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Explosive Growth in EV Production and the Rising Cost of Minerals Creating the Case for Recycling of Batteries

September 27, 2021

Brigita Darminto

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Explosive Growth in EV Production and the Rising Cost of Minerals Creating the Case for Recycling of Batteries

By Brigita Darminto, September 2021

The number of lithium-ion batteries (LiBs) produced is increasing explosively. This is primarily due to Electric Vehicle (EV) demand. EV sales are predicted to outpace those of fossil-fuel powered vehicles by 2033 - 5 year searlier than previously expected - due to a combination of; tougher key policies such as CO2 emissions standards and zero-emission vehicle (ZEV) mandates; additional incentives that safeguard EV sales from the economic downturn; an expansion in the number of EV models; and, finally, the continuous fall in battery cost. Over the next two decades, around 90% of battery demand is projected to come from EVs. As the number of new batteries produced grows significantly, so does the pile of spent batteries that once powered those cars. What will happen to them? This article will outline the many reasons for recycling batteries, including environmental and potentially economic benefits, as well as noting the lessons learned from lead acid battery (LAB) recycling. It will then focus on the recycling technologies currently available, and what governments around the world have done to promote LiB recycling.

 

Why Do We Need to Recycle?

McLellan et al, predicted that the annual demand for lithium and cobalt from EVs and energy storage could exceed the current production rates as early as 2022 and 2023 respectively. The IEA’s latest report on The Role of Critical Minerals in Clean Energy Transition is in line with this prediction. They state that by 2030, in a scenario consistent with climate goals, the supply of lithium and cobalt from existing mines and projects is estimated to meet only 50% of the projected demand while that of copper will meet 80%. As the latest Intergovernmental Panel on Climate Change (IPCC) special report reveals a ‘code red for humanity’, the transition to renewable energies become more urgent, hence the necessity of supply of these increasingly critical minerals.

Current EV batteries contain valuable minerals like cobalt, nickel, lithium, aluminium, and copper. Each cell chemistry contains different amounts of valuable minerals, which subsequently dictate the type and amount of minerals recoverable and the salvage value of the battery itself. As the number of battery cells produced increases over the years, technology learning and economies of scale have pushed down the price of LiBs by 97% from 1991 to 2018. This is the inverse of the trend in battery mineral prices. As seen below, the prices of lithium carbonate, cobalt, nickel, aluminium, and copper are either higher or the same as they were a decade ago. Therefore, mineral costs now account for 50% to 70% of the total battery costs, up from 40% to 50% five years ago. IEA analysis suggests that it takes on average over 16 years to move mining projects from discovery to production. Will the suppliers be able to ramp up output to match rapidly increasing demands? Recycling will recover some of the precious minerals from used batteries, which can be used for manufacturing new batteries. This can help to alleviate the pressure on primary sources, stabilise the price fluctuations and close the price gap between EVs and Internal Combustion Engine (ICE) cars, there bycreating more incentives for both EV producers and consumers to make the switch to EVs. 

Historical Prices of LiBs and Critical Minerals

Sources: London Metal Exchange, Statista and Our World in Data

In the future, there might be a change in LiB chemistry. For example, a shift to Li-Sulfur (Li-S). This will reduce the demand for cobalt but increase the demand for lithium, as Li-S batteries contain a higher amount of lithium. By 2050, the cumulative demand for lithium with the current technology could reach 170% of the current reserves and could be as high as 280% of the current reserves if the shift to Li-S batteries happens. A change in battery chemistry might help match the supply and demand of one or more critical minerals but at the expense of the others. Recycling, on the other hand, could have a great impact on reducing the primary demand of critical minerals in both the current and future technology scenarios.

The production and processing of primary minerals give rise to a variety of environmental and social issues, that if poorly managed can harm local communities and further disrupt their supply. The current largest sources of lithium are pegmatite and continental brines. Lithium purification from brines take a few months and requires as much as 500,000 gallons of water per ton. This water intensive process has been blamed for destroying fragile ecosystems, converting meadows and lagoons into salt flats and depleting local groundwater resources across the Atacama Desertin Chile. There is also concern over the quality of the minerals. In recent years, ore quality has continued to fall across a range of minerals. For example, over the past 15 years, copper ore grade in Chile has declined by 30%. Extracting metal content from lower-grade ores requires more energy, which then increases the production costs, waste volumes and greenhouse gas emissions (IEA Report). Spent LiBs are an important secondary source of minerals, sometimes with even higher purity than in their natural ores. If spent LiBs are disposed of properly, the recovered minerals can alleviate the pressure on natural resources. Moreover, these wastes pose a threat to the environment and human health. Therefore, recycling spent LiBs can help mitigate environmental problems and bridge the gap between the supply and demand of the minerals, conserving the natural resources.

Lessons Learned from LABs Recycling

There are three options for EV batteries at the end of their first life: a second life, recycling and direct disposal. If current trends for handling the spent batteries continue, most EV batteries may end up in landfills even though they can be recycled. For example, in Australia, only 2 to 3% of LiBs are collected and sent offshore for recycling. The recycling rates in the European Union and the US aren’t much higher, estimated at less than 5%. These numbers are very different for LAB. More than 97% of LABs are recycled in the US and Europe, and over 75% of the lead used in new LABs comes from recycled batteries.

What factors enable the formation and continuation of LAB’s closed loop economy? 

  1. Recycled lead is valuable and functionally equivalent to virgin lead.
  2. Most of the battery weight is composed of reusable lead.
  3. Cell chemistries are relatively homogenous. There are a limited number of different materials that need to be sorted, making recycling technically simple and inexpensive.
  4. The distribution routes of new and spent LABs overlap significantly.
  5. Strict and clear lead disposal regulations. Because lead is highly toxic, most disposal facilities either refuse to accept LABs or are legally prohibited from doing so, hence recycling is the only viable option.

LiBs Recycling Methods and Challenges

The recycling of LiBs can include pre-treatment stages for discharging and dismantling, which are then followed by mechanical treatments that take advantage of the different physical properties of the components to separate and enrich them. Examples of mechanical processes are sieving and magnetic and air separation. In the recycling flow, these mechanical processes are generally followed by a hydrometallurgical or pyrometallurgical approach. 

Hydrometallurgy refers to the application of aqueous solutions for metal recovery. The main advantages of hydrometallurgical processes are (i) reduced energy consumption due to lower temperature requirements, (ii) the recovery of Li in carbonate form, (iii) the fact that leached metals can be reused for new LiB cathodes and (iv) a high efficiency of different battery chemistries. Traditionally, strong in organicacids, like hydrochloric and sulphuric, are used as leaching agents due to their ability to dissolve metals. The main challenges of hydrometallurgy lie in the high volume of process effluents to be treated and recycled or disposed, and the selectivity of the acid leaching, which makes the procedure complicated. There is new research which focuses on the use of organic acids produced by microorganisms, beneficial due to their reduced health issues and increased eco-friendly features. As green alternatives, glucose, sucrose, lactose and ascorbic acid were, also tested. Li-Cycle, a Toronto-based lithium-ion recycler uses a combination of mechanical safe size reduction and hydrometallurgy resource recovery. This company was founded in 2016 and went public on the New York Stock Exchange (NYSE) on August 11, 2021. They claimed that their processes generated no waste, no air emissions, and zero discharge; “The solution recycled back through the process continuously” said Tim Johnston (now Executive Chairman). 

Pyrometallurgical processes are based on high temperatures. Although 100% recyclable, Li is usually not recovered due to the economic unfeasibility of slag leaching. Many of the existing pyrometallurgical industrial processes, such as that used by Umicore, incorporate a process that is like smelting. A major disadvantage of pyrometallurgical processes is that they require a significant amount of energy to treat waste gases before they enter the environment. Pyrometallurgical processes strongly depend on LiBs chemistries, particularly on the cobalt content and price; the most expensive battery mineral. From the reduction process, typically an alloy containing cobalt, nickel, copper, and iron is produced. This alloy will then be subjected to further processing using hydrometallurgical methods to break it down to its mineral constituents. Umicore’s plant in Sweden has the capacity to process 7,000 tons of LiBs annually.

In direct recycling, battery materials are recovered and can be reintroduced into the supply chain with little additional processing. Cathode recovery is the main advantage of direct recycling. Cathode compounds are recovered without using energy-intensive pyro-or hydrometallurgical process but they may need to undergo re-lithiation before being reused in batteries. Recovered materials might be suitable for applications with less strict requirements.

Recycling Methods – Pros & Cons

Sources: Steward et al., 2019, Mayyas et al., 2018, Mossali et al., 2020

Is Battery Recycling Economically Viable?

According to the World Economic Forum (WEF) insight report, a circular battery value chain is one of the major short-term drivers to achieve the 2 degree Paris Agreement goal in the transport and power sectors. Around 30% carbon emissions reductions in the transport and power sectors can be achieved by closing the loop of the battery value chain. Some of the critical activities in the battery value chain are battery repair and refurbishment to be used as second-life batteries (SLBs), and battery recycling. Refurbishment and repair of battery systems used in EVs and Energy Storage Systems (ESS) can extend their lifetime, reduce the demand for new batteries, and improve costs over their lifetime.

During refurbishment and repair, degraded or faulty battery modules are replaced with new ones to enable the capacity of the remaining modules to be used further in an EV or other applications. However, in the long term, the refurbishment is assumed to be limited to only 5% of End of Life (EoL), the moment where the batteries reach the end of its usefulness and/or lifespan, EV and ESS batteries because the trend of having homogeneous battery ageing undermines the business case for exchanging the deteriorated modules. In addition, there is alack of incentive for automotive companies to optimize their battery design for repair and refurbishment. BCG did an analysis to compare the profit margin for repurposing EV batteries for a second life versus that for at-scale battery recycling, as seen below. They found that the profit margin for recycling is 3 times that for repurposing.

Taking the chemistry type, the recycling technology, acquiring batteries to be recycled, and the amount of metals recovered during the recycling process into consideration, recycling seems both economically and environmentally sustainable. Recyclers can earn attractive margins, OEMs and cathode manufacturers can gain an additional source of materials to ensure supply, and recycling the materials generates a smaller carbon footprint than mining  – except for Lithium Iron Phosphate (LFP) batteries where iron content is more sustainably mined than recycled. In their battery day last year, Tesla announced that they are going to adopt iron-based batteries for applications that require a long cycle life. Subsequently, CATL, the leading global LiBs producer and a supplier of Tesla, has made an investment to deliver on this announcement. How will Tesla and CATL’s new strategies affect the future of recycling? It is hard to know the answer now, as a new recycling technology that makes iron recycling more sustainable might be in development. However, what we know now is that an increasing number of iron-based batteries circulating in the market is going to pose another challenge for battery recycling. 

Estimated Second-Life Repurposing and Recycling Economics

Source: Niese et al., 2020

Carbon Dioxide (CO2) Savings from Producing Cathode Materials with Recycled Materials Instead of Virgin Raw Materials

Source: Stewart et al., 2019

When comparing the Net Recycling Profit (NRP) of five different cathode chemistries for five countries (China, South Korea, US, Belgium, and UK) we observe that financially viable recycling can be achieved via:

(i) Recycling in locations with low labour and fixed costs such as China, which reaches an NRP of up to 21.91$ per kWh, helps with cost minimization

(ii) Recycling the batteries in the same country as they were used and collected is relevant, as it can reduce overall costs by up to 70% due to reduced transportation (from 1.24 $ per kWh if used and collected in the UK but recycled in China to 0.39 $ per kWh if used, collected and recycled in the UK)

(iii) Economies of scale are relevant

(iv) Recycling high value battery chemistries like NCA can be more profitable

(v) Using direct instead of pyrometallurgical recycling method reduces cost

(vi) Developing standardised and easy to disassemble battery packs is needed.

In addition, policy interventions in the form of subsidies and other financial means might be necessary. It is important to ensure a profitable process, especially during the first operating years of a recycling plant, until economies of scale are reached or when high value material content, like cobalt, has been reduced or removed from the future battery’s chemistry

Redwood Materials, a B2B battery recycling company created by Tesla co-founder and former CTO Mr. JB Straubel, processed 10,000 tons of refuse in 2020 at its operations near Tesla’s Nevada Gigafactory and will “recycle several gigawatt-hours of material” this year, according to Straubel. It has industrial partnerships with Amazon, Proterra (electric bus maker), Specialized (electric bike maker), and Panasonic (Tesla’s battery partner in its Nevada Gigafactory). It has also been announced that Redwood plans to transform the lithium-ion battery supply chain by offering large-scale sources of materials domestically in the US from as many recycled batteries as available combined with sustainably mined materials. Could Redwood’s connection with Tesla and industrial partnership with other potential customers, like Proterra and Specialized, help it achieve economies of scale and change the recycling game?

 

Governments’ Policies on LiB Recycling

Compared to lead, lithium is less toxic and historically there has been far less incentive to recycle these batteries. However, waste management is becoming a global issue as the grow thin LiB use grows tremendously and significant numbers of LiBs are reaching their End of Life (EoL). Currently, there is no consensus on how LiBs should be regulated as waste. Disposal bans and more effective collection systems for LiB recycling are becoming popular in many areas of the world, such as North America and Europe. The table below summarizes LiB collection and recycling regulations and policies across the world (non exhaustive).

Lithium-Ion Batteries Current Collection & Recycling Regulations

Legend: Green pin represents clear targets and laws in place; amber pin means that state interventions are in progress or have been implemented in some parts of the countries; and red pin means no laws are in place 

Sources: Winslow et al., 2018, Call2Recycle 

The Future is Circular

As climate issues become more pressing each day, the transition to EVs and renewable energies needs to be accelerated and carried out holistically, taking into account the minerals from which the technologies are made of and how to dispose the waste safely and in environmentally friendly ways. Improper waste disposal and treatment of batteries may lead to another catastrophe for the environment.

There are existing technologies that could lead to sustainable battery recycling, both economically and environmentally. However, we currently observe very different collection and recycling rates between LABs and LiBs. The key to this may lie in specific government’s policies. Banning LiBs from the disposal facilities seemed to be efficient for LABs globally. In addition, the homogeneity of LAB cell designs and very high quality of recycled lead make the recycling much simpler and more appealing than LiBs. Standardisation of LiB cell designs and new technologies to improve the quality and sustainability of LiBs recycling may be needed to encourage more recycling. All stakeholders need to play a part in recycling in order to push the carbon footprint of these ‘clean’ technologies even lower, in order to reach the Net Zero targets and make the world economy more sustainable.