Graphite is a key component of zero-emission energy and transportation
Posted: Tue Jun 17, 2025 9:39 am
The US has imposed export controls, screening overseas investments, and partnering with Japan and the Netherlands to try to limit China’s access to advanced semiconductor technologies used in artificial intelligence and modern weapons systems. In response, China in October 2023 imposed export controls on gallium and germanium, two critical components for semiconductors and renewable energy. China dominates the production and processing of both elements. But it appears that it was the subsequent restrictions on graphite, as well as the overly optimistic timeline for developing alternative sources of supply proposed by the IRA’s developers, that caused the storm. The militarization of semiconductor supply chains, while essential to US national security, has now led to the militarization of clean energy.
It is used in batteries and motors for electric vehicles, solar panels, and nuclear reactors. Global graphite production is expected to increase 8-25 times by 2040 to meet projected global demand under the International Energy Agency’s policy and sustainability scenarios. China is the world’s largest producer, accounting for 77% of global production in 2023, and the largest exporter special database of synthetic graphite. As of 2022, the United States was the largest importer of graphite, followed by South Korea and Japan.
The latest rule change provides some relief for automakers seeking to qualify for the IRA’s electric vehicle tax breaks, as U.S. EV adoption slows, but continues to grow. However, the long-term path to a fully de-risked graphite supply chain to the U.S. is unclear. The IRA incentivizes companies to source from the U.S. or from countries with which the U.S. has a free trade agreement. But the provisions create significant barriers. Graphite, like cobalt and nickel, is a key electric vehicle mineral for which the U.S. and its FTA partners are only marginal producers, accounting for 2.0% of global production in 2023. Currently, only one producer, Australian company Syrah Resources, claims to have a fully IRA-compliant supply chain for active anode materials outside of China. Syrah processes raw materials at its American facility in Vidalia (Latin America), and the raw materials come from the Balama mine in Mozambique.
It is used in batteries and motors for electric vehicles, solar panels, and nuclear reactors. Global graphite production is expected to increase 8-25 times by 2040 to meet projected global demand under the International Energy Agency’s policy and sustainability scenarios. China is the world’s largest producer, accounting for 77% of global production in 2023, and the largest exporter special database of synthetic graphite. As of 2022, the United States was the largest importer of graphite, followed by South Korea and Japan.
The latest rule change provides some relief for automakers seeking to qualify for the IRA’s electric vehicle tax breaks, as U.S. EV adoption slows, but continues to grow. However, the long-term path to a fully de-risked graphite supply chain to the U.S. is unclear. The IRA incentivizes companies to source from the U.S. or from countries with which the U.S. has a free trade agreement. But the provisions create significant barriers. Graphite, like cobalt and nickel, is a key electric vehicle mineral for which the U.S. and its FTA partners are only marginal producers, accounting for 2.0% of global production in 2023. Currently, only one producer, Australian company Syrah Resources, claims to have a fully IRA-compliant supply chain for active anode materials outside of China. Syrah processes raw materials at its American facility in Vidalia (Latin America), and the raw materials come from the Balama mine in Mozambique.