From waste to worth: battery recycling

Electric mobility is pushing governments across Europe to adopt new strategies. Not only when it comes to readapting our cities to the new charging needs, but also to address battery recycling. This is an even more pressing issue when we take into consideration that global demand for batteries is soaring, and is expected to increase a staggering 14-fold by 2030, with the EU accounting for 17%.

In line with this, the European Parliament and the Council have adopted the New Batteries Regulation in 2023, which aims to minimize the environmental impact of this exponential growth in battery usages. But, what’s behind this rise?

What is driving battery recycling?

Battery recycling could be described as a diamond in the rough: it’s a booming sector worldwide that holds immense potential for economic growth and environmental benefits. What are its main contributors?

Technological advancements

Battery recycling used to be perceived as expensive and inefficient. But technology has improved this process and made it more efficient to recover valuable materials from old batteries. New methods have also been developed, such as hydrometallurgical and pyrometallurgical. The result? Higher recovery rates, less waste, and a smaller environmental footprint.

Supply chain stability

Car manufacturers highly prize stability for the continuity of their operations. They need a steady supply of materials to produce new EV batteries. But this is not always easy to get, since relying on mining alone can be unpredictable. Thanks to battery recycling, companies can access a local and consistent supply of these critical raw materials.

Big names like VW and GM are aware of this and have started partnering with recycling companies (like Redwood Materials and Li-Cycle) to make sure they always have enough recycled materials. As a result, prices stay stable while the car manufacturers aren’t as dependent as before on mining costs.

Decarbonization and ethical sourcing

For companies committed to reducing their carbon footprint, harnessing the benefits of recycled battery materials makes total sense. In fact, production of these materials releases about four times less carbon dioxide than those of minerals extracted from the earth. That’s why using recycled materials is a great strategy for businesses to avoid these practices while still getting what they need.

Regulatory incentives

As we’ve mentioned before with the case of the European Union, governments around the globe are encouraging battery recycling through the introduction of new rules. Again in Europe, the End-of-Life Vehicles Directive requires car manufacturers to take back and recycle old batteries. Meanwhile, in the United States, policies like the Inflation Reduction Act offer tax breaks for using recycled battery materials. As more countries follow suit, the future of battery recycling looks promising, driven by regulatory frameworks that prioritize environmental responsibility and resource conservation.

What recycling technologies are used?

When it comes to recycling batteries, there are two main methods used today, each with its own strengths:

Hydrometallurgical processing

It’s essentially a chemical process. After old batteries are broken down, the remaining material (called “black mass”) is treated with acids. These acids dissolve the black mass, making it possible to separate and extract valuable metals like nickel, lithium, and cobalt. This method stands out because it produces high recovery rates, meaning more of the precious materials can be saved and reused to make new batteries. It’s efficient, and the metals that come out of this process are ready to go back into production.

Pyrometallurgical processing

This is our second process and a simple way to understand it is to think of it as the melting of batteries down in a furnace. Instead of using chemicals, this approach uses heat to separate the metals. When the batteries are heated to high temperatures, metals like cobalt and nickel are melted and collected, while other parts burn off or turn into a byproduct called slag. Pyrometallurgical processing is simple and reliable, but it usually recovers fewer materials than the chemical (hydrometallurgical) method, as some valuable components can be lost during the process.

Innovative recycling methods

Besides these two traditional methods, there are some new techniques under development that aim to make battery recycling even better. For example, direct recycling involves restoring old battery materials to a state where they can be reused without going through extensive processing. Meanwhile, hydro-to-cathode recycling skips several steps by turning black mass directly into new battery components.

The economic potential of battery recycling

Despite its many advantages, being successful in the growing field of battery recycling is no easy task. Businesses should focus on the following key areas:

Supply of batteries (feedstock)

Even if your company is willing to start ripping the benefits of this business, it can’t do it without a steady supply of old batteries. That’s why strong relationships with automakers, battery manufacturers, and even consumers are fundamental to ensure they always have enough batteries to recycle. Also, they need to guarantee that contracts and partnerships are reliable, so that there’s a consistent flow of used batteries to keep operations running smoothly.

Building strong partnerships

Recycling is not a one-step process. We’ve seen all the different steps it takes for the batteries to be reused. To do it properly, companies need to partner with various actors in the supply chain. Let’s take the example of a recycling firm that wants to team up with a logistics company specializing in metal refining. This type of partnership helps create a more efficient and end-to-end recycling system that benefits both parties alike.

Advanced technology

The recycling industry is constantly evolving, and companies need to keep up with the latest technological advances. The best way they can do it is by investing in new and improved recycling methods that can help them recover more materials, lower their costs, and operate more sustainably. Additionally, as battery designs change, recyclers must stay updated on these trends so they can adapt their processes accordingly.

Pioneering a sustainable future

The potential value creation for EV batteries is enormous: $95 billion per day by 2040, attracting attention from both automakers and recycling companies. The question is, are we ready to make the most of its potential? Success will depend on the governments and companies building efficient recycling systems, investing in technology and making the right partnerships. It’s clear that battery recycling can be a driving force behind a sustainable future and a greener planet.

Source: All the information contained in this article has been taken from Breiter, A., Linder, M., Schuldt, T., Siccardo, G., & Vekić, N. (2023, March 13). Battery recycling takes the driver’s seat. McKinsey & Company.