CATL Bets on Forestry Waste for Next-Generation Battery Materials
Synopsis
The investment underscores growing interest in alternative sources of graphite as demand for lithium-ion batteries continues to accelerate.
CATL forestry waste battery materials gained major momentum in early July, as electric vehicle (EV) battery materials giant CATL purchased a 20 percent stake in New Zealand-based startup CarbonScape, which is developing battery-grade graphite from forestry waste.
The investment also gives CATL the right to appoint one director to CarbonScape's board, and both firms will collaborate on commercializing the technology at gigafactory scale. The deal's financial terms were not disclosed.
CarbonScape has developed a method for converting woody biomass into biographite, a replacement for traditional mined and synthetic graphite used in lithium-ion battery anodes. Its technology utilizes forestry waste, and thus presents a new source for a critical battery material.
With China producing an increasing number of EVs, more graphite sources are required. By investing in this forestry waste technology for battery materials, CATL expanded its own footprint in the supply chain.
Graphite Supply a Priority
Although only accounting for less than 1 percent of the battery material weight, graphite remains the most constrained material for lithium-ion battery makers.
Global battery demand surpassed the 1 TWh benchmark in 2025 for the first time, thanks in part to burgeoning EV sales, according to IEA Global EV Outlook 2026.
In addition, graphite is highlighted in the report as among the most concentrated critical minerals within the battery sector, as China accounts for the majority of the world's processing capacity.
CarbonScape has operated a pilot plant since 2018, and is currently working on building larger-scale production plants, including a demonstration plant in Finland, aimed at serving the European and North American battery markets.
The company has also received funding from Nordic forestry firm Stora Enso and appears to be a key player in the growing trend toward renewable graphite production.
Alternative Materials Gain Industry Attention
The CATL forestry waste battery materials initiative comes as both governments and manufacturers increasingly look to diversify their battery supply chains.
Policies are being put in place in the U.S. And EU, for example, to spur domestic mining of essential battery metals, and Australia has been expanding its critical mineral sector for worldwide battery production.
Global passenger EV sales are projected to reach 23.3 million in 2026, with China representing the largest market, followed by the EU and the U.S., according to BloombergNEF's Electric Vehicle Outlook 2026.
As the scale of battery production grows in these markets, demand for graphite is likely to continue to rise, creating demand for alternative inputs, such as forestry byproducts.
Source: Bloomberg
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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