Following some of the comments made about the importance of recycling to supply of battery materials at the Tesla Battery Day and in other recent articles, I wanted to share some thoughts about how much battery raw materials supply is likely to actually be derived from recycling, and when.
Unfortunately, I have to disagree with what Tesla said while wed all like Batteries to be a totally circular industry, it will be many, many years before that could be the case, in my view. Recent commentary from a number of sources about how recycling materials can replace mined materials for usage in batteries is a little disingenuous at the current time.
Ive written about recycling before in Battery Materials Review and we also presented a Recycling focus on the Recharge podcast in March this year, which you can listen to here.
Before I get lots of hate mail, I need to say that I believe 100% in battery recycling and think that it's going to be a vital part of the industry going forward. My issue is about how it's being represented as a solution to the impending battery raw materials shortage.
It's not, and I explain why below.
Mechanics of cell recycling
Note here the differentiation between batteries and cells in electric vehicles and consumer applications. Cells are the individual units. Batteries in this context are groups of cells as well as associated management systems and packaging. The differentiation between cells and batteries is quite important in recycling because batteries contain large amounts of lower value materials like steel, copper, aluminium and plastics whereas cells contain less of that sort of material. Getting the cells out of a battery can involve substantial physical effort and expense.
Before batteries can be recycled they first have to be made safe by discharging, often using a salt solution. The battery components are then generally separated using mechanical methods, including sieving and crushing, as well as physical methods such as magnetic separation. Lower value components such as plastics, aluminium and copper can be separated from black mass or black powder which typically consists of anode (graphite, silicon) and cathode materials (lithium, cobalt, manganese and nickel) which are the most valuable components of lithium-ion batteries.
There are two main methodologies for recycling of anode and cathode material; pyrometallurgical methods and hydrometallurgical methods. They each have their own advantages and disadvantages. Pyrometallurgical (heat) treatment is seen by many as more robust but it tends to result in higher losses to waste. Hydrometallurgical (water, leaching) treatment tends to result in higher recovery levels but often with higher associated costs since the material may have to go through many series of leaching and precipitation. It's outside the scope of this article to go into the chemistry of battery recycling but there is plenty of information available from companies in that segment.
In only rare cases is material directly recovered from recycling of lithium-ion cells of sufficient quality to be immediately re-used in battery production. In most cases it needs to be further purified in order to be effectively re-utilised.
Logistics of battery recycling
One of the key issues with recycling of consumer batteries is collection and storage. While recycling rates are quite high in some Asian countries like China they are much lower in other countries less than 10% in the EU, US and Australia. In many countries, lithium-ion batteries are seen as dangerous cargo because of issues with fires. This means that they often cant be transported by rail (for instance in China) and its difficult to get permits to ship them. This makes the logistics of collecting and storing batteries difficult and expensive. In our model we assume global average collection rates for consumer batteries rising to 30% by the end of the decade. That's obviously conservative and may rise. But then again, it may not.
For EV batteries, logistics is also likely to be an issue. Not so much for faulty batteries which are likely to be either at a battery or car plant, but for end of life batteries. One of the questions that occupies the industry is what should be done with these batteries? Will they be collected back by auto companies? Will they be collected by scrap merchants? And the important question, will they carry a residual value?
Some recycling companies are expecting to be able to source waste EV batteries for free but it seems likely that there will be a cost to collecting them, and there will certainly be a cost associated with storing them safely, and there may very well be a residual value to the batteries as well, particularly if they are viable for end of life applications. This may affect the economics of battery recyclers going forward. Other recyclers (particularly those targeting faulty EV batteries) see this as a margin business; they will provide a fixed price service to the client. It will be interesting to see which business model (if either) prevails over time.
Our base case assumption is that battery raw materials prices rise considerably from current levels which should make collection, transport and recycling of used and faulty batteries a profitable pastime. The recycling industry is and will become increasingly economically viable. The question is how long it will take until recycling can make a major contribution to balancing out demand for battery raw materials?
Types of batteries being recycled
A large proportion of todays lithium-ion battery recycling business is based on recycling consumer lithium-ion batteries where a large amount of the economics is based on cobalt. A lot of these old cellphone, tablet and laptop batteries utilise the LCO (Lithium Cobalt Oxide) battery chemistry, with a small subset using the LMO (lithium manganese oxide) chemistry. While lithium can be recycled from consumer batteries its such a small component of the battery and the batteries are so small that its not a meaningful percentage of current lithium output.
Now and going forward the focus will be on EV batteries since theres going to be a huge growth event in that business. But there are two types of EV batteries which will be available for recycling faulty batteries and end of life batteries.
Its not well-known outside the industry but a large proportion of the EV cells that are currently being produced are not actually used in EVs. And thats because they fail quality control testing either at the cell factory, the battery assembly plant or at the EV factory. Depending on manufacturer, between 10-30% of batteries may be off spec and unusable. A cottage industry is starting to spring up with battery recyclers opening plants adjacent to cell, battery and EV factories in order to re-utilise the material used in faulty batteries.
BUT this is kind of a zero-sum game in terms of materials supply/demand balances because unless there is a substantial decrease in the number of faulty batteries, any material reclaimed from faulty batteries one year will simply be utilised by next years faulty batteries. And, in addition, while battery output continues to grow rapidly there will actually be more material lost in faulty batteries which wont be covered by recycling from previous years
The other recycling focus for EV batteries will be end of life batteries. But the issues with end of life recycling are: (1) the length of EV battery life of 10-12 years, and rising; and (2) the huge growth in EV production that were forecasting over coming years.
Battery life the key factor restricting recycling impact
Just to put this situation in context, there are round about eight million EVs extant in the world currently, of which five million were sold in the last three years. That means that it will be the end of this decade at the earliest before the bulk of those batteries are available for recycling, and that ignores the possibility for some of them to be used in second-life applications.
In addition to that, we expect to produce around two million EVs this year, but in when those batteries become available for recycling, Im currently forecasting (before taking into account the revelations of the Tesla Battery Day) that global EV sales will be in the order of 33 million PEVs.
If 75% of those EV batteries are collected in 10 years and some of those are allocated to second life usage, perhaps only 60% would go for direct recycling, which means that only the batteries of 1.2 million EVs would be available for recycling, or just under 4% of forecast EV sales in . If you factor in recovery at c.90% then it's 1.1m EV batteries. Not a lot, is it? This is ignoring any change to average battery sizes (which is included in my supply/demand models but not in this simplified example).
Ive forecast for cobalt and lithium in my models. The chart below shows that recycling wont start to make a material impact in lithium supply until -30. And even then it wont be a substantial impact.
In cobalt, the situation is slightly different. As the EV market transitions to lower cobalt batteries, cobalt demand will not grow as rapidly as for other cathode materials and the batteries using high cobalt chemistries will have more bang for their buck by the latter part of the decade. Nevertheless recycled cobalt is still not going to replace the need to mine cobalt...
The real issue is going to be in high purity manganese where there really hasnt been a market up until now. Manganese in LMO batteries is derived from manganese dioxide; its not HPEMM. It will need substantial processing to get to HPEMM, at a substantial cost. Once again, we highlight that there are no easy answers, except mining, in high purity manganese.
Theres already a recycling industry for nickel but its primarily for nickel used in stainless steel. Output from this will require extensive further processing to be viable for battery applications. Nickel can be recycled from batteries which use the NCM and NCA formulations but again, given the rapid growth in demand, supply of high purity nickel from recycling is unlikely to make an impact on demand from the battery industry until the next decade.
Ive focused on cathode materials in this article. Unfortunately (or fortunately depending on your perspective), the situation is the same in anode materials. Theres unlikely to be a significant amount of material available from the recycling industry until the early s.
Considering these numbers, it will take ten years of steady state EV production (ie not growing rapidly) for recycling to become a significant percentage of battery materials supply. Only then will batteries become a truly circular industry. It could take until the s for that to be the case...
To imply that recycling can make a significant impact on battery raw material supply/demand balances before then is disingenuous. Theres going to be no substitute in the near-term for investing in new raw materials extraction capacity
Matt Fernley is editor of Battery Materials Review and Head of Research for Westbeck Capital's Volta Fund.
Batteries are expensive and have a relatively short life span. As discarded batteries grow by the tonnage, entrepreneurs are enticed to start a business in recycling. With an annual world market () of $33 billion, lead acid is the most common battery in use. This is followed by Li-ion at $16.6 billion, NiMH at $2 billion and NiCd at $1 billion. All other chemistries only make up $1 billion. Table 1 lists the material cost per ton to build these batteries.
Subsidy needed
Cobalt $50,000 Relevant, subsidy Lithium iron phosphate $400Subsidy needed
Lead acid $1,500 Profitable Nickel$10,000$17,000Subsidy neededCadmium$2,200Subsidy neededTable 1: Metal value per ton of batteryLithium-ion batteries are expensive to manufacture and this is in part due to the high material cost and complex preparation processes. The most expensive metal of most Li-ion is cobalt, a hard lustrous gray material that is also used to manufacture magnets and high-strength alloys.
Knowing that billions of Li-ion batteries are discarded every year and given the high cost of lithium cobalt oxide, salvaging precious metals should make economic sense and one wonders why so few companies recycle these batteries.
The reason becomes clear when examining the complexity and low yield of recycling. The retrieved raw material barely pays for labor, which includes collection, transport, sorting into batteries chemistries, shredding, separation of metallic and non-metallic materials, neutralizing hazardous substances, smelting, and purification of the recovered metals.
Recycling programs for lead acid are said to have started soon after Cadillac introduced the cranking motor in as a for-profit business rather than protecting the environment. Recycling can be harmful, especially with lead acid batteries. Lead can enter the body by inhaling or ingestion when touching the mouth with lead-contaminated hands. This puts workers and residents of the surrounding areas at risk of lead poisoning. (See BU-703: Health Concerns with Batteries)
The EPA (Environmental Protection Agency) has imposed strict guidelines in recycling of lead acid batteries in the USA. The recycling plants must be sealed and the smokestacks fitted with scrubbers. To check for possible escape of lead particles, the plant perimeter must be surrounded with lead-monitoring devices. Rules are bound to be broken and batteries soon end up in Mexico and other developing countries with relaxed regulations. China, a leader in lead acid battery production, also took action to protect the environment by introducing strict guidelines that only reputable companies can meet.
Goto RE TECH to know more.
Nickel-based batteries can also be recycled and the retrieved materials are iron and nickel, which are used in stainless steel production. Nickel-metal-hydride (NiMH) yields the highest return in nickel, and with ample supply recycling is said to make money. Low demand for cadmium has reduced the profitability from recycling NiCd batteries. The growth in batteries is with Li-ion but valuable materials are difficult to retrieve. This makes Li-ion less attractive for recycling and a financial breakeven may not be possible without subsidies.
The true cost to manufacture Li-ion is not so much in the raw materials, as is the case with lead acid and NiMH, but in lengthy processing and purification processes of the raw materials to reach battery grade. Retrieving lithium at only 3 percent of the cell mix may never reach break-even levels. If the purity of lithium is below 99.5 percent, then it is not suitable as raw material for batteries. Recycling brings the metal to ground zero, from which costly preparations begin anew. It is often cheaper to mine raw material than to retrieve it from recycling. Lithium from recycled batteries is commonly used for non-battery applications, such as lubricating greases that are found in WD-40 and other products, rather than batteries. (See BU-308: Availability of Lithium)
Direct recycling technologies for lithium-ion batteries my offer a solution in refining used Li-ion into high value cathode and anode materials. Direct recycling may become profitable if the technology can be developed to large-scale processing made possible with high volume EV batteries reaching end-of-life. Direct recycling is said to be cleaner than older methods that melt the material.
Although alkaline and zinc-carbon account for over 90 percent of batteries consumed in the United States, they contain few precious metals and the toxicity is low. Organizations are seeking ways to recycle these batteries as well for the basic metal content and with high volume such a venture should become viable. Table 2 lists the typical metals content of commonly recycled batteries.
Fe
Iron
Mn
Manganese
Ni
Nickel
Zn
Zinc
Li
Lithium
Cd
Cadmium
Co
Cobalt
Al
Aluminum
Pb
Lead
65%
NiCd35%
22%
15%
NiMH20%
1%
35%
1%
4%
Li-ion22%
3%
18%
5%
Alkaline24%
22%
15%
Table 2: Metals in commonly recycled batteries as a percentage of the overall contentEnvironmental issues and the ability to recycle play an important role when choosing a battery system. If the UPS operates mostly in standby and can provide longevity of 10 years, then lead acid is a strong contender. The preference of lead acid over Li-ion and nickel-based systems is manifested in moderate pricing, superior safety, dependable operation, and the ability to recycle. Table 3 compares the cost to manufacture and recycle batteries.
The primary objective of building a good battery is long life, safety and low price. Recycling is an afterthought and manufacturers do little to simplify the retrieving of precious metals. The recycling business is small compared to the vast battery industry, and to this day, only lead acid can be recycled profitably.
Nickel-based batteries might make money with good logistics, but Li-ion and most other chemistries yield too little in precious metals to make recycling a viable business without subsidies. The major expense with modern batteries is not so much the raw materials, as with lead acid, but lengthy preparations, purifications and processing down to micro- and nano-levels. Nevertheless, batteries contain valuable material that can be re-used for new products.
To make recycling feasible in the meantime, subsidies are created by adding a tax to each pack sold. The goal goes beyond retrieving metals for re-use to preventing toxic batteries from entering landfills. Combining the environmental benefit with making a profit is the ultimate goal, and this might become feasible with innovative new recycling processes in development.
Another model is to sort batteries into functional and non-functional groups and give those with capacities of 80 percent or more a second life. Cells and modules of larger battery systems can be tested individually and reassembled in a new pack(See BU-803: Can Batteries be Restored?)
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