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Friday Five

20th Jan 2023

Battery Recycling and EU Directives

On December 8th 2022, The European Union took a huge step forward in tackling battery-related environmental issues. The Batteries Regulation outlines progressive measures to reduce carbon footprints and ensure responsibly recycled content for all batteries over the next four years. By 2025, strict rules around Extended Producer Responsibility (EPR) will have been established, setting new sustainability standards within Europe's thriving tech industry.

 

By 2025, the EU's guidelines will impose significantly higher collection targets for portable batteries. By 2027, these are expected to reach 63% and increase to 73% by 2030. The same holds for light-powered means of transport: In four years' time, their battery collections must exceed 52%; this number should elevate all the way up to 61% in 2031! Recycled materials within the Lithium sector also have a goal set before them – 50 % already during next year, followed rapidly by an 80 % recovery target just three years after that point.

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Further effort is being taken into consideration when it comes down to businesses engaging with the internal market, as they need to demonstrate proof of environmental responsibility based on socially responsible sourcing practices prior to any material acquisition procedure taking place.

 

As the battery industry continues to grow, with greater production and strengthening regulations driving sustainability initiatives, an underlying challenge is emerging raw material scarcity. To tackle this hurdle effectively calls for a rethink of how we manage recycling - but this comes at its own set of complications across multiple stakeholders.

High Barriers to Entry

Soaring entry requirements have made it increasingly challenging to access new markets. To maintain a competitive edge, businesses must achieve economies of scale - yet even this may be insufficient in meeting sustainability standards if no premium is available as an incentive. This is further complicated by variable scrap rates and widely varying recovery efficiency when using existing recycling technologies.

Large Numbers of Competitors

With more than 30 recycling projects already announced across the European Union, competition is heating up for companies hoping to join in on this energy revolution. Manufacturers of cells, automotive Original Equipment Manufacturers (OEMs), and traditional recyclers are all jockeying for positions as they pursue lucrative opportunities. for making a green transition. As such, those looking to join forces must act swiftly to ensure success in what has become a highly contested marketplace

Batteries: Recycle or Reuse? A look at the options available

For end-of-life batteries, securing maximum return is the primary consideration for owners. This has resulted in a competition between reuse and recycling to offer the best price - creating an ever-present dilemma.

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Value.

Reuse: Reusing batteries can be incredibly valuable, as evidenced by Merlin's research. Batteries with only slight cosmetic damage or blemishes that still offer first-life performance are particularly prized when refurbished.

 

Recycled: The strategic recycling of batteries can help reduce dependence on mined resources and limit environmental damage from landfills and carbon emissions during circulation, provided carbon capture and renewable energy are used for the process. Such practices also comply with international "Rules of Origin" laws - an opportunity not to be overlooked!

Costs

Reuse: Reusing battery packs is becoming increasingly important as the cost of producing new ones rises. Electric storage systems offer an attractive way to repurpose existing power sources, reducing waste and associated environmental impacts.

 

Recycle: Ensuring economic viability is not easy. Multiple factors come into play for lithium-ion battery recycling to reach profitability, such as transportation distances, labour costs, battery-pack design and the specific recycling method being used.

 

Keeping the recycling process within country borders offers many benefits, including reducing emissions and slashing transportation expenses. It also guarantees a reliable material supply chain.

 

As we move towards an increasingly electric future, these steps must be taken to ensure better sustainability practices.

Success Factors

Reuse:

  • The procurement of reliable and continuous feedstock is essential for success

  • A strong strategy to win over the competition posed by new batteries

  • Access to granular data on tracking history 

Recycle:

  • The ability to scale and handle multiple battery materials

  • Long-term agreements to recoup CAPEX

  • Facilitating homogeneous access to reliable feedstocks

Challenges:

Reuse:

Batteries are typically not designed to be re-used, so safety is a key concern when considering the potential of re-use. Additionally, depending on the battery chemistry, cycle life, degradation curve, and discharge characteristics may impact whether or not they are suitable for reuse.

 

Recycle:

Recycling batteries is a complex process with many challenges that must be considered.

 

Collection and transportation costs may prove expensive. High recovery rates are important to improve efficiency and maximise recovered materials' value. Unfortunately, waste is inevitable during battery recycling which needs to be managed properly. Furthermore, the recycling process is extremely energy-intensive.

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Conclusion

These issues pose challenges, but they can be addressed by utilizing new technologies and correctly implemented policies

Canada has moved up to second place in BloombergNEF's global ranking of battery-producing countries, behind only China.

This significantly improved from its fourth and fifth-place rankings in 2020 and 2021, respectively.

 

Canada has made substantial investments over the last 12 months, amounting to $15 billion towards electric vehicle production, component manufacturing, critical mineral mining and processing, and the country’s first gigafactory.

 

Prime Minister Justin Trudeau and several provincial counterparts are promoting Canada's mineral wealth as a competitive advantage in the shift to electric vehicles.

 

Lithium, one of six critical minerals listed by Canada in its December strategy due to its importance for clean technology, is a key component of battery production. Still, only modest amounts are currently produced here.

 

The US and Europe want to move supply chains away from China which dominates the EV sector due to geopolitical concerns.

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Italvolt, an electric vehicle battery maker, has announced a licensing agreement with Israeli start-up StoreDot for fast-charging battery technology.

 

Italvolt will be raising funds to build a plant in Italy where the lithium-ion batteries will be manufactured, and it has agreed to ringfence a minimum amount of these batteries for StoreDot's business and customers.

 

The cells developed by StoreDot can deliver 100 miles (161 km) of range on 5 minutes charge by 2024, making EVs more attractive and cost-effective.

 

Currently, EVE Energy produces the licensed technology in China, which is then shipped to Chinese & Korean customers. Still, this partnership with Italvolt provides them with a closer European manufacturing partner.

Scenario planning in the context of sustainability 
by: Ophelia Otto Customer Engagement Director – DACH Region Circulor
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Scenario planning has been a staple exercise for most supply chains.

Particularly procurement teams are familiar with the importance of identifying the business-critical strategic decisions that require pressure-testing.

Today, including all relevant and cross-functional stakeholders means casting a wider net than before. To ensure that the envisaged scenarios cover all relevant bases, a formerly often neglected perspective must be at the core of all planning - sustainability.

Whilst sustainability is quickly growing in importance, it simultaneously does so in complexity. It has always been a challenge to avoid vague and unscoped questions for scenario planning exercises. However, in this new normal post pandemic world, with unprecedented volatile markets and shortages, any uninformed strategic decision will lead to supply chain disruptions.

Never has it been more important to hold industries accountable past a code of conduct, at the same time, never before has it been possible to gain full transparency beyond tier 1 suppliers.

With companies’ strategy and purpose-driven commitments in mind, new scenarios must be designed to meet requirements of an entirely different environment.

The historic balance of quality and price must include environmental impact and human rights issues. New ways of quantification must be found to measure performance against relevant emerging metrics.

Sustainable revenue must be the goal, a term that translates into a variety of holistically important issues from GHG emissions to SDG goals or ESG targets all the way to new business models.

Companies that act now and realise this opportunity to grow, will come out as market leaders with sustainable products, revenue, and highly resilient supply chains.

Industry-agnostic platforms such as Circulor’s Prove are here to facilitate a seamless transition and enable global companies to gain full transparency across even the most complex of supply chains.

Circulor’s holistic solution enables you to identify new driving forces and critical uncertainties relevant to our time. Equipped with the right insights, likely truths can be connected quickly to respective scenarios, whilst advanced analytics will facilitate constant monitoring and necessary adjustments going forward.

Be in charge, own your products down to every material and all tiers of suppliers. Using the right scenarios will not only help you refine your supply chain strategy but will furthermore ensure that sustainable development of your business is on track.

Traceability is key to a successful transition to markets in which only purpose-driven organisations will thrive, and where people will realise their power to affect change by choosing what they purchase and who they work for.

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