New Zealand-based startup CarbonScape is developing what it says is the first-to-market biographite—a carbon-negative alternative to the critical material used in lithium-ion batteries. As the company sees it, biographite will provide a much-needed alternative for EV and grid-scale battery supply chains by sustainably creating a critical raw material that currently depends on costly and high-emission production processes.

Last month, the company announced a new investment of $18 million—led by renewable materials company Stora Enso Oyj and joined by lithium-ion battery producer ATL (Amperex Technology Ltd.) and other strategic partners—intended to support the commercialization of its biographite and plans to establish production in Europe and the U.S.

“CarbonScape’s biographite enables the establishment of localized battery supply chains from the ground up,” said Ivan Williams, CEO of CarbonScape. “If we are to truly move away from fossil carbon and power our economies through mass electrification, we urgently need sustainable alternatives like biographite to scale quickly. This investment represents a strong statement of support for sustainable sourcing of battery materials for global decarbonization.”

The company says that the strategic partnerships with Stora Enso and ATL will bring expertise from “all sides” of the supply chain, significantly accelerating the company’s growth and biographite’s speed to market.

“Partnering with CarbonScape marks another step on our journey to serve the fast-growing battery market with sustainable, local materials made from trees,” said Juuso Konttinen, Senior Vice President, of Biomaterials Growth Businesses at Stora Enso.

“Our partnership with CarbonScape allows us to continue to create the technology of the future and brings us one step closer to a net-zero economy,” added Joe Kit Chu Lam, ATL Executive Vice President.

CarbonScape began the development of biographite in 2016, aiming to replace fossil carbons with a sustainable alternative, so it appears to have an early lead on the competition. The company “has spent the last three years testing its materials with leading battery manufacturers such as ATL,” Williams told Futurride. “Based on conversations with our network of cell and battery manufacturers, no other companies appear to be at the same stage of commercialization.”

The company’s patented process uses timber and forestry industry by-products such as wood chips as a sustainable alternative to synthetic (petroleum-based) and natural (mined) graphite, the result being a cleaner, competitive, and more secure raw material. Its pilot facility in Marlborough produces biographite for customer testing and validation while providing the necessary scale-up data for global commercialization.

Graphite makes up to 50% of the weight of a lithium-ion battery, CarbonScape citing VC Elements data, with over half of global demand for graphite now coming from the battery sector and the material used primarily for the anode.

“Graphite is also used in other battery components, but by far the greatest volume of it is used for the anode,” said Williams. “In terms of EVs, the typical battery contains between 50 and 100 kg of graphite. That is why the anode is the focus for us. It is where we see biographite making a significant impact— playing a key role in filling the projected supply gap while localizing and securing supply chains with a carbon-negative process.”

Synthetic graphite is favored over mined graphite by battery manufacturers as it is considered to be higher performing, said Williams.

“Currently, synthetic graphite accounts for close to 75% of the graphite used in lithium-ion batteries, the balance being natural graphite and other materials,” he explained. “On a nanoscale, biographite is structurally very similar to synthetic graphite, meaning its in-battery performance compares very well to synthetic graphite.”

According to CarbonScape, graphite production is one of the largest CO2 emitters in the battery raw materials supply chain and represents a significant proportion of the cost of a battery.

“Synthetic (man-made) graphite is produced from fossil-fuel-based feedstocks such as needle coke from oil processing, and natural graphite is a fossil carbon that is mined from the ground, in a similar way to coal,” explained Williams. “Biographite on the other hand, while also man-made, makes use of the carbon that trees capture during photosynthesis. CarbonScape transforms leftover residues from the local forestry industry into a sustainable form of graphite, biographite.”

Adding to the graphite challenge are battery supply chains that are long and complicated, with materials crossing the globe from source, through processing, and battery assembly to reach end consumers.

With countries increasingly competing for raw materials, securing supplies of graphite is key to ramping up production of EVs and renewable energy systems, as reflected in the recent U.S. Final Critical Materials List. A recent analysis by Reuters predicts a global supply deficit of 777,000 t (856,000 ton) by 2030, with EV sales alone due to more than triple by this date.

“Recent regulatory tailwinds show that the time is right for biographite, with the EU’s Critical Raw Materials Act and the U.S.’s Inflation Reduction Act both incentivizing onshoring where possible to bolster supply-chain security,” said Williams. “We remain open to working with additional strategic partners, such as cell and battery manufacturers and EV manufacturers, to strengthen and decarbonize their supply chains too.”

According to CarbonScape, meeting the demand for batteries with synthetic graphite would require more than tripling existing production capacity, using fossil-fuel feedstocks and high-emission processes. To use mined graphite, again citing Reuters, would require almost 100 new mines, each taking around 10 years or more to come online and costing hundreds of millions of dollars, with enormous social and environmental costs.

Biographite’s carbon-negative footprint is said to save up to 30 t (33 ton) of CO2 emissions per tonne of material compared to synthetic or mined graphite. Using biographite will enable battery manufacturers to cut the carbon footprint of each battery by 30%, potentially reducing sector emissions by more than 86 million t (94 million ton) of CO2 per year by 2030.

CarbonScape says its cleaner, faster process could produce enough biographite to meet half the total global projected graphite demand for EV and grid-scale batteries by 2030 using less than 5% of the forestry industry by-products generated annually in Europe and North America.

Crucially, biographite production can be localized near EV and battery manufacturing hubs, helping to vertically integrate domestic and regional supply chains. This also could reduce geopolitical risk as countries compete for minerals and as mineral producers seek a greater share of the value, as reported by Reuters recently in Chile, which plans to nationalize the lithium industry, and in Indonesia, which has banned exports of nickel ore in an attempt to build a domestic industry.