Mike Yarwood, Managing Director, Loss Prevention, at insurer TT Club explains why the storage of lithium-ion batteries requires a robust risk management strategy.

Lithium-ion batteries are indispensable to modern commerce. They power the devices we use every day, enable the transition to electric vehicles and support renewable-energy storage. However, their growing role in the global supply chain is bringing an equally significant challenge: how to store them safely in warehouses.

Understanding thermal runaway

The principal physical hazard is thermal runaway. This self-accelerating chemical reaction can be initiated by internal cell defects or by mechanical, electrical or thermal abuse. A battery that has been dropped, crushed, punctured, overheated or improperly charged may be damaged internally, even where no defect is immediately visible. The period between damage and failure can range from seconds to days.

When thermal runaway occurs, the consequences can escalate rapidly. Lithium-ion fires can reach temperatures of up to 1,200°C, generate flammable and toxic gases, reignite after initial extinguishment and, in some circumstances, create an explosion risk. Unlike conventional fires, the reaction inside a battery can generate oxygen, making suppression methods that rely on smothering flames far less effective. Equally concerning is the prospect of adjacent batteries becoming involved in a fire, multiplying both the scale and complexity of an incident.

Start with a site-specific risk assessment

The starting point for warehouse operators should therefore be a robust, site-specific risk assessment. This needs to account for the type, chemistry, condition and state of charge of the batteries, as well as their packaging, storage arrangement, inventory level and proximity to other combustible or hazardous materials. Low state of charge may reduce the energy available during a failure, but it does not remove the risk entirely.

The hierarchy of controls is a useful framework. First, operators should seek to eliminate unacceptable risks – for example, by refusing or managing critically damaged, non-compliant or unidentified batteries. Engineering measures should then provide the principal protection: dedicated, compartmentalised storage areas; non-combustible materials; suitable ventilation; temperature and humidity control; appropriate spacing; and fire-resistant construction.

Design storage around the risk

Ideally, lithium-ion batteries should be stored in a dedicated area or, where the nature and scale of the operation justify it, a separate warehouse. The environment should be cool, dry and protected from direct sunlight and other heat sources. Storage at height should be avoided wherever possible, as even a relatively short drop can damage a battery. The layout must also enable access for detection and firefighting systems; dense storage arrangements that obstruct suppression efforts are a serious concern.

Early warning is critical. A warehouse should not wait for visible flames before recognising an incident. Detection systems should be capable of identifying abnormal temperature rises, smoke and gases associated with battery failure. Continuous thermal monitoring of batteries and pallets is strongly recommended where feasible, with automatic alerts at pre-set thresholds. At a minimum, there should be documented daily visual and temperature inspections.

Plan fire protection and emergency response

Fire protection also requires careful consideration. The selected system must reflect the specific battery products, warehouse design, racking configuration and likely fire scenario. Early suppression fast-response sprinklers can offer valuable protection, while in-rack systems may help address localised events. Deluge systems can be highly effective in cooling and controlling larger fires. There is no universal solution, but there is a clear imperative: operators must ensure that their protection systems are designed for lithium-ion battery behaviour, not simply adapted from a conventional warehouse model.

People and planning are equally vital. Employees must understand the warning signs of battery failure, the toxicity hazards and the actions required in an emergency. They should be trained regularly and participate in realistic emergency exercises. However, warehouse staff should be cautious in their response to battery fires and recognise the limitations of on-site intervention. Significant battery fire incidents can rapidly develop beyond the capabilities of personnel and available equipment. Clear escalation procedures, timely engagement of emergency services, and a well-rehearsed response plan are therefore critical

This makes engagement with local fire and rescue services particularly important. Responders need immediate access to accurate site plans showing battery locations, other hazardous goods and firefighting systems.

Control the risk before batteries arrive

Finally, sound risk management begins before batteries arrive at the gate. Contracts must define the scope of services and allocation of liabilities, particularly where charging, repacking or co-packing is offered. Inventory thresholds should be agreed, stock must be traceable, and stagnant or abandoned cargo identified early. Subcontractors should operate on terms that match the liabilities assumed by the warehouse operator.

Lithium-ion batteries are central to the energy transition and modern trade. The answer is not to avoid them, but to recognise that safe storage calls for purpose-designed facilities, disciplined operations, clear contractual controls and close collaboration with emergency services. Prevention, early detection and decisive response remain the foundations for reducing the potential for major loss.