Life After Linear: Making batteries circular
As an emerging, much-hyped concept, the practical meaning and implications of the circular economy can be difficult to grasp. To stop value chain stakeholders and public authorities from going around in circles, our Life After Linear series breaks down a clear, circular story for some of the most important material value chains of Europe’s low-carbon future.
In this opening edition, Battery Innovation consultant Piotr Grudzień investigates the challenge ahead for bringing batteries, the enablers of an electrified Europe, into the circular economy, and presents four different approaches: reduce, repair, repurpose, and recycle.
BATTERY WASTE: SOME CONTEXT
Lithium-ion batteries are used as energy storage in various applications, ranging from consumer electronics to stationary energy storage systems (ESS) and electric vehicles (EVs). Although most of us know them from smartphones, currently EV batteries by far exceed any other product category in market size: in 2021 they represented 75% of all batteries placed on the market, on a capacity basis.
Where does battery waste come from? Up to 5% of new batteries’ volume is discarded from the manufacturing process, roughly 10% finish their life due to car accidents or defects and are replaced, while the remaining 85% becomes waste when the electric vehicle is not economical to repair and is dismantled. In all these cases, according to current regulations, retired Li-ion batteries in Europe have to be collected and recycled with a minimum efficiency of 50%. Compared to waste streams in other sectors, one could say Li-ion batteries need special treatment. There are several reasons for this.
The production of Li-ion batteries has a high carbon footprint and requires the use of critical raw materials (CRM) like cobalt and lithium, of which the sourcing is linked to detrimental impacts, such as human rights violations and the contamination of the environment during mining operations. Circularity approaches prolong the useful life of batteries, reducing the demand for manufacturing new batteries while satisfying the growing need for the electrification of transport and the energy transition. The European Commission believes that these approaches can also help achieve the greenest battery value chain globally, securing Europe a competitive edge against Asia and the U.S. This is why upcoming updates to the battery regulation and end-of-life vehicle directive have a strong focus on sustainability issues, increasing already stringent recycling requirements and opening opportunities for higher-value circularity approaches.
In 2017, when EU officials started discussing how to set up the greenest Li-ion battery industry, circularity was just a concept, with few use cases to build on. I think the bar was set very high, especially considering that Europe at that time had no experience in mass manufacturing or the recycling of batteries. However, with a mix of massive investments in the battery value chain and rigorous regulations, the EU’s ambitious plan seems to be taking shape. The last couple of years has revealed essential knowledge among researchers and experience among businesses to offer a wide range of demonstrated circularity solutions. So we live in exciting times, making sure that all value is retrieved from batteries, especially before tossing them in the shredder!
Piotr Grudzień, Innovation Consultant
4 APPROACHES TO BATTERY CIRCULARITY
Various approaches in battery circularity are best described by the 4R principle. This model prioritises waste reduction in the design phase, followed by extending the product’s lifetime through battery repair, giving batteries a second life in different applications by repurposing, and recovering valuable metals through recycling. Each approach faces multiple technical challenges, largely influences market dynamics and to some extent is incentivised by EU regulations. These curious interdependencies are explained separately for each of the 4Rs below.
Reduce: saving critical raw materials
The first principle of circularity is to eliminate (= design out) waste from the product. An average EV battery pack with Nickel Manganese Cobalt (NMC) cells includes approximately 52 kg of graphite, 29 kg of nickel, 8 kg of cobalt and 6 kg of lithium (other materials like steel, aluminium, copper and plastics are considered non-critical). Replacing these rare earth metals with more abundant materials would significantly increase the sustainability of rechargeable batteries, but new chemistries struggle to achieve energy density similar to NMC, which undermines their use in the most demanding applications. A reduction in the use of primary raw materials can be also achieved by limiting the manufacturing scrap (currently reaching up to 5% on a mass basis) or by using recycled materials. In the EU, the latter approach is mainly driven by legislation.
The new battery regulation accepted in December 2022 is introducing very ambitious measures: minimum levels of recovered cobalt (16%), lead (85%), lithium (6%), and nickel (6%) from manufacturing and consumer waste will have to be reused in new batteries. Many stakeholders warn that this will push up the prices of secondary raw materials since there may not be sufficient supply available on the market.
Thankfully, there are several solutions at hand that can help. In April 2022, Tesla announced that nearly half of their new EVs were already using iron-phosphate (LFP) batteries which are nickel-free and cobalt-free. In the meantime, a Chinese cell manufacturer CATL announced they will begin the mass production of sodium-ion batteries (NIB) in 2023, which would be lithium-free and cheaper than Li-ion chemistries.
Another solution for better management of mineral stock is to enforce a battery passport, a concept proposed in the new battery legislation. There are several initiatives working together to deploy it – Battery Pass focuses on the efficient management of data, while Catena X is developing an application for stakeholders. Last but not least, we have the rightsizing approach which aims to design the batteries as big as necessary and as small as possible – this can be done by an in-depth analysis of driving profiles showing what battery size is really needed for a specific type of vehicle.
Repair: outliving the vehicle itself
The second circularity approach is about repairing the batteries that experience a manufacturing defect, an accident or natural degradation. Most EV makers offer a warranty for 8 years or 100,000 miles (whichever is reached first) and within this time, the OEM replaces the battery if its state of health (SoH) falls below 70% of the original capacity.
The new battery regulation doesn’t cover this topic very widely, however, it proposes that the workshops servicing batteries should receive access to the battery management system. This is highly important because battery diagnosis will be one of the key activities needed to repair the battery and being able to read the BMS is essential. Since most electric vehicles on the roads are relatively new, car workshops still don’t have the necessary skills, experience and tools to repair EV batteries.
We believe there are three main ways to repair batteries more efficiently. First of all, all new batteries should be designed in a way that allows fast and simple disassembly. For example, MARBEL, a H2020 project is working on a modular design of the battery pack which helps reduce the time for maintenance. Secondly, the workshops have to train the personnel and invest in tools for battery diagnosis and replacement. A good example to follow is a programme launched in 2021 by Volkswagen which has built a network of 450 centres qualified for servicing EVs. The third solution is to predict battery failures before they happen by monitoring the data from EV usage. This can be done through analytics platforms like the one developed by German start-up Twaice.
Repurpose: a second life for every battery?
When the battery reaches the end of (its first) life in an electric vehicle, it usually has a remaining capacity of 60-80%, which is more than enough for use in other applications, like stationary energy storage. However, there are several challenges which hinder this opportunity.
First of all, end-of-life (EoL) batteries are difficult to source – they usually end up at car dismantlers scattered around Europe. Imagine you want to build a 6 MWh energy storage from 60 kWh car batteries. This means you have to find at least 100 retired electric vehicles of the same model and ideally with the same remaining capacity – currently, it is virtually impossible due to the low number of EoL EVs in Europe.
Moreover, there is no common certification of 2nd life battery performance, which undermines the operations of repurposing companies and lowers the quality of second-life battery products overall. Last but not least, high repurposing costs and decreasing prices of new cells put into question the economics of battery reuse.
Nevertheless, reuse is probably the most dynamic field of battery circularity, with many energy storage start-ups blooming every year and trying to extract more value from retired EV batteries.
To solve some of the above-mentioned challenges, start-ups often enter partnerships or create joint ventures with car makers, ensuring a streamlined and high-quality supply of EoL batteries. Another way to make a 2nd life business is to source EV batteries from independent car dismantlers and use 3rd party testing centres (or own equipment) for their evaluation. This approach can be facilitated by dedicated trading platforms like the ones developed by Cling Systems or Circunomics. Examples of the most recent second-life battery projects with stakeholders involved are presented in the infographic below.
Recycle: striving for efficiency
Recycling is mandatory when a battery no longer can be repaired or repurposed. According to law, each EV battery in Europe has to be collected and recycled.
In the proposed new battery regulation, the European Commission increases required recycling rates on a mass basis (from 50% today to 65% in 2025 and 70% in 2030) and sets – for the first time – recycling rates for specific materials (35% for lithium and 90% for nickel, cobalt and nickel in 2026). There are two main challenges to this approach. To achieve such high percentages, the batteries have to be first dismantled which is a very labour-intensive and costly process. Moreover, the transportation of damaged batteries can be very expensive, especially when it involves transnational transport – reverse logistics account for roughly 50% of the recycling costs.
How can we tackle these recycling challenges? Two solutions are expected to have the highest impact. Firstly, the cell manufacturers start entering the recycling business to close the loop of their products. For example, in 2021, Swedish cell manufacturer Northvolt produced the first battery fully from secondary nickel, manganese and cobalt. This was made possible by applying a hydrometallurgical recycling process which can recover up to 95% of metals with a high level of purity. On the other hand, the challenge of transportation costs can be solved by the hub & spoke approach. Here, the battery is first locally shredded and then sent to recycling in the form of a black mass. This approach has been popularised by U.S. company Li-Cycle which will deploy two such spoke plants in Europe next year.
Battery circularity still faces numerous challenges. In my eyes, some of them will soon be solved because they are receiving proper attention from researchers and investments into new businesses, for example, in the fields of new chemistries, battery passports, and second-life energy storage solutions. However, I also believe several aspects of circularity are not sufficiently covered: fast and independent battery testing, upskilling repair workshops and dismantlers, and streamlining reverse logistics. More support initiatives, novel technological concepts, and international standards are needed in these fields to develop a mature 4R model for battery circularity.
Piotr Grudzień, Innovation Consultant
How we’re tackling this topic
Bax & Company is working hard to accelerate the adoption of these circularity approaches by the Li-ion battery value chain.
As a partner of the collaborative H2020 COBRA project, we’re contributing to the development of the next generation of cobalt-free Li-ion batteries for electric vehicles, which will help reduce the usage of critical raw materials. In this project, our role is to communicate and disseminate project results, bring in market intelligence through bi-monthly reports, and support partners in commercialising their innovations.
Another initiative that we have helped to set up is the Horizon Europe project BatteReverse which has just recently been approved for funding and is scheduled to start later this year. This project supports two circular approaches – repurpose and recycle, by developing and demonstrating a next-generation automated, connected, and standardised process for increased safety, efficiency, and sustainability of Li-ion battery reverse logistics. Bax & Company’s role will be to analyse and propose innovative circular business models at a battery’s end of life, build a community of reverse logistics stakeholders, and help our project partners bring their innovations closer to the market.
As well as building and participating in EU-wide collaborative initiatives, Bax & Company also supports European associations in developing innovation roadmaps and position papers, works together with large industries or SMEs to perform feasibility and scouting studies for innovative technologies, helps clients to quantify the financial and environmental impact of such technologies, and consults various organisations on the analysis of battery-related policies.
DO YOU WANT TO MAKE BATTERIES CIRCULAR?
We help stakeholders of the Li-ion battery value chain to increase the sustainability of this technology – by facilitating collaboration, bringing innovations closer to the market, and helping to navigate new regulations.
Reach out to a member of our team today!
