Lithium produced from South American brines can have a significant carbon-footprint advantage over material derived from hard-rock spodumene. But turning that difference into a verifiable and commercially valuable attribute remains a challenge as Europe introduces new requirements on carbon footprint, traceability and supply-chain due diligence.
A real advantage the market cannot verify
One tonne of lithium carbonate produced from brines in Jujuy using solar evaporation generates between 2 and 4 tonnes of carbon dioxide equivalent per tonne of final product. The same tonne produced from spodumene ore processed in roasting furnaces in China generates between 15 and 20 tonnes (Skarn Associates, 2023). The difference in carbon impact between the two production routes is roughly an order of magnitude.
By Serrana Verges*
Master’s degree in Blockchain and Web3, EBIS Business TechSchool, Spain. Founder of Woman in Blockchain Latam.
Yet both tonnes are traded as though they were equivalent. Producers operating under more demanding environmental standards receive the same price as those that do not. This standardization results in an estimated US$600 million to US$1.8 billion per year in uncaptured value, based on projected production in northwestern Argentina and an environmental premium of between 8% and 22% over benchmark prices in bilateral critical-minerals contracts with verified attributes (Center for International Private Enterprise and Fundación Libertad, 2026; U.S. Geological Survey, 2025).
The reason for this gap is technical: there is currently no data infrastructure capable of independently demonstrating, through records that cannot be retroactively altered, how much freshwater was consumed in producing a specific tonne, what its actual carbon footprint was, and under what social and environmental conditions it was extracted.
Without that evidence, the environmental advantage claimed for brine-based lithium remains an assertion rather than something that can be independently demonstrated. European regulation is now making the ability to substantiate such claims increasingly relevant to market access.
What Europe requires, and who must comply
The European Union’s Battery Regulation (Regulation 2023/1542) does not directly impose its obligations on an Argentine lithium carbonate producer. The regulated entity is the battery manufacturer placing its products on the European market. That manufacturer, however, needs information from its raw-material suppliers to meet two major sets of requirements with defined implementation dates.
The first is the Digital Battery Passport, which becomes mandatory from February 18, 2027, for electric-vehicle batteries and industrial batteries with a capacity above 2 kWh (Article 77 of Regulation 2023/1542). The passport must include information on the battery’s carbon footprint and the origin and composition of its materials. Calculating that footprint extends upstream into raw-material extraction and processing, increasing the importance of reliable supplier-level data throughout the value chain.
The second is supply-chain due diligence, which explicitly covers lithium alongside cobalt, nickel and natural graphite. The application of these obligations was postponed until August 18, 2027, under Regulation 2025/1561. The European Commission’s implementation guidelines are due to be published by July 26, 2026.
For South American brine operations, the broader environmental and social risk categories covered by the regulation make issues such as water management, biodiversity and the interaction between lithium extraction and surrounding ecosystems particularly relevant to the due-diligence process.
Commercial pressure can also precede formal regulatory deadlines. Major electric-vehicle manufacturers are increasingly incorporating traceability requirements into supply agreements with cell manufacturers, with those information requirements moving upstream toward raw-material suppliers. In practice, the commercial consequences of incomplete or rejected data packages can extend beyond regulatory compliance and affect the terms under which material is purchased.
Three obstacles the industry debate tends to underestimate
Primary data from input suppliers is one of the weakest links. Calculating a credible product footprint requires information extending beyond the lithium operation itself and into relevant inputs used during processing. Solar-evaporation lithium carbonate production, for example, requires significant volumes of soda ash and lime, some of which must be transported long distances by truck.
When fragmented suppliers cannot provide sufficiently robust data, calculations may need to rely more heavily on secondary datasets and standardized emission factors. That can reduce the degree to which a producer can demonstrate the specific environmental performance of its own supply chain. Traceability is therefore only as strong as the information available across the different links involved in production.
A “batch” at a solar-evaporation operation is partly a statistical construct. Brine from dozens of wells, with varying concentrations of lithium, magnesium and sulfates, is mixed through cascading evaporation ponds over cycles lasting 12 to 18 months. The process involves selective salt precipitation, liquor recirculation and evaporation rates that vary with daily weather conditions.
Lithium carbonate packaged at a given point in time may therefore contain lithium extracted months or even years earlier, combining material from different wells and processing periods, as well as water sourced during different seasons. Assigning a differentiated carbon and water footprint to that specific batch in real time may therefore require probabilistic estimates with clearly stated uncertainty ranges rather than being presented as a direct batch-level measurement.
Water accounting remains subject to unresolved scientific questions. One of the central challenges for brine operations is determining how extraction interacts with surrounding freshwater systems and ecosystems.
First, hydrogeological models used to understand groundwater systems in salt flats can carry significant uncertainty, while some impacts on lagoons and high-altitude wetland vegetation may take years to become observable. Production-year data alone may therefore be insufficient to conclusively establish the absence or presence of longer-term impacts.
Second, there is an underlying debate over what should be measured and how it should be classified. Mining companies distinguish brine from freshwater and argue that brine extraction should not be treated as conventional freshwater consumption. Other approaches focus instead on whether changes in brine pressure and groundwater dynamics could affect adjacent freshwater aquifers or increase salinization risks.
Commercial structures can determine who captures the premium
Many lithium operations in northwestern Argentina have Chinese refining groups among their major shareholders or buyers. When lithium carbonate reaches a refinery that processes material from different origins for both European and Asian customers, maintaining a direct chain of custody between the original producer and the battery ultimately sold in Europe becomes more complex.
The cost of building traceability infrastructure may therefore fall on the Argentine producer without necessarily guaranteeing that the producer captures the economic benefit of a potential environmental premium. If an intermediary buyer is not contractually required to recognize and pass through that value, the premium may never reach the upstream producer.
Capturing that value consequently requires more than verifiable data. It also requires contractual structures capable of preserving the connection between verified environmental attributes and the price paid for the material throughout the value chain.
What can be built today
With existing technology, operators can implement independently verifiable measurement and recording systems for Scope 1 and Scope 2 emissions, which are under the operator’s direct control, as well as for freshwater consumption at the processing plant, with sufficient accuracy to support high-level assurance processes.
The Cauchari-Olaroz operation, managed by Lithium Argentina Corp. together with Ganfeng in Jujuy, is moving toward conformance with the Responsible Minerals Assurance Process, providing one concrete example of efforts in this direction (Lithium Argentina Corp., May 2026).
The initial implementation cost of this type of digital infrastructure is estimated at between US$1.5 million and US$3 million. In high-salinity environments, annual maintenance costs can exceed US$1 million, significantly above some of the industry’s initial estimates, due to accelerated sensor degradation caused by crystallization and scaling in brines containing more than 300,000 milligrams per liter of dissolved solids.
What cannot yet be established with the same degree of scientific certainty is batch-level water traceability capable of resolving the hydrogeological uncertainties associated with salt-flat systems, or a complete chain of verified primary data covering every third-party input.
Those gaps cannot be closed through technology investment alone. They also require methodological development, greater alignment between Argentina’s provincial validation frameworks and European accreditation standards, and more sophisticated modeling of the Puna’s hydrogeological systems.
The Digital Battery Passport becomes mandatory on February 18, 2027. Supply-chain due-diligence obligations take effect on August 18, 2027. These deadlines are fixed.
The carbon-footprint advantage that Argentine brine-based lithium can offer over certain spodumene-based production routes is potentially substantial. But demonstrating and monetizing that advantage is not simply a technological or regulatory challenge. It is also scientific, institutional and contractual.
The sooner the industry defines those gaps precisely, the more productive the discussion about how to close them can become.
*Serrana Verges is Director of IoT-AI-Blockchain Architectures at Ambioteck. She holds a Master’s degree in Blockchain and Web3 from EBIS Business TechSchool in Spain and a Master’s degree in Marketing from UNICEN in Argentina. She is the founder of Woman in Blockchain Latam, an initiative focused on blockchain education and awareness across Latin America.
