The energy transition relies on secure supplies of raw materials for the large-scale deployment of low-carbon technologies. Graphite is a critical mineral for governments across Europe and the United States (US), given its importance to strategic sectors and the risks associated with its supply. The mineral plays an essential role in decarbonizing two economic sectors with high emissions of greenhouse gases: transportation and heavy industry.

Technologies that enable the decarbonization of transport and steel production will rely heavily on a consistent supply of high-quality graphite, leading to an exponential growth in the demand for graphite over the coming decades. This paper analyses the practical, geopolitical and environmental challenges of sourcing graphite, and provides recommendations of how the European Union (EU) and the US can mitigate supply risks in the next decades.

As most countries strive toward carbon neutrality within the coming decades, the demand for graphite could increase up to 500% compared to 2018 levels.1 The concentration of graphite production and processing in China, which accounts for approximately 80% of global graphite supply, leaves the EU and US vulnerable to supply chain disruptions.2 When it comes to lithiumion batteries, Chinese dominance becomes even more striking. China dominates the entire supply chain for lithium-ion batteries, not just those parts of the supply chain that rely on the production of graphite. As China is committed to decarbonizing its economy, the global supply of graphite and batteries will be placed under considerable stress.