US government commits to funding lithium revolutions

The US government will fund 20 companies across 12 states to strengthen US independence in the new electric age. Funding of USD 2.8 billion has been pledged by Washington, while an additional USD 6.2 billion has been promised by the 20 companies named as recipients. The money will be used to build and expand facilities to extract and process lithium, graphite and other lithium battery materials, make components, and demonstrate new approaches.

Potential environmental impact

According to representatives of the Biden administration, “Currently, virtually all lithium, graphite, battery-grade nickel, electrolyte salt, electrode binder and iron phosphate cathode materials are produced abroad, and China controls the supply chains for many of these key imports.” There have been deep concerns that the lithium battery era could erode the US’ position as a global industrial leader unless the federal government supports industry initiatives.

Expectations soared because of the uncapped nature of the tax credits on offer. Credit Suisse estimated that federal climate spending would be double the baseline estimate of the USD 400 billion outlined, while the multiplier effect of private investments and green financing programmes could raise the total to nearly USD 1.7 trillion over 10 years.