker 1: So I think there's a couple of different questions and 253 00:13:46,800 --> 00:13:50,960 Speaker 1: points to make. Certainly that transportation emissions can be quite high, 254 00:13:51,040 --> 00:13:54,840 Speaker 1: but it really depends what you're transporting. So in that example, 255 00:13:54,880 --> 00:13:58,400 Speaker 1: we were looking at when companies transport what's called concentrates, 256 00:13:58,559 --> 00:14:01,240 Speaker 1: So this is material that's been mind but it hasn't 257 00:14:01,280 --> 00:14:05,119 Speaker 1: been turned into a metal yet. And when you're transporting 258 00:14:05,120 --> 00:14:08,520 Speaker 1: that material from say Australia to China or maybe somewhere 259 00:14:08,520 --> 00:14:11,959 Speaker 1: in Africa to China, what you find is that concentrate 260 00:14:12,000 --> 00:14:14,960 Speaker 1: only contains maybe six percent of the material you actually 261 00:14:14,960 --> 00:14:19,440 Speaker 1: want and then material that you don't need, and so 262 00:14:19,600 --> 00:14:23,120 Speaker 1: the emissions associated with transporting that can be quite high. 263 00:14:23,280 --> 00:14:25,880 Speaker 1: But if you were to process that material on site, 264 00:14:25,880 --> 00:14:28,520 Speaker 1: So using the example of Australia, if you were to 265 00:14:29,000 --> 00:14:32,200 Speaker 1: mine or in the ground and convert it to the 266 00:14:32,280 --> 00:14:35,359 Speaker 1: lithium form that you need, such as the lithium hydroxide 267 00:14:35,720 --> 00:14:39,480 Speaker 1: and transport that lithium hydroxide to China, actually those transportation 268 00:14:39,480 --> 00:14:41,120 Speaker 1: emissions are gonna be a lot lower than if you're 269 00:14:41,120 --> 00:14:45,200 Speaker 1: transporting that concentrated material. Is pilots are going to play 270 00:14:45,200 --> 00:14:48,040 Speaker 1: a factor in any of this. Policy has the potential 271 00:14:48,080 --> 00:14:52,080 Speaker 1: to be incredibly important on this front, where at the moment, 272 00:14:52,520 --> 00:14:56,800 Speaker 1: around three quarters of battery manufacturing capacity is located located 273 00:14:56,800 --> 00:14:59,360 Speaker 1: in China, and what we expect to see in what 274 00:14:59,360 --> 00:15:03,280 Speaker 1: we're beginning to see the early signs of his battery 275 00:15:03,320 --> 00:15:06,960 Speaker 1: manufacturing moving much closer to demand centers such as here 276 00:15:06,960 --> 00:15:10,080 Speaker 1: in Europe or in the United States. A big part 277 00:15:10,120 --> 00:15:14,560 Speaker 1: of that is likely to be policy where the European 278 00:15:14,600 --> 00:15:19,160 Speaker 1: Commission and policymakers across the world are increasingly aware and 279 00:15:19,320 --> 00:15:23,200 Speaker 1: concerned around life cycle emissions, not just tail pipe permissions, 280 00:15:23,520 --> 00:15:25,920 Speaker 1: and they would like manufacturers to prove that they have 281 00:15:26,040 --> 00:15:29,360 Speaker 1: acceptable life cycle emissions to be able to participate in 282 00:15:29,400 --> 00:15:32,600 Speaker 1: the market, because otherwise it would defeat the purpose. And 283 00:15:32,680 --> 00:15:36,880 Speaker 1: so it's not unreasonable to expect that the European Commission 284 00:15:36,960 --> 00:15:41,960 Speaker 1: or other policymakers will actually demand their manufacturers meet increasingly 285 00:15:42,040 --> 00:15:45,960 Speaker 1: stringent life cycle emission standards in order to operate in 286 00:15:46,000 --> 00:15:49,720 Speaker 1: a in a market, and that could incentivize manufacturers to 287 00:15:49,800 --> 00:15:54,240 Speaker 1: set up plants in Europe rather than rather than incur 288 00:15:54,720 --> 00:15:57,760 Speaker 1: these additional sort of carbon costs by having to import 289 00:15:57,840 --> 00:16:00,600 Speaker 1: into that into the trade block. I think that could 290 00:16:00,600 --> 00:16:03,520 Speaker 1: be interesting as well. When we're talking about manufacturing in Europe, 291 00:16:03,520 --> 00:16:06,280 Speaker 1: then how the country or the region that you choose 292 00:16:06,320 --> 00:16:09,680 Speaker 1: to manufacturing affects the price if you're having to buy 293 00:16:09,720 --> 00:16:12,800 Speaker 1: carbon credits to offset some of the emissions that you're producing. 294 00:16:13,160 --> 00:16:15,680 Speaker 1: On top of that as well, different countries within the 295 00:16:15,720 --> 00:16:19,440 Speaker 1: region will have different electricity costs. So again using the 296 00:16:19,440 --> 00:16:21,960 Speaker 1: example of Sweden, because they have a lot of hydro there, 297 00:16:22,120 --> 00:16:25,240 Speaker 1: electricity is quite cheap in comparisons somewhere like Poland or 298 00:16:25,240 --> 00:16:28,160 Speaker 1: Germany where the costs are higher. So doing this study 299 00:16:28,800 --> 00:16:30,880 Speaker 1: put you into a debate. I mean, it puts you 300 00:16:30,880 --> 00:16:33,040 Speaker 1: in a discussion with academic groups you know, and other 301 00:16:33,120 --> 00:16:36,160 Speaker 1: organizations around the world. Usually when these groups do these studies, 302 00:16:36,160 --> 00:16:38,560 Speaker 1: they'll do another one. So what's next for you guys 303 00:16:38,640 --> 00:16:41,920 Speaker 1: in this line of research. I think the most important 304 00:16:42,000 --> 00:16:45,320 Speaker 1: thing in terms of in terms of this publication and 305 00:16:45,360 --> 00:16:47,920 Speaker 1: what we found when we reviewed all the other literature 306 00:16:48,480 --> 00:16:52,520 Speaker 1: was actually the lack of transparency was really holding holding 307 00:16:52,560 --> 00:16:57,920 Speaker 1: back the dialogue. Now, what we have done here um 308 00:16:58,040 --> 00:17:00,840 Speaker 1: is we we will be releasing the model over over 309 00:17:00,880 --> 00:17:03,880 Speaker 1: the next month or so, because, as we've talked about, 310 00:17:04,080 --> 00:17:06,879 Speaker 1: there were so many different things that can change the 311 00:17:06,960 --> 00:17:10,680 Speaker 1: ultimate emissions, whether it's the manufacturing process, or the country 312 00:17:10,720 --> 00:17:13,960 Speaker 1: of location or the technology. So by releasing the model 313 00:17:14,560 --> 00:17:18,280 Speaker 1: to our clients, we want to be able to let 314 00:17:18,400 --> 00:17:22,080 Speaker 1: them make those decisions and understand the sensitivity. And I 315 00:17:22,119 --> 00:17:25,159 Speaker 1: think that that's a big that that is a big 316 00:17:25,200 --> 00:17:28,040 Speaker 1: shift to what we've seen so far in the literature. 317 00:17:28,640 --> 00:17:30,359 Speaker 1: So the next step is to get the model out there. 318 00:17:30,440 --> 00:17:34,040 Speaker 1: Huh exactly. So, James, we better wrap up the podcast 319 00:17:34,080 --> 00:17:37,760 Speaker 1: and send you back to your task. James Logan, thanks 320 00:17:37,760 --> 00:17:40,480 Speaker 1: for joining us, Thanks for having US, thanks very much. 321 00:17:43,280 --> 00:17:45,879 Speaker 1: Bloomberguin e F is a service provided by Bloomberg Finance 322 00:17:45,960 --> 00:17:48,800 Speaker 1: LP and its affiliates. This recording does not constitute, nor 323 00:17:48,840 --> 00:17:52,240 Speaker 1: it should it be construed, as investment advice, investment recommendations, 324 00:17:52,400 --> 00:17:55,160 Speaker 1: or a recommendation as to an investment or other strategy. 325 00:17:55,240 --> 00:17:58,400 Speaker 1: Bloomberginna F should not be considered as information sufficient upon 326 00:17:58,440 --> 00:18:01,640 Speaker 1: which to base an investment decision. Neither Bloomberg Finance LP 327 00:18:01,920 --> 00:18:05,120 Speaker 1: nor any of its affiliates makes any representation or warranty 328 00:18:05,200 --> 00:18:08,120 Speaker 1: as to the accuracy or completeness of the information contained 329 00:18:08,119 --> 00:18:10,520 Speaker 1: in this recording, and any liability as a result of 330 00:18:10,560 --> 00:18:12,200 Speaker 1: this recording is expressly disclaimed.