THE UNNAMED WAR: ELECTRIC BATTERIES AND THE RISE OF SUPPLY CHAIN DISPUTES
The inexorable shift to renewable energies has already triggered increased demand for electric batteries. Confrontations for access to resources and capital have already begun. This unnamed war affects the entire supply chain, from the exploration and extraction of rare commodities, such as lithium, cobalt and other metals needed to manufacture lithium-ion batteries, to their production and distribution.
While this war is rumbling below the headlines at present, related disputes already occur and are going to increase exponentially in the years to come. From red flags about poor worker protection and violation of human rights in certain countries in which the necessary materials are mined, to more complex supply chain issues – the fight for rare resources will fast become the new gold rush.
Arbitral institutions will have a critical role to play in those disputes given the transnational nature of the supply chain ecosystem and related contracts. In particular, institutions located in geopolitically neutral jurisdictions are bound to be involved to settle highly sensitive geopolitical quarrels.
The coronavirus (COVID-19) pandemic has temporarily slowed down the demand for electric batteries but climate change remains the defining crisis of our time. Bar a few exceptions, governments around the globe understand the heightened necessity to transition out of fossil fuels in favour of renewable energies. No corner of the globe is immune to the devastating consequences of climate change. Rising temperatures are fuelling environmental degradation, natural disasters, weather extremes, food and water insecurity, economic disruption and conflicts, to name just a few disastrous effects. This imperative transition to green energy has made it necessary to increase the production capacity of lithium-ion batteries, which are popular for electric vehicles as well as cell phones and laptops because of their high energy, high power density and high-cycle-life.
Apr-Jun 2021 issue
BVI International Arbitration Centre