The global battery industry is moving fast, and China’s battery giant CATL is already looking beyond today’s technologies.
At the 2026 Forum on Building China Into an Equipment Manufacturing Power, CATL Chief Scientist Wu Kai highlighted lithium-air batteries as one of the most promising technologies for the future. While the technology is still far from commercial use, its potential could transform electric vehicles (EVs) and energy storage systems over the next decade.
At the same time, CATL is pushing ahead with sodium-ion batteries and expanding its energy storage testing capabilities, showing that the company is working on both near-term and long-term battery solutions.
Why Lithium-Air Batteries Are Creating Excitement
Battery makers constantly search for ways to store more energy in smaller and lighter packages. This is where lithium-air batteries stand out.
- According to Wu Kai, lithium-air batteries could theoretically achieve an energy density of up to 3,500 watt-hours per kilogram (Wh/kg). That is several times higher than today’s commercial lithium-ion batteries.
Higher energy density means a battery can store more power without increasing weight. For electric vehicles, this could translate into significantly longer driving ranges. For energy storage systems, it could mean more power in a smaller footprint.
The concept itself is not new. Scientists first discussed lithium-air batteries in the 1970s, and rechargeable versions appeared in the 1990s. Since then, researchers worldwide have worked to unlock the technology’s potential.
Major companies and research groups have continued exploring the field. Around 2010, IBM conducted extensive lithium-air battery research. More recently, U.S. researchers reported important breakthroughs, including improved cycle life and energy density under laboratory conditions.
However, despite decades of research, lithium-air batteries remain largely confined to laboratories.
How Lithium-Air Batteries Work
Unlike conventional lithium-ion batteries, lithium-air batteries use metallic lithium as the anode.
The biggest difference lies on the cathode side. Instead of relying on heavy solid materials, lithium-air batteries use oxygen from the surrounding air. The oxygen enters through a porous carbon structure and participates in the battery’s chemical reactions.
This design reduces the amount of material required inside the battery, helping create an extremely lightweight system.
Because the battery draws oxygen from the atmosphere, it can theoretically achieve much higher energy density than existing battery technologies.
The table shows why lithium-air technology attracts so much attention. Even compared with advanced solid-state batteries, the theoretical energy storage potential is dramatically higher.
Significant Challenges Still Remain
Despite its promise, lithium-air technology faces several major obstacles.
One challenge involves lithium peroxide, a material that forms during discharge. This compound acts as an electrical insulator, making battery operation less efficient.
In addition, scientists still struggle with slow reaction speeds inside the battery. Catalysts designed to improve these reactions have yet to deliver consistent results.
Another issue is electrolyte stability. Current electrolytes tend to degrade over time, limiting battery lifespan. Furthermore, lithium metal anodes can develop dendrites—tiny needle-like structures that may reduce performance and create safety concerns.
Because of these technical barriers, industry experts generally believe large-scale commercialization remains at least a decade away.
- READ MORE: CATL’s Profit Surges 42% With Global Battery Demand and the Shift to a Zero-Carbon Future
Sodium-Ion Batteries Are Much Closer to Reality
While lithium-air batteries represent a long-term goal, CATL is making faster progress with sodium-ion technology.
The company unveiled its sodium-ion battery platform last year and expects large-scale production to begin in 2026.
Sodium-ion batteries use abundant sodium instead of lithium. Although they generally store less energy than lithium-based batteries, they offer several advantages:
- Lower material costs
- Greater resource availability
- Better performance in cold weather
- Reduced dependence on lithium supply chains
To support commercialization, CATL recently launched Phase VI expansion of its Fuding manufacturing base in Fujian Province.
The company plans to invest approximately RMB 5 billion ($725 million) in a new production line capable of adding 40 gigawatt-hours (GWh) of annual sodium-ion battery capacity.
Meanwhile, CATL and Changan Automobile have announced plans to launch the world’s first mass-produced passenger vehicle powered by sodium-ion batteries. The vehicle is expected to reach customers in mid-2026.
CATL Continues to Dominate Global EV Batteries
CATL’s investment strategy comes as the company strengthens its position in the global battery market.
According to data from SNE Research, CATL installed 141.4 GWh of batteries worldwide during the first four months of 2026. That represented nearly 20% growth compared with the same period last year.
- The company’s global market share climbed to 40.1%, reinforcing its leadership in the EV battery sector.
Chinese battery manufacturers continue to gain ground across the industry. Companies such as CALB, Gotion, EVE Energy, SVOLT, and Sunwoda all reported strong year-over-year growth.
Meanwhile, BYD maintained its position as the world’s second-largest battery supplier. Although its battery installations declined slightly, the company’s overseas EV expansion and battery innovations could support future growth.
CATL Opens World’s Largest Energy Storage Validation Center
Beyond batteries themselves, the company is also investing heavily in energy storage reliability. It recently opened the CATL Xiamen Energy Storage Validation Research Institute (ESVL), which it describes as the world’s largest and most comprehensive energy storage testing and validation platform.
The facility covers roughly 10 hectares and required an investment of around RMB 3 billion ($440 million).
Importantly, CATL says the platform will operate as open infrastructure available to the broader energy storage industry.
Why Real-World Testing Matters
As energy storage installations expand worldwide, performance and reliability have become major concerns.
Many storage projects fail to perform exactly as expected after deployment. Delays in grid connection and operational challenges can increase costs and reduce returns for developers and investors.
CATL believes the industry must move beyond testing individual components and focus on validating entire systems under real operating conditions.
The ESVL facility is designed to evaluate:
- Safety performance
- Grid-support capabilities
- Long-term reliability
- Station-level operational performance
According to Wu Kai, scientific testing and rigorous validation will become increasingly important as energy storage projects grow larger and more complex.
The facility also works with international certification organizations, including TÜV SÜD, TÜV Rheinland, China General Certification Center, and CSA Group.
Looking Ahead
CATL’s latest moves reveal a two-track strategy. On one hand, the company is preparing for the future through advanced technologies such as lithium-air batteries. On the other hand, it is accelerating the commercialization of sodium-ion batteries and expanding energy storage infrastructure today.
Lithium-air batteries may still be years away from reaching consumers. Nevertheless, their enormous theoretical energy density makes them one of the most intriguing battery technologies under development.
Meanwhile, sodium-ion batteries and advanced energy storage systems are already moving toward commercial reality. Together, these efforts could help CATL maintain its position at the center of the rapidly evolving global battery industry.
The post CATL Bets on Lithium-Air Batteries While Expanding Sodium-Ion and Energy Storage Leadership appeared first on Carbon Credits.
The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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