Global Market Size, Forecast, and Trend Highlights Over 2025-2037
Sustainable Battery Materials Market size was USD 49.90 billion in 2024 and is estimated to reach USD 110.42 billion by the end of 2037, expanding at a CAGR of 6.3% during the forecast period, i.e., 2025-2037. In 2025, the industry size of sustainable battery materials is evaluated at USD 53.04 billion.
The global sustainable battery materials market is expected to grow rapidly owing to the electrification of key industrial sectors including energy generation, storage, and transportation. Batteries are viewed as a crucial enabling technology to support global efforts to reduce greenhouse gas emissions and increase the usage of renewable energy sources. Batteries facilitate the storage of surplus energy generated by wind and solar farms, enabling a greater number of electric vehicles to operate with zero direct emissions, particularly during periods of limited natural energy production. On a global scale, nations and corporations have committed to ambitious objectives and significant investments in clean energy and electric vehicle infrastructure.
The International Energy Agency (IEA) revealed that according to present policy settings, battery demand is expected to continue growing rapidly, increasing more than seven times by 2035 and four and a half times by 2030. It is anticipated that emerging sustainable battery materials markets and developing economies (EMDEs) other than the People's Republic of China will increase their share of the worldwide battery consumption from 3% in 2023 to 10% by 2030. It is also anticipated that battery production will diversify, mostly as a result of investments in North America and Europe under present regulations, as well as increased demand and production in EMDEs other than China, provided all declared climate pledges are kept.
Furthermore, industries and governments push for greener alternatives, and the need for efficient, long-lasting, and eco-friendly batteries is growing. The graph below shows the growing battery demand:
Sustainable Battery Materials Market: Growth Drivers and Challenges
Growth Drivers
- Innovation in alternative battery chemicals: Limited availability and geopolitical risks associated with lithium, cobalt, and nickel are driving innovation in alternative battery chemistries such as sodium-ion, lithium-sulfur, and solid-state batteries, reducing reliance on scarce resources. In the context of striving for affordable and sustainable energy solutions, various alternatives to traditional lithium-ion batteries exhibit significant potential. Sodium-ion batteries stand out due to the abundance and cost-effectiveness of sodium compared to lithium. This not only reduces production costs but also minimizes the environmental impact associated with sourcing and processing materials. Additionally, for large-scale energy storage applications, redox flow batteries provide an innovative and highly scalable solution. By circulating liquid electrolytes through electrochemical cells, these batteries efficiently store and release energy through electron transfer, aligning with the needs of renewable energy integration.
Moreover, metal-air batteries, such as zinc-air batteries, present another compelling alternative. Their ability to achieve high energy density while maintaining a lightweight structure is crucial for enhancing energy storage solutions. These batteries generate electricity through the oxidation of metals like zinc or aluminum, utilizing oxygen from the air. This eliminates the need to keep an oxidizing agent within the battery itself, resulting in a more compact and efficient design.
Together, these alternatives highlight a shift towards more sustainable and accessible energy storage technologies, addressing both economic and environmental concerns in energy production and consumption.
- Expansion of renewable energy storage solutions: As solar, wind, and other renewable energy sources continue to grow, efficient energy storage solutions are essential to balance supply fluctuations and ensure grid stability. Sustainable batteries, made from abundant and eco-friendly materials, are becoming a priority for large-scale energy storage projects, particularly in off-grid and rural areas where access to consistent power is limited. Additionally, the push for carbon neutrality is prompting energy companies and governments to invest in battery technologies with minimal environmental impact, such as sodium-ion and iron-air batteries. These innovations improve the lifespan and efficiency of energy storage systems along with reducing reliance on critical materials, making renewable energy adoption more sustainable and cost-effective in the long run.
Therefore, the expansion of renewable energy storage solutions, such as grid-sale battery farms and off-grid solar systems, requires sustainable, long-life, battery materials that align with the clean energy transition. For instance, IEA reported that by the end of 2022, the total installed grid-scale battery storage capacity was about 28 GW, the majority of which had been added during the preceding 6 years. Due to the addition of over 11 GW of storage capacity, installations increased by more than 75% in 2022 compared to 2021.
The graph below illustrates the annual grid-scale battery storage addition:
Challenges
- High investment costs: Establishing production facilities that comply with strict emission regulations and carbon footprint standards is essential to producing battery materials in an environmentally sustainable manner. This includes utilizing more capital-intensive modern manufacturing technologies and procedures than conventional ones. For instance, it costs an estimated USD 5 billion to construct a lithium-ion battery Gigafactory with an annual output capacity of 35 GWh. Similarly, greater costs for sourcing, supply chain development, and carbon capture system deployment are associated with sustainable production of other essential commodities such as cobalt, nickel, and graphite.
- Supply chain management issues: Battery material manufacturing frequently depends on limited geographical sources, which may be subject to interruptions. For instance, the supply and price of vital elements like lithium, cobalt, and nickel can be greatly impacted by geopolitical conflicts, trade restrictions, and environmental regulations in important producing nations. According to the International Monetary Fund (IMF), supply chain interruptions may result in higher expenses and longer lead times, which may impede the expansion of the market for electric vehicles (EVs) and the manufacturing of batteries in general. Maintaining a steady supply chain becomes crucial as battery demand rises. Businesses must create risk-reduction plans that include diversifying their suppliers, procuring locally, and looking into substitute materials that can lessen reliance on high-risk areas.
Sustainable Battery Materials Market: Key Insights
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
6.3% |
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Base Year Market Size (2024) |
USD 49.90 billion |
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Forecast Year Market Size (2037) |
USD 110.42 billion |
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Regional Scope |
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Sustainable Battery Materials Segmentation
Battery Type (Lithium Ion, Lead Acid, Others)
Lithium-ion segment is expected to hold over 55.1% sustainable battery materials market share by the end of 2037, Compared to other battery types such as lead-acid, lithium-ion batteries have a higher energy density, which allows them to store more electricity in a lighter and smaller form. As a result of this, lithium-ion is the recommended option for applications with limited weight and region, such as
electric vehicles and consumer electronics. The fact that lithium-ion batteries do not suffer from the memory effect like nickel-based batteries do is another significant benefit. This makes it possible to partially charge lithium-ion batteries without gradually lowering their full capacity. Devices can run longer between charges owing to their high energy density and lack of memory effect. Because it directly affects the total cost of ownership, its useable life is vital for the customer. Lithium-ion technology is being significantly improved by ongoing research and development. With every iteration, new cathode and anode materials are making better voltage and energy density. Large companies are also refining chemistries for enhanced safety measures to mitigate the risk of lithium-ion overheating.
Material (Cathode, Anode, Electrolyte, Others)
The cathode segment in sustainable battery materials market is predicted to garner a significant share during the assessed period. During the charging and discharging process, the cathode is one of two electrodes employed to recover and extract chemical energy. High energy density advanced cathode materials are necessary to fulfill the demanding power and electric vehicle (EV) range standards. To support the growing EV market, the automotive sector has become the single biggest end-user of lithium-ion batteries. Leading automakers have responded by making significant investments in the research and manufacturing of electric vehicles. In the foreseeable future, cathode consumption will be sustainably increased by this significant industry shift. During this time of rapid change and expansion, suppliers must prepare to provide automakers with high-performance, cost-competitive materials.
Our in-depth analysis of the global sustainable battery materials market includes the following segments:
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Battery Type |
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Material |
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Application |
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Customize this ReportSustainable Battery Materials Industry - Regional Synopsis
North American Market Statistics
North America sustainable battery materials market is set to dominate revenue share of around 38.4% by the end of 2037. The region can meet the rising domestic demand as it is home to numerous R&D facilities, significant battery material manufacturers, and a strong supply chain network. As a leader in technology and industrialization, the U.S. also has advantageous government regulations that encourage battery development. In January 2024, in addition to supporting a consortium to address key priorities for the next stage of widespread EV commercialization, the U.S. Department of Energy (DOE) announced more than USD 131 million for initiatives to improve research and development (R&D) in EV batteries and charging infrastructure.
It serves as a center for the production of lithium-ion battery chemistries, which are essential for EV and electronic power. To guarantee supply security, leading companies are also establishing several battery gigafactories in the nation. To close the gap between local supply and production demands, a significant amount of battery-grade raw materials, such as lithium, cobalt, and graphite, are imported. But to increase resource security and dispose of e-waste responsibly, recycling initiatives are being reinforced.
Similarly, Canada is in a unique position to address these issues because of its abundance of vital minerals, such as lithium, cobalt, nickel, and graphite. In 2023, Innovation, Science, and Economic Development Canada revealed that the government invested over USD 10 billion to support the domestic battery supply chain, including mining, processing, and recycling investments. New collaborations between Canadian companies and international EV manufacturers further support this effort. Additionally, the nation’s commitment to a net-zero economy by 2050 and its focus on developing a domestic battery supply chain – reducing reliance on imports – are driving innovation in sustainable alternatives such as soil-state and sodium-ion batteries.
APAC Market Analysis
Asia Pacific sustainable battery materials market is expected to grow at a significant rate during the projected period. In recent years, Asia Pacific has become the regional sustainable battery materials market with the quickest rate of growth, and this trend is predicted to continue. China is becoming the world's leading producer of lithium-ion batteries due to its sizable electronics industry and drive for new energy vehicles. The nation is home to a substantial number of facilities for the production of cathode and anode materials. Japan and South Korea are also heavily represented across the battery production value chain. These nations are seeing an increase in investments to increase the capacity of sophisticated cathode chemistries of the nickel-manganese cobalt (NMC) type that are rich in lithium. Regional demand is being driven by the availability of raw materials, cheap production costs, and an emphasis on local battery deployment.
Furthermore, India’s ambitious renewable energy targets, necessitate large-scale energy storage solutions that rely on sustainable battery materials such as sodium-ion and lithium-ion-phosphate (LFP), which are less dependent on scarce imports. The India Brand Equity Foundation indicated that India wants to achieve 280 GW of solar power by 2030, which will contribute significantly to the nation's total goal of 500 GW of renewable energy. The presence of abundant raw materials for alternative battery technologies, combined with a strong policy framework and investments from global and local players, is accelerating the shift toward greener, locally sourced battery materials in the country.
Similarly, in South Korea, the processing of cathode material components was approved as a mineral processing process in the proposed guidance for the electric vehicle tax credit due to the government and businesses' persistent efforts to draw in investment since the U.S. government announced the IRA. This makes it simpler for battery manufacturers to meet the IRA parts and minerals requirement if the precursors of cathode material components are processed in Korea, a U.S. free trade partner. Therefore, to meet the IRA criteria, Chinese corporations are expanding their presence in Korea through joint ventures with Korean companies. In addition to investing in industrial complexes in Saemangeum and Pohang that the government designed last year to specialize in batteries, major materials companies like EcoPro, LG Chem, and POSCO Future M have announced joint ventures with Chinese companies like Zhejiang Huayou Cobalt and CNGR to produce precursors.
Companies Dominating the Sustainable Battery Materials Market
- BASF SE
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- TCI Chemicals Pvt. Ltd.
- LANXESS AG
- LOHUM
- Kureha Corporation
- NEI Corporation
- NICHIA Corporation
- Umicore Cobalt & Specialty Materials
- Epsilon Advanced Materials
- Ascend Elements
The sustainable battery materials market is distinguished by a dynamic competitive environment that includes well-established and up-and-coming businesses. To protect their supply chains and satisfy the rising demand for electric vehicles, major automakers like Tesla, Panasonic, and BMW are spending more and more on environmentally friendly battery technology and materials. To guarantee a consistent supply of vital components like lithium and cobalt, these businesses are concentrating on vertical integration and collaborating with raw material suppliers. Furthermore, committed battery producers like CATL and LG Chem are leading the way in innovation, creating cutting-edge materials and recycling techniques to improve battery sustainability and performance.
In the News
- In September 2024, LANXESS, a specialty chemicals business, produced new high-quality iron oxides for use in lithium iron phosphate (LFP) batteries, earning the coveted ICIS Innovation Award 2024. The award in the category Best Product Innovation from a Large Company acknowledges LANXESS' exceptional contribution to the development of value chains for LFP in the Western regions.
- In March 2024, LOHUM, India's largest producer of sustainable energy transition materials through battery recycling, raw material refining, and battery repurposing, raised USD 54 million in series B funding from Singularity Growth, Baring Private Equity, Cactus Venture Partners, and Venture East, among other new and existing venture firms.
Author Credits: Rajrani Baghel
- Report ID: 7380
- Published Date: Mar 26, 2025
- Report Format: PDF, PPT
