Burning Concerns: The Growing Threat of Lithium-Ion Fires

By: Peter Simon

Aug 05, 2024 — Incidents of Lithium-ion (Li-ion) battery-related fires are increasing globally, in part due to an increased demand for devices that use these batteries, such as laptops, phones, e-scooters and e-bikes, and smartwatches. In fact, the global demand for Li-ion batteries is expected to surge sevenfold — from 700 GWh in 2022 to around 4.7 TWh by 2030. What does this mean in terms of risk and insurance? Insurers are reevaluating their liabilities as claims increase and businesses and policymakers attempt to understand how to mitigate associated risks.

The Where and Why of Li-ion Battery Fires

In the US alone, there were more than 25,000 incidents of fire or overheating relating to Li-ion batteries between 2017 and 2022 (Orion180 2023). The impact has been most pronounced in urban areas, where e-bikes and e-scooters have grown substantially in the past five years and where fires started by Li-ion batteries can more easily spread through multi-occupancy buildings.

The risk of combustion can be increased by various factors, including battery damage, improper disposal, and quality issues during manufacturing. Lithium is highly reactive to water; therefore, Li-ion batteries require tightly welded outer casings to seal out all contaminants and moisture. These protective casings sometimes fail, and when they do, a phenomenon known as "thermal runaway" can occur. Thermal runaway occurs as a domino effect and can be triggered by manufacturing defects, damage to the battery, improper charging practices, or aging. It's a cycle that keeps increasing the temperature and pressure inside the battery until it ignites or explodes.

"When an exothermic reaction occurs in one part of the battery, it starts to release heat and deform, leading to uncontrolled heat production that can result in a cascade effect to the next cell and eventually cause a fire," explains Peter Simon, Loss Control and Construction Safety Leader, Gallagher Bassett Technical Services. "Additionally, it starts releasing flammable gases, which can cause an explosion from the container, making the fire hard to extinguish."

Urban Centers: Denser Spaces, More Fire Risk

With large populations and demand for technology, urban areas have a high concentration of Li-ion batteries. The growing popularity of e-bikes and e-scooters means more batteries are stored and charged within close proximity to buildings. Here, a single fire can pose a significant threat to people and property.

Certain types of properties are at a higher risk of exposure than others, including multi-occupancy high rises, public buildings with public charging stations, and student accommodations that typically have a high density of electronic devices, e-bikes, and e-scooters. Charging stations for electric vehicles (EVs) often have multiple batteries in one place, which can pose a potential fire hazard if any of them malfunctions.

Various factors can spark battery fires, such as charging-equipment malfunctions, product defects, voltage fluctuations, and other electrical faults. In Queens, New York, a tragic house fire resulted from using an incompatible charger to charge an e-bike battery.

EVs owners often leave their vehicles unattended during the lengthy charging process. Their absence increases the likelihood of overlooking warning signs, with higher risk in multi-story and basement parking facilities.

Li-ion battery fires can lead to significant disruptions, causing property damage and business interruptions while also jeopardizing the safety of workers and customers; however, there are also other liabilities, such as water and soil contamination resulting from firefighting operations.

An example of environmental contamination is the fire that took place at an abandoned paper mill in Morris, Illinois in 2021. Concerned about the potential for battery packs to explode, firefighters used 28 tons of cement to extinguish the flames. Following the incident, the Illinois Environmental Protection Agency took legal action against the former owner of the paper mill.

Waste and recycling facilities also face significant exposure to fires caused by the improper disposal of Li-ion batteries. According to California's Recycling Agency, batteries are the leading cause of fires at the state's waste facilities, resulting in millions of dollars in damage each year.

Electric Vehicles Are a Major Source of Li-ion Fires

EVs are one of the most significant contributors to Li-ion-related fires worldwide, a risk set to increase as the number of EVs on the road increases. While some evidence suggests that EV fires are less frequent than those in hybrid vehicles and petrol or diesel vehicles, the severity can be much greater (Friswell 2024).

One of the biggest components of an EV is the battery pack, with fires behaving according to battery size, chemistry, and state of charge, among other factors. Lithium battery packs directly caused nearly 24% of all EV fires, and EV battery fires can reach up to 4,900°F (2,700°C) (Lindner 2024). In March 2024, a highway in southern Illinois was closed for nearly three hours due to a single EV burning on the road (Wehner 2024). It took three fire departments and thousands of liters of water to prevent the blaze from spreading.

Battery packs store significant amounts of energy but are susceptible to catching fire when damaged or exposed to saltwater, which corrodes and short circuits traditional Li-ion batteries (CTIF International Association of Fire Services 2023). In Florida, several EVs caught fire after being submerged in storm-surge floodwaters following Hurricane Ian — a phenomenon that was also witnessed during recent typhoons in Japan (CTIF International Association of Fire Services 2022).

Taking the Heat Off: New Fire Codes

Government authorities and regulatory bodies are introducing new safety standards and fire codes to mitigate the risk and ensure the safe use of Li-ion technology. Underwriters Laboratories (UL) have developed two new standards — UL 9540 and UL 9540A (Vertiv 2021) — that focus on the safety of energy storage systems (ESS):

• UL 9540: A system-level listing standard that defines an ESS design, construction, and performance requirements to ensure their overall safety
• UL 9540A: A standardized test method that evaluates how well an ESS design can contain thermal runaway events within a single battery cell and prevent fire from spreading to other cells

Quality control testing remains important to ensure that the manufacturing process doesn't generate metal fragments that could later cause a fire. Other methods of reducing the exposure include installing safety features — such as mechanical supports — that can protect the batteries from thermal runaway even when exposed to high temperatures.

Industries that rely heavily on Li-ion battery storage are investing in early detection, which can help to contain overheating batteries before they become dangerous.

A best-practice approach includes closely adhering to safety standards and careful inspection and disposal of damaged batteries. Staff should be made aware of the threat and given clear guidance on how and where batteries can be stored and safely charged.

"Anecdotally, it appears a disproportionate number of fires are created by low-quality batteries that do not have the appropriate certification or quality control, thus the increased propensity to fail resulting in thermal runaway," says Gallagher Bassett's Technical Services' Peter Simon. "These batteries are often purchased due to their low price.

"The non-certified battery risks have become so problematic that some jurisdictions — New York City, for example — have passed laws prohibiting the buying and selling of batteries that are not UL certified. But even with the new laws, people are still buying and selling these non-certified batteries online."

Conclusion: Adapting to Change and Building Resilience

Li-ion batteries are an essential part of the journey to net zero and the transition to renewable sources of energy. Improvements in quality and safety are constantly being made, but exposures will inevitably continue to grow as our reliance on Li-ion batteries increases.

As the landscape continues to shift, it's important to understand the risks involved and the steps to take to mitigate them. Taking proactive steps to mitigate exposure to thermal runaway involves investing in safety controls and quality assurance across the value chain, as well as greater education and awareness on how to prevent Li-ion battery fires.