Abstract
This study uses life cycle assessment (LCA) and multi-region input-output (MRIO) models to evaluate the impact of material sourcing routes on the carbon footprint and ESG risks for producing NMC 622 batteries. A baseline scenario, with battery production and material sourcing in China, is compared to alternative scenarios with battery production in Norway and material supply from European and Norwegian industries. Findings indicate that relocating battery manufacturing to Norway significantly reduces carbon emissions due to the country’s low-carbon electricity. Further emission reductions are possible by onshoring the production of key components like aluminium and copper foil. ESG analysis reveals that sourcing materials from Europe or Norway substantially lowers risks across most categories and increases the share of economic output in low-risk regions. However, some high-risk exposures, such as water stress and biodiversity impact, may increase depending on specific material sources.