Will China’s Limits on Graphite Hurt Li-ion Production?
China's plan to limit graphite exports has far-reaching effects on electric vehicles and efforts to transition to renewable energy.
Graphite is a form of carbon most people are familiar with as the soft, dark, gray lead of a pencil. That’s just one of its uses—a more critical one in the modern world is as the anode lithium-ion battery anode (negative electrode) that powers cell phones, personal electronics, and, increasingly, electric vehicles (EVs).
Graphite in pegmatite rock. Image used courtesy of USGS
In fact, graphite has become one of the most important materials as the world moves toward electrification, and control of its production has become an issue of global strategic importance. Now, the world’s biggest supplier, China, says it will limit the amount of graphite it exports.
How Graphite Works in Anodes
Graphite consists of sheets of carbon atoms. When a battery is charged, electrons travel from the battery cathode (positive electrode) through an electrolyte and are trapped between the layers of carbon atoms. When the battery discharges, it releases the electrons, which return to the cathode. Graphite can withstand repeated insertion and removal of large numbers of electrons, giving a battery a high charge capacity and a long service life. Other materials, such as silicon, have been tried in lithium-ion battery anodes. However, when electrons are inserted into a silicon structure, the anode expands, creating cracks that severely limit the battery life.
How a graphite anode works in a lithium-ion battery. Image used courtesy of GAO
Two types of graphite are used as battery anode material. Natural graphite is mined primarily in Mozambique, China, Brazil, Madagascar, and Canada. Synthetic graphite is made from natural gas. China processing accounts for more than 60 percent of natural graphite and nearly all synthetic graphite production worldwide. According to Benchmark Minerals, China will provide 92.6 percent of the global battery anode graphite capacity in 2023, and that number will remain strong, with a projection of 90.2 percent in 2035.
To be used in a battery anode, the graphite must be 99.999 percent pure. About 70 percent of anodes are made using synthetic graphite, while about 20 percent come from natural graphite materials. Most leading EV battery companies like CATL, LG Energy Solution, and Panasonic use anode materials supplied by Chinese suppliers like BTR, Shanshan, and Putailai.
Impact of China’s Graphite Trade Limits
China has announced that beginning in December, it will start limiting the export of graphite materials. According to the Chinese Ministry of Commerce and the General Administration of Customs, three types of high-purity graphite used in lithium-ion battery anodes would no longer be exported without permits. Pointing out that in addition to EV anodes, high-purity graphite has significant military applications, China said that the export controls would help protect the country’s “security and interests.”
Depending upon how stringently the permits are enforced, the move could increase graphite prices, reduce supplies available for EV manufacturing, and ultimately result in localized sourcing of graphite in other parts of the world. Russia was once a major supplier of graphite materials before its war with Ukraine and subsequent sanctions. Mining operations in Mozambique, Sweden, and Canada, along with projects in Tanzania and the U.S., are already underway, and more could be added.
In 2022, the U.S. Geological Survey mapped out locations for graphite resources in the U.S. Image used courtesy of USGS
The effects of China’s move on EV production are particularly distressing—a typical EV battery pack contains between 100 and 200 pounds of graphite, and EV sales are growing, with 10 million battery-powered vehicles sold in 2022 and nearly 14 million EVs expected to be sold by the end of 2023.
China’s move is not that surprising, coming on the heels of a U.S. decision at the beginning of October to limit the types of semiconductors that American companies can sell to China. Specifically, the U.S. seeks to prevent China from obtaining the most advanced artificial intelligence-capable computer chips—particularly those that the U.S. says can be used to develop advanced weapon systems. The new rules excluded the types of chips used in phones, video games, and electric vehicles.
In July of this year, China announced a curb on exports of germanium and gallium, two elements critical to semiconductor device manufacturing, as EE Power discussed in September.
The Bigger Picture: Renewable Energy and Climate Change
Tit-for-tat trade squabbles between superpowers are undeniably preferable to naval battles in the South China Sea. Still, limiting the availability of battery anode materials has an indirect effect on the electrification of transportation and battery energy storage systems that allow the adoption of renewable energy sources. Both are necessary to curb global climate change, a task we have been woefully unable to accomplish. To prevent catastrophic changes to our planet’s environment, China and the U.S., the two biggest emitters of greenhouse gases, must set aside trade distractions and work together to solve real problems and move us to a low-carbon economy.