This December, the International Council on Clean Transportation (ICCT) released a report- “A Global and Regional Battery Material Outlook” that emphasized the critical need for major vehicle markets to achieve 100% BEV sales for new light-duty vehicles by 2035 and heavy-duty vehicles by 2040. This is in conjunction with the Paris Agreement’s target of limiting global warming to below 2°C. While progress lags behind this trajectory, many nations are setting ambitious targets and exploring new measures to accelerate vehicle electrification. This transition will drive a sharp rise in demand for batteries and essential materials like nickel, lithium, and cobalt.
Nickel Demand Soars with EV Batteries
Governments worldwide are adopting policies to expand battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) to combat global warming and air pollution.
The surge in EV adoption has significantly boosted demand for nickel, a key component in battery production. This analysis highlights trends in battery technology and the growing importance of nickel while exploring strategies to manage the demand for this material.
To begin with, let’s study the growth trajectory of electric vehicles as explained in the ICCT report.
- Baseline projections estimate that global annual battery demand for road transport will grow from 808 GWh in 2023 to 3.8 TWh by 2030, reaching 7.0 TWh by 2040.
- Light-duty vehicle (LDV) BEV battery demand alone is expected to increase ninefold by 2050, while heavy-duty vehicles (HDVs) will see a 24-fold jump.
Moving on nickel’s role in the battery landscape continues to evolve. The silvery-white metal plays a vital role in high-performance batteries like lithium nickel manganese cobalt oxide (NMC) variants. This variant has higher nickel content and unique features like better energy storage and vehicle range. Thus, as EV adoption rises, nickel demand is expected to soar.
- The global nickel demand for EV batteries will reach 1.4 million metric tons (Mt) by 2030 and 2.2 Mt by 2040.
Image: Annual global demand for nickel under the baseline and demand reduction scenarios, all with the baseline battery technology share
Tracking Nickel Demand for Batteries Across Regions
China
Nickel demand for batteries in China is expected to grow significantly, increasing from 93 kt in 2023 to 273 kt in 2030 and 379 kt in 2040. This rise is mainly due to the emergence of high-nickel NMC variants, even when the overall share of NMC batteries declines. However, policy measures like recycling programs and the promotion of smaller battery sizes could help reduce nickel demand by up to 29% by 2050.
United States
In the U.S. demand for nickel demand is set to surge from 50 kt in 2023 to 359 kt in 2030 and 471 kt in 2040. This reflects rising sales of high-nickel, low-cobalt NMC variants, such as NMC811. Additionally, recycling and changes in cathode composition are expected to moderate long-term demand growth.
European Union
The EU forecasts demand for nickel to increase from 71 kt in 2023 to 353 kt in 2030 and 623 kt in 2040. High-nickel variants, including NMC811 and NMC955, will dominate the market. However, smaller battery sizes and recycling could cut demand by 29% in 2035 and 16% by 2050.
MUST READ: Powering the Future of Nickel with NMC 811 Batteries
India and Indonesia
Emerging economies like India will see a nickel demand surge, projected from 1 kt in 2023 to 20 kt in 2030 and 67 kt in 2040. Notably, industrialists predict that this growth will be driven by expanding BEV sales, especially two- and three-wheelers, and the adoption of high-nickel variants.
In Indonesia, nickel demand will climb from 0.18 kt in 2023 to 8 kt in 2030 and 27 kt in 2040. Indonesia’s rich nickel resources make it a top player in NMC battery production, potentially driving higher demand under NMC-dominant scenarios. On the contrary, a shift to high LFP market shares could reduce nickel demand.
Tackling Nickel Supply Challenges Amid Surging Demand
From the above study, we saw that high-nickel NMC batteries currently drive global nickel demand, with China, the United States, and the European Union leading this surge. However, advancements in battery technologies present viable pathways to reduce reliance on nickel.
For example, expanding LFP battery adoption could decrease nickel demand by 33% by 2030 and 21% by 2040 compared to baseline projections. Similarly, sodium-ion batteries, a promising technology with minimal nickel content, are expected to replace some LFP batteries. Thereby, further alleviating supply pressures.
These emerging technologies showcase the industry’s adaptability in overcoming supply chain challenges and addressing rising material costs. The growing shift toward diverse battery chemistries demonstrates the potential to balance material demand while maintaining electrification goals.
Strategies for a Sustainable Supply Chain
Ensuring a sustainable battery supply chain requires proactive strategies to manage nickel demand effectively. Key approaches include:
- Material Innovation: Developing and scaling low-nickel or nickel-free battery chemistries like sodium-ion and solid-state batteries to reduce dependency on critical materials.
- Battery Recycling: Investing in advanced recycling technologies to recover nickel and other valuable materials from used batteries, creating a circular economy.
- Smaller Batteries: Promoting EV models with smaller battery sizes to optimize material use and reduce the strain on raw material supplies.
Boosting Domestic Battery Production and Mining Capacities
Financial incentives are vital for strengthening domestic battery production and supporting material supply chains. Policies like the U.S. Inflation Reduction Act (IRA) provide tax credits for battery manufacturing, while the EU’s Battery Fund aims to boost battery production across Europe. Similarly, India’s FAME scheme and Indonesia’s reduced VAT for EVs link purchase incentives to the use of local components, enhancing domestic supply chains. These initiatives connect financial support to local manufacturing, fostering self-reliance and industry growth.
A robust EV supply chain also requires upstream investments in mining and refining capacities. Under baseline scenarios, nickel mining is projected to meet 97% of global demand by 2030. ICCP predicts if LFP batteries gain more market share then nickel supply could exceed demand to adapt to the industry dynamics.
Disclaimer: Visuals and Data Source
Alaska Energy Metals: An Emerging Nickel Player
However, mining and refining capacities face challenges, such as long project lead times and regional concentration. Governments with domestic reserves can step in with financial support to expand operations. For instance, the IRA mandates that some critical EV battery materials must be mined, refined, or recycled in the U.S. or allied countries. This ensures stable material flows, secures supply chains, and strengthens local economies.
By diversifying mining and refining capacities while promoting alternative battery chemistries, the industry can balance growth with sustainability and resource conservation.
Significantly amid all these challenging market conditions, an emerging player is targeting U.S. nickel independence. Alaska Energy Metals Corporation (AEMC) is leading efforts to support the U.S. energy transition through its flagship Nikolai project in Alaska. The site holds a significant resource of nickel, copper, cobalt, and platinum group metals. And the Canadian Nickel Junior is sourcing them sustainably.
Thus, a company like AEMC will play a significant role in reducing U.S. reliance on imports with robust exploration plans for nickel and other critical minerals.
- FEATURED: Live Nickel Prices
- CHECK OUT: Unlocking Alaska’s Nickel to Drive America’s Clean Energy Revolution
The post Nickel Supply Woes: Innovations Steering a Sustainable EV Future appeared first on Carbon Credits.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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.
Net zero is often described as a balancing act: cut what you can, account for the rest, and reach zero on the ledger. That framing is useful, but it leaves something out. It treats every tonne of carbon as interchangeable and every route to zero as equally sound, while the science tells a more specific story.
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