Circular Economy Insights: Lithium-ion Battery Recycling

Global interest in recycling used lithium-ion batteries (LiB) from electric vehicles has spurred the creation of 103 pilot plants focused on meeting demand in this emerging market. Another 110 facilities are being planned for the coming years, as chronicled in a new report from German consultancy ecoprog. 

 

A lineup of refined battery materials processed by Redwood Materials. Image used courtesy of Redwood Materials

 

The European Union, China, and North America currently lead the LiB recycling market and are likely to continue that trajectory in the coming years, reports ecoprog's trend study. In the longer term, the yearly volume of LiB material destined for recycling treatment is expected to top 30 million tons. 

Beyond the 200-some operational or planned LiB facilities covered in the report, ecoprog also identified around 70 recycling plants/projects focused on other battery types. 

Underlying these developments are new policies by the European Union, Canada, China, and American states like California that ban the sale of gas-fueled internal combustion engines and add new quotas for electric car adoption. Ecoprog reports that operators and project promoters differ significantly by region: North America is dominated by startups, while Europe has more waste management companies leading projects. At the same time, the level of participation from battery manufacturers is comparatively high in Asia. 

Below, EE Power will analyze these findings in the context of global trends around LiB recycling and second-life applications—pillars of the so-called “circular economy.” 

 

Metals Demand Spurs Circular Economy Projects

Zooming out: Electric cars are projected to account for 60% of all vehicle sales globally by 2030, according to the International Energy Agency. And 2022 was a banner year for the market, per data from EV-Volumes: 10.5 million new battery electric vehicles (BEVs) and plug-in hybrid EVs (PHEVs) were delivered worldwide, up 55% from 2021. Sales are expected to reach new heights this year too, further accelerating the already-record-high demand for metals from EV batteries, which BloombergNEF projects will reach 17 million tons in 2030. 

 

Projected demand for metals from lithium-ion batteries through 2030. Image used courtesy of BloombergNEF

 

Pair that timetable with the fact that EV batteries typically last 10 to 20 years, and so arises the demand for facilities that collect, disassemble, sort/shred, and reintegrate old EV batteries for a new life in other applications. Some are being used for battery energy storage systems (BESSes). 

For example, EE Power recently reported on a California-based hybrid solar/BESS facility that reached 25 megawatt-hours of capacity from 1,300 Honda and Nissan battery packs. 

Stakeholders from major carmakers to battery manufacturers to disposal providers are gearing up for growth in the emerging battery recycling market, while researchers work to optimize and simplify the process. For car giants, in particular, the prospect of recycling and reintegrating old battery packs is attractive because it avoids the high costs and supply chain challenges of mining and refining new raw materials such as lithium, nickel, and cobalt—all key ingredients in EVs. 

 

Refined battery materials produced by Nevada-based Redwood Materials. Image used courtesy of Redwood Materials 

 

One of the major players leading this front in the United States is Redwood Materials, which says on its website that its process can recover 95% of critical battery elements before resupplying raw materials back to battery manufacturers. The Nevada-based startup has secured battery recycling partnerships with Toyota, Audi/Volkswagen Group, Ford, and Volvo, and it launched its first used battery collection program in California last year. 

Another prominent name is Massachusetts-based Ascend Elements (formerly Battery Resourcers), which opened North America’s largest commercial-scale LiB recycling facility in Georgia last year. The company’s website boasts a materials recovery rate of up to 98%. Supported by two DOE grants totaling $480 million, the company is currently building a $1 billion facility in Kentucky to produce lithium-ion cathode materials from recycled battery feedstock. 

Europe’s major player is Hydrovolt, a joint venture of Swedish battery maker Northvolt and Norwegian aluminum giant Hydro, which opened the continent’s largest EV battery recycling plant last year. Located in Norway, the plant will recycle more than 12,000 tons of battery packs annually, enough to cover the entire volume of batteries retired in its home country. Like Redwood Materials, Hydrovolt says its fully automated recycling process can recover 95% of battery materials, which would then be supplied to Northvolt for further recycling in battery production and to Hydro for recirculation into aluminum products. 

 

European firms Northvolt and Hydro pioneered the continent’s largest battery recycling plant, which came online in May 2022. Image used courtesy of Hydrovolt

 

Canada is another industry player, with Toronto-based Li-Cycle leading several significant developments. It arrived early to the game, commissioning its first commercial project in 2019 with the capacity to process 2,500 tonnes of lithium-ion batteries annually. That figure has more than doubled since then, while the company added other LiB recycling facilities in New York (with a capacity of 5,000 tonnes), Arizona (10,000 tonnes), and Alabama (another 10,000). This year, Li-Cycle will begin operations at two facilities in Germany and Norway, each bringing 10,000 tonnes of capacity. It will also commission another hub in New York, expecting to process 35,000 tonnes of black mass annually. 

Meanwhile, China is already outpacing its counterparts in battery recycling. One study published in 2022 found that the country accounts for more than two-thirds of current battery recycling capacity and has the highest volume of journal publications and patents. Recently, Chinese lithium-ion battery giant Contemporary Amperex Technology Co. (CATL) revealed plans to build a $3.5 billion industrial campus to recycle battery raw materials. 

 

Battery Recycling to Boost Supply Chains 

Public interest is also high, with governments funding new research and development projects and adding battery recycling to their existing regulations and renewable targets. 

Ecoprog’s study mentions that the EU has plans in the works to govern recycling quotas. In December 2022, EU officials announced a provisional agreement to implement battery collection targets, minimum levels of recovered materials (such as cobalt, lead, lithium, and nickel) to be reused in batteries, and other provisions.

China’s regulations arrived years before the EU. In 2018, the country introduced rules requiring car manufacturers to establish facilities to collect and recycle their used batteries. 

The U.S. lags behind its European and Asian counterparts on these oversight-focused policies, instead taking an incentives-based approach. It’s throwing heaps of federal dollars into the circular economy, intending to expand the domestic supply chain to reduce its reliance on China for raw material extraction and processing. 

The U.S. Department of Energy (DOE) will invest $3 billion via its Battery Manufacturing and Recycling Grants program. Late last year, the DOE selected 10 projects to receive $73.9 million for advanced materials separation and reintegration processes for lithium-ion batteries, alongside second-life demonstrations. Also, Redwood Materials announced it received a conditional commitment for a $2 billion DOE loan to construct its first battery materials campus. By 2025, it plans to produce 100 gigawatt-hours per year of battery-grade copper foil and cathode-active materials from new and recycled feedstocks—enough to build over 1 million EVs annually in the U.S.