Lithium to EVs value chain
Electrification will be key in promoting Europe’s ambition of net zero emissions by 2050, and storage will play a fundamental role in paving the way for a sustainable transition, as the European Union (EU) aims to become a leading geography in lithium-ion battery production and electric mobility.
Portugal has several competitive advantages for developing an integrated value chain, namely natural resources, nearby automotive capacity, infrastructure, renewable energy, and geographic position.
Galp, on the other hand, is in a privileged position, due to its experience in operating large-scale industrial businesses and chemical processes, experience in raw material sourcing and trading, renewable know-how and a highly skilled workforce.
As such, and considering the fast-growing EV adoption outlook, Galp is moving forward with plans to participate in the development of a local and integrated value chain.
In December 2021, Galp established the joint venture “Aurora” with Northvolt to develop a lithium conversion plant with an annual production capacity of up to 35,000 tons of lithium hydroxide, with operations expected to start by 2025 and commercial operations by 2026.
The JV is currently conducting technical and economic studies and looking at possible site locations.
Galp and Northvolt will also jointly explore other opportunities in the lithium-ion battery value chain, notably with a focus in Iberia.
Galp also leads the 17-member consortium that made an application for funds from the Portuguese Recovery and Resilience Plan (PRR), which may contribute to the development of this project as well as support the entire value chain in Portugal, from mining to recycling, both in product investment and research and development components.
Galp sees this move into the battery value chain as a scalable opportunity and, as the business case evolves, there is a potential to further expand its conversion capacity throughout the decade.
Corporate Venture Capital and Other businesses
During 2021 Galp has accelerated its Corporate Venture Capital activities. The Company increased its participation in the Energy Impact Partners (EIP) venture capital fund, an investment platform that focuses on energy transition opportunities. Through this fund, the Company has been exposed to cutting edge research and engaged with innovative ventures, looking at bringing in some as new business partners that will help Galp successfully navigate the energy transition.