IISD recommends localisation of key battery parts to leverage India’s advantages

0
0
iisd-recommends-localisation-of-key-battery-parts-to-leverage-india’s-advantages
IISD recommends localisation of key battery parts to leverage India’s advantages

Updated – November 24, 2024 at 07:14 PM. | Chennai

The institute suggested implementing supportive regulations and trade and industrial policies to help India maximise its comparative advantages in the EV battery supply chain.

Source: IISD report

Source: IISD report

The International Institute for Sustainable Development (IISD) has recommended that India prioritise local production of key battery components, including synthetic anodes, electrolytes and cell casings and pouches. The institute suggested implementing supportive regulations and trade and industrial policies to help India maximise its comparative advantages in the electric vehicle (EV) battery supply chain.

India has the opportunity to scale up its battery production, thanks to the presence of domestic suppliers, strong cost competitiveness and low reliance on intellectual property and foreign technology, IISD indicated in a report.

It pointed out that the Indian government should incentivise the development of domestic cathodes, the highest-value components in a battery cell. While India’s technology-agnostic approach could support the development of various battery types, IISD suggested prioritising lithium ferro phosphate (LFP) cathodes due to their lower cost and suitability for India’s climatic conditions. Adopting LFP batteries could also help reduce reliance on critical mineral imports like cobalt and nickel.

Support R&D

To seize future opportunities in the battery industry, IISD suggested that the Indian government support research and development (R&D) and incentivise the commercialisation of next-generation technologies like sodium-ion and solid-state batteries.

The institute further urged India to adopt clearer environmental, social, and governance (ESG) guidelines and robust reporting frameworks to boost the global competitiveness of domestic battery companies. It also highlighted the importance of increased public investment in establishing cell fabrication and testing centres with trained workers to ensure the quality of raw materials, components, and equipment.

In addition, the government should create incentives for a circular economy by promoting the recycling of end-of-life batteries and improving the efficiency of used battery collection. 

Multiple opportunities

IISD noted that China is currently grappling with significant overcapacity across the battery supply chain, which makes it more challenging for Indian companies to compete in a saturated market. Despite this, India can potentially add significant value to the global battery supply chain. Localisation of critical equipment used in cell manufacturing should be prioritised through technology partnerships and trade agreements with key allies.

The country’s chemical sector expertise, technological capabilities, favourable trade and geopolitical relations with countries like South Korea, Japan, the United States, and the European Union, and its growing network of free trade agreements with mineral-rich nations provide India with several opportunities. There is room for India to diversify away from China for some equipment through collaboration with free trade agreement partners, but it will need to consider the cost implications on downstream battery companies, it said.

Acknowledging the role of India’s Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC) in kick-starting the growth of the EV battery ecosystem, IISD stated that accelerated investments and regulatory support will be crucial for India to become a competitive player in the rapidly evolving automotive supply chain and EV battery technology landscape.

LEAVE A REPLY

Please enter your comment!
Please enter your name here