Recycling EV batteries is a problem, but not as you think
The global rush to recycled batteries is excellent news for automakers, however, there isn't nearly enough scrap to feed them all.
The wave of new factories poses a significant risk for the recycling industry itself, Bloomberg reported on Thursday.
"Nobody is really looking at each other, and they seem to think there will be a lot of scrap and end-of-life batteries," Hans Eric Melin, the founder of a UK-based consultancy Circular Energy Storage(CES), told Bloomberg.
"But if you look at the level of capacity that's coming online, it's huge in relation to what we need."
Global capacity for recycling batteries will more than double between 2021 and 2025, outpacing this year's waste supply, according to the CES.
Several well-known specialized recycling companies, like Glencore Plc, are heavily investing in converting waste into the materials needed to power the electric vehicle revolution.
While the industry waits for early EV models to start turning up in large numbers at garbage yards, shortages are expected to last well into the next decade.
By 2025, there may be three times as much room for recycling factories as there will be scrap to power them. Naturally, the old batteries will eventually start to pour in, but recycling businesses must exist in the interim.
Before legislation requiring companies to use more recycled materials in their batteries starting in 2030, automakers in Europe urgently need to establish factories, the Bloomberg report noted.
Dominance of Recycling
China is home to over 80percent of the world's battery recycling capability.
More EVs have been on the road for a longer period of time; therefore, China is where the first significant wave of scrap is anticipated to appear.
Over the past year, there have been numerous plans for new recycling facilities around Europe and North America, but such facilities will have to wait even longer for the supply to increase.
Manufacturing waste will make up 78 percent of the available scrap supply in 2025, while end-of-life batteries will make up 22 percent.
The market won't reach an inflection point where volumes of used batteries available to recyclers start to rise until the mid-to-late 2030s, according to a recent study by UK's Benchmark Mineral Intelligence, a publisher for the lithium ion battery to electric vehicle (EV) supply chain.
Old, used-up batteries and leftovers from battery manufacturing are the two main categories of recycling feed. Additionally, battery manufacturers are reducing waste at their facilities, leaving even less material for recyclers.
"In terms of where the scrap is coming from, China is going to be dominating supply," Benchmark analyst Sarah Colbourn told Bloomberg.
"It's quite an opaque market to understand, but the overwhelming majority of capacity is in China, and the volume of scrap available will be higher in China."
As per Ajay Kochhar, CEO, and co-founder of Canadian recycling startup Li-Cycle Holdings Corp. The biggest roadblock will likely be for companies primarily focused on processing "black mass."
"Supply for us is not an issue, we have more batteries than we can typically handle," Kochhar said.
"But there is a question about how that will evolve for the industry as a whole."
Battery scrap forecast
Recycling companies will rely substantially on the scrap created during the battery-making process in the near future. But even that is under threat; last month, CES cut in half its long-term predictions for industrial scrap to consider significant improvements in production efficiency over the last few years.
The efficacy of rules intended to get customers to clean out their drawers and recycle old gadgets will determine the availability of the batteries found in old electronics, which are another significant source of supply.
To support the rapid expansion of the electric vehicle industry, car manufacturers will continue to rely heavily on miners, and shortages are expected to continue there as well.
"The scale of demand is just incredible, and the mining aspect needs some attention," Benchmark's Colbourn said.
"One thing I can say for certain is that we'll still be facing deficits, and recycling isn't going to be able to plug that gap any time soon."
The Hybrid Observatory for Earth-like Exoplanets (HOEE) would convert the largest ground-based telescopes into the most powerful planet finders yet.