Propulsion Québec unveils its new study on end-of-life lithium-ion batteries

Montreal, November 17, 2020 — Propulsion Québec, the cluster for electric and intelligent transportation, today unveiled a brand new study entitled “End-of-life electric vehicle batteries and their management through an extended producer responsibility (EPR) mechanism.” To frame the management of end-of-life EV batteries and limit their environmental risks, Propulsion Québec commissioned the consulting firm EY for the completion of an analysis on the applicability of an extended producer responsibility (EPR) mechanism in Quebec.

The study reports the main obstacles and opportunities related to implementing an EPR mechanism in Quebec and, to that end, presents:

• An overview of existing collection mechanisms for electric vehicle batteries and identifies the lessons Quebec can draw from implementing EPR mechanisms here and elsewhere in the world;
• The elements of the legal framework governing electric vehicles and their batteries, as well as the collection and transportation of lithium-ion batteries in North America;
• The advantages and opportunities of EPR and the specifics of the regulatory EPR mechanism envisaged in Quebec for EV batteries;
• The issues and best practices for applying an EPR mechanism for end-of-life lithium-ion batteries in the transportation industry in Quebec and in surrounding markets.

EPR, a solution for managing the recycling of end-of-life batteries

The study shows that the extended producer responsibility (EPR) mechanism, already well established in Quebec for other products, is a regulatory framework applicable to EV batteries with sufficient flexibility. Moreover, the current North American legal framework does not present an obstacle to establishing such a recycling mechanism for lithium-ion batteries; it would even be complementary to other existing regulations, notably on end-of-life vehicle recycling, batteries and cells, and the transport of dangerous goods. EPR would also address the concerns of key market players, particularly regarding the environmental and safety management of battery end-of-life.

Already proven for EV batteries in Europe, EPR could represent a first in North America in Quebec. Implementing this recycling mechanism for electric vehicle batteries would allow Quebec to consolidate its portfolio of expertise in transport electrification and to position itself as a North American leader.

This study reveals that EPR costs would not be a barrier to the electric vehicle market, according to an initial financial estimate. Contrary to general perception, this mechanism is not the source of the recycling costs that are inevitably present during a battery’s life cycle.

The analyses carried out on regulation, stakeholder issues, private and public practices internationally, and the envisioned scenario show that EPR would be a good solution to address current and future challenges. The study suggests key success factors to ensure the success of EPR for EV batteries in Quebec.

Quotes

“By 2050, it is estimated that nearly 70% of the North American vehicle fleet will be electrified, which will have a major impact on the value chain in the transport electrification industry and notably on the management of EV batteries. Quebec has the necessary leadership to plan the collection and management of end-of-life EV batteries, and EPR proves to be a good solution to address current and future challenges, according to certain recommendations we have made. We must work now on concrete solutions to address the challenges related to end-of-life EV battery management. This study identifies the key issues and proposes possible deployment scenarios thanks to the efforts of stakeholders and the main market players consulted throughout the research and analysis process,” said Sarah Houde, President and CEO of Propulsion Québec.

“The Government of Quebec is proud to support the work of Propulsion Québec. This study helps identify possible solutions and initiate actions for the responsible use of end-of-life electric vehicle batteries. The findings and conclusions are interesting. It is essential to examine now, with the collaboration of different partners, the avenues open to us. The Quebec Plan for the Valorization of Critical and Strategic Minerals is precisely intended to take this reflection further,” said Mr. Jonatan Julien, Minister of Energy and Natural Resources and Minister responsible for the Côte-Nord.

“With the battery sector, we will develop a true circular economy model. From the sustainable extraction of our minerals to battery recycling, we will rely on our cutting-edge technologies to develop a sustainable electric transport industry with the lowest carbon footprint,” said Pierre Fitzgibbon, Minister of Economy and Innovation.

Propulsion Québec’s recommendations

The study proposes the following courses of action if the Government of Quebec decides to move forward with a regulatory amendment to govern end-of-life EV batteries:

1. Consult the concerned stakeholders in order to define the main parameters of EPR, such as realistic targets, taking into account the reality of the different affected markets and the intellectual property protection issues specific to the EV industry;
2. Ensure distinguishing between the different types of flows and battery chemistries for end-of-life batteries, as EPR parameters, collection logistics and processing could differ for each;
3. Ensure implementing an EPR according to a realistic and progressive schedule and in a way as harmonized as possible with other North American jurisdictions that are considering putting in place similar mechanisms. Quebec is well positioned to establish itself as a North American leader and has the potential to positively influence other legislation in this area, but to do so it will be important to take advantage of consultation mechanisms already in place, particularly in the American Northeast;
4. Propose a flexible regulatory framework that can be revised periodically to ensure its application aligns with the availability of end-of-life EV batteries as well as with the realities of manufacturers and recyclers (technical and financial viability);
5. Carry out a rigorous and in-depth quantitative analysis to better estimate the costs of EPR and their effects on transport electrification since the quantitative analysis prepared by EY must be interpreted with caution given the absence of reliable data for Quebec and the use of assumptions based on the situation in Europe.

This study was carried out with the financial participation of Ministry of Energy and Natural Resources, theMinistry of the Environment and the Fight Against Climate Change, ofRECYC-QUÉBEC, ofCall2Recycle Canada, of theAssociation of Auto and Truck Parts Recyclers, ofHydro-Québec, ofRecyclage Lithion, ofNemaska Lithium, ofNouveau Monde Graphite and ofMason Graphite.

To learn more about the management of end-of-life lithium-ion batteries through an extended producer responsibility (EPR) mechanism:

About Propulsion Québec

Quebec’s cluster for electric and intelligent transportation brings together all stakeholders in the sector around coordinated projects aimed at positioning Quebec among the leaders in the development and implementation of land transport modes that promote electric and intelligent transportation. Created in 2017, Propulsion Québec now has over 180 members from different sectors and deploys its resources across seven distinct workstreams aimed at developing and supporting innovative projects. The cluster benefits from the financial support of the Government of Quebec, the Government of Canada, the Montreal Metropolitan Community (MMC), Quebecor and ATTRIX.