As the U.S. and other countries sprint to decarbonize the automotive sector through the widespread deployment of electric vehicles, the demand for lithium, a soft alkali metal used in several types of EV batteries, is expected to skyrocket. Continued investment in sustainable lithium recovery technologies will be key to the U.S. securing a better foothold in battery supply chains, according to industry experts.

The U.S. must lead the way in advancing technology that achieves high environmental standards if it intends to outcompete major producers such as China in lithium processing and EV battery production, said Chris Berry, an independent lithium analyst and president of House Mountain Partners.

"What we need to do in this country is not just bring more material on stream but do so more sustainably," Berry said in an interview. "Otherwise, it's self-defeating."

Some lithium projects have come under fire for using groundwater resources, producing greenhouse gas emissions, and causing other environmental consequences. With the increased attention on environmental, social and governance issues from investors and consumers, several lithium producers have ramped up efforts to find more sustainable extraction methods, Berry said.

"From the company's standpoint, you will not get investment from institutional asset managers unless you have a very clear and very credible ESG plan and a serious strategy," Berry said. "It never used to be that way. I mean, don't get me wrong, ESG always was important, but now it's top of the list."

The Initiative for Responsible Mining Assurance, or IRMA, recently introduced a set of industry-wide standards hosted by a consortium of nongovernmental organizations, labor unions and communities that govern alongside private sector leaders. IRMA offers a certification process to promote environmental and social best practices in mineral processing.

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With the top of the supply chain attracting more scrutiny, sustainable innovations in mineral processing will be crucial, according to IRMA Executive Director Aimee Boulanger.

"I think people are definitely finally looking at the top of the supply chain and saying that the fact these minerals are going to be used for green energy alone is not enough," Boulanger said. "That does not negate the importance of running a responsible operation so we don't undermine our goals. In a climate-stressed world, if we go to get these minerals and we further de-water arid environments, we are definitely creating an inherent problem in our solution."

On June 10, Schlumberger New Energy and Panasonic Energy of North America announced an agreement to strengthen the sustainability and efficiency of lithium extraction at the Nevada-based NeoLith Energy pilot plant. The pair hopes to commercialize an extraction process that does not rely on freshwater resources from external sources, according to the statement.

Controlled Thermal Resources, a lithium and renewable energy company with headquarters in the U.S. and Australia, plans to launch a geothermal facility in California to recover the commodity through direct lithium extraction.

Further, leading lithium producers Albemarle Corp. and Sociedad Química y Minera de Chile SA have already pledged to reduce water use in recent sustainability reports.

The quality and scale of lithium reserves in other countries such as Chile surpass much of what the U.S. has to offer, according to Albemarle Chief Technical Officer Glen Merfeld. That means optimizing sustainable extraction technologies, such as direct lithium extraction or ion exchange solvent extraction, remains critical, Merfeld said during a June 14 roundtable hosted by the U.S. Energy Department.

"It really is incumbent on us to fully utilize the resources that we do have and do that really cost competitively [and] in a sustainable matter," Merfeld said. "The U.S. needs to support the development of technologies to improve lithium recovery and purification of resources."

On June 8, the Biden administration published findings from its review of the country's critical supply chains and recommended sweeping investment in the advanced battery supply chain through grants, cooperative agreements, and research and development contracts.

Despite a raft of technological breakthroughs in lithium extraction methods companies have touted in recent years, many solutions remain in the pilot stage.

"It's just going take more time to prove that these technologies, while they work on a pilot scale, can work on a commercial scale," Berry said. "But I think we're really headed in the right direction."