Key EV Battery Material Could Come From Surprising Source: Methane

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(Bloomberg) — Graphite is key to making the lithium-ion batteries that power everything from electric cars to smartphones. While China is the world’s top producer and exporter of crystalline carbon, there is a push to grow the US supply chain.

Oakland-based startup Molten Industries is trying to build by relying on something cheap and plentiful in the US: natural gas. The company has developed a special technique to break down methane into graphite and hydrogen, the latter of which can be used as a source of clean energy. The venture was partially funded by a $25 million Series A financing round led by Bill Gates’s Breakthrough Energy Ventures (BEV).

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“This is at the intersection of two climate technology theme areas that are very important to us at Breakthrough: making batteries scalable and more cost-effective to boost EV sales, and on the other hand, cheap clean hydrogen,” said BEV Managing. Director David Danielson.

Big auto companies are hungry for cheap and reliable domestic graphite because of international supply chain problems, he said. Graphite is usually mined or synthetically produced from fossil fuels, and China controls about three-quarters of the world’s graphite anode supply chain, according to data from minerals intelligence firm Benchmark.

Higher freight costs like those experienced during the pandemic and China’s temporary export ban have raised concerns in the US and elsewhere about the risks of depending on a single source of the precious material. Boosting domestic production is a top priority of the Biden administration, which in 2022 is calling for the Defense Production Act to fund the industry.

To make graphite, Molten relies on pyrolysis, a technique that involves heating methane until it breaks down into its carbon and hydrogen components. If there is no oxygen or water during this process, methane will break down without any CO2 emissions.

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Other pyrolysis companies exist but most of them make products like soot or carbon black that cannot be used in battery production. These companies also often rely on microwave or plasma-based heating, techniques that can be energy intensive. By contrast, the Molten reactor is like a toaster: It uses resistive heating, which is more efficient, according to co-founder and Chief Executive Officer Kevin Bush.

Molten says the graphite will be competitive with other sources. It is also banking on the fact that customers will want synthetic graphite-emissions lower than the current type on the market, which is made by treating feedstocks based on fossil fuels using a process that emits methane and air pollution. The only potential source of emissions in the Molten process is from the production of natural gas used as feedstock or grid electricity that drives pyrolysis.

Graphite wasn’t a big part of the startup’s vision when it was founded in 2021. “Our original focus was just making hydrogen at the lowest cost with the most energy-efficient reactor,” Bush said. “We knew we could make battery-grade graphite instead of just amorphous carbon soot.”

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Molten has built a pilot reactor in Oakland and is building a full commercial-scale unit the size of a shipping container that Bush said he expects to be operational next year. The unit will be able to produce 500 kilograms (1,100 pounds) of hydrogen and 1,500 kilograms of graphite per day, he said.

Whether there will be a demand for the latter in the coming decades remains to be seen. Other materials like silicon, lithium and hard carbon may begin to compete with graphite as the standard material in battery anodes, according to BloombergNEF. That shift could cut demand in half by 2035.

The hydrogen market can also be challenging due to the high cost of producing and using it and policy uncertainty, according to Payal Kaur, a BloombergNEF hydrogen analyst.

“It’s a story that follows every market,” Kaur said. “You have more supplies than you do.”

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