In the quest for electrification and cleaner energy sources, all eyes are on lithium, a.k.a. white gold, and how the market strives with battery prices continuing to fall.
According to BloombergNEF, the dramatic lithium price dropping trend will persist for several years, making battery technology economically viable for global decarbonization efforts. Benchmark Mineral Intelligence echoes this sentiment, highlighting the impending lithium market expansion driven by surging EV demand.
What Drives Lithium Battery Prices Down?
In the past year, the price of lithium iron phosphate (LFP) battery cells in China has dropped 51% to an average of $53 per kilowatt-hour (kWh), which is significantly lower than the global average of $95/kWh last year, per BloombergNEF.
This price decrease is driven by several factors, including:
- Falling Raw Material Prices: Raw material costs, particularly for the cathode, have sharply declined. The cathode’s share of total costs for LFP cells in China dropped from 50% in early 2023 to under 30% this year.
- Overproduction: China’s battery production capacity exceeds global electric vehicle (EV) demand, leading manufacturers to cut prices to maintain market share. Average capacity utilization in Chinese battery plants fell from 51% in 2022 to 43% in 2023 and is expected to decrease further.
- Technological and Manufacturing Improvements: Companies like CATL and BYD are investing heavily in R&D, automation, and new factories, launching new products rapidly.
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One of the most essential ingredients in the production of batteries, lithium powers some of the most important devices in our everyday lives. Dramatic lithium price dropping trends will persist for several years making battery technology economically viable for global decarbonization efforts. Li-FT Power Ltd. (TSX-V: LIFT | US: LIFFF) is the fastest developing North American lithium junior. Click here to learn more about their vast lithium assets including their flagship project, a 100%-owned Yellowknife Lithium project.
A Bright Prediction for Lithium Batteries
BloombergNEF predicts that low lithium battery prices will persist for several years, significantly impacting the automotive and power sectors. At $50/kWh, battery technology is already economically viable for decarbonizing road transport globally.
A major evidence is on point. In China, pack-level prices for the most common battery chemistries have been below the $100/kWh benchmark since October 2023. Lithium iron phosphate (LFP) pack prices are now at $75/kWh, making EVs competitive with combustion cars in most segments.

Additionally, Chinese EVs are now the cheapest drivetrain by average transaction price, even excluding mini-city cars. This shift will gradually reflect outside China, benefiting commercial EV manufacturers and reducing the premium they pay for batteries.

With the lithium battery prices dropping fast, another market stands to gain a lot from it – energy storage.
Turnkey energy storage systems are 43% cheaper than a year ago. Global stationary storage installations are projected to rise to 155 GWh this year, up 61% from last year, according to BNEF data.
The narrative of perpetual battery and battery metal shortages has been challenged by recent developments. For instance, Toyota’s assertion last year that there were not enough batteries to meet global demand now appears outdated as battery prices continue to fall.
In fact, the substantial drop in battery prices in China could revolutionize the global automotive market by making EVs more affordable and accelerating the transition to renewable energy storage solutions.
More notably, it signals that the lithium market is on the verge of a significant expansion in the coming years, as what the Benchmark Mineral Intelligence highlights in its Q2 2024 Lithium Market Overview. Benchmark is a prominent provider of independent data and advisory services for the lithium-ion battery and EV supply chain.
On the Brink of a Major Expansion
While short-term volatility is expected, long-term prospects indicate a structural deficit as the lithium supply struggles to keep pace with the accelerating EV revolution.
According to Benchmark’s latest report, global lithium demand is projected to reach 1.15 million tonnes of lithium carbonate equivalent (LCE) by 2024, with an astounding 87% driven by batteries, particularly EVs—the dominant end-use application.
Looking ahead, demand is forecasted to more than double, reaching 2.89 million tonnes LCE by 2030. Batteries account for a staggering 94% of consumption, while industrial uses like glass and ceramics decline to just 6% of the total.
Simon Moores, CEO of Benchmark Mineral Intelligence remarked on this trend, saying:
“The lithium market is facing a demand tsunami from the rise of EVs that will put immense pressure on supply. Every auto maker has ambitious EV targets, and lithium-ion batteries are the enabling technology.”
On the supply side, Australia led lithium production in 2023 with a 40% global market share from hard rock mines, followed by Chile at 24%. However, Chinese production is anticipated to surpass Chile by 2025 as new projects come online.
Geographical diversification in lithium mining will increase as the market expands, yet the concentration of lithium chemical production remains high in China and South America. Significant capital investments are deemed necessary to expand current operations and meet future demand.
Benchmark’s price forecast sees spodumene concentrate, a key driver of lithium chemical prices, to average $5,000 per tonne longer-term. This translates to a lithium carbonate price of around $30,000 per tonne.
What All These Mean for Investors?
For investors, the lithium market’s growth trajectory presents opportunities across producers like Albemarle, SQM, Ganfeng Lithium, and Pilbara Minerals, as well as battery manufacturers, EV makers, and ETFs focusing on the EV supply chain. Moores emphasized that white gold is pivotal in unlocking the EV and clean energy revolution. This calls for unprecedented scaling that hinges on significantly higher prices.
Investors must meticulously navigate opportunities and threats in this dynamic market.
- LITHIUM COMPANY SPOTLIGHT: Li-FT Power: The Fastest Developing Lithium Junior
Despite recent challenges such as oversupply and lower-than-anticipated EV sales in China, which led to substantial price declines for lithium carbonate, the long-term outlook remains optimistic. Anticipated strong rebound in demand with accelerating global EV adoption suggests potential price recovery from 2025 onwards.
But the caveat? Sustained high prices are necessary to incentivize new supply to meet future demand for lithium through the decade.
The post Lithium Markets in Limbo: Next Leg Up or Down? appeared first on Carbon Credits.
Carbon Footprint
The Strategic Case for Nature-Based Carbon Investments
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
- 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).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- 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.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
Carbon Footprint
How to buy plastic credits, and what to check before you do
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
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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