On the path to becoming net-zero, risk managers need to be aware of increased hazards like lithium-ion battery fires.
Concerns about climate change and global warming have given rise to a lot of green initiatives in recent years. But are these programmes unintentionally doing more damage than good?
United Kingdom Prime Minister Rishi Sunak pledged in September 2023 that the Conservatives will implement measures to cut carbon dioxide (CO2) emissions by 68% by 2030 and provide a workable plan for the UK to achieve net zero emissions by 2050.
Lithium Ion
By prohibiting the sale of new gasoline and diesel vehicles by 2035 and by obtaining 620 million pounds in funding for zero-emission vehicle grants and electric vehicle (EV) infrastructure, Rishi Sunak has attempted to meet these aims.
Drivers in the United Kingdom have been adopting electric vehicles at a considerable rate as a result of these initiatives, choosing more environmentally friendly modes of transportation.
For instance, data from the insurer Allianz’s States of Mind New Mobility survey, which was released on June 20, 2023, revealed that 60% of drivers desired to convert to electric vehicles.
Furthermore, the research noted that there were twice as many electric vehicles available in 2021 as there were in 2018.
After polling over 25,000 customers in ten key markets—Australia, Belgium, Brazil, Canada, China, France, Germany, Italy, the United Kingdom, and the United States—Allianz was able to acquire this data.
Graham Hawkins, associate director and head of environmental at insurance services company Charles Taylor, cautions that “just because something is green, does not mean it is not going to represent a risk to the environment if it goes wrong,” in an exclusive interview with sister magazine Insurance Times.
Hawkins has been interested in one particular issue since joining Charles Taylor in July 2022: the unforeseen environmental effects of “green” projects.
Recognising The Dangers
For instance, risk managers and insurers need to be aware of and prepared for the increased hazards that electric vehicles (EVs) bring.
According to Hawkins, “electric car charging stations, for instance, require a lot of area because the vehicles take longer to fill, which affects the site.”
High-voltage cables with oil coolers are required to supply electricity to the charging stations.
“[Therefore], there is a risk associated with having all these electric vehicles together, so care must be taken to ensure that these cables are not harmed in any manner. A fire may then result from damage to one of the cables,” Hawkins stated further.
Because of the batteries inside, an electric vehicle may explode if a fire develops or if there is a thermal runaway effect. That carries a risk.
Thermal runaway is the result of an electrical current overcharging or charging a cell or battery to a point where the temperature rises, increasing current flow and causing the cell to overheat even more. Lithium-ion batteries have the potential to catch fire during this operation.
Commonly seen in electric vehicles (EVs), lithium-ion batteries are rechargeable batteries that use lithium ions as the main component of their electrolyte.
Lithium-ion battery fires are “the capital’s fastest developing and escalating fire risk,” according to the London Fire Brigade in H1 2023.
According to Honeywell Safety and Productivity Solutions data released in September 2023, the United Kingdom fire services documented 239 fires related to electric vehicles between July 2022 and June 2023.
Compared to the 130 instances reported during the same period in 2022, this is an 83% increase.
According to the data, there has been an average of 20.1 unintentional electric vehicle fires each month as of June 2023, which is 30% more than the monthly average of 15.5 fires reported in 2022.
According to Hawkins, risk managers and surveyors focus primarily on fire hazards.
“These green projects include hazards that, if not contained before the fire department arrives, may become an environmental concern,” he said.
According to Hawkins, brokers “probably need to learn a little bit” about the increased hazards that electric vehicles (EVs) provide.
He feels that there is still a need “to support some of the small brokers [that] may not have the specialist staff,” even if he admits that some specialist brokers are “great” when it comes to handling green initiatives and their potential hazards.
To overcome any obstacles, cooperation amongst all stakeholders in the insurance value chain is required, according to him.