EU: sourcing low-carbon nickel or risking failing sustainability
And Europe’s new battery regulation will also require EV battery makers to disclose the carbon footprint of their supply chain and, by 2027, comply with a maximum CO₂/kg threshold. This means automakers building cars in Europe will be under pressure to source low-carbon nickel, and other minerals, or risk failing sustainability rules.
Tesla’s Elon Musk urged nickel miners in 2020: “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way.”
That wasn’t just talk: in 2022, Tesla signed a long-term deal with Vale to supply nickel from Vale’s Canadian operations, which run on hydroelectric power. Nickel rounds from Vale’s Long Harbour refinery in Newfoundland carry a carbon footprint of 4.4 tonnes CO2 per tonne of Ni, roughly one-third the industry average for class 1 nickel.
And this is not just a one-off deal, for example:
- in 2021, Tesla agreed to buy nickel for its batteries from BHP, the world’s largest miner, as it looked to secure non-China supply
- in 2022, automaker Stellantis signed an agreement with GME Resources to secure supplies of nickel and cobalt sulphate for EV batteries
- in 2022, General Motors (GM) partnered with Queensland Pacific Metals in Australia for long-term nickel and cobalt supply
The West now hopes to leverage environmental concerns to fix another problem — national security.
