The past eight years have been the warmest on record, according to recent NASA data. The consequences are already evident — from the numerous forest fires that ravaged Europe and North America to severe flooding in various parts of the world.
The transportation sector is partially responsible for this rise in global temperatures. In the U.S. and the U.K., the transportation sector now emits more greenhouse gases than any other sector. Globally, the sector is responsible for more than a quarter of CO2 emissions. Nearly three-quarters of transportation emissions come from vehicles such as cars, buses, motorcycles, and trucks.
Tackling the climate crisis by accelerating the transition to green transport will be crucial to preserving the planet for future generations. The number of electric vehicles (EVs) on the road must increase dramatically to stay below the 1.5C warming limit decided at COP26.
In this scenario is where lithium plays a crucial role. One might ask why lithium-ion batteries are favoured for EV engines, not sodium, magnesium, or hydrogen batteries. The small size of a car means there is limited space to store the energy needed to have a large range. Lithium is the lightest metal in the world, with a much-higher energy density than other metals. As a result, less energy is needed to move the car, which allows for higher efficiency and greater travel distance. This is the domain where lithium will play a crucial role.
The suitability of lithium has naturally led to a huge spike in demand. In 2015, most lithium demand was for glass, ceramics and grease, while batteries accounted for less than 30 percent of demand.  However, a recent McKinsey report shows that batteries will account for 95 percent of lithium demand by 2030, with total demand increasing by 25-26 percent annually. 
Many now fear there will be insufficient resources to meet demand and make the urgently-needed transition. SQM is committed to meeting the challenge. From mid-2022, SQM will ramp up production to 180,000 mt/yr of lithium carbonate and 30,000 mt/year of lithium hydroxide, more than triple its output from 2018. SQM also bought a 50 percent share in Australia’s Mount Holland lithium project. The project is expected to deliver 50,000 tons of lithium hydroxide per year by the end of 2024, and SQM is exploring more opportunities abroad.
While other lithium miners are ramping up production to meet demand, SQM must ensure that it does so in a way that prioritizes environmental and social responsibility. To do otherwise would be counterintuitive and only further endanger our planet.
Sustainability is central to SQM’s efforts to increase its production. SQM’s lithium production process naturally produces minimal CO2 emissions and has one of the lowest carbon and water footprints. The brine is concentrated in evaporation ponds, taking advantage of the climatic conditions of the Salar de Atacama and the high levels of solar radiation. As a result, 97.4 percent of SQM’s lithium production process is powered by solar energy. SQM continuously strives to be better. Therefore, SQM aims to become 100 percent carbon neutral in its lithium and potassium production by 2030.
SQM is already taking steps to achieve this goal. In early 2022, SQM began exploring ways to decarbonize its logistics routes. Chile’s first two high-tonnage electric trucks were introduced for large-scale mining operations on the 86km route from the company’s Coya Sur plant in María Elena to the port of Tocopilla. The conversion of SQM’s fleet of 320 diesel trucks to e-trucks will potentially reduce CO2 emissions by 3,840 tons per year. If the project succeeds, the e-trucks will be introduced on the Salar de Atacama-Carmen Lithium Chemical Plant route, which will help reduce emissions even further. SQM is putting into practice what it promises — by minimizing its environmental impact to contribute to a greener world.
SQM is committed to sustainable mining through rigorous environmental monitoring. After all, companies cannot meaningfully begin to minimize their impact if they don’t even know their impact. The Atacama Basin is a sensitive wetland. For this reason, SQM has implemented a comprehensive, real-time environmental monitoring program, which tracks more than 300 biotic and hydrogeological monitoring stations, to prevent damage to or degradation of the vegetation, flora, fauna and aquatic biota. SQM wishes to preserve the integrity of the Atacama ecosystem and ensure that its activities bring prosperity to the people who live around its operation zone.
To this end, SQM also decided to commission a third-party audit against the world’s most rigorous standard of best practices in environmental and social responsibility at industrial scale mines: The Initiative for Responsible Mining Assurance’s (IRMA’s) Standard for Responsible Mining. IRMA is the answer to a global demand for more socially and environmentally responsible mining. IRMA offers true independent third-party verification and certification against a comprehensive standard for all mined materials — providing ‘one-stop coverage’ of the full range of issues related to the impacts of industrial-scale mines.
Decarbonizing transportation will be critical to preventing further global warming. Electric cars emit three times less CO2 on average across the supply chain than equivalent gasoline cars. As electric vehicles become a cornerstone of the transition to clean energy, the demand for lithium will inevitably increase. SQM is committed to ensuring that this demand is fed sustainably.
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