Largest Electric Vehicle Battery Producers Require Cleaner Energy Grids for Decarbonization, According to Research
In the rapidly growing electric vehicle (EV) industry, the carbon footprint of battery manufacturing has come under scrutiny. A recent report by the International Energy Agency reveals that China produces over three-quarters of batteries sold globally and has been responsible for more than 70% of all EV batteries ever produced. However, the carbon intensity of electricity varies significantly by location, with France boasting the lowest carbon intensity, where NMC battery cells could achieve as low as 52 kilogrammes of carbon dioxide equivalent per kilowatt hour.
The Greenpeace report highlights that most leading EV battery manufacturers have not set sufficient targets for 100% renewable electricity use or supply chain emissions reductions, indicating significant carbon footprint challenges in current EV battery production. The report critically assesses emissions reduction efforts across global manufacturers, implying that emissions intensity varies considerably by location and energy sourcing.
Shifting production from China to Europe could result in emissions reductions of 32 to 60 percent, with France attaining the greatest benefit due to its low-carbon grid. Even within Europe, country-to-country differences can result in emissions savings of 30 to 42 percent simply by operating in lower-intensity markets. The report recommends that policymakers and industry prioritize siting gigafactories in regions with cleaner grids or invest in dedicated renewable energy sources for on-site power.
Asia, a key region hosting many top EV battery producers, faces challenges due to reliance on fossil fuel power and slower renewable transitions. The report emphasizes the importance of renewable energy availability and lower carbon-intensive power grids to minimize the carbon footprint of battery manufacturing. Siting gigafactories in regions with cleaner energy grids (such as those with growing investments in renewable energy) is preferable to reduce overall emissions.
It is worth noting that China's increase in renewable energy generation caused the country's emissions to fall for the first time ever in the first quarter of 2025. Battery manufacturing is one of the major sources of emissions contributing to the carbon footprint of lithium-ion batteries, with the second being the production of cathode materials.
The manufacturing stage of battery production is responsible for about one-third of cradle-to-gate carbon dioxide emissions. All top 10 battery manufacturers studied have established net zero targets to be reached by 2050 or earlier. Leading EV battery manufacturers Contemporary Amperex Technology Company Limited (CATL), BYD, and LG Energy Solution (LGES) operate hundreds of gigawatt-hours of capacity in China and Poland, where the carbon intensity of the national grid exceeds 500 grams of CO2 per kilowatt-hour.
Greenpeace's report calls for strong targets for supply chain emission reduction to send a signal to suppliers that they need to take action. CATL, LGES, and Panasonic Energy have both committed to 100% renewable electricity for their operations and established carbon reduction targets for their supply chains, according to Greenpeace.
Greenpeace East Asia campaigner Erin Choi urges all battery makers to set decarbonisation targets for electricity use and raw material sourcing. The report recommends that policymakers and industry prioritize siting gigafactories in regions with cleaner grids or invest in dedicated renewable energy sources for on-site power to ensure cleaner production processes and reduce the carbon footprint of EV battery manufacturing.
- Net zero targets have been set by all top 10 battery manufacturers, aiming to be achieved by 2050 or earlier, as highlighted in the Greenpeace report.
- The manufacturing stage of battery production is responsible for about one-third of cradle-to-gate carbon dioxide emissions.
- Shifting production from countries with high carbon-intensive power grids, such as China, to regions with cleaner grids, like France or those with growing investments in renewable energy, could lead to significant emissions reductions.
- The SDG aiming for responsible consumption and production can be advanced by reducing the carbon footprint of battery manufacturing, a major source of emissions contributing to the carbon footprint of lithium-ion batteries.
- Data-and-cloud-computing technology can play a crucial role in tracking the carbon footprint of the EV industry, helping manufacturers to make more informed decisions regarding energy sourcing and emissions reductions.
- Environmental science, technology, and finance must collaborate to create a more sustainable EV industry, focusing on renewable energy, carbon reduction, and cleaner production processes to combat climate-change impacts and achieve a net-zero carbon future.
