The Vulcan Energy Resources Ltd (ASX: VUL) share price rocketed up 20% to a new all-time high of $2.83 in early trade today. This comes after the lithium producer announced new regulations from the European Commission into lithium-ion battery production.
While the All Ordinaries Index (ASX: XAO) is down 0.17% at 6,905 points, the Vulcan share price is breaking new ground, currently trading up 15.3% at $2.71.
What’s driving the Vulcan share price to new highs?
As global attention turns toward climate change, the European Commission has proposed new mandatory requirements on carbon footprints from lithium miners. Vulcan says this will complement the company’s aim to become the world’s first zero carbon lithium producer.
From 1 January, 2026, all lithium-ion batteries in Europe will include a carbon intensity performance class label. Following the change, if companies do not meet the maximum carbon footprint threshold, they will not be able to operate in Europe. The ban will come into effect from 1 July 2027.
In light of this, manufacturers will have to demonstrate to authorities that the raw materials sourced, are done so in an environmentally friendly way. This will be conducted through a third party which will use a digital passport tracking of the battery materials used in each battery product.
What did the CEO say about the new regulations?
Vulcan CEO Francis Wedin welcomed the European Commission stance, saying it was “a major endorsement of Vulcan’s Zero Carbon Lithium strategy”:
Decarbonisation, responsibly sourced lithium and renewable energy are the foundation of Vulcan.
Our early adoption of this strategy gained EU support and puts us at the forefront of the lithium sector where companies will have to adapt to the rapidly evolving global aims of decarbonisation in the production process and responsibly sourced materials. With our PFS due shortly we go into 2021 knowing that our project, process and product, to produce battery quality lithium hydroxide for electric vehicles in Europe for the European market with net zero carbon footprint, will be strongly supported by EU regulations.
We are the only lithium project globally which is being developed to have a zero-carbon footprint, we have the largest lithium resource in Europe and own the trademark Zero Carbon Lithium which can be licenced to battery manufacturers and OEMs using our product.
About the Vulcan share price
The Vulcan share price has been on an upward trajectory over the past year. Shareholders who bought into the company at the start of the year would be sitting on gains of more than 1,800%. That means if you invested $1,000 in January, the value of your shares would now be worth more than $18,000.