Battery recycling race taking off
The challenges of sourcing critical battery materials and recycling of EV batteries
As EV adoption continues to accelerate, with EV sales more than tripling between 2020 and 2022,1 two big questions remain: 1) how are we going to source the critical materials needed for battery production and 2) how are we going to recycle batteries? Answering the second question can help answer the first one.
Critical materials are… well, critical
The active components in batteries contain some of the most valuable materials, either in terms of price, scarcity or both. The most popular battery chemistry includes lithium, nickel, manganese and cobalt (NMC). In 2022, demand for lithium exceeded supply, with 60% of lithium demand coming from EV battery manufacturers.2 The complementary anode material is graphite, which is now classified as critical material since it is expected to remain the preferred material for rechargeable batteries.
With current battery technologies, the accumulated demand for critical materials between 2020 and 2040 could represent 12m tons of lithium, 55m tons of nickel and 4m tons of cobalt, correspondent to around half of the global reserves already economically recoverable as of 2022 and up to 18% of the total estimated resources.3
It is worth noting that the production of these critical materials is highly localised: the vast majority of lithium is produced in Australia and Chile, with the majority of cobalt and graphite produced in Congo and China, respectively.
Cue battery recycling
As EVs are exponentially adopted, we can expect an increased number of EV batteries reaching their end-of-life in the next decade. Setting up the required infrastructure and value chain for battery recycling is imperative to benefit from the full environmental benefits that the EV transition brings.
Current battery recycling technologies can reduce the production emissions of NMC111-based batteries by as much as 50%, while reducing air and water pollution associated with mining.4
Battery recycling can also partially help with solving critical materials sourcing. The International Council on Clean Transportation expects that battery recycling could reduce the combined annual demand in new lithium, cobalt, nickel, and manganese mining by 11% in 2040, and 28% in 2050.
Additionally, recycling mitigates the geopolitical and pricing risk associated with sourcing critical materials from foreign, and sometimes unstable, countries, enabling battery producers to locally source part of their raw materials.
Note for investors from our expert:
“I would advise caution when analysing technological viability without experts. Batteries are complex systems and at the moment are most definitely not designed for recycling.
Expertise on process engineering (chemical, metallurgical, or similar) is necessary to evaluate whether a proposed technological solution can bring the expected advantages of materials recovery with reasonable capital and operating costs and without the additional burdens such as emissions of toxic components or negative environmental impacts.”
We have experts from leading institutions in battery recycling. Reach out to us to schedule expert calls or to conduct technology reviews of your next opportunity.
Timing is key
Meaningful ramp-up of EV batteries recycling is expected to start by 2030. This is a function of battery lifetime, and EV adoption timelines. In addition, part of end-of-life EV batteries can be reused (e.g., energy storage units) for another decade or so, further delaying feedstock availability.
In 2020, there was a supply of around 250kt of EV batteries globally for recycling, of which around half coming from production scrap and the other half end-of-life.5 By 2030 that value is expected to be more than 7x higher, high end-of-life representing around 60% of the available supply. By 2040 end-of-life batteries are expected to represent 94% of total battery recycling supply, with volumes totalling 20,500kt (82x 2020 volumes).6
The International Council on Clean Transportation estimates 1.2 million batteries will reach their end-of-life in 2030, increasing to 14 million in 2040, and 50 million in 2050.
Recycle & Roll?
Today, both pyrometallurgical and hydrometallurgical recycling are well established technological pathways for critical metal recovery. Direct recycling is an emerging pathway.
Pyrometallurgical recycling is a mature solution that has the flexibility of treating mixed battery chemistry feedstock and has good efficiency in recovering transition metals. The downside is its poor recovery of lithium, and no recovery of graphite, among other materials. The process is also energy intensive and produces air pollutants and hazardous waste. GHG emissions from the production of NMC111-based batteries could be reduced by 6%.7
Hydrometallurgical recycling is also a mature technology that allows the recovery of aluminium, lithium, cobalt, copper, nickel and manganese with high purity. The process does not typically include graphite recovery. The downside is the usage of pollutant acids that require water treatment and the need to adapt the plant for specific battery chemistries. GHG emissions from the production of NMC111-based batteries could be reduced by 26%.8
Direct recycling is an emerging pathway that brings several advantages. The process directly recovers cathode and anode materials that can be reused in new battery cells, delivering the most environmentally friendly outcome. The downside is that the process is not yet proven at industrial-scale and the plants must be adapted to specific battery chemistries. When considering the use of a direct recycling pathway that recovers 95% of the cathode material, the greenhouse gas emissions are reduced by as much as 50%.9
The road ahead
There is a significant governmental push to incentivise innovation in battery recycling. These efforts include the EU’s European Battery Alliance, the UK’s Automotive Transformation Fund, the National Interdisciplinary Circular Economy Research Programme and the United States’ National Science Foundation Phase II Small Business Innovation Research grants.
Noteworthy innovative approaches include the usage of froth flotation to recover graphite, which is already a mature technology in other industries such as mining, hydro-to-cathode-active-material recycling and water-based binders.
It is worth noting that there is currently a vacuum in processes addressing the recycling of alternative battery chemistries, such as silicon-based or sodium-ion. Since these technologies are not yet being adopted in the market, we are looking at a couple of decades until there is sufficient feedstock. Without end-of-life materials, there is no business case for recycling companies.
Regulation in the EU and China is further accelerating battery recycling, with regulators introducing producer responsibility to collect end-of-life batteries.
In the EU, in addition to element-specific recovery targets, 65% of all material (by weight) in a lithium-ion battery needs to be recovered from 2025, increasing to 70% from 2030.10
The race has begun
The majority of industrial-scale hydrometallurgical recycling plants are located in China,11 but European players are catching up. Belgium-based Umicore announced the construction of a $525m battery recycling facility, BASF announced plans for a commercial scale battery recycling black mass plant in Germany, and Glencore announced plans to build Europe’s largest battery recycling plant in Italy in partnership with Li-Cycle.
By 2040, McKinsey estimates the value creation for EV battery recycling to be worth $95 billion per year.
Argonne National Laboratory, 2022
Argonne National Laboratory, 2022
Argonne National Laboratory, 2022
ICCT, European Commission, 2022
ICCT, Mrozik et al., 2021