IN FOCUS6-8 min read

How sustainable is lithium?

Lithium is a critical enabler of the energy transition, but its production is often associated with adverse environmental and social impacts. We discuss this paradox and assess whether the benefits of lithium’s use in EV batteries and energy storage outweigh the negatives, or vice versa?

Photo of salt flat in Bolivia


Clara Mallinckrodt
Climate Change Analyst

Lithium is a crucial metal for the energy transition. It is poised to see enormous growth in demand from clean energy technologies, increasing 40-fold by 2040 versus 2020 levels. This is nearly double the expected growth in cobalt and nickel.

The battery industry is currently the leading source of lithium demand and accounted for 74% of end-use in 2022. Lithium-ion is the preferred cell chemistry for battery energy storage systems and electric vehicles (EVs).

But while it is pivotal to transforming the energy system, the production of lithium is associated with various negative environmental and social impacts. Here we look at some of the key issues and summarise best practice for lithium producers.

Where is lithium found?

Lithium is a naturally occurring but non-renewable metal found in three main sources:

  1. Hard rock mineral ores (e.g., spodumene) – these are mostly located in Australia, China, the US and Russia.
  2. Salt brine – more than half of the world’s known lithium resources are found in brines within the ‘lithium triangle’, consisting of Chile, Bolivia, and Argentina.
  3. Clay – lithium-bearing clay minerals account for only a small share of known lithium deposits and are concentrated in areas across China and the southwestern US. We have not included clay in our research as production is relatively minimal and so data on emissions, energy and water use is poor.

The nature and location of lithium deposits has important implications when it comes to the sustainability characteristics of production.

What are the key sustainability considerations around lithium production?


Key issues relate to the depletion of local communities’ freshwater sources, contamination risk from tailings, and infringement on indigenous lands. Although lithium mines and brine facilities tend to be based in rural areas, the effects of production can reach far wider than physical operations.

Investors also need to be cognisant of risks relating to human rights and corruption in producing countries. Lithium extraction is fairly geographically concentrated compared to other critical metals, with more than 90% of global supply coming out of Australia, Chile, and China. As countries in relatively advanced states of economic development, the risks of forced labour, conflict, and social controversies are lower for lithium than other critical metals.


For lithium extracted from brine sources, the depletion of freshwater aquifers presents a major concern. This has been linked to the spread of deserts in already water-stressed arid regions.

When brine is pumped to evaporation ponds at the surface, the lost aquifer volume is recharged by freshwater from the surrounding water table, which eventually becomes brine through the dissolving of mineral-rich bedrock. This displacement-recharge process is not included under companies' reported freshwater 'consumption'. If we account for it, the water intensity of lithium from brine would increase from 9.4m3 to over 100 m3, which is nearly double that of the mineral ore process.

Our analysis suggests that the principal issue associated with mining lithium from mineral ores is energy use. This process involves roasting the ore at very high temperatures, which requires substantial inputs of high energy-density fossil fuels, typically coal.

Overall, there is a considerable difference in the environmental impact of lithium produced from brine versus mineral ore. Brine extraction has a lower environmental impact across three core sustainability indicators, demonstrating 86% lower emissions, 95% less energy use and 84% less water consumption than the mineral ore extraction process.

Sustainability key performance indicators of lithium production processes (per tonne of lithium carbonate equivalent)

Table showing sustainability of lithium KPIs: mineral ore vs brine

How does lithium compare to other metals on sustainability factors?

As part of this research, we have developed a scorecard to assess the sustainability of lithium and other energy transition metals and minerals across multiple social and environmental metrics, covering both production and utilisation impacts. The chart below shows a simplified version of this scorecard.

Assessment of environmental and social impacts of lithium and other critical metals

Table showing Schroders estimates of lithium environmental and social impacts vs other metals

As we can see, our analysis suggests lithium has the least negative impact of the critical minerals in this basket. The scorecard assesses each metal across 18 metrics in total, with lithium scoring better than the basket on carbon intensity (tCO2/$mn) and biodiversity but having a more negative impact in relation to ecosystem services and water stress.

From a social perspective, lithium scores comparatively well but investors should be aware of the potential future risks associated with production expansion in regions with weaker standards on labour and community rights.

Meanwhile, from the perspective of utilisation, the positive impacts of lithium are almost unrivalled when compared to other metals in the sample.

The use of lithium in EVs is associated with an ‘avoided emissions’ benefit relative to vehicles with an internal combustion engine (ICE). On average, EVs generate nearly 30% lower lifecycle emissions and our research finds that lithium inputs account for only a fraction of these emissions, estimated at between 0.3% to 2.5% of the total EV footprint (depending on estimates for vehicle/battery life, range, etc).

In this context, the downstream utilisation benefit of lithium far outweighs the upstream production externalities. The main carbon hotspot in the EV value chain is the emissions associated with electricity used for charging, which accounts for around two-thirds of lifecycle footprint. As electricity grids continue to decarbonise and transition to renewables, the differential between EV and ICE lifecycle emissions should continue to widen and increase the avoided emissions benefits of lithium.

How can lithium production be decarbonised?

For lithium produced from both brine and mineral ore, the processing stage accounts for over 96% of total lifecycle emissions and more than 85% and 96% of overall energy consumption, respectively. This is where lithium miners need to focus their decarbonisation efforts, however the ease of reducing emissions differs for brine and mineral ore producers. Electricity accounts for the majority of energy inputs in the brine process, therefore switching from fossil-based to renewable generation offers a reasonably simple and cost-effective route to decarbonisation.

However, the share of renewables in the grid mix varies drastically by country. Lithium miners in Chile are well-positioned to transition their operations away from fossil-based electricity, due to the relatively high share of local renewable electricity generation: 53%, versus the global average of 39%.

In the mineral ore process, coal is the dominant energy source while electricity constitutes a mere 3.7% of energy inputs. This means the emissions reduction potential from switching to renewables is limited. Ore-based producers in Australia, the US and Canada rely on alternative fuels or retrofitting facilities with carbon capture and storage (CCS) to reduce operational emissions, meaning the transition trajectory is less viable.

What does best practice look like in lithium production?

The below table sets out realistic expectations of company best practice to mitigate the environmental and social impacts of lithium production.

Table listing sustainability best practice for lithium producers

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Clara Mallinckrodt
Climate Change Analyst


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