Recycling Lithium-ion Batteries is a Cost-Effective Choice

Recycling Lithium-ion batteries has a bright, cost-effective and sustainable future ahead.

Recycling Lithium-ion Batteries is a Cost-Effective Choice

By: Utkarsh Singh, Co-Founder & CEO, BatX Energies 

Although battery packs have been assembled in India for several years now, the actual Lithium cells themselves have always been imported from countries like China. Commercial production of Lithium cells in India is yet to begin. As a result, India meets its Lithium-ion battery needs solely through imports. 

In the present scenario, if India is to produce its own Lithium-ion batteries, it has little choice but to import all of the raw materials needed for cell manufacturing. This is because none of the Rare Earth metals such as Lithium, Nickel, Cobalt, and Manganese which are used in the manufacturing of Lithium-ion cells is mined in India in any significant quantity.  

However, India does have an abundant domestic source of these metals – used Lithium-ion batteries from which the four Rare Earth metals along with Graphite can be extracted through recycling. At an increasing rate, this would cut down the burden on imports while securing an alternative raw material supply chain, reducing our dependence on exporting economies. At the moment, less than 5% of Lithium-ion batteries are recycled due to technological and economic constraints. The good news is that Lithium battery recycling and reusing will lead us toward a circular economy. 

Mr. Utkarsh Singh Co-founder & CEO, BatX Energies

Light to medium-heavy commercial vehicles will mainly be electrified in the future, contributing about 1 TWh of demand by 2030. Electrified aviation and shipping will also increase their requirement for Lithium-ion batteries, leading to increased overall demand from the global energy industry. With the global demand for recycled batteries set to surge by 2030, the supply of raw materials is the primary cause for concern on the horizon. Global battery demand is expected to surge exponentially and reach nine terawatt-hours (TWh) annually by then. This is 15 times higher than what was witnessed in 2021 as stated in a report by Rystad Energy. 

Cost-effectiveness of Recycling Lithium-ion Batteries 

The transportation sector in almost all countries is working towards drastically reducing greenhouse gas (GHG) emissions. One of the most promising possibilities is electric vehicles (EVs)  fuelled by Lithium-ion batteries (LIBs). The LIB market is expected to grow tremendously over the next decade, owing to industry and legislative pushes as well as consumer demand for EVs. As a result,  the need for raw materials will skyrocket. There’s an additional concern about the availability of essential elements like Lithium and Cobalt. Because cathode materials account for 30-40% of total battery cost, a cost-effective and environmentally-friendly direct recycling process that provides reusable battery-grade cathode materials will reduce energy usage and battery material costs.  

To reduce the cost of recycling Lithium-ion batteries, we need to reduce the steps in the recycling process. Building close collaborations and effective communication between researchers and technology developers will be significant for India to succeed with our challenges. Local capacities can also be built steadily. Markets will be split and studied at the regional and national levels based on battery type, EV type, and end-use. Li-ion batteries dominate the electric vehicle (EV) market, are prevalent in consumer devices and have become increasingly used in stationary energy storage.  However, Lithium-ion batteries’ sustainability depends on their entire lifecycle, including end-of-life management.

Furthermore, there are growing concerns about the scarcity of raw materials such as Cobalt. Recycling can recover the embedded value of battery metals, generating additional revenue. This will also establish a circular supply chain that will be partially immune to shifting commodity prices for battery materials which are currently driven by mining. Stakeholders recognise recycling’s potential throughout the Li-ion battery supply chain. It is estimated that 12 million tonnes of Li-ion batteries will be recycled in 2042, with the market at a CAGR of 22%, as predicted by a report shared by IDTechEx. 

Rise In Demand 

According to recent studies conducted by JMK Research and The Institute for Energy Economics and  Financial Analysis, India’s annual Lithium-ion battery market is expected to rise to 116 GWh in  FY2029-30 from 2.6 GWh in FY2020-21 with electric vehicles (EVs) accounting for 90 per cent of the overall industry (IEEFA).  

Rise In Production 

These studies also show that Lithium-ion battery demand for automotive applications would rise yearly from 2.3 GWh in FY2020-21 to 104 GWh by FY2029-30 due to favourable government policies such as Faster Adoption and Manufacturing Hybrid and EV (FAME) and different state-level EV  regulations. Given this inevitable increase in demand, the data further emphasises increasing  Lithium battery production in India. As these essential metals are not mined in India, battery recycling makes a viable alternative to satisfy rising demand. Recovering 80-90 per cent of Lithium,  Cobalt, Nickel, Manganese and Graphite will help put India on the path to true Circularity. 

The Future Looks Promising 

Lithium-ion batteries lose approximately a quarter of their capacity when removed from electric vehicles. That still leaves a lot of useful energy within the battery which recyclers can and should use for other purposes as well. The few Lithium-ion battery recyclers that exist globally are now actively working with automakers to help them transition their Lithium-ion batteries into a more recyclable and reusable state. That is a significant shift in the industry’s business practices; especially compared to Lead Acid batteries of the past and is a promising sign for a new approach to waste. In addition,  Lithium-ion battery technologies have reduced in price to levels equivalent to solar energy technology such as Photovoltaic modules that are often regarded as the gold standard in sustainable energy. 

Direct recycling will become a viable choice if the technology gets developed to allow for large-scale processing of end-of-life EV batteries in huge quantities. In addition, direct recycling is more cost-effective and environmentally friendly than older processes that involved the melting of materials.  As clearly stated in a recent report by Rystad Energy, electric passenger vehicles (EV) will become a  consequential benefactor to the future of battery growth, accounting for approximately 55% of the industry’s total demand by 2030. Additionally, the need for Lithium-ion batteries will reach 4.9 TWh by 2030, which is more than 13 times higher than 2021’s comparatively low capacity of 373 GWh. 

Extracting Lithium, Cobalt, Manganese, Nickel (and other valuable materials such as Copper,  Aluminium, and Graphite) from spent Lithium-ion batteries has only recently become profitable. In addition, the electric vehicle (EV) boom resulted in a threefold increase in the price of Lithium and a  fourfold increase in the price of Cobalt between 2016 and 2018. Thus, a handful of Lithium battery recycling businesses have opened in India and around the world; with those that already exist growing capacity.

Investments have started to flow, garnering opportunities for recycling, refurbishing and reusing end-of-life EV Lithium-ion batteries (LIBs) in energy storage systems. Recycling of Lithium-ion batteries has a bright, cost-effective and sustainable future ahead. It’s time to shift towards a circular economy that will expedite the process of recycling toward a sustainable future for everyone.

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First published on: 22-04-2022 at 09:30 IST