The global lithium-ion battery supply chain is pivotal to achieving worldwide decarbonization. However, its geographically dispersed production stages pose substantial challenges for carbon management. From upstream resource extraction and midstream material refining to downstream battery manufacturing and recycling, he highly decentralized geographical distribution of the production stages not only results in uneven carbon emissions but also makes carbon footprint accounting and management extremely complex, posing a severe challenge to global collaborative carbon reduction.

A pioneering study published in Nature (https://doi.org/10.1038/s41586-025-09617-4) now offers a transformative model to resolve this paradox. A research team from the Guangzhou Institute of Energy Conversion (GIEC), Chinese Academy of Sciences, in collaboration with Beijing University of Technology and other research partners, has developed a lithium cycle computable general equilibrium (LCCGE) model, bridging micro-level recycling data with macroeconomic trends to formulate robust decarbonization strategies.

The proposed model integrates life-cycle thinking with global economic dynamics through two core custom modules: The Li-cycle dynamics module connects the material and value flows throughout the entire lifecycle of lithium-ion batteries, simulates the impact of circular economy strategies on the supply chain, and achieves a closed-loop simulation of the “raw material extraction-production-recycling- remanufacturing” process. The GHG emissions accounting module comprehensively tracks the carbon emission footprint of the lithium-ion battery supply chain, distinguishes the responsibilities of the producers and the consumers, and provides a quantitative basis for the assessment of emission reduction effects.

The LCCGE model is the first to integrate the micro-level technical details of life cycle assessment with the macroeconomic dynamics of computable general equilibrium models, enabling the precise simulation of the cascading effects of various policies, technologies, and trade strategies on the economic benefits and environmental footprints of global supply chains. Based on this model, it has quantitatively revealed for the first time the "value-emission paradox" in the global lithium battery supply chain: The mining process, with a relatively low added value, contributed 18.78% of the economic value but generated 38.52% of the carbon emissions; the cathode material production process, with a higher added value, generated 34.82% of the emissions but created 42.56% of the economic value. This structural imbalance indicates that the key to decarbonization of the industrial chain lies in targeted management of the manufacturing stage, and highlights the urgent need to explore the emission reduction potential of circular economy pathways.

Through systematic simulation studies of thousands of complex scenarios, it was confirmed that the effect of a single emission reduction policy is relatively limited and prone to negative effects such as “burden transfer”. The team also proposed an optimal path for achieving deep decarbonization of the industry, namely a comprehensive strategic framework of “Global Collaboration + Regional Customization”. This framework suggests that countries should engage in cross-regional cooperation in terms of technology, trade and environmental policies, and tailor their respective circular economy strategies according to their roles in the supply chain.

The research systematically reveals the complex trade-offs between economic efficiency and regional equity during the decarbonization of the global lithium-ion battery supply chain, providing a comprehensive decision-making basis for global governance that goes beyond a single perspective. The optimal global lithium battery supply chain decarbonization strategy framework proposed by the research provides a collaborative governance mechanism for effectively addressing the aforementioned challenges. Under this strategy, it is expected that the average emission intensity of the global lithium-ion battery supply chain can be reduced by 35.87% by 2060, with reduction potentials of 42.35% for China, 39.14% for the United States, and 37.28% for the European Union.

This study provides a scientific blueprint for decarbonizing complex global supply chains and establishes a balanced sustainability framework, opening new avenues for systemic industrial decarbonization.