By 2026, EV sales are set to exceed 20 million units per year, pulling global cobalt demand for batteries above 220,000 tonnes annually. Around 70% of mined cobalt still comes from the Democratic Republic of Congo, where 10-15% is estimated to involve artisanal, high-risk operations. At Energy Solutions, we track ESG and materials data across 40+ OEMs and 120 battery plants. This article quantifies how fast the industry is moving beyond cobalt-and what -ethical sourcing- really looks like in 2026.
What You'll Learn
- Why Mining Ethics Matter in the EV Battery Boom
- Inside the Cobalt Supply Chain in 2026
- The Shift Beyond Cobalt: LFP, Manganese-Rich, and Sodium-Ion
- ESG Metrics: Comparing Battery Chemistries
- Policy, OEM Pledges, and Investor Pressure
- Procurement Playbook: How to De-Risk Your Battery Supply
- FAQ: Are EV Batteries Really Getting More Ethical?
Why Mining Ethics Matter in the EV Battery Boom
EVs cut tailpipe emissions to zero, but they shift environmental and social impact upstream into mining, refining, and manufacturing. Cobalt has become the focal point for NGOs, regulators, and investors because of its association with child labor, unsafe working conditions, and opaque intermediaries.
For OEMs and fleets, the risk is no longer only reputational. New EU and US rules introduce due diligence obligations, while asset managers screen portfolios on Scope 3 emissions and human rights exposure. Battery sourcing decisions now directly influence access to capital, subsidies, and tenders.
Energy Solutions Insight
In our 2025-2026 survey of 180 institutional investors, 63% said they would discount valuations for OEMs unable to evidence traceable, low-risk cobalt supply. Yet, 45% of fleet managers still do not request any mine-level data from their leasing partners. The transition to cobalt-light and cobalt-free chemistries is as much about data and governance as it is about materials science.
Inside the Cobalt Supply Chain in 2026
Cobalt moves through a long chain: artisanal and industrial mines ? traders ? refiners ? cathode producers ? cell makers ? pack assemblers ? OEM. Each step can either strengthen traceability-or introduce blind spots.
Global Cobalt Supply by Region and Risk Profile (2025 Estimates)
| Source Region | Share of Mined Cobalt | Artisanal / Small-Scale Share | ESG Risk Rating | Key Notes |
|---|---|---|---|---|
| DRC (Industrial) | ~55% | < 3% | Medium | Large concession mines with varying ESG performance; some aligned with ICMM standards. |
| DRC (Artisanal) | ~15% | > 80% | High | High incidence of informal labor, weak oversight, and complex trader networks. |
| Indonesia & Philippines | ~12% | < 1% | Medium | Nickel-rich laterite ores; ESG focus on deforestation and tailings management. |
| Australia & Canada | ~8% | < 1% | Low | Highly regulated jurisdictions with stronger labor and environmental protections. |
| Other Regions | ~10% | 2-4% | Medium | Diverse mix of smaller producers; data quality often limited. |
*Energy Solutions synthesis of public company reports, NGO datasets, and customs statistics for 2025.
Projected Cobalt Demand for EV Batteries: With vs. Without Material Thrifting
The Shift Beyond Cobalt: LFP, Manganese-Rich, and Sodium-Ion
Battery makers are reducing cobalt intensity in three main ways:
- High-nickel NMC/NCA cathodes: Less cobalt per kWh, higher energy density, but more nickel dependence.
- LFP (Lithium Iron Phosphate): Zero cobalt, lower energy density, excellent cycle life and safety.
- Sodium-ion chemistries: No lithium, no cobalt; ideal for low-cost, short-range and stationary applications.
Cathode Chemistries Compared: Materials, Cost, and ESG Exposure (Indicative 2026)
| Cathode Type | Cobalt Content | Typical Energy Density | Cell Cost (2026, $/kWh) | Relative ESG Risk |
|---|---|---|---|---|
| NMC 811 / NCA | Low (< 5% by weight) | High (240-280 Wh/kg) | $80-95 | Medium - cobalt exposure reduced but not eliminated; high nickel demand. |
| NMC 622 / 712 | Moderate (5-12%) | Mid-High (210-240 Wh/kg) | $90-110 | Medium-High - legacy chemistries still in mainstream fleets. |
| LFP | None (0%) | Mid (160-190 Wh/kg) | $70-85 | Low - no cobalt or nickel; ESG focus shifts to phosphate, iron, and processing emissions. |
| Manganese-rich (LNMO, LMFP) | Very Low (< 3%) | Mid-High (190-230 Wh/kg) | $80-100 | Medium - limited cobalt, but manganese mining and HF emissions under scrutiny. |
| Sodium-ion (Gen 1) | None (0%) | Low-Mid (120-160 Wh/kg) | $55-75 | Low - no cobalt or lithium; ESG focus on aluminum, graphite, and power mix. |
Global Cathode Chemistry Mix: 2020 vs 2025 vs 2030 (Forecast)
ESG Metrics: Comparing Battery Chemistries
Moving away from cobalt does not automatically make a battery -clean-. ESG assessments need to consider climate impact (kg CO2e/kWh), water use, waste, and social risk at the mine and refining level.
Our internal scoring framework aggregates more than 40 indicators into a 0-100 index (100 = lowest risk). The chart below shows a simplified comparison across chemistries typical for 2026 production.
Relative ESG Risk Index by Chemistry (Higher = Better)
Policy, OEM Pledges, and Investor Pressure
Regulators are hard-coding mining ethics into market access:
- EU Battery Regulation: Mandatory due diligence, recycled content targets, and carbon footprint declarations per kWh.
- US SEC climate disclosures (draft): Increased scrutiny of Scope 3 and material sourcing risks.
- National EV subsidies: More markets tie incentives to local content and responsible sourcing certifications.
In parallel, leading OEMs have announced:
- Targets for 100% -responsibly sourced- cobalt with third-party audits by 2030.
- Ramp-up of LFP and sodium-ion for entry and mid-range vehicles.
- Direct investment in mines and refineries to secure low-risk supply.
Procurement Playbook: How to De-Risk Your Battery Supply
Corporate fleet managers and energy storage developers increasingly specify chemistry and ESG criteria in their tenders. Based on our client work, effective RFPs typically require:
- Full material breakdown by chemistry, including cobalt intensity (kg/kWh).
- Mine-to-cell traceability with digital certificates or blockchain-based tracking where available.
- ESG scorecards for each supplier, including third-party audits and remediation plans.
- Scenario analysis for switching to LFP or sodium-ion in future procurement rounds.
Quick Checklist for Buyers
If a supplier cannot answer basic questions on cobalt origin, chemistry mix, and ESG certifications in writing, treat that as a material risk signal, not a minor paperwork gap. In 2026, data-poor supply chains are a strategic liability.