From the mobile phone in your pocket to the back of a bus, batteries are everywhere and will only become more present in everyday life. The global lithium-ion battery market exceeded US$150bn in 2025, an increase of more than 20% from 2024 according to the International Energy Agency. Demand for more sustainable energy and backup power is growing and expected to bring the battery market with it.

CATL is the world’s biggest battery manufacturer, creating energy storage systems for EVs, data centres and beyond. It held more than 39% of the global battery market in 2025 and reached production capacity of 772 GWh, with 321GWh under construction. 

While batteries can support sustainability for many industries, Dennis Pan is in charge of making CATL’s batteries themselves more sustainable. As Chief Sustainability Officer, his role is to ensure that sustainability is integrated from strategy to execution across research and development, manufacturing, the supply chain and the full product lifecycle. 

“I have been deeply involved in the lithium-ion battery industry for 14 years, starting my career in supply chain management,” Dennis explains. “That experience is the most valuable asset in my current ESG role – I have always believed that you can only make ESG practical and impactful if you truly understand every link in the value chain and the specific pain points of upstream and downstream partners.”

What sustainability means at CATL

More than a fifth of the world’s greenhouse gas emissions come from manufacturing, the World Resources Institute found. With regulatory pressure growing, cutting emissions is required but no easy feat. 

Dennis says: “Sustainability at CATL is defined by being full-chain, tech-driven and results-oriented. Instead of being a symbolic concept, we have integrated sustainability into our core competitiveness.” This includes aiming to achieve carbon neutrality in core operations by 2025 and across the entire supply chain by 2035. So far, 20 CATL factories have been certified as carbon neutral and multiple have been recognised as World Economic Forum Sustainability Lighthouses. 

In his role, Dennis feels he faces two primary challenges: decarbonising amidst rapid growth and navigating regional regulatory differences. “The challenge is not just to meet local compliance, but to proactively lead and systematically exceed these standards by establishing a globally unified, trustworthy sustainability framework,” he explains. “This requires immense global coordination and system-building capabilities.”

Inside a Lighthouse factory

CATL’s Yibin plant is a rare Lighthouse factory, recognised for both productivity and sustainability. There are only 223 Lighthouses around the world and far fewer recognised for excellence in more than one category. This base is also the world’s first zero-carbon battery factory. Dennis says this is his proudest achievement yet. 

“All energy consumed at the site is sourced from renewables, with clean hydropower as the primary source,” Dennis explains. Located near the Yangtze River, the site uses microgrid photovoltaic storage to decrease its environmental impact. 

Inside the facility, advanced technologies like AI-driven energy management and digital twins monitor the entire production process. Packaging circularity has been scaled across CATL’s operations, cutting material use and improving resource efficiency. In China, reusable and universal racks cover all projects, supported by IIoT-enabled lifecycle scheduling. 

Dennis adds: “We’ve enabled 13 core upstream suppliers at the Yibin hub to achieve carbon neutrality, creating a low-carbon ecosystem. It isn't just a pilot; it is a replicable model for zero-carbon industrialisation globally.” Together, these efforts have resulted in a 56% reduction in carbon footprint. 

The Lighthouse recognition “showed the world that CATL is leading the zero-carbon transformation – that our efforts aren't just concepts in a report, but proven, scalable industrial practices”, he explains. “Our work in battery recycling and supply chain transformation has set a benchmark for the entire industry, which gives me a great sense of pride.”

Building resilience

Making resource-intensive manufacturing sustainable is certainly no easy feat. The biggest challenge, however, “stems from rapidly evolving policies across different markets”, Dennis feels. Regulations like the European Union’s Carbon Border Adjustment Mechanism (CBAM) require extreme transparency across the supply chain. 

While global battery demand is surging, more than 75% of the supply chain remains concentrated in China according to the IEA. Any new environmental standard passed in Europe or North America sends shockwaves upstream. Manufacturers now need to act as global coordinators, pushing their entire domestic supplier network to adopt strict carbon accounting to satisfy foreign buyers. “Additionally, there is rising pressure regarding the sustainability of raw materials and circularity,” he explains. 

“We approach this by using technological innovation as our foundation and life-cycle management as our tool. By anticipating these changes and aligning with the world's highest standards, we succeeded in building a sustainable development framework.” This helps CATL turn regulatory pressure into a driver for growth. Dennis adds: “We don't just aim for compliance; we aim to lead the industry in collective resilience.”

The future of manufacturing

Over the next 18 months, Dennis predicts four key shifts for sustainability in his industry. “Carbon policies and compliance frameworks will start to take effect in more countries and regions, forcing the industry to pursue genuine decarbonisation,” he explains. “Companies that fail to meet sustainability standards will gradually be phased out."

Dennis explains: “Second, the circular economy will enter a scaled‑up development phase. The use of recycled materials in battery production will become widespread and normalised across the industry, further reducing the carbon footprint of the entire value chain.” Beyond the environmental benefits, building out this infrastructure can act as an economic shield. Recovering battery-grade chemicals locally allows manufacturers to hedge against raw material price volatility and reduce dependence on politically sensitive mining supply chains.

Next, he believes carbon‑footprint traceability and corporate sustainability transparency will become core competitive advantages. “When selecting partners, customers will place greater emphasis on a company’s sustainability capabilities and compliance performance,” Dennis says. 

Dennis sees the models of Lighthouse and zero-carbon factories being replicated across the industry fast. “Low‑carbon manufacturing will become the mainstream approach, driving the battery sector toward higher‑quality and more sustainable development," he explains.