Lithium And Cobalt Presents An Economic Opportunity For Stakeholders In The Recycling Value Chain

The rise of electric vehicles (EVs) has sparked debate over the environmental impact of lithium-ion battery production and disposal. While EVs create no emissions during operation, the production and disposal of their batteries have significant environmental consequences. 

EV battery volumes are increasing rapidly as they near the end of their useful life, with over 100 million vehicle batteries estimated to be retired over the next decade. These batteries contain precious metals such as lithium, cobalt, and nickel, which are extracted from finite resources, with mining operations frequently incurring environmental and societal damage. Improper battery disposal can contaminate soil and water, threatening ecosystems and human health.

From a sustainability standpoint, EV battery recycling offers significant environmental benefits by reducing the carbon footprint and ecological impact of battery production and disposal. By closing the loop on materials and extending battery lifespan, recycling minimises the need for new resource extraction and energy-intensive manufacturing processes. This conserves natural resources and mitigates climate change by cutting greenhouse gas emissions associated with mining and production.

Automotive OEMs' decarbonisation and ethical supply-chain targets result in a preference for recycled battery materials over newly mined battery materials, as the former has approximately four times lower carbon emissions, resulting in a more than 25 percent lower carbon-emissions footprint per kilowatt-hour (kWh) of battery cell capacity produced.

The escalating demand for critical minerals like lithium and cobalt presents an economic opportunity for stakeholders in the recycling value chain. As the global transition to clean energy accelerates, the battery demand is skyrocketing, causing price fluctuations in raw materials and creating a profitable market for recycled metals. 

Reliable recycling technologies also stabilise metal market fluctuations, benefiting downstream users. Revenues across the battery recycling value chain, from collection to metal recovery, are predicted to exceed $95 billion per year by 2040, driven mostly by the price of recovered metals, expected battery cell chemistry adoption, supply chain regionalization, and so on. According to McKinsey research, the monetary value generated per tonne of battery material may surpass $600 as early as 2025.

Furthermore, EV battery recycling supports environmental justice principles by reducing the negative effects of resource exploitation on marginalised communities and indigenous peoples. Recycling promotes social responsibility and sustainable development across the supply chain by lowering demand for conflict minerals and encouraging ethical sourcing practices.

A comprehensive reverse supply chain will be required to collect, test, and recycle batteries. Companies are developing a number of business models to accommodate this. Regulatory incentives are creating favourable conditions for local recycling, such as the US Inflation Reduction Act 2022, which allows recycled battery materials (such as lithium, cobalt, and nickel) to qualify for significant tax credits available under the domestic materials clause, even if those materials were not mined in the United States or in countries with which the United States has free-trade agreements.

Regulatory pressure is further motivating businesses to recycle. For example, the new Batteries Regulation passed by the EU will ensure that, in the future, batteries have a low carbon footprint, utilise minimal toxic compounds, use less raw materials from non-EU nations, and are collected, reused, and recycled to a high degree in Europe.

Advances in recycling technology promise to improve the efficiency and economics of EV battery recycling. Traditional techniques such as hydrometallurgical and pyrometallurgical recycling do exist, but they suffer scale, cost, and reliability issues. Research into battery design and material composition can help with disassembly and component separation, expediting the recycling process and increasing resource recovery. To boost EV battery recycling, battery manufactures should follow the circularity design idea.

To address these issues, governments, businesses, and stakeholders must work to develop creative solutions that make every EV battery chemistry economically viable. One viable method is to introduce extended producer responsibility (EPR) initiatives, which hold manufacturers liable for their goods' end-of-life management, including battery recycling. Manufacturers are encouraged to design batteries for recyclability and invest in recycling infrastructure when recycling costs are built into the product lifecycle.

EV battery recycling represents a vital confluence point for economics and sustainability, providing a path to a cleaner, more efficient, and egalitarian transportation system. We can realise the full potential of battery recycling by combining technological innovation, policy incentives, and stakeholder collaboration to create a circular economy that benefits both the earth and its inhabitants. 

(Shubham Vishvakarma is the founder and chief of process engineering at Metastable Materials.)