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Is Direct Lithium Extraction the Key to Solving the Lithium Shortage Crisis?

The rise of Direct Lithium Extraction (DLE) technology promises to open up new sources of lithium supply this decade, potentially helping to avert a forecasted shortfall. According to a new Benchmark special report, DLE represents a group of technologies that selectively extract lithium from brines. This novel technology offers a significant shift in the lithium supply landscape.

What is Direct Lithium Extraction?

DLE is a well-established technology with operational projects in China and South America. The process begins with extracting brine from aquifers, which is then transported to a processing unit. Here, lithium is selectively extracted using a resin or adsorption material, while the spent brine is reinjected into the aquifer, ensuring no depletion or environmental damage. 

direct lithium extraction DLE process
Image from Cleantech Lithium website.

The resin captures or adsorbs lithium chloride (LiCl) from the brine. Then the captured lithium is stripped with water, creating a lithium eluate. This eluate undergoes further concentration through reverse osmosis and mechanical evaporation before being processed into battery-grade lithium using industry methods.

One of the key advantages of DLE is its ability to reduce the environmental impact compared to traditional extraction methods. Conventional techniques often lead to soil degradation, water pollution, and destruction of habitats and biodiversity. In contrast, DLE minimizes these issues by avoiding extensive evaporation ponds and using selective extraction methods.

Moreover, DLE technologies help lower the carbon footprint of lithium extraction by reducing energy consumption and greenhouse gas emissions. By employing more efficient and targeted extraction methods, DLE significantly cuts the energy required compared to traditional techniques.

This efficiency contributes to the decarbonization of the energy sector, making DLE a crucial technology for reducing the overall environmental impact of lithium production.

Current and Future DLE Production

Currently, there are 13 operational DLE projects projected to produce about 124,000 tonnes of lithium chemicals in 2024. By 2035, DLE is expected to contribute 14% of the total lithium supply, amounting to around 470,000 tonnes of lithium carbonate equivalent (LCE), as per Benchmark’s Lithium Forecast. 

Direct lithium extraction forecast

While most of this supply will come from continental brines, geothermal and oil fields could contribute 9% and 14% respectively.

The Role of DLE in New Brine Projects

Almost 75% of new brine projects are expected to use some form of DLE. This highlights the growing importance of unconventional lithium sources and the expanding ecosystem of new players in the lithium value chain, especially oil companies that bring substantial capital and expertise.

Despite its potential, DLE’s path to commercialization faces several challenges, including:

  • issues with scalability, 
  • inflationary pressures, and 
  • delays at new brine projects. 

Technical risks also pose hurdles for new investors. Benchmark’s DLE special report outlines various DLE technologies, including adsorption, ion exchange, solvent extraction, and membranes, with adsorption being the most widely adopted and best-established, particularly in China.

Each brine source is unique in terms of impurity levels and lithium concentration, meaning there is no ‘one-size-fits-all solution’. Consequently, each DLE solution must be tailored to the specific environmental and economic conditions of the project.

Unlocking New Sources: Oil-field Brines

DLE technology has the potential to unlock previously undeveloped sources of lithium, such as petro brines and geothermal deposits, by achieving recovery rates of 80-90% compared to the current evaporation yields of 20-50%. This is particularly significant for “unconventional” brine resources in western jurisdictions, aligning with the political priorities in the US and European Union to build localized and diversified streams of critical minerals.

DLE’s potential is attracting significant interest from major players, including oil and gas companies. For example, Standard Lithium’s Stage 1A project in Arkansas could be the first petro brine project to come online in 2026. It has an initial production of 5,000 tonnes per year. 

Additionally, Exxon Mobil has signed a non-binding memorandum of understanding (MOU) with battery producer SK On for the supply of up to 100,000 tonnes from its DLE lithium project in Arkansas.

Despite the enthusiasm, DLE projects face significant capital and operating cost challenges. These projects have seen substantial cost increases as they advance and feasibility studies are updated.

Rising global inflation rates, along with higher equipment, utility, and labor costs, have driven these increases. For example, early-stage DLE projects have an average capital intensity of $37 per kilogram of lithium carbonate equivalent (LCE), while advanced projects average $60 per kilogram of LCE.

Given these challenges, Direct Lithium Extraction is unlikely to be a short-term solution for the lithium industry. Benchmark does not believe that DLE technology alone can bridge the structural deficits in the lithium market. However, it remains a promising avenue for expanding lithium supply in the long run.

The post Is Direct Lithium Extraction the Key to Solving the Lithium Shortage Crisis? appeared first on Carbon Credits.

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The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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