Demand for green materials is expected to increase substantially in the near to medium term, with 80% of buyers willing to pay a price premium — and green lithium is one of them.
Green lithium refers to lithium that is extracted, processed, or recycled with a drastically reduced carbon footprint and minimal environmental disruption compared with traditional mining.
According to global new energy materials company Tianqi Lithium (SHE:002466), demand for green lithium is expected to reach 40% of the market by 2030, but full decarbonisation of lithium production could increase costs by 10–20%.
At the Fastmarkets European Battery Raw Materials Conference 2026, CEO Frank Ha said demand was being driven by increased corporate commitment and stricter regulatory requirements.
However, the sector’s investment pipeline and current market pricing are yet to fully reflect this shifting demand.
“Globally, there is now consensus that the energy sector must go green,” Ha says.
“Yet, there is significant misalignment between green investment and green value, and the way that value is recognised by the market. If the green value cannot be recognised through market mechanisms, incentives for further investment into green technologies and capacity will weaken.”
Ha explains this challenge needs to be solved in order to ensure real, verifiable green value is recognised through a more transparent pricing mechanism.
“This is particularly relevant in major producing markets, such as Australia, where higher sustainability standards increasingly form part of the industry’s competitiveness,” he says.
That shift in how lithium is valued could begin well before a tonne of spodumene or lithium chemicals reaches the market.
For Australian explorers, the opportunity is about more than finding lithium. Rather, it is about identifying resources that could potentially be developed into lower-carbon supply.
Explorers at the front end
As customers seek to reduce the emissions embedded in their products, the environmental profile of future lithium projects could become another factor differentiating one source of supply from another.
This puts explorers and developers at the front end of a changing supply chain, with decisions around extraction methods, energy use, processing, and infrastructure potentially shaping the green credentials of future lithium production.
Several Australian explorers are already advancing lithium projects that could form part of this next generation of supply.
In Western Australia, TG Metals (ASX:TG6) is advancing its Lake Johnston Project, which hosts the Burmeister lithium deposit. In August, Burmeister delivered a resource of 6.7 million tonnes (Mt) @ 1.2% lithium oxide.
TG Metals has already progressed metallurgy and processing studies as it works towards development of the project.
“Lake Johnston is strategically located and within trucking distance to the Port of Esperance,” CEO David Selfe says.
“We continue to engage with interested third parties to progress Burmeister towards first production.
“Important early workstreams are also advancing, including the mining lease application and water exploration activities required to support future development.”
In late August, TG Metals began a diamond drilling program at Burmeister to produce spodumene-rich samples for potential direct shipping ore (DSO) customers.
The recovered core will be cut, scanned, crushed, and screened ahead of being provided to interested customers. Quarter-core samples will also undergo laboratory analysis.
“With the initial DSO pit shell taking in 6.7Mt, Burmeister would potentially be the largest DSO open-pit lithium development in Australia,” Selfe adds.
Building lithium exposure
Sentinel Exploration (NSX:SOX) is also building lithium exposure through its WA project portfolio, with its Kirup Project considered prospective for lithium and gold.
Kirup is located near the Port of Bunbury, a key enabler of Australia’s clean energy transition as the world’s largest dedicated lithium export port.
However, the region has recently experienced a downturn following Albemarle’s (NYSE:ALB) decision in February 2026 to idle its Kemerton lithium hydroxide processing plant and place the facility into care and maintenance.
While Kemerton remains idle, Albemarle also holds an interest in the Greenbushes lithium mine in WA’s South West region, alongside privately held Talison Lithium, which owns 51% of the operation.
Greenbushes is a large-scale, long-life, hard-rock lithium mine that contains four spodumene concentrate plants.
These projects highlight the role Australia’s exploration sector could play in shaping the next generation of lithium supply. But finding the resource is only the beginning.
Green lithium’s future viability
The market is placing greater emphasis on the carbon intensity of critical minerals, and as such, the way these projects are being developed, powered, processed, and brought to market could become more important.
According to Tianqi, the lack of a credible and consistent green value mechanism is one of the key challenges to the future viability of green lithium.
CEO Frank Ha explains that, for green lithium, the market is still in the early stages, with value predominantly reflected through premiums negotiated in bilateral contracts.
“The result is pricing that is fragmented and a market that lacks independent, transparent, and comparable green pricing,” Ha says.
Tianqi has proposed a four-step pathway to establish a uniform, global standard for green lithium pricing: define, measure, recognise, and discover.
Define refers to establishing a green lithium standard based on comprehensive environmental, social, and governance (ESG) dimensions. This includes water, biodiversity, and supply chain traceability.
Measure involves setting transparent, quantifiable, and comparable methodologies and a global benchmark to ensure green attributes are measured on a standardised basis.
Recognise refers to establishing global standards and certification systems, while discover refers to maturing demand and discovering the real value of green lithium.
For green lithium to move beyond a niche premium and play a meaningful role in the global supply chain, the industry needs a clearer way of measuring and recognising lower-carbon production.
That brings the focus back to Ha’s central point: if the market does not recognise the additional value created by greener production, the financing incentive to invest in the technologies and projects needed to deliver it could remain limited.
Write to Aaliyah Rogan at Mining.com.au
Main image: Tianqi Lithium
