European EV battery maker Northvolt and Stora Enso, a leading renewable packaging and paper products provider and one of the largest private forest owners in the world, have signed a joint development agreement. The two companies will work together to create a battery that contains an anode made from lignin-based hard carbon produced with sustainably produced wood from Nordic forests. This will make it the world’s first industrialized battery, featuring an anode sourced entirely from European raw materials.

Stora Enso will be supplying Lignode, its lignin-based anode material, while Northvolt will focus on cell design, the development of production processes, and technology scale-up. Stora Enso’s leadership has also stated that its Lignode would serve applications from mobility to stationary energy storage. Currently, Stora Enso is evaluating the first industrial production of Lignode at their production site in Finland through a feasibility study.

Analyst QuickTake: The exploration of new sources of sustainable raw materials within the European battery value chain offers advantages of lowering both carbon footprint and cost. Furthermore, the move comes at a time when major European economies are announcing their intentions to ban the sales of ICE vehicles by 2030 or 2040, with projections estimating that EVs would make up 70% of all vehicles sold in Europe by 2040. This future would dramatically increase the battery demand from EVs produced in Europe to 1,200 gigawatt-hours per year, making the prospect of locally produced batteries an attractive option.