Saturday 1-Oct-2022
9.6 C
Frankfurt am Main

Nordic Pine and Spruce Trees Become Electric Car Batteries

OpinionsNordic Pine and Spruce Trees Become Electric Car Batteries

Svenska Dagbladet, one of the top daily newspapers in Sweden, recently published an interesting article on renewable graphite, an innovation by Nordic paper and packaging giant Stora Enso, the sixth largest company in its sector in a global comparison. Stora Enso was founded following a merger between Swedish mining and forestry products company Stora and Finnish forestry products business Enso-Gutzeit Oy in 1998.

In an interview with Tomas Augustsson of Svenska Dagbladet in January 2022, Lauri Lehtonen, Innovation Manager for Biomaterials at Stora Enso, talks about using raw materials from Nordic forests to make electric vehicle batteries more environmentally friendly.

Nordic renewable raw material from trees instead of Chinese mines and fossil-based graphite. This could be the sustainable solution for European battery factories and electric car manufacturers. Stora Enso believes in a new and large market for the forest industry.

Lauri Lehtonen is enthusiastic. As Innovation Manager for Stora Enso’s biomaterials, he sees a new market opening. And it is the rapid increase in the demand for electric vehicles that is behind it. Or rather, the increasing number of electric vehicles are creating a huge demand for lithium-ion batteries.

Lehtonen believes that the forest industry would be able to replace at least one of the rare substances that battery manufacturers are so dependent on – graphite. The mineral is mined either in underground mines or open pits. Or made as synthetic graphite from oil in an energy-intensive process.

The new alternative that Stora Enso is investing in comes instead from the forest and is based on lignin. A substance that is usually described as the “glue” that holds the trees together. “The growth volumes in the Nordic forests are so ample that half of it could cover the lignin needs of the European electric car industry,” says Lehtonen. According to Stora Enso’s calculations, the global battery market will increase tenfold in the next ten years. The company also expects to have potential sales of appr. EUR 1 billion in this rapidly growing market around 2025.

“It’s pretty amazing. But these are large forests, and we have a very valuable asset here,” says Lehtonen. There is no new revolutionary formula behind it. On the contrary, the method was developed in the 1990s. There was no shortage of new materials for batteries at the time.

“Arriving at the right time in the market is very important when it comes to innovation. In the 1990s, the market was small, but now the growth is exponential, and it is the electric vehicles that are driving it,” says Lehtonen when explaining why interest in a lignin-based material in the batteries has gained momentum.

Growth in the electric vehicle market is evident in many parts of the world. In Sweden, for example, the share of electric cars and rechargeable hybrid electric vehicles doubled last year and one in five new cars sold in the country were fully electric.

The increasing number of EV’s is in many ways a major advantage for the environment. Unlike fossil fuel vehicles, electric cars do not produce direct greenhouse gas emissions. However, there will be large CO2 emissions of carbon dioxide when electric cars are manufactured, significantly greater than for traditional cars. And it is mainly the production of the batteries that causes emissions, according to calculations from Swedish electric car manufacturer Polestar.

There is also another challenge with batteries. To manufacture them, a range of raw materials are required that can cause major environmental damage when they are mined. Sometimes the refined products are also made under dangerous or unhealthy working conditions.

From a European perspective, there is another major drawback. Almost all the raw materials, 99% according to the European Commission, needed to make batteries for electric cars in Europe come from other parts of the world. Two-thirds of the graphite produced today, for example, comes from China. Mozambique, India and Brazil also have a reasonably large production, while the European contribution is almost negligible.

This, in turn, has led the European Commission to classify graphite as a critical asset for coping with the need of electrification of vehicles in the 2020s. Now the management of Stora Enso hopes to replace graphite with a similar material that basically comes from ordinary pine and spruce trees.

The trees contain about third of its mass of lignin. Today, it is almost a residual product that is, among other things, burned as firewood. Many people also have other plans for lignin. For example, it can be used as a replacement for plastics or fibres to create strong materials used to build aircraft, wind turbines and the like. Or, as mentioned, to replace the graphite that makes up one part of the batteries, the anode.

The trees in the Nordic forests could simply become a raw material that can make the European battery industry that much more environmentally friendly. In addition, the high dependence on non-EU countries is reduced. It is important to electrify vehicles. But it also requires a lot of materials, like graphite. It is now produced in a very fossil-intensive way, and we want to make it sustainable instead,” says Lehtonen.

At the pulp mill in Sunila, Finland, Stora Enso is already working on a pilot plant for its graphite material. The aim is to have a commercial production up and running within a couple of years. Within a few more years, production may be spread to five separate plants.

But it also depends on the battery manufacturers really wanting to use the new wood-based material. Stora Enso wants to attract customers who will appreciate that batteries with their anode material can be charged faster than batteries with traditional graphite. They also work better at low temperatures. One apparent disadvantage is that the vehicle’s range will be somewhat shorter. But there are ways to compensate for it. Another crucial issue is also the price. “It will be competitive”, Lehtonen assures.

There are very few potential buyers in Europe. But the picture can change quickly when companies such as Northvolt, Volkswagen and Volvo Cars are investing in a rapid expansion of battery factories. In total, there are finalised and funded plans in existence for some 30 very large battery plants in Europe and a further ten are known to be in the pipeline.

At Northvolt, there is also great interest in finding new alternatives. Jesper Wigardt, Head of Communications at the Swedish company, points out that Northvolt generally tries to buy materials as close to its production as possible.

“We would like to have more local value chains in Europe, and we see a lot of good projects around it. This also applies to graphite and the anode side, where it is interesting to see what the forest can contribute,” says Wigardt.

But he also points out that Europe is starting from a low level. The global battery industry has so far been concentrated in the eastern parts of Asia. “Things are moving forward in Europe, but we are building an industry from virtually zero,” he says.

Wood becomes hard coal

Stora Enso makes its anode material using lignin from trees. The lignin is converted under high heat into hard carbon, which can then be used instead of synthetic graphite created from oil products or ordinary graphite from mines and open pits.

Graphite mix in the battery

The lithium-ion batteries used in electric vehicles consist of several parts. The anode is built from a copper foil with a graphite mix on it. In the cathode, some type of metal oxide or iron phosphate is used. For example, it could be lithium-manganese dioxide or lithium-nickel-manganese cobalt oxide.

Graphite consists of pure carbon, just like diamonds. Sweden has some deposits of graphite, mainly in the northern parts of the country. From time to time, graphite has been mined in the Kringel mine in Ovanåker municipality.

Author: Jauri Häkkä, LinkedIn

Sources: Svenska Dagbladet, Swedish Battery Association and SGU, Geological Survey of Sweden.

Jauri Häkkä, Principal, Widhaby Advisors. Jauri is the founder of Widhaby Advisors, a Stockholm-based firm focusing on investment strategy, asset allocation and portfolio construction, specialising on alternative investments, private markets and sustainability. Having 25 years+ experience in portfolio management and fund/manager selection, he has held senior positions at Nordic asset managers – including Executive Director and PM at Nordea Asset Management between 2006 and 2016. Jauri serves currently in several non-executive roles, including board memberships in APFI and Scandinavian Financial Research as well as senior advisor roles at C8 Technologies and Sijoittaja Group. He holds a MSc (Econ.) degree from Hanken School of Economics in Helsinki and is a Certified EFFAS Financial Analyst.