In line with commitments to reduce their carbon footprint and the desire to capture the promising socio-economic benefits of a green transition, most North American provincial and state governments are supporting the transition towards electrification of transportation, with Quebec for example announcing a ban of gas vehicle for 2035 as part of its most recent Green Economy Plan. Sales of electric vehicles are rising, and, in percentage terms, EV sales have outperformed internal combustion engine sales in Europe and the U.S. so far in 2020, even in the difficult economic conditions created by COVID-19.
But while this transition is powering a fast-growing EV market, soon it will also generate a fast-growing stockpile of end-of-life batteries which, after a potential second life in energy storage, will need to be managed in a socially and environmentally responsible manner. That puts an onus on those same governments to put in place policies to deal with the looming stockpile of end-of-life batteries.
No regulations in place
Where are we at today? According to research conducted by consulting firm EY for Propulsion Québec, there are as yet no regulatory mechanisms (such as an extended producer responsibility program) to address the disposal of end-of-life EV batteries in North America.
A number of states and provinces representing the top North American EV markets on the west coast and in the northeast are examining their options, however. In this, they are taking their cue from battery recycling initiatives introduced by OEMs like BMW, Volkswagen, Renault and Nissan, as well as the adoption of regulatory mechanisms in China, Norway, Netherlands and Belgium.
Dedicated private-sector companies are also bringing solutions to market. Among them: Lithion Recycling, Retriev and American Manganese in Canada; Li-Cycle, SunEel MCC and Battery Solutions in the U.S. As a group, they are working on technological solutions to maximize battery material recovery rates and minimize the environmental footprint of their industrial processes, with the ultimate goal of being a viable source of high-quality materials for battery cell manufacturers.
A need for collaboration
While this recent activity is encouraging, it is not enough. Based on analysis we conducted on the industry, developing efficient technologies and implementing regulatory mechanisms won’t ensure financial viability and sustainability of EV battery recycling unless we also see more collaboration between North American governments.
The reason? To be economically and technically viable, EV battery recyclers will need to maximize volumes of end-of-life EV batteries by concentrating them in centralized hubs. Ideally, these will be located strategically near battery cell/component manufacturers and, most importantly, in regions where the energy portfolio enables clean processing and recycling.
New technologies can maximize added-value and minimize the non-recycled portion, but only the implementation of a “spoke-hub” model (inspired by the commercial aviation industry) can maximize end-of-life EV battery collection.
Spoke-hub model of battery collection
This model starts with local EV battery collection points (e.g. auto parts recyclers and dismantlers). From there, the dismantled EV batteries would be transferred to regional processing facilities that would be responsible for breaking down the battery metals (mainly lithium, nickel, cobalt, manganese and graphite) into a mixture called a “black mass.” The black mass would then be transported to centralized hubs, where it would be further processed and recycle back into battery-grade materials to feed battery cell/component manufacturers.
This model offers other advantages beyond the benefits of scale.
First, it makes it possible to easily trace recycled battery materials as they are used in the production of new EV batteries. In a world of growing consumer demand for provenance transparency and greener products, the importance of traceability must not be minimized. Secondly, because the end-of-life batteries are broken down into a black mass before they are transported, this reduces transportation costs and related GHG emissions and eliminates any hazardous material classification. The result is lower all-in cost of recycling.
There are hurdles to overcome. Getting all regional jurisdictions to collaborate is no easy task. But if OEMs must comply with different regulatory mechanisms in each province or state, how would such a model be implemented? And if it fails, who would end up with the burden of supporting recycling efforts that turn out not to be economically viable?
Some propose that recycling could be done on a voluntary basis, similar to what is done presently for lead-acid batteries. But this overlooks a key difference between the economic value of lead-acid and EV battery materials. The composition in the former does not vary, so their economic value remains stable at levels high enough to justify voluntary efforts to collect and recycle them. However, the chemical composition in EV Li-ion batteries varies, with some having higher economic value than others. A voluntary mechanism would only prioritize collection and recycling of high- value batteries, leaving the lower-value units behind.
To get to at least regional scale collaboration across North America, it makes sense to start with jurisdictions that are already studying which regulatory mechanisms are best for them. Quebec, for example, has declared its interest in expanding its Extended Producer Responsibility mechanism to include EV batteries. Such efforts should be paired with those in other nearby provinces and states in order to attain sufficient end-of-life EV battery volumes regionally.
Concerted strategies and stakeholder engagement
It is our hope that all key stakeholders (governments, OEMs, auto parts recyclers, battery recyclers and battery manufacturers) will see the value in working on a global strategy to support the development of a viable and sustainable EV battery recycling industry. As a society, especially in this unique COVID-19 era, we have the responsibility to take advantage of every opportunity to transform our economy and make it more environmentally responsible. The transition towards the electrification of transportation not only promises a cleaner economy, but also new socio-economic benefits for all. It would be a big disappointment for future generations if we were to miss it.
This text has already been published in Electric Autonomy Canada on November 20th, 2020.