Companies in the United States are rushing to recycle electric vehicle batteries in North America due to a little-known provision in the U.S. Inflation Reduction Act, putting the continent at the head of a worldwide race to challenge China's hegemony in the sector.
The IRA has a provision that, regardless of their country of origin, automatically certifies EV battery materials recycled in the United States as American-made for subsidies. This is crucial because it allows manufacturers who employ recycled battery components from the United States to qualify for EV production incentives.
More than a dozen industry insiders and experts were questioned by Reuters, and they claim that this is sparking a boom in U.S. factory construction, motivating automakers to investigate more recyclable batteries, and maybe making it more difficult for consumers in underdeveloped nations to purchase used EVs.
According to research firm EMR, China currently handles almost all of the world's EV battery recycling, which is expected to expand from $11 billion in 2022 to $18 billion by 2028. That industry will expand as more EVs are released and the current fleet of vehicles ages out.
According to BMW sustainability chief Thomas Becker, the materials in such batteries, which are principally lithium, cobalt, and nickel, are valued on average between 1,000 and 2,000 euros ($1,123) per vehicle.
Although those materials "can be recycled infinity times and not lose their power," according to Louie Diaz, vice president at Canadian battery recycling company Li-Cycle, which received a $375 million U.S. government loan for a New York plant slated to open later this year, they may become scarce in a few years as automakers increase EV production. According to Diaz, this financing assisted in moving up the decision to invest in the plant.
The $2 billion U.S. government loan for the construction of a battery material recycling and remanufacturing complex in Nevada was awarded to Redwood Materials in February. According to CEO JB Straubel, the IRA treats recycled battery materials as locally "urban mined," or materials recovered from scrap rather than obtained from mining.
This has encouraged American businesses to advance recycling initiatives more quickly than their European Union counterparts, who have instead prioritised requirements, such as requiring minimum amounts of recycled materials in EV batteries in the future.
While recycling companies like Ascend Elements, Li-Cycle, and others are proposing European facilities in the next years, some American facilities are currently under construction thanks to easy access to capital and the made-in-America incentive.
"What it (the IRA) does is change the demand equation for battery materials," said Mike O'Kronley, CEO of Ascend Elements, which already has one recycling plant open in Georgia and has received nearly $500 million in Energy Department grants under the infrastructure law for a plant in Kentucky slated to open in late 2023. "We need to keep those valuable materials... so we can put them right back into EVs."
According to Christian Marston, chief technical officer at Altilium Metals, which is constructing a facility in Bulgaria and intends one in the UK by 2026, the race is on to create "closed-loop supply chains" where recovered materials are used in locally created new batteries.
"Everybody wants to control their own supply chain and nobody wants to be reliant on the Chinese," he said.
China, which recently announced tighter standards and boosted research assistance for recyclers, is still in the lead. Chinese authorities called the U.S. Inflation Reduction Act "anti-globalization" after it was passed last year and charged the United States with "unilateral bullying."
According to data from PitchBook.com, there are at least 80 companies engaged in EV recycling globally. Over 50 startups have attracted at least $2.7 billion from corporate investors including automakers, battery manufacturers, and mining goliaths like Glencore, nearly all in the previous six years.
By 2030, the amount of EV batteries that can be recycled should have increased more than tenfold, according to consultant Circular Energy Storage.
According to CES, 11.3 Gigawatt hours (GWh) of batteries will run out in 2022, and by 2030, that number will climb to 138 GWh, or about 1.5 million electric vehicles.
Batteries for electric vehicles can last up to ten years.
By 2040, 40% of the battery materials used in new EVs, according to some industry officials, may be sourced from recycled stocks.
There is now very little recycling capability in the United States and almost none in Europe.
The auto breaker Charles Trent Ltd. has constructed two lines at a facility in Poole, southern England, where workers disassemble old or broken cars to recycle everything.
In part because there is no place to recycle them, it has constructed specific containers for EV batteries, which are sold for research or utilised by retrofitters energising fossil-fuel automobiles.
Currently, "black mass" made from shredded EV batteries is sent from Europe to China for recycling.
There is a competition to extract the highest price from that black mass.
"The one who gets the highest yield at the lowest cost ... will win this game," said Bruno Thompson, CEO of Cambridge, England-based startup The Battery Recycling Company, which plans its first plant in 2024.
According to chief commercial officer Thea Soule, Dallas, Texas-based Ecobat has enhanced its recovery method such that roughly 70% of battery-cell lithium is available for recycling. Ecobat shreds batteries in Europe and the U.S. for recycling elsewhere.
Soule predicted that yields will eventually rise to values between 90% and 100%.
The EU will require minimum percentages of recycled lithium, cobalt, and nickel in EV batteries in eight years, therefore increasing yields is important. Additionally, the EU will set strict guidelines for recycling outside of Europe.
According to Kurt Vandeputte, senior vice president at Belgian materials company Umicore, those circumstances will successfully keep recycling local.
Finding used EVs to recycle is another major challenge. Up to 30% of Europe's outdated fossil fuel vehicles currently end up in underdeveloped nations or are scrapped abroad. Some automakers are attempting to determine how to monitor those EVs.
Nissan has resorted to leasing EVs in Japan in order to keep possession of the batteries, whilst Chinese EV manufacturer Nio (9866.HK) rents batteries to customers.
Keeping such materials in Europe would deny developing nations access to a less expensive form of transportation.
The value of battery components, according to BMW's sustainability director Becker, should make recycling more appealing than exporting cars, but Europe must concentrate on making sure those EV batteries do not disappear.
"We've got to make sure we lose nothing," Becker said.
(Source:www.reuters.com)
The IRA has a provision that, regardless of their country of origin, automatically certifies EV battery materials recycled in the United States as American-made for subsidies. This is crucial because it allows manufacturers who employ recycled battery components from the United States to qualify for EV production incentives.
More than a dozen industry insiders and experts were questioned by Reuters, and they claim that this is sparking a boom in U.S. factory construction, motivating automakers to investigate more recyclable batteries, and maybe making it more difficult for consumers in underdeveloped nations to purchase used EVs.
According to research firm EMR, China currently handles almost all of the world's EV battery recycling, which is expected to expand from $11 billion in 2022 to $18 billion by 2028. That industry will expand as more EVs are released and the current fleet of vehicles ages out.
According to BMW sustainability chief Thomas Becker, the materials in such batteries, which are principally lithium, cobalt, and nickel, are valued on average between 1,000 and 2,000 euros ($1,123) per vehicle.
Although those materials "can be recycled infinity times and not lose their power," according to Louie Diaz, vice president at Canadian battery recycling company Li-Cycle, which received a $375 million U.S. government loan for a New York plant slated to open later this year, they may become scarce in a few years as automakers increase EV production. According to Diaz, this financing assisted in moving up the decision to invest in the plant.
The $2 billion U.S. government loan for the construction of a battery material recycling and remanufacturing complex in Nevada was awarded to Redwood Materials in February. According to CEO JB Straubel, the IRA treats recycled battery materials as locally "urban mined," or materials recovered from scrap rather than obtained from mining.
This has encouraged American businesses to advance recycling initiatives more quickly than their European Union counterparts, who have instead prioritised requirements, such as requiring minimum amounts of recycled materials in EV batteries in the future.
While recycling companies like Ascend Elements, Li-Cycle, and others are proposing European facilities in the next years, some American facilities are currently under construction thanks to easy access to capital and the made-in-America incentive.
"What it (the IRA) does is change the demand equation for battery materials," said Mike O'Kronley, CEO of Ascend Elements, which already has one recycling plant open in Georgia and has received nearly $500 million in Energy Department grants under the infrastructure law for a plant in Kentucky slated to open in late 2023. "We need to keep those valuable materials... so we can put them right back into EVs."
According to Christian Marston, chief technical officer at Altilium Metals, which is constructing a facility in Bulgaria and intends one in the UK by 2026, the race is on to create "closed-loop supply chains" where recovered materials are used in locally created new batteries.
"Everybody wants to control their own supply chain and nobody wants to be reliant on the Chinese," he said.
China, which recently announced tighter standards and boosted research assistance for recyclers, is still in the lead. Chinese authorities called the U.S. Inflation Reduction Act "anti-globalization" after it was passed last year and charged the United States with "unilateral bullying."
According to data from PitchBook.com, there are at least 80 companies engaged in EV recycling globally. Over 50 startups have attracted at least $2.7 billion from corporate investors including automakers, battery manufacturers, and mining goliaths like Glencore, nearly all in the previous six years.
By 2030, the amount of EV batteries that can be recycled should have increased more than tenfold, according to consultant Circular Energy Storage.
According to CES, 11.3 Gigawatt hours (GWh) of batteries will run out in 2022, and by 2030, that number will climb to 138 GWh, or about 1.5 million electric vehicles.
Batteries for electric vehicles can last up to ten years.
By 2040, 40% of the battery materials used in new EVs, according to some industry officials, may be sourced from recycled stocks.
There is now very little recycling capability in the United States and almost none in Europe.
The auto breaker Charles Trent Ltd. has constructed two lines at a facility in Poole, southern England, where workers disassemble old or broken cars to recycle everything.
In part because there is no place to recycle them, it has constructed specific containers for EV batteries, which are sold for research or utilised by retrofitters energising fossil-fuel automobiles.
Currently, "black mass" made from shredded EV batteries is sent from Europe to China for recycling.
There is a competition to extract the highest price from that black mass.
"The one who gets the highest yield at the lowest cost ... will win this game," said Bruno Thompson, CEO of Cambridge, England-based startup The Battery Recycling Company, which plans its first plant in 2024.
According to chief commercial officer Thea Soule, Dallas, Texas-based Ecobat has enhanced its recovery method such that roughly 70% of battery-cell lithium is available for recycling. Ecobat shreds batteries in Europe and the U.S. for recycling elsewhere.
Soule predicted that yields will eventually rise to values between 90% and 100%.
The EU will require minimum percentages of recycled lithium, cobalt, and nickel in EV batteries in eight years, therefore increasing yields is important. Additionally, the EU will set strict guidelines for recycling outside of Europe.
According to Kurt Vandeputte, senior vice president at Belgian materials company Umicore, those circumstances will successfully keep recycling local.
Finding used EVs to recycle is another major challenge. Up to 30% of Europe's outdated fossil fuel vehicles currently end up in underdeveloped nations or are scrapped abroad. Some automakers are attempting to determine how to monitor those EVs.
Nissan has resorted to leasing EVs in Japan in order to keep possession of the batteries, whilst Chinese EV manufacturer Nio (9866.HK) rents batteries to customers.
Keeping such materials in Europe would deny developing nations access to a less expensive form of transportation.
The value of battery components, according to BMW's sustainability director Becker, should make recycling more appealing than exporting cars, but Europe must concentrate on making sure those EV batteries do not disappear.
"We've got to make sure we lose nothing," Becker said.
(Source:www.reuters.com)
