"Carbon neutrality isn't something CATL (Ningde Times) can do alone. To hit the goal, 80%–90% of the reduction effort must be pushed together with the supply chain. Over the next 10 years, we plan to achieve carbon neutrality together with more than 100 major steel suppliers and 200–300 key suppliers."
CATL, the world's largest battery maker, has rolled up its sleeves for decarbonization. After earning international carbon-neutral certification for all 20 of its production plants early this year, it will, as an industry first, trace carbon data across the entire supply chain and link it to actual procurement criteria to take on carbon neutrality across the battery supply chain by 2035. Beyond simply switching the power source at battery factories, the company says it will change production methods across the entire process of making batteries—from mineral mining to materials production, logistics, and recycling.
This means the procurement criteria of the world's largest battery maker are changing, a shift expected to ripple across the global battery industry. At CATL headquarters in Ningde, Fujian province, China, on the 18th, Vice President Akin Li said, "The carbon neutrality that CATL is pursuing is a project that spans the entire industry value chain," adding, "We will share our carbon-neutral experience and methodology with supply chain partners to reduce emissions together."
◇ "Carbon-neutral batteries have already become a ticket to overseas markets"
There is market demand for CATL to extend carbon neutrality beyond its own production lines to the entire supply chain. As electric vehicles spread rapidly, batteries have become a core component of the auto industry, and automakers and governments have begun to manage not only emissions during vehicle operation but also emissions generated during battery production.
Amid even predictions that "if a battery isn't carbon-neutral, it will be no different from fossil fuels," Li assessed that "the level of battery emissions has already become one of the key competitive factors." He said, "In Europe, they already require managing carbon-related information in the production of each battery, and many customers are already clearly setting carbon reduction requirements in bid documents," adding, "The carbon neutrality that CATL is pursuing is a means to meet local regulations in overseas business while ensuring sustainability and strengthening future competitiveness."
◇ "CATL should not cut alone"… 80% in the supply chain is the real issue
But cutting emissions only at battery factories was far from enough. According to the company, the emissions structure of batteries is not simple. More than 80% of emissions over CATL's product life cycle occur in the supply chain.
In particular, cathode and anode materials production is cited as a highly energy-intensive process. Because cathode materials typically must be sintered at high temperatures of 700–1000°C for about 40–50 hours, they consume massive energy. On top of that, more than 50% of total emissions come from producing key materials such as metals and structural components. That is why CATL set the goal of "supply chain carbon neutrality by 2035," going beyond factory carbon neutrality last year.
Li said, "CATL is large enough to produce about 748 GWh of batteries last year. For a company of this scale to have achieved carbon neutrality in core operations is a leading example globally and in the industry," adding, "In battery recycling, we are already working with many customers to raise recovery rates to 99.6% for metals such as nickel, cobalt, and manganese, and 96.5% for lithium."
◇ More orders for low-emission firms… CATL to change procurement first
To spur partner participation, CATL plans to prioritize orders for low-emission firms and even offer long-term contracts. In the process, it will proceed step by step from measuring suppliers' emissions to shifting to low-carbon across production, logistics, and recycling. The goal is to change production methods across the industries supplying CATL's batteries, creating a structure in which companies that emit less carbon gain an advantage in CATL's supply chain.
First, CATL is using its own carbon management system to track emissions data across the supply chain, from mineral mining to raw material refining and materials production. It has already secured emissions data from more than 100 key tier-1 suppliers and plans to expand the scope to the entire major upstream supply chain.
It will then introduce low-carbon materials and processes and expand the use of clean power, while also pushing for electrified logistics and recycling of spent batteries. In particular, starting in 2027, it will require carbon footprint submissions in bids for new projects and reflect renewable energy use ratios and energy efficiency in supplier evaluations.
Li said CATL's role is to build this "carbon neutrality equation" in-house and set a precedent for the industry. "For a large battery company like CATL, it is hard to find a peer for apples-to-apples comparison. We are looking closely at carbon-neutral cases in China as well, but fundamentally we have tried things directly and found methods that fit CATL's real conditions," he said, adding, "Through this experience, we are building a methodology that can be applied elsewhere going forward."
He drew a line against concerns that the various measures for carbon neutrality could adversely affect battery quality or price. He said, "Carbon-neutral product design is fundamentally premised on guaranteeing the battery performance that customers demand," adding, "If CATL's carbon neutrality were to pass on additional expense to customers, it would not be sustainable in the first place." He added, "Carbon neutrality is ultimately a benefit, not a burden."