Implications of mineral price volatility on the outcome of social life cycle assessment interpretation—a battery material case study

Abstract

Purpose New research methods are needed to better understand the progress toward social sustainability goals. Social life cycle assessment (S-LCA) is one way to measure this progress, but price volatility may cause challenges in using monetary value-based S-LCA modelling with typical S-LCA databases. To address these methodological concerns, the study focuses on assessing the impacts of price volatility on S-LCA results through a comparative case study on the social risks of battery materials. Methods The Social Hotspot Database (SHDB) was used to compare cathode active material (CAM) production in Finland and globally to see how price volatility of minerals impacts the results of comparative S-LCA. Also, a sensitivity analysis was performed on the prices of multiple minerals and energy types used in NMC 811 CAM production. Results and discussion This study shows that price volatility might have an unanticipated effect on the results of S-LCA, e.g., by increasing the social risks when the mineral price is decreased due to price volatility. This may cause challenges with interpretation of the results or when results of two different studies using price data from different years are compared with each other, e.g., the results of social product declarations (SPD). However, one of the main purposes of using the SHDB is to find the countries and sectors with the highest social risks in the supply chain, and these results were less sensitive to price volatility except for lithium which also had the highest price fluctuation. Conclusions Price volatility can have significant impacts on the results of the monetary value-based S-LCA. It is recommended that the mineral price volatility is considered if developing product category rules for battery-related sectors. The importance of sensitivity analyses should be emphasized, and physical unit-based reference flow should be preferred if site-specific data collection about worker hours is possible.