Elsevier

Journal of Cleaner Production

Volume 187, 20 June 2018, Pages 485-495
Journal of Cleaner Production

In the lab: New ethical and supply chain protocols for battery and solar alternative energy laboratory research policy and practice

https://doi.org/10.1016/j.jclepro.2018.03.097Get rights and content

Highlights

  • Higher education alternative energy research needs new ethical procurement protocols.

  • Guidance is proposed for laboratory procurement policy and product development.

  • Early product design must consider conflict minerals and critical materials.

  • This reduces supply chain risks of negative social, environmental and supply impacts.

  • Few universities/laboratories and their suppliers currently consider such issues.

Abstract

Ethical procurement of laboratory supplies is a neglected, but vital issue for the ethical development of new alternative energy technologies. This is important from the earliest development stages in alternative energy research due to potential impacts from the commercialization of products into global mass production. The authors constructed a framework for examining risk-based, supply chain due diligence in higher education laboratory research. The focus was on materials which present ethical risks - including ‘conflict minerals’ and ‘critical materials’, with the latter including rare earth elements. These materials can potentially have security of supply issues and/or cause social, conflict and environmental impacts including human rights abuses. The authors applied the framework to one year's procurement of materials at two Australian universities' laboratories, researching battery storage and solar energy and identified suppliers, and suppliers' policies on procurement of materials with potential risks. In search of best-practices in higher education policies on laboratory procurement, the authors analyzed procurement and supply chain policies from four Australian universities involved in alternative energy materials research, and identified emerging international, higher educational procurement policies for conflict minerals. Key issues regarding critical materials, and regulatory approaches to conflict minerals were discussed, leading to proposed actions for Higher Educational leaders to enhance ethical alternative energy research procurement and subsequent product innovation. This reinforces the importance of research strategy including materials choices. In other words, “it is important to get it right at an early stage”.

Introduction

The authors examined ethical procurement and supply chain issues in higher educational (HE) research laboratories, which are focused on developing alternative energy technologies such as battery storage and solar photovoltaic (PV) energy. The global supply chains of procured materials for research facilities span a continuum from mines, smelters/refiners and metal traders' exchanges, to research facilities, manufacturers and retailers (OECD, 2011, 5). Just as ethical issues have arisen with supply chains of carbon-intensive energy such as coal, including labor, environmental and human rights abuses related to mining, the authors examined ethical risks associated with materials used in alternative energy research supply chains; and the potential benefits of using risk-precautionary practices in HE, alternative energy laboratories (Guess and Husted, 2016).

In HE laboratories, the amounts of materials used in research are usually small, which may explain why ethical procurement and chain of supply practices for laboratory procurement have gained so little attention to date. It is also at the research stage that ethical controversies surrounding the use of materials may dictate due diligence steps be taken, or caution against the use of particular materials, both in the laboratory and in anticipation of commercial product development.

On 4 November 2016, the Conference of the Parties to the United Nations Framework Convention on Climate Change (The Paris Agreement) entered into force. This Agreement commits the signatories to strengthening developing countries' abilities to deal with climate change impacts by putting in place “appropriate financial flows, a new technology framework and an enhanced capacity building framework” (UNFCCC, 2017). Aligned to this, the authors of this paper defined ethical procurement as encompassing a range of practices. These practices include that materials: need to be ethically sourced; they must be sufficiently available; their sourcing should not cause or exacerbate conflict; and in terms of equity and access and the transition to a post-fossil carbon future, alternative energy products should enable remote, poor and developing country communities' access to affordable energy sources (Delisio, 2015, Sauer and Seuring, 2017, Thai, 2006). Brown and Taylor (2014) have linked climate change to issues of justice and ethics, which underpin obligations on high-emitting countries to develop harm avoidance processes, and enable access to new technologies for poor, vulnerable countries and communities. Alternative energy research and development is key to this agenda.

The authors first constructed a framework for classifying materials used in alternative energy research focused on conflict and critical materials. The framework drew on a conceptual discussion of corporate social responsibility (CSR) debates on procurement, supply chains and ‘conflict minerals’. Conflict minerals can finance violent conflict and human rights abuses because they are mined in conflict-affected and high-risk areas such as the Democratic Republic of Congo (DRC) and surrounding countries. The authors, drew on EU resources (European Commission, 2014, European Commission, 2017, European Commission, 2018), US research by the US Department of Energy (US DOE, 2011, US DOE - Department of Energy, 2010) and (US Department of the Interior, 2018) and research conducted by Geoscience Australia (Skirrow et al., 2013), to arrive at a definition of ‘critical materials’, which are ‘critical’ to economic development, the production of alternative energy technologies and security of supply issues, such as rare earth elements like cobalt and lithium.

As a note on terminology, the term ‘materials’ was used as a generic umbrella term by the authors to denote elements, minerals/metals and ores. The terms conflict minerals and critical materials are recognized in public discourse worldwide. Conflict minerals are commonly defined as wolframite (tungsten); columbite-tantalite (also known as coltan from which tantalum is derived); cassiterite (tin); and gold; or their derivatives. These are known as 3 TG. Other minerals or their derivatives could be assessed as conflict minerals in the future if found to finance conflict (OECD, 2016). Conflict minerals have received regulatory attention internationally including Section 1502 of the US Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act, 2010) in the US, and more recently, the EU's legislation on conflict minerals which comes into force in 2021 (European Parliament, 2016). Lists of critical materials vary by country and over time. Critical materials have not yet received such regulatory attention as conflict minerals, but there has been growing international attention to developing strategies to increase critical materials' security of supply (Ali et al., 2018, CMI, 2014, Ciupagea, 2013, US Department of the Interior, 2018).

Having developed the classificatory framework, the authors' second stage of research documented the materials used in two Australian research laboratories, which conduct alternative energy research in the Australian Research Council Centre of Excellence for Electromaterials Science (ACES, 2017).1 Both laboratories' procurement records for one year were examined, and publicly available data was used to identify their main laboratory materials' corporate suppliers. The authors examined the suppliers' policies on procurement, their supply chains and commitments to social and environmental responsibility. The procurement policies of four Australian universities involved in minerals research were also analyzed for reference to conflict minerals, critical materials and related issues, to investigate the extent to which current policies address such materials; after which international developments in best practice HE procurement in this field were examined.

Ethical procurement and supply chains are a major issue in CSR research and practice, driven by scandals in for example, mining and electronics industries (AI and AW, 2016: Hodal, 2012) and in garment manufacturing (Kaufman et al., 2004, Motlagh, 2013, Wilkins, 2013). Concerns have focused on human rights, labor conditions, environmental impacts, and on the use of toxic or harmful products (Delisio, 2015, Seay, 2012, Thai, 2006, United Nations Group of Experts, 2004).

In the alternative energy and electronics industries, products such as new generation lithium-ion battery energy storage systems (such as the Tesla Powerwall) use, for example, lithium, cobalt and tin. Critics highlight ethical issues related to the use of these materials and their potential links to conflict, human rights abuses, poor labor standards, environmental impacts and security of supply issues (Ali et al., 2017, Ali et al., 2018, Thomas, 2016, Thomas, 2017). Magnets used in electric/hybrid vehicle motors and wind turbines, also have security of supply issues due to their use of the rare earth elements, neodymium and dysprosium.2 This, along with these materials' potential toxic environmental impacts from waste products produced during mining and processing, drew attention to the need to ensure these magnets' ethical production, as their use increases with higher numbers of electric vehicles and wind turbines (Bourzac, 2011). Toxic environmental impacts occur with all types of materials' mining and processing; and cleaner production processes are increasingly being used to prevent or minimize toxic emissions. Yet it is essential that the growing production of ‘cleaner’ products like electric vehicles for the post-fossil carbon era, implement best-practice now, and into the future.

Such examples illustrate how organizational performance and global supply chains are now subjected to more specific tests for transparency, accountability, human rights, environmental and ethical probity; and for cleaner production in terms of toxic materials generated during production. Some independent non-governmental organizations (NGOs) such as Global Witness are functioning as global watchdogs, which conduct audits and social media campaigns. For companies, CSR and sustainability performance and reporting have gained traction due to enhanced corporate awareness of consumer concerns and human rights-driven ethical responsibilities, most clearly outlined in the United Nations (UN) Guiding Principles on Business and Human Rights (BHRRC, 2017). The result has been growing calls for organizations to conduct detailed procurement and supply chain risk identification, data collection, benchmarking and reporting (Boström et al., 2015, Mitchell, 2015).

Preliminary to the empirical research, the authors developed a classificatory framework to identify materials which present ethical risks. A scan of recent publications on synthetic energy systems and electro materials research in scholarly journals, indicated alternative energy battery and solar research uses materials including those categorized as conflict minerals and critical materials (for example Bloodworth, 2013, Bloodworth, 2015, Lim, 2015). Journals scanned included: Chemical Communications, Chemistry of Materials, Electrochimica Acta, Journal of Cleaner Production, Journal of the Electrochemical Society, Journal of Material Chemistry, Journal of Physical Chemistry, Nature Chemicals, and Scientific Reports.

Conflict minerals are widely used in electronics like laptops and mobile phones, and by various other industries (European Parliament, 2016). By ensuring they are sourced from audited, “conflict-free” smelters/refiners, the financing of armed groups can be reduced. Concurrently, there has been an increasing identification of practices that can be undertaken by companies and other organizations along the supply chain such as HE laboratories, which actively assist peacebuilding within countries (Ralph and Hancock, 2018, Ralph, 2015).

Rare earth elements have been categorized by some countries as critical materials. They are relatively abundant in the Earth's crust, but discovered minable concentrations are less common than for other ores. China has the largest reserves of rare earth elements. In 2012 China produced 86 per cent of world production and has continued to dominate supply (Zepf et al., 2014, 74-7). Substitutes exist for many applications, but are usually less effective. The seventeen rare earth elements currently identified internationally are:

Rare earth elements underpin recent technologies critical for alternative energy economies, including solar PV devices, battery technologies for transport and energy storage, and phosphors for lighting (US DOE, 2011). Chinese export quotas and tariffs on rare earth element-based products caused an international shock, with price hikes in 2011 generating international responses to the security of supplies of critical materials. Countries outside China have also increased production/exploration projects to achieve greater independence in their supplies of rare earth elements (Ciupagea, 2013).

Several countries or groups of countries have developed 'risk lists' of critical materials for developing alternative energy and high-technology goods. The level of criticality can reflect risk of supply, and the importance of such materials from an economic perspective and therefore, their significance to countries' economies and national security (European Commission, 2014, European Commission, 2017, European Commission, 2018, Geoscience Australia, 2016, Hallstedt and Isaksson, 2017; Executive Office of the President, 2017; US DOE, 2011, US Department of the Interior, 2018). Supply risk factors include the:

  • geopolitical stability of supplier countries;

  • geological scarcity;

  • level of concentration of resources, production and processing in countries or by individual companies;

  • method of recovery (such as a by-product of a major commodity); and

  • trade policies (Geoscience Australia, 2016).

To improve transparency in critical materials markets, countries have ranked critical materials based upon collaborative research efforts among the US, EU, United Kingdom (UK), South Korea and Japan (Executive Office of the President, 2016, Geoscience Australia, 2016, Skirrow et al., 2013, 11-2; US DOE, 2011, 3, 7–9, 134; WWF-Ecofys, 2014).

Countries' assessments of which materials are critical has varied, along with the studies' objectives, approaches and scopes. The EU and US studies integrated supply risk and importance in their assessments, whereas the UK assessed supply risk only.

The EU identified the need to focus on all stages of the supply chain (exploration, extraction, processing, recovery and recycling) of critical materials for eco-industries, and on risk mitigation through recycling and substitution as part of industry policy (Ciupagea, 2013, 6). Approaches to critical raw materials (CRM) in the EU have undergone constant regulatory review every three years, as new materials take on importance to the EU economy and/or high risk associated with their supply. The 2018 update cited three criteria underpinning CRM importance: links to industry “across all supply chain stages”; modern technology such as mobile phones and environmental considerations linked to clean technologies where CRMs “are irreplaceable in solar panels, wind turbines, electric vehicles, and energy-efficient lighting”.

A 2011 EU CRM initiative listed 14 materials, there were 20 listed in 2014 and 27 in 2017 (European Commission, 2014, European Commission, 2017). A further report in 2018 highlighted potential for CRMs in the circular economy as part of an EU renewed industrial strategy and the EU Circular Economy Action Plan under the 2016 Clean Energy Package centred on the EU economy's energy transition (European Commission, 2018). Of central importance is investment in battery value chains for both mobile (vehicle) and stationary applications (European Commission, 2017 Investing, 11).

The US Department of Energy's 2011 report identified sixteen critical materials (including rare earth elements) (US DOE, 2011, 3, 7–9, 134). Materials were selected based on factors contributing to risk of supply disruption including a small global market, lack of supply diversity, market complexities caused by coproduction, and geopolitical risks. The US Department of Energy's 2011 critical materials strategy included: diversify supply, develop substitutes and drive reuse, recycling, and efficient use of materials in manufacturing (CMI, 2014, Sverdrup et al., 2017).

Authors from the US Critical Materials Institute (CMI), established in 2013, argued that “[c]riticality is a recurring phenomenon, and … will increase in frequency in the coming decades”. Scarcity of supply of the volumes needed for transitioning to renewable energy is a defining factor for critical materials, along with the average time lag of fifteen years for development of known resources, eighteen years for new materials development and deployment, investment costs in the billions, and uncertainty surrounding the impacts of materials recycling upon the dynamics of supply (CMI, 2014).

In response to US Executive Order 13817 issued by President Trump on December 20, 2017 entitled “A Federal Strategy To Ensure Secure and Reliable Supplies of Critical Minerals” (Executive Office of the President, 2017), a list of 35 “commodities that are vital to the Nation's security and economic prosperity” was published (US Department of the Interior, 2018). These commodities are listed in Table 1.

A combined ranking was developed by Geoscience Australia (based on a synthesis of individual country rankings by the EU, Japan, Republic of Korea, and US). This represents a broad, multiple-country view of which materials are most critical. Materials like iron, aluminium, copper, gold, lead and uranium were listed in category three (lowest criticality), as countries do not consider them as having immediate high risk of supply (Skirrow et al., 2013, 10-2). Table 2 includes the highest risk category one critical materials (with criticality scores of 12–29 [highest]) and category two materials (with criticality scores of 5–11) by Geoscience Australia.

Section snippets

Method: identifying materials in laboratory procurement for alternative energy research

The authors of this paper identified the key materials and the suppliers of these materials used by Deakin University (synthetic energy systems – batteries) and Monash University (solar PV) laboratories 2014–2015, as indicative of materials currently used in their battery and solar PV research. Research materials and their suppliers were identified and combined, from lists of materials compiled from one year's procurement records for 2015 for each laboratory.

It should be noted that this list of

Identification of materials used in battery and solar laboratories

The results confirmed that materials were procured across the categories of ‘conflict minerals’ and ‘critical materials’ (which included rare earth elements). Table 3 lists the materials procured by the laboratory researchers. (This list is illustrative and non-exhaustive.)

Supply chain policy analyses were conducted on six companies listed in Table 3

  • US-headquartered Sigma Aldrich (including Sigma Aldrich Australia; and as the company was taken over by Merck in 2014, research includes Merck (Germany));

  • Targray (Canada);

  • L&F Materials Co. Ltd. (South Korea);

  • NEI (US);

  • Sedema

Discussion

The researchers of this laboratory procurement paper identified that the two laboratories focused upon in this analysis (Deakin and Monash universities), working on alternative energy batteries and solar power, had procured gold and tungsten (conflict minerals); neodymium (rare earth elements); and (critical materials) cobalt, lithium, tungsten, magnesium, nickel, manganese, chromium, molybdenum, palladium, ruthenium, strontium and titanium.

Regarding materials' supply companies, Sigma

Conclusions

There has been a groundswell of debates on ethical procurement and supply chains across various sectors. But HE laboratory leaders in alternative energy research and product development have been slow to incorporate ethical procurement protocols in the purchasing of materials such as conflict minerals and critical materials used in research. Because at the research stage, many vital decisions are made regarding new product innovation, it is especially urgent that these considerations are

Acknowledgements

Funding from the Australian Research Council Centre of Excellence Scheme (Project Number CE 140100012) is gratefully acknowledged.

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