Energy Exploration Technologies, Inc. (EnergyX), led by CEO Teague Egan, has moved the United States closer to building a reliable domestic lithium supply chain. The company recently commissioned its Project Lonestar™ lithium demonstration facility in Texas, marking a key milestone in scaling direct lithium extraction (DLE) technologies.
This development comes at a time when lithium demand is rising sharply due to electric vehicles and energy storage systems. At the same time, the U.S. remains heavily dependent on foreign processing, particularly from China.
- According to the US import data and Lithium import data of the USA, the total value of US lithium imports reached $432.36 million in 2024, a 9% decline from the previous year.
- The total value of US lithium imports (cells & batteries) accounted for $205.29 million in the first 6 months of 2025.
Against this backdrop, EnergyX’s progress offers both technological validation and strategic value.
From Concept to Reality: How Project Lonestar™ Works
Project Lonestar™ is EnergyX’s first major lithium project in the United States and its second globally. The demonstration plant, located in the Smackover region spanning Texas and Arkansas, is now operational and uses industrial-grade systems rather than small pilot equipment.
- The facility produces around 250 metric tons per year of lithium carbonate equivalent (LCE).
While this output is modest compared to global supply, its importance lies in proving that EnergyX’s proprietary GET-Lit™ technology can efficiently extract lithium from brine. The plant processes locally sourced Smackover brine, a resource that has historically been underutilized despite its lithium potential.
Unlike traditional lithium production, which often relies on hard-rock mining or evaporation ponds, DLE technology directly extracts lithium from brine using advanced filtration and chemical processes. This reduces production time and may lower environmental impact.
- More importantly, the Lonestar™ plant can supply 5 to 25 tons of battery-grade lithium samples to customers.
This allows battery manufacturers to test and validate the material before committing to large-scale supply agreements.
Scaling Up: From Demonstration to Commercial Production
The demonstration plant is only the first phase of a much larger plan. EnergyX aims to scale Project Lonestar™ into a full commercial operation capable of producing 50,000 tonnes of LCE annually across two phases.
- The first phase alone targets 12,500 tonnes per year, which would already place it among the more significant lithium producers in the U.S.
- Significantly, the company has invested approximately $30 million in the demonstration facility, supported in part by a $5 million grant from the U.S. Department of Energy.
- For the full-scale project, EnergyX estimates total capital expenditure at around $1.05 billion.
Cost metrics suggest strong economic potential. The company estimates capital costs at roughly $21,000 per tonne of capacity and operating costs near $3,750 per tonne. If these figures hold at scale, the project could compete effectively with global lithium producers, particularly in a market where cost efficiency is becoming increasingly important.
Teague Egan, Founder & CEO of EnergyX, said,
“Bringing the biggest integrated DLE lithium demonstration plant online in the United States is a foundational milestone for EnergyX and for U.S. domestic lithium production in general. This facility not only validates the performance of our technology on an industrial scale under real-world conditions, but also establishes EnergyX as the lowest cost producer in the U.S. Ultimately this benefits all our customers who need large volumes of lithium for EV and ESS applications, as well as any lithium resource owners looking to implement best-in-class DLE technology whom we are happy to license to.”
Breaking the Bottleneck: Why U.S. Refining Matters
One of the biggest challenges facing the U.S. lithium sector is not resource availability but refining capacity. While lithium deposits exist across the country, most battery-grade lithium chemicals are processed overseas.
China dominates this segment, controlling roughly 70 to 75 percent of global lithium chemical conversion capacity. This concentration creates a structural dependency. Even when lithium is mined in the U.S. or allied countries, it is often shipped abroad for processing before returning as battery materials.
Project Lonestar™ directly addresses this gap. By integrating extraction and refining into a single domestic operation, EnergyX is working to build a complete “brine-to-battery” value chain within the United States. This approach could reduce reliance on foreign processing and improve supply chain resilience.
U.S. Senator Ted Cruz highlighted the project’s importance, noting that domestic lithium production supports both energy security and defense readiness, particularly for applications in advanced battery systems.
- CHECK: LIVE LITHIUM PRICES
The Current Landscape: Limited Supply, Big Ambitions
How Much Lithium Does the U.S. Have?
The United States has a strong lithium resource base, but it still struggles to produce it at scale. Data from the United States Geological Survey shows that the country held about 14 million tonnes of lithium reserves in 2023, ranking it third globally.
Despite this, U.S. production remains very low. The country produced only 615 metric tonnes of lithium in 2023, according to USGS. This is tiny compared to global leaders. Australia produced around 86,000 tonnes, while Chile reached about 56,530 tonnes in the same year.
Lithium Reserves by Country 2026
In simple terms, the U.S. has plenty of lithium underground. But it still needs time, investment, and better infrastructure to turn those resources into a real supply.
Investment is flowing into regions such as Nevada, North Carolina, and Arkansas. If even a portion of these reserves is converted into production, the U.S. could significantly reduce its reliance on imported lithium.
Active Resources and Future Potential
At present, U.S. lithium production remains relatively small. The only active large-scale operation is the Silver Peak Mine in Nevada, which produces between 5,000 and 10,000 tonnes of LCE annually, depending on market conditions.
However, several projects are in development that could significantly expand capacity. The Thacker Pass project, for example, is expected to produce around 40,000 tonnes per year in its first phase once operational later in the decade.
In addition, brine-based developments in the Smackover region aim to produce tens of thousands of tonnes annually, with long-term plans exceeding 100,000 tonnes across multiple sites.
These projects indicate a shift from a niche domestic industry to a more substantial production base. Still, timelines remain uncertain due to regulatory and financial challenges.
Demand Surge: Batteries Drive the Lithium Boom
The urgency to expand lithium production is driven by rapid growth in battery demand. Electric vehicles, renewable energy storage, and grid modernization are all increasing lithium consumption.
According to S&P Global, U.S. lithium demand is expected to grow at an average rate of 40 percent annually between 2024 and 2029. Canada is projected to see even faster growth, albeit from a smaller base, with demand rising by around 74 percent per year over the same period.
Globally, battery capacity is forecast to approach 4 terawatt-hours by 2030. This expansion highlights lithium’s central role in the clean energy transition. Without sufficient supply, battery production—and by extension, EV adoption—could face constraints.
Why Progress Takes Time
Turning lithium reserves into operational mines and processing facilities is not straightforward. Projects often face long permitting timelines, environmental scrutiny, and legal challenges. Financing can also be difficult, especially in a volatile commodity market.
Local opposition can further complicate development, particularly in areas with high environmental concerns. These factors can delay projects by several years, slowing the pace of expansion.
To address these barriers, the U.S. government is increasing its involvement through funding, policy support, and efforts to streamline permitting. The Department of Energy’s backing of EnergyX reflects a broader strategy to accelerate domestic critical mineral development.
Conclusion: A Strategic Shift in Motion
Project Lonestar™ represents a meaningful step toward reshaping the U.S. lithium landscape. By proving the viability of direct lithium extraction at an industrial scale, EnergyX has laid the groundwork for larger, commercially viable operations.
The project also aligns with national priorities around energy security, supply chain resilience, and clean energy transition. While challenges remain, the combination of technological innovation, government support, and rising demand creates a strong foundation for growth.
As the world moves toward electrification, lithium will remain at the center of the transition. Projects like Lonestar™ show that the United States is beginning to close the gap between resource potential and real-world production—one facility at a time.
The post Texas-Based EnergyX’s Project Lonestar™ Signals a Turning Point for U.S. Lithium Supply 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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