[Podcast] GigaWhat: Clean the messy trail

The clean energy sector maintains that it is crusading the fight against climate change. But first, the road to making clean energy technologies needs to be fixed. The supply chain for the renewable energy sector is riddled with human rights violations while extracting minerals, over-exploitation of resources, lack of recycling policies and many more issues.

In this episode of GigaWhat, Mongabay-India Contributing Editor and the podcast host, Mayank Aggarwal, speaks with Jessie Cato (natural resources programme manager, Business & Human Rights Resource Centre) and Saurav Goyal (founding member, Metastable Materials) about various aspects of the clean technology supply chain.

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Full transcript:

You are listening to Everything Environment by Mongabay-India.

Mayank Aggarwal (MA): The world has placed large bets on renewable energy to tackle climate change. The technology – solar panels, windmills, electric vehicles, gleam with hope. But the road to creating clean energy technology leaves behind a messy trail.

Jessie Cato (JC): We know that renewable energy companies and those who invest in them view themselves as the good guys within the climate crisis. But because of that, there has been less focus on what the adverse impacts of renewable energy projects can be.

MA: Clean tech relies heavily on minerals such as copper, lithium, nickel, cobalt and rare earth elements. And their demand is booming by the day.

Lithium, an irreplaceable component of lithium-ion batteries which are currently at the heart of electric vehicles, is primarily produced in Australia and Chile. Seventy percent of the global cobalt supply – crucial for batteries – comes from the Democratic Republic of Congo.

Since critical minerals come from a few countries, the pressures on those regions are high. Unsafe and unsustainable cobalt mining has led to tragic human rights violations and environmental issues. Several other examples are emerging from countries where such mining occurs, many of them less industrialised nations.

After mining, other clean tech supply chain stages include materials production, equipment manufacturing and construction, transport, operation and end-of-life handling of the technology. Issues at any of these stages directly affect the world’s plan to reduce carbon emissions and build a sustainable future.

India does not mine lithium or cobalt. Neither does it produce some key minerals required for manufacturing photovoltaic cells – silicon, silver, indium, arsenic, etc.

Since countries depend deeply on each other to meet their clean energy requirements, the massive influence of geopolitics is inevitable.

A graph by the International Energy Agency displaying the current processing of cobalt, lithium, nickel, copper and rare earth metals used across clean technologies shows China in the lead.

About 60 percent of global lithium processing – China.

A full 100 percent of natural graphite processing used for battery anodes – China.

The country also leads the manufacturing of solar PV cells and modules.

The COVID-19 pandemic and the Russia-Ukraine conflict exposed the volatility of the clean tech supply chain when the world witnessed shortages of semiconductors and critical minerals for manufacturing clean technology.

All these scenarios put India in a tough spot in the global clean energy race.

In this episode of GigaWhat, we hear about the role of countries, investors and companies in ensuring a sustainable supply chain and why a course correction is urgent.

I’m Mayank Aggarwal, Contributing Editor at Mongabay-India. We are an online publication dedicated to bringing you stories on science and the environment in India. In our special podcast series, GigaWhat, we’ll explore some of the biggest questions, challenges, and opportunities in India’s transition from fossil fuels to clean energy sources.

JC: My name is Jessie, and I’m the programme manager of Natural Resources at the Business and Human Rights Resource Centre. And we focus on human rights along the renewable energy value chain with a specific focus on transition, mineral mining, and renewable energy projects.

I think a lot of stakeholders like civil society and industry understand that one of the challenges around ensuring that supply chains are clean or rights-respecting is the opacity of the supply chains currently, which is why you see an emphasis at the moment on pushing the industry to undertake supply chain mapping. We know that tracing from a mine site to technology, whether that be wind and solar or battery technology, is extremely challenging right now. And we often lose that traceability around the smelting and manufacturing stage.

I think there’s a general understanding that there are human rights problems with extraction and that those problems have been historic. Some of those are more well known, like cobalt and child labour. But extraction as a whole is impactful. It may be more present in some locations or more well-known, but it is not absent anywhere.

MA: A Mongabay article by Claire Asher notes that a deeply-researched example of technological-critical element mining impacts is in Inner Mongolia, an autonomous region of China. The Bayan’obo district supplies half the world’s rare-earth elements. For decades, the Bayan’obo open-pit iron mine has also extracted niobium, lanthanum and neodymium for smartphones, electric cars and wind turbines, with local communities and ecosystems paying a heavy price.

Similarly, biodiversity and human health are at stake in Indonesia, one of the world’s richest nickel sources for making wind turbines and electric vehicles.

JC: There is a push-through for a lot of companies who want to implement more robust human rights due diligence that includes steps to identify and mitigate and address potential abuse and the introduction of the EU mandatory human rights due diligence regulations.

MA: The European Union’s site says that “the proposal aims to foster sustainable and responsible corporate behaviour throughout global value chains.” Companies failing to conduct effective due diligence face administrative penalties and civil liability.

JC: I think it’s going to go a long way in setting the bar for that kind of global standard, particularly as it is a model that is moving away from voluntary compliance. And that’s where we have seen supply chain diligence previously being looked at. And so we’ve companies who haven’t wanted to undertake it or have wanted to undertake it in a light way, those voluntary mechanisms have allowed them to do that.

The EU moving towards a model that is mandatory, that does have repercussions for not meeting it, I think is going to be a significant step towards how companies think about their own supply chain due diligence, but also how renewable companies continue to engage with their mining counterparts, because we know that they currently are not being held accountable for some of the abuses that are happening at the mining site. But they also understand that it is going to be an increased risk to them. And you have seen some civil society already really looking at this traceability and pushing end-user companies. Particularly at the moment, there’s been quite a focus on even companies like Tesla, who have abuses within their supply chain, such as their nickel supply. So this is going to be a growing area of action, I think, in advocacy for civil society. But I also think there is there is movement on a global level that will translate down to regions and countries around what mandatory due diligence looks like across the supply chain.

MA: In the context of the sustainable supply chain for such minerals, the debate is often between a business case versus human rights or impact on the environment. Is there any way to address that?

JC: That debate of business versus human rights is actually pushed by less scrupulous companies and the fossil fuel industry. The idea that human rights violations are an unpleasant but unnecessary part of the energy transition is absolutely false. And if you look at research from organisations like the Resource Centre, we know that the less rights-respecting a project or a company is, the more likely it is to drive conflict. Now, when you have conflict around a project site, what you have are delays, you have strikes, you have protests, you have investors pulling out, and you have projects that absolutely do not go ahead. They do not make business sense anymore.

We’ve seen this at an operational level with really large copper projects. There’s one in Peru, that’s a very good example called Las Bombas. It is consistently being shut down because of conflict with the workers and the community side. And we’ve also seen this in the exploration and licensing process. Most recently, you may have seen reports coming out from Serbia, where Rio Tinto is trying to open a lithium mine and has had strong opposition from the community, which ended up in the government cancelling that project.

Last year, the UN’s main human rights body voted to recognise the right to a safe, clean, healthy and sustainable environment as a human right. And they’ve also appointed a special repertoire to monitor human rights in the context of the climate emergency. Now, that may sound unconnected to supply chains. But that’s a significant step for the UN to take when we know that the supply chains for renewable energy technologies are currently not transparent and have human rights violations both across them and down at the mine.

I think when countries like India are looking at a new sector that is expanding rapidly, there are already these kinds of principles that they can take and develop into a local context that makes sense. And use that as a guiding framework for how they think about expanding their renewable energy sector as well, because governance is not only about strong regulation, it is about enforcement. So it’s great to have strong environmental protections and laws protecting labour rights, but these rights and protections need the political will to be enforced. So there’s work for governments to think about how they are holding companies accountable.

And often, there is pressure on governments to allow companies to behave in a way that perhaps goes against some local laws to continue the investment within the country and to continue the project. And I think there is an increasing shift, not just from companies being held accountable for their overseas projects, but also governments and communities having less tolerance for this kind of behaviour.

MA: The global framework of ESG – environmental, social and governance – is emerging as an important tool for investors to monitor a company’s ethical and sustainability track record. So, bad practices across supply chains will affect investments. In India, the process of applying the ESG framework to assess companies is slowly picking up.

JC: We know that renewable energy companies and those who invest in them view themselves as the good guys within the climate crisis. And for a good reason. We need renewable energy, and it’s an exciting sector. It is going to have the potential to change the world, but because of that, there has been less focus on what the adverse impacts of renewable energy projects can be, and also what the [impacts of] expansion of mining to power these projects is.

So, we feel that highlighting those risks now, while the sector is still taking shape and ensuring that they understand and have the due diligence in place, means that we set the sector up for growing success. And we mitigate, as much as possible, the potential for conflict. I think many investors in the renewable energy sector are making it clear that a company’s human rights policies and practices are critical elements of how they evaluate material risk and financial performance. And they see having these policies and practices in place as a strategic advantage for their assets. So governments are going to play a role in holding those companies accountable. But companies themselves are going to find that if they don’t have these particular policies in place if they don’t have robust human rights due diligence, they’re going to get less and less investment because it is a move that has been put forward by a lot of different investors that they want to see responsible projects, they want to see sustainable and rights-respecting supply chains, they want companies to have this information on hand as well. And so industry working to bring that transparency to their own supply chains is going to be critical for them to be able to get that investment.

MA: India took some steps to ensure a reliable supply of minerals to keep the sector running.

In 2019, the government formed a company Khanij Bidesh India Limited or KABIL, with the participation of three Central Public Sector Enterprises. The objective of KABIL is to ensure a consistent supply of 12 critical and strategic minerals that have a meagre resource base. Among those, lithium and cobalt were significant.

KABIL is building partnerships with mineral-rich countries such as Australia and those in Africa and South America.
When solar panels, batteries and other types of equipment are disposed of, their mineral components also reach the end of the road. But it doesn’t have to be that way. Extracting minerals from electronic waste is one of the solutions to strengthen the supply chain and prevent metals from leaching into the environment.

But Jessie says that the concept of circular economy in the sector has a long way to go. A scalable, profitable technology for efficient recycling is not there yet.

JC: I think the other reason it gets less [attnention] is that it goes to challenge that extractive model that has been profit-driven. If we continuously need to extract minerals to drive renewable energy, that’s a massive win for the mining sector. If we’re able to increase our recycling and reuse of those minerals and things, we need to extract less. And so I think there is work as a whole for governments and society and also the tech companies to look at not just the profit of these different pieces of technology, whether that be wind and solar, but also batteries and smartphones and laptops that use these minerals. But what it means for us to be able to think about more sustainable use of these minerals. So focus less on extraction and more on reuse and recycling. I don’t think that is a conversation that has been properly discussed at a global level.

MA: In the first episode of GigaWhat, we spoke about the lack of policy in India to treat clean tech waste and set up a recycling infrastructure.

One of the experts suggested the need to improve the design of clean tech with a design-to-disassemble principle making the extraction and recycling phase efficient.

A startup based in Bengaluru is attempting to make a business case by extracting copper, aluminum, cobalt, nickel, and lithium from lithium-ion batteries. We spoke to its founding member, Saurav Goyal.

Saurav Goyal (SG): Metastable Materials is an urban mining company. We are starting with lithium-ion batteries for now. We intend to get the end-of-life batteries from consumer electronics or every automobile and get the precious metals out of them, which include lithium, cobalt, and nickel. All these metals are already in a supply crunch. So, we intend to extract these metals out of these dead batteries and then throw them into the native supply chains so that they can be reused, instead of looking forward to just the freshly mined metals out of the ores.

It’s kind of a free supply coming in into India. With the batteries, we are getting lithium, with the batteries again, we are getting cobalt, with other electronic items also, we are getting all these metals. So, it would be a huge waste of potential to throw these batteries and e-waste into landfills or to export them for processing to some other country.

MA: Shubham Vishvakarma founded Metastable Materials in 2021. The idea is rooted in his IIT Roorkee days when he worked to find a better recycling process for lithium-ion batteries. Now, the company claims to use a cost-effective and chemical-free method for extraction. With a new R&D center in Bengaluru, the company is yet to roll out its services on a large scale.

SG: So here we are working on optimising processes, increasing the efficiency and achieving higher purity and yield for the next two-three years. What we want to do is to set up the infrastructure for the Indian context actually to create all these lithium-ion batteries.

As you know, the demand for EVs is increasing day by day, and dead batteries are soon going to come back into the supply chain, where people need to take care of these batteries before it becomes a huge headache for the environmental agencies and for the government.

JC: The renewable energy sector itself, globally and at national levels, I think, is at a critical point in setting the tone for what the energy transition is going to look like. Is it going to replicate the profit-driven extractive model which has caused significant harm? Or is it going to be the good guy, is it going to be a new path for the energy sector that has human rights at the centre, the window for that change is closing. Because, like any new and growing sector, there is only a small time to influence how it’s going to work. And then those practices become embedded. And that just becomes the way that it is.

So if we don’t push for that change now, locally, nationally, globally, if we accept that a transition is going to be fast, but it’s not going to be fair, then we risk all these kinds of abuses that you mentioned – allowing human rights violations to flourish, replicating the abuses of the extractive sector and setting that as the model for the energy transition.

MA: Please share this episode with your friends and family or on social media.

This show was produced and scripted by my colleague Kartik Chandramouli, edited and mixed by Tejas Dayananda Sagar, copy edits by Aditi Tandon, we got production assistance from Ayushi Kothari, and the GigaWhat artwork is by Pooja Gupta. We’ll be out with another episode of GigaWhat soon. Take care.

 

Banner image: Lithium mine in Salar de Uyuni, Bolivia (2018). Photo by Oton Barros (DSR/OBT/INPE)/Flickr.