Lithium may currently be the darling of the clean energy sector, but experts in the European Union are casting a wary eye on the material. The uncertainty is in light of a recent proposal by the European Chemicals Agency (ECHA), which asks relevant agencies to classify lithium in its forms as lithium carbonate, lithium chloride, and lithium hydroxide as materials hazardous to human health.
While regulators are still on the fence regarding the issue, leading lithium company Albemarle Corporation finds that a yes vote may force them to shut down their plant in Langelsheim, Germany.
According to Albemarle’s chief financial officer Scott Tozier, the company would be unable to import its primary feedstock – lithium chloride – should the EU declare lithium as a dangerous substance. As Albemarle’s lithium sales earn the company around $500 million a year, the possible closure of its German processing plant will have a serious impact on its bottom line.
In addition, hundreds of people would be put out of work if the company is forced to terminate its operations in Germany. Albemarle’s Langelsheim plant has been operating as a lithium processing facility since 1921 and employs over 600 workers. The plant also accounts for 8% of the company’s projected net sales for this year.
Tozier added that this possible reclassification of lithium would also hamper any initiatives in the EU to localize the supply chain for green battery production. Battery makers may be forced to move the process to non-EU nations. In which case, companies like Albemarle would not be able to convert materials within their own premises and the cost of sending lithium out and bringing it back in to produce cathodes will warrant additional expenses.
Other industry officials and experts have concurred with the Albemarle statement and have all expressed concerns regarding the future of lithium-ion battery production and recycling within the region.
While the ECHA’s proposal is currently under consideration by the European Commission, EY member states are giving their respective opinions on it to a committee slated to meet on July 5 and 6, 2022. Lithium will be just one of several chemicals that have been recommended for reclassification as hazardous materials, and the committee is expected to make its decision towards the end of this year or by early 2023.
In the meantime, the EU and the United States are moving forward to establish better, more secure, and independent supply chains within their territories. They aim to reduce their reliance on China as the primary source of lithium and lithium compounds for clean power.