FREYR Battery concludes frame agreements for more than 90% of its raw material requirements for initial plants in Norway

FREYR Battery – a developer of clean, next-generation battery cell production capacity – has entered into nine frame agreements with key suppliers for the supply of battery materials required for the Customer Qualification Plant (“CQP”) being built in Mo i Rana, Norway. The remaining four frame agreements are in the final stages of negotiations. These frame agreements will be the basis for supply of raw materials to the CQP as well as to Gigafactories 1 and 2.

FREYR is on track to start the initial sample production of lithium iron phosphate (LFP) battery cells in its CQP in the second half of 2022. The frame agreements described above will form the legal basis for the supply of the facility with cathode active material, anode active material, separators, electrolyte, Al-foil, Cu-foil, and insulation material, comprising more than 90% of the material required on both a value and volume basis. The next step will be to agree on volume and price for each raw material, after which FREYR will be in a position to issue purchase orders.

We are very pleased to announce that we have made strong progress in establishing a framework that would allow us to secure a large part of the critical raw materials required for our initial production facilities,” said Dr. Tilo Hauke, EVP of Supply Chain in FREYR. “In an increasingly market short environment both for battery cells and raw materials, a core strategic focus for the company is to secure its supply chain,” he added.

FREYR has also entered into an agreement for localized supply of raw materials in the Nordics with Glencore, as well as a Heads of Terms for a JV with the Taiwanese company Aleees to establish giga production of LFP cathode materials in the region. This JV is expected to address the need to establish competitive European LFP cathode supply, which is currently primarily sourced from major producers in China. Both agreements demonstrate FREYR’s progress in delivering the supply of localized, low-carbon raw materials for Gigafactory battery-cell production in Norway and Finland.

FREYR has a stated ambition of sourcing all its raw materials locally to its Gigafactories in the Nordics and in the USA and base such supply on renewable energy sources. Localized raw material production based on renewable energy is a core part of enabling FREYR’s delivery of world-class battery solutions with the lowest possible carbon footprint.

FREYR is targeting an 80% reduction in CO2e emissions on a full life cycle basis including logistics and recycling, documented through relevant Life Cycle Assessments (LCA). Enabling a localized supply chain for raw materials comprises close to half of this ambition and could add up to 31 kg CO2e saved per KWh of battery produced on top of the 33 kg CO2e saved per KWh by producing, packaging, and recycling battery cells in Norway and/or the Nordic region, said Tom Einar Jensen, CEO and Co-Founder of FREYR Battery.

At current (ETS) prices per ton of CO2e in the EU, which recently broke through 100 US$/t, these CO2e savings comprise a potential value of 6.3 US$/KWh of battery cell produced. Based on FREYR’s currently targeted production of 83 GWh in 2028 this translates to more than $500 million in yearly ‘de-carbonization value,” Jensen concluded.

FREYR is now actively working on documenting and validating the LCA aspects of the company’s ambitions and progress and how such value can accrue to the company and its partners.

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