Season 2, Episode 4 - Game Changers and Transition Makers: Powering EVs with Net Zero Lithium

Elena Lambros:

Hello and welcome to ESG Matters at Ashurst. I'm Elena Lambros, a partner at Ashurst Risk Advisory. You're listening to the second season of Game Changers and Transition Makers. In this series, we meet global entrepreneurs who are embracing disruption to boost business performance and drive the sustainability agenda. In today's episode, you'll hear my conversation with Dr. Francis Wedin, founder and executive chair of Vulcan Energy Resources. Dr. Wedin is a battery materials and renewable energy industry executive focused on developing global scale decarbonisation opportunities.
He co-founded Vulcan Energy's Zero Carbon Lithium Project, a dual renewables and lithium chemicals project in 2018. Vulcan Energy's purpose is to empower a carbon neutral future to supply lithium chemicals and renewable energy from Europe for Europe from its Zero Carbon Lithium and renewable energy project. Without further ado, let's jump in and hear the discussion.
I thought it might be good for our listeners if you could just tell us a little bit about yourself and your business, Vulcan, and what you are focused on trying to achieve.

Dr Francis Wedin:

Sure, my name is Francis Wedin. I'm the founder and executive chair of Vulcan Energy. Vulcan is an integrated renewable energy and lithium chemicals company. Simply put, what we're trying to achieve is zero carbon lithium or lithium with a net zero carbon footprint to be supplied to the automotive industry to help with the transition to electric vehicles. How do we do that? It's about bolting together the technologies that we already have.

In this case, it's adsorption to extract lithium salts from brines and then engineering out the fossil fuels out of the process, in this case using natural heat in the subsurface to drive that lithium extraction. Lithium comes currently from so-called hard rock mining, and it comes from brines. Some of the brine production uses this adsorption, but unfortunately you need heat to drive the adsorption and that mainly comes from fossil gas at the moment.

What we've done at Vulcan is to really spend time on the flow sheet and engineer out the gas required for that heat source and also find the right location where we can use the natural heat from the ground to drive that lithium extraction process. What we end up with is a battery quality product, a battery quality lithium hydroxide, which we will be selling to our customers, which are mainly European automakers, which is a lithium hydroxide produced with net zero carbon footprint.

Now the side benefit of this is we produce a byproduct and that byproduct is renewable heat and power. We're already producing this actually. We're already a renewable energy producer. For local communities, local businesses, local industry, because we're extracting this hot brine from the ground which contains the lithium, we're using parts of that heat to drive the lithium extraction process.
The top 100 degrees, if you like, of that brine we're selling as renewable heat and power, basically renewable heat and power, which is really the holy grail of renewable energy. That's a good byproduct to have for a lithium chemicals project and we are addressing a problem which is global, which is the high upfront carbon budgets of electric vehicles, batteries in general, and lithium in particular.

Elena Lambros:

Excellent, you've touched on quite a few things there that are obviously incredibly important to the net zero transition. You're talking about getting the lithium for electric vehicles, making sure it's battery quality, having the energy positive. Maybe just expand on how did you come to work in this and develop this project and what was your process to get to even thinking about all the steps that you need to take to put this in place?

Dr Francis Wedin:

Sure, I come from the mining industry originally and I started working in the lithium sector about 10 years ago now. I founded I guess as a more traditional sort of hard rock lithium development company. Lithium comes from two sources. It comes from brines, salts in brines, and it comes from mining, so-called hard rock mining. I started in the hard rock mining space and was involved in starting a project, which is now supplying the Chinese markets with hard rock lithium.

Throughout that process, that was sort of a four year journey, I realised that the carbon budgets of particularly the hard rock side was very high. I mean inherently you're mining something. You're crushing it, grinding it, and then you're roasting it through a very energy and reagent intensive process to produce a battery quality product. This was creating a very high carbon budget, which on the global scale is quite small for now, but when you look at how many electric vehicles there are going to be in the coming years as we transition to full electric, it starts to become quite big.

If you assume that we're going to transition all of the world's passenger vehicles, not counting buses and trucks, et cetera, et cetera, just passenger vehicles to electric in the coming years, if you use the current average carbon footprint of lithium production, you're talking about 2 billion tons of CO2 emitted just for the lithium in the batteries. That's not counting the nickel, the graphite, the cobalt, everything else that goes into these cars.

It was recognising that and trying to find a solution for it. It was really starting with zero carbon lithium on a whiteboard and working backwards from there. I still got the whiteboard actually. Essentially, it was looking for technologies that were already commercially in use because we need to build these projects very, very quickly. This is a transition that's happening right now, not sometime in the future. We didn't really have much time to do any R&D.

This was really about finding commercially used technologies and bolting them together and it ended up being adsorption to extract the lithium from brines. That is a low energy and low reagents process. Just by using that process, you can lower the carbon footprint a lot. Then, it was looking for brines, which contain lithium, which also have a natural heat source that can drive the process. There was a bit of a geographic search there for the right locations for this.

Happily, Europe has its largest lithium resource in the Upper Rhine Valley in a heated lithium brine. It's sort of right technology and right place to apply it, but you could apply this elsewhere as well where you have those conditions. It was about putting those together and then putting the team together from different industries, oil and gas, chemicals, lithium industry, geothermal industry, and then also doing a lot of work on engineering and test work to make sure that we have something that is financeable effectively. That's really how it all came together.

Elena Lambros:

That's absolutely fascinating and thank you for such a great description of what I'm sure is a very complicated process, but you've made it seem easier to understand. You're obviously working in an area that's very critical to transition. You've thought about addressing the carbon budget of what you do, putting the right technology in place. In terms of next steps for Vulcan, what does success look like to you?

Dr Francis Wedin:

We've essentially got the projects to a point where it's so-called shovel ready. It's ready to be built. We've invested about €300 million in the project to date. A lot of work has happened since we founded the company six years ago and we've already started producing the geothermal renewable energy. We are a renewable energy producer. We've been piloting the lithium extraction for the last three and a half years, producing all the data we need to build the commercial plants.

We're basically ready to go. We've got off takes with the main automakers and battery makers in Europe. We're fully sold out for our first phase of production. All the elements are in place. We now have to complete a financing to build our first commercial plants. We're deep in that process at the moment. Success I mean looks like completing that financing by the end of the year and then really shovels in the ground.

Then, it's a two and a half year build and then two and a half years afterwards hopefully producing Europe's first fully domestically produced lithium hydroxide product, including from the upstream to the downstream, but also the world's first commercially produced lithium hydroxide with net zero carbon footprints. Then, really from there what we're aiming to do is expand with the market. It is a very large reservoir in central Europe. We have the ability to really sort of copy paste the plants and the production.

Our customers, European automakers, they want a lot of lithium in the years to come and they want as much as we can produce and more quite frankly. The idea is we grow. Every two and a half years, we're building another phase of production and we're growing as the market grows. The side benefit of that is we're going to be growing more renewable energy production, more geothermal heat production across central Europe and the Rhine Valley, including for industry as well. That's really the strategic plan going forward.

Elena Lambros:

Excellent, that's pretty exciting then that you're going to be shovel ready so quickly and then quite a quick timeframe really to getting the product out to market and also having that renewable energy already going, very impressive. Maybe you could talk to us about what you think is the key to re-imagining current systems and therefore changing the game.

Dr Francis Wedin:

Sure, once again, I think the energy transition is something that we have to do right now. I think we have to look at the tools that are available to us. Obviously, research and development is great and we should be doing that, but I think we should be really focusing our efforts on building what we can with the tools that we have now. I think it's looking for big opportunities to decarbonise, looking for opportunities that would remove millions or hundreds of millions of tons of carbon globally, and looking at those existing technologies that we can bolt together.

We have the tools to do so. It is not just about the technology. It's also about the people and I think the advantage of what we're doing, which looks and smells very much like oil and gas just minus the hydrocarbons essentially. You've got wells. You've got pipelines. You've got energy production, chemical processing. The other thing you need for making a business like this a success is you need the people skills.

Once again, I think it's about using the skills we already have as well as the technologies we already have and those skills that we're using predominantly come from the oil and gas industry. The oil and gas industry, they've been the smartest people in the room certainly in my sector for the last few decades. It's utilising those really smart brains to build projects that have economies of scale, are highly efficient, are cost competitive, and can decarbonise the sector that they're in.

Elena Lambros:

Great, thank you. I think that focus in terms of utilising what we already have to really make that big impact in terms of decarbonisation in the immediate term is a really great way of thinking about it and looking towards the future. Now I'm just going to change tack slightly. I know I ask everyone this question, but what is your own personal commitment to net zero in the next 12 months?

Dr Francis Wedin:

That's a good question.

Elena Lambros:

Apart from obviously running a net zero carbon lithium project, which is hugely impressive.

Dr Francis Wedin:

I've done a reasonable amount to earn my carbon footprint so far. I've got the solar. I've got the electric vehicles, but I think I mean my biggest carbon footprint is flying. I'd like to be in a position in 12 months with a project fully financed where I can travel less and lower my carbon footprint a bit.

Elena Lambros:

Great, thank you. I have to say flying is one of mine as well. I always fly far too much I feel for someone focused on climate change and sustainability. Now a last question is if you could provide listeners with one action to take away, what would it be?

Dr Francis Wedin:

I think the embodied energy it takes to make the things that you are buying and the embodied materials that are required for things like the electric vehicles that you're buying. Really have a think about where this stuff comes from because the energy transition is very metals intensive. You need a lot of lithium for batteries and other metals as well.

You need a lot of copper for wiring, but also other things like solar panels, wind turbines, et cetera. I think what gets lost in the conversation is the upfront carbon budgets of making those things. What I see quite a bit actually is the conversation is not always honest at least in the political space about the carbon budgets of those tools of the transition if you like. I think we need to have an honest conversation.

I think we need to recognise that the things that we're building have an upfront carbon budget and we'll have another carbon budget to recycle eventually as well. Then, really honestly try and tackle the carbon footprint of those metals that we're using. I think the action would be to have a think about that, to be mindful of that, and to help come up with solutions I think as well because I think that's one of the main challenges of the transition.

Elena Lambros:

Thank you. I think on that note it's a perfect way to end the conversation, but thank you again for joining. I've really loved hearing about Vulcan, hearing about the work, and good luck with the financing round.

Dr Francis Wedin:

Thanks very much, Elena. Thanks for having me on.

Elena Lambros:

Thank you for listening to this episode of ESG Matters at Ashurst. I hope you found this episode engaging and inspiring. To subscribe to future episodes of Game Changers and Transition Makers and to hear previous episodes, click on the link in the show notes or search ESG Matters at Ashurst on Apple Podcasts, Spotify, or wherever you get your podcasts. While you're there, please feel free to leave a rating or a review. Finally, to learn more about all Ashurst podcasts visit Ashurst.com/podcasts. In the meantime, thanks again for listening and goodbye for now.