Canada’s battery supply chain holds huge potential, but the time to act is now



Luke Sarabia | Electric Autonomy Canada

Canada is primed to take advantage of the booming international demand for lithium-ion batteries, but the window to act is closing, according to a report by Clean Energy Canada

With electric vehicle production surging globally and many nations working to meet ambitious climate targets, the demand for lithium-ion batteries is expected to grow exponentially for years. As a result, according to a new report from Clean Energy Canada (CEC), developing Canada’s battery supply chain presents a huge opportunity for the nation’s economy, but one that will disappear if action is not taken promptly.

The benefits of Canada developing a robust battery supply chain are clear-cut and gaining increased attention. Electric Autonomy Canada recently announced a national panel discussion series, starting June 1, which will explore why and how stakeholders at various levels can act to turn the huge industrial potential into reality.

Minerals, materials in place

As the report, Turning Talk into Action: Building Canada’s Battery Supply Chainpoints out, the global market for lithium-ion batteries is expected to exceed $100 billion by 2030, causing an explosion in demand for minerals such as graphite, lithium and cobalt. Currently, 80 per cent of the world’s batteries are produced in Japan, South Korea and China, and battery production in the EU has begun ramping up significantly.

With known deposits of those critical minerals, ample clean energy, and access to a highly skilled workforce and a well-integrated North American market, Canada has concrete potential to be a sustainable battery provider.

In fact, BloombergNEF recently ranked this country fourth in the world in terms of that supply chain potential.

However, according to the CEC report, should battery manufacturing not materialize quickly enough domestically, the Asian and European battery sectors will likely pick up the slack, while the EU aims to be entirely self-sufficient in EV batteries by 2025.

Government, industry organization key

The federal government has acknowledged the sector’s potential; its strengthened climate plan committed to a “mines to mobility” battery development strategy, and the 2021 budget included $36.8 million to advance critical battery mineral processing and refining expertise. It has also invested$100 million in Lion Electric’s battery module production facility in Quebec and entered into a Joint Action plan on Critical Minerals with the U.S. government.

But the report, compiled after a two-day workshop involving many leading Canadian players, such as General Motors Canada, Lion Electric, the Mining Association of Canada, the Automotive Parts Manufacturers’ Association and Unifor, says it needs to do more.

Foremost among its recommendations is a call for the formation of an “intergovernmental battery secretariat” to coordinate provincial and federal government efforts to develop Canada’s battery manufacturing potential, as well as an industry-led battery task force. It also recommends the formation of a North American Battery Alliance in order to leverage our U.S.-integrated economy and form a strategy that ensures competitiveness with Europe, where an EU battery alliance already exists among key government and industrial groups for the same purpose.

Equally crucial, however, is maximizing access to Canada’s sustainable battery metals, minerals and materials supply. In order to kickstart a sustainable and robust battery manufacturing sector, the report recommends improving supply chain data and transparency, developing a mineral and metal production action plan and creating a plan for clean investment in Canadian mining projects.

Other key recommendations include launching a dedicated battery industry supply fund, promoting Canada’s brand as a supplier of clean batteries, and creating a battery centre of excellence which could conduct research and direct innovation in next-generation battery technology, advanced battery manufacturing and battery recycling.

Luke Sarabia is a writer and editor based in Toronto. He holds a degree in English and Art History from McGill University.

To read the full commentary, please click here.

To read the referenced report, please click here.