Back in 2018, battery experts and cell manufacturers predicted that cell prices will drop lower than $100/kWh during 2022 and 2023, making the cost of carry of an EV lower than that of an internal combustion engine (ICE) vehicle. However, metal prices soared over the past two years. Since metals account for a large portion of the total batter production cost, cell prices rose out of expectation. Additionally, greenflation put the concentration of lithium-ion battery raw material supply in China into the limelight. When the world relies on one single regional supplier, any issue occurs within that region, such as unstable power supply, water shortage, and pandemic lockdown that result in declines or suspension in production, upends global markets. Such supply chain disruptions have increased since the Covid-19 outbreak in 2020. In pursuit of stable supply chains, net-zero targets, and ESG commitments, all countries focus on recycling batteries, hoping to achieve stable supply and sustainability in one fell swoop.
Europe mandates raw material recycle
On December 10, 2020, the European Commission proposed the Battery Regulation to regulate batteries and waste batteries at EU level, repealing Directive 2006/66/EC and amending Regulation (EU) No 2019/1020.” Later passed in March 2022, the new law will come into force in early-2023. In Chapter II, Article 8, the European Commission regulates:
1. From January 1, 2030, industrial batteries, electric vehicle batteries, and automotive batteries with internal storage and a capacity above 2 kWh that contain cobalt, lead, lithium, or nickel in active materials shall contain at least 12% cobalt, 85% lead, 4% lithium, or 4% nickel recovered from waste.
2. From January 1, 2035, industrial batteries, electric vehicle batteries, and automotive batteries with internal storage and a capacity above 2 kWh that contain cobalt, lead, lithium, or nickel in active materials shall contain at least 20% cobalt, 85% lead, 10% lithium, or 12% nickel recovered from waste.
Table 1. Minimum share of raw materials recovered from waste required by the EU
In Article 49, battery manufacturers are required to collect waste batteries from end users, either “individually or through a producer responsibility organization.” The collection shall be free and not obligatory for end users. Manufacturers shall collect waste batteries in cooperation with distributors of the batteries, end-of-life vehicle treatment and recycling facilities, public authorities, and third-party institutions. As for portable batteries, the minimum collection rate will increase from 65% by the end of 2025 to 70% by the end of 2030, according to Article 55. To track and manage recycling process, information regarding all batteries will be made available online in the “battery passport,” and each battery will be identified with a unique identification number.
China’s recycle system
In 2017, the Ministry of Ecology and Environment (MEE), Ministry of Commerce, National Development and Reform Commission, and General Administration of Customs jointly published the Announcement regarding Matters Concerning Comprehensively Prohibiting the Import of Solid Waste. The scope of the prohibition was expanded in September 2020 to include all wastes imported from other countries. In 2018, the Ministry of Industry and Information Technology (MIIT) and the MEE jointly published the Interim Measures for the Management of Recovery and Utilization of New Energy Vehicle Power Battery, putting automotive makers in charge of vehicle battery recycling and lithium-ion battery life cycle management, spanning production, sales, trials, discard, and recycle. Afterward, the MIIT published a whitelist of qualified cell manufacturers under the recycle regulation. Only the listed are eligible for recycle subsidy. There were five manufacturers listed in 2018 and 47 in 2022, including BYD, Gotion High-tech, Ganfeng Lithium, SVOLT, etc.
Battery recycle is still in an early stage but will rise as governments across the globe put forth relevant policies and exercise supervision. Recycling batteries not only helps stabilize material supply and achieve sustainability but also serves as a key solution to the concentration of critical material supply in China.