The global lithium-ion battery supply chain is pivotal to achieving worldwide decarbonization, yet its geographically dispersed production stages present challenges for carbon management. From upstream resource extraction and midstream material refining to downstream battery manufacturing and recycling, the highly decentralized distribution of production not only results in uneven carbon emissions but also complicates carbon footprint accounting and management, posing a major hurdle to global collaborative carbon reduction efforts.

To address this challenge, a research team from the Guangzhou Institute of Energy Conversion (GIEC) of the Chinese Academy of Sciences, in collaboration with partners, has developed a lithium cycle computable general equilibrium (LCCGE) model. The framework bridges micro-level recycling data with macroeconomic trends to inform robust decarbonization strategies.

Their findings were recently published in Nature.

The proposed model integrates life-cycle thinking with global economic dynamics through two core custom modules. The Li-cycle dynamics module links material and value flows across the entire lifecycle of lithium-ion batteries, simulates the impact of circular economy strategies on the supply chain, and enables closed-loop simulation of the "raw material extraction-production-recycling-remanufacturing" process. The GHG emissions accounting module comprehensively tracks the carbon footprint of the lithium-ion battery supply chain, differentiates between producer and consumer responsibilities, and provides a quantitative foundation for evaluating emission reduction effects.

The LCCGE model is the first to combine micro-level technical details from life cycle assessments with the macroeconomic dynamics of computable general equilibrium models. This integration allows for simulation of the cascading effects of various policies, technologies, and trade strategies on the economic benefits and environmental footprints of global supply chains. Using the model, the team quantitatively revealed, for the first time, a "value-emission paradox" in the global lithium battery supply chain: Mining, a relatively low-value-added process, contributes 18.78% of the economic value but accounts for 38.52% of carbon emissions. Meanwhile, cathode material production, with higher added value, generates 34.82% of emissions while creating 42.56% of economic value. This structural imbalance indicates that targeted management of manufacturing stages is key to decarbonizing the industrial chain.

Through systematic simulations of thousands of complex scenarios, the researchers confirmed that single emission reduction policies have limited effects and are prone to negative consequences such as "burden transfer." They also proposed an optimal path for deep industry decarbonization: a comprehensive strategic framework of "Global Collaboration + Regional Customization." The framework calls for cross-regional cooperation on technology, trade, and environmental policies.

The study systematically uncovers the complex trade-offs between economic efficiency and regional equity in decarbonizing the global lithium-ion battery supply chain, offering a decision-making basis for global governance that transcends single perspectives. Under this strategy, the global lithium-ion battery supply chain's average emission intensity is projected to decrease by 35.87% by 2060, with reduction potentials of 42.35% for China, 39.14% for the United States, and 37.28% for the European Union.

This study provides a scientific blueprint for decarbonizing complex global supply chains and establishes a balanced sustainability framework, opening new avenues for systemic industrial decarbonization.