- In the US, lead acid batteries have a near perfect recycling record of 99.3% and recycled lead from used batteries satisfies over 80% of domestic demand.
- Roughly 85% of lithium-ion batteries are discarded because there is no infrastructure, collection, sorting and transportation are challenging and used electronics, including their batteries, frequently end up in China.
- Lithium-ion battery recycling dynamics will change if EVs become mainstream because logistics will be simpler and recycling will be quite profitable.
- The timing of those changes is impossible to predict due to uncertainties arising from second life applications.
- It’s a battery industrial corollary to the Groucho Marx conundrum, “If we had some eggs we could have eggs and ham, if we had some ham.”
Recycling is one of those warm and fuzzy, yet incredibly mushy, terms that people just love to abuse. The goal of all recycling is to recover valuable materials so they can be reused to make new products. Anything less is simply safe disposal that wastes valuable materials by removing them from the supply chain.
To recycle lead-acid batteries, for example, you shred them and dump everything into a water bath where the plastic floats and the metal sinks. Then you skim the plastic off the top, smelt the metal layer to remove impurities and process the bath water to reclaim the sulfuric acid. The recovered lead, plastics and acid are all suitable for reuse in battery manufacturing. The process is simple, clean and profitable because a tonne of batteries contains roughly 700 kg of lead with a market value of roughly $1,400. In the US, lead acid batteries have a near perfect 99.3% recycling record and recycled lead satisfies over 80% of annual demand. It’s an almost perfect closed loop system where substantially all of the materials used to make lead-acid batteries are recycled and reused over and over again.
Lithium-ion batteries, in contrast, are complex devices with important concentrations of several valuable materials. The schematic on the left shows the basic construction of a lithium-ion cell and the table on the right summarizes typical mass percentages for various cell components.
From a recycling perspective, the most valuable metals are lithium, cobalt, nickel and copper. While aluminum, steel and carbon anode materials have modest values, those values pale in comparison to the technology metal values. The following table summarizes the spot market values of the technology metals embodied in a tonne of high energy lithium-ion cells.
Compared to lead acid batteries that contain about $1,400 worth of valuable metals per tonne, end-of-life lithium-ion batteries are a potential bonanza. Since the metal values per tonne are so large, I’ve uploaded a copy of my recycling spreadsheet to my Dropbox. To download a copy of the spreadsheet, CLICK HERE.
At present, the technologies required to effectively recycle lithium-ion batteries and recover the embodied metal values are both complex and poorly developed. If you shred a lithium-ion battery, the lithium will react with moisture in the air and ignite the electrolyte and separators. While cryogenic and inert atmosphere techniques minimize combustion risk, they’re expensive in practice. Once you overcome the combustion risk and shred lithium-ion batteries you end up with small pieces of metal foil that are coated with multi-metal or carbon powders. Here too, there are ways to separate battery shreds into purer waste streams, but they’re expensive. Between the costs of fire prevention, material separation and recycling, it’s a big challenge.
If you decide to shortcut the process and simply toss scrap batteries into a UHT furnace, the separators and electrolytes contribute a little process heat, the nickel, copper, cobalt, iron and manganese are recovered in a multi-metal alloy that’s difficult to separate into pure metals, and the lithium and aluminum are recovered in a slag. The alloy and the slag must then be further processed with hydro-metallurgical techniques to recover commodity grade metals.
In 2009, the Department of Energy was authorized to dole out $2 billion in ARRA battery manufacturing grants. The only category of grants that was not fully awarded was “Area of Interest 4: Advanced Lithium ion Battery Recycling Facilities” which earmarked $25 million for two $12.5 million awards. Since the funding solicitation only drew $9.5 million in acceptable funding applications, the remaining $15.5 million was not awarded.
Any time there are no takers for free government money, it says something.
While the technical challenges of lithium-ion battery recycling are real, there are solutions and historically nontechnical problems have been more important. The impediments include:
- Low metal prices – technology metal prices trended downward from 2010 through 2015 and market prices for lithium and cobalt have almost tripled in the last two years, so the attractive recoverable metal values in the table are a recent development.
- Small battery sizes – lithium-batteries historically ranged from 10 to 50 wh of capacity and weighed from 2 to 10 ounces, so it takes thousands of used batteries to generate a ton of recycling feedstock.
- No infrastructure – while used lead-acid batteries are invariably returned to avoid a core charge when a new battery is installed, there is no established infrastructure to collect, package and transport used lithium-ion batteries for recycling.
- No reliable supply chains – without a collection infrastructure, there can be no reliable supply chains and the biggest challenge most recyclers face is sourcing enough batteries to keep facilities operating at acceptable capacity utilization rates.
- Very high costs – collectively, small battery sizes, high collection and logistics costs, and unreliable supply chains increase recycling costs to a point where it’s cheaper to discard used batteries than it would be to recycle them.
- Substantial exports in e-waste – the collection, refurbishment and resale or recycling of used electronic devices, or e-waste, is big business and when battery powered devices enter the e-waste stream, their used batteries go along for the ride.
The economics of lithium-ion battery recycling will change if EVs become mainstream because recycling automotive battery packs will be cheaper and the logistics simpler. The timing of those changes, however, is almost impossible to predict because of uncertainties arising from second life applications.
While I would be hard-pressed to accurately describe the likely near-term evolution of battery repurposing and recycling, Creation Inn, a UK consulting firm, released a comprehensive report in January 2018 titled, “Circular opportunities in the lithium ion industry; analysis of the global end-of-life market for lithium ion batteries.” I was intrigued when I read a summary of Creation Inn’s conclusions in an online article. I was delighted when Creation Inn agreed to send me a courtesy copy of their report. It’s a comprehensive, engaging and thoroughly impressive piece of work; an eye-opener that discussed a variety of used battery market dynamics I didn’t know existed. Frankly, I think anyone who’s contemplating a major investment in a battery recycling venture should consider buying a copy of the report before making a decision.
The first point the report drove home was that many believe used cells in EV battery packs will have significant remaining capacity when the pack is replaced or the EV is taken out of service. The logic is pretty straightforward. EVs are not a difficult duty cycle for batteries because:
- Daily depth of discharge is shallow because most EVs offer 100 to 300 miles of range while the average owner drives less than 50 miles a day; and
- Charge and discharge rates are gentle because charging at home takes several hours and urban commuting typically includes significant low speed segments.
Therefore, the cells in an automotive battery pack should have significant remaining capacity when the pack is taken out of service in a vehicle. While I’ve always assumed that second life users would resist combining old cells with new control systems, cooling systems and housings, it’s undoubtedly a business that end-of-life battery owners will want to pursue to maximize the value of their battery investments.
The second and more important point the report drove home was that lithium-ion battery recycling is not likely to be a business where technology wins. The report identifies seven recyclers in Europe, only one of which is public, three recyclers in North America, none of which are public, and four more recyclers in Asia, none of which are public. It also mentions several companies that are working to develop new hydrometallurgical techniques for processing old batteries. At the end of the day, Creation Inn is not convinced that there is or will be a “best” technical solution or that the best will be significantly better than the “second-best,” the “third-best,” or, for that matter, the “tenth-best. The primary factor that will drive success or failure in the battery recycling business will be control over a reliable stream of used batteries that can be used as feedstock.
I don’t agree with Creation Inn’s conclusion that second life battery applications will be a thing. Second life was a crucial talking point when metal prices were lower and lithium-ion battery manufacturers and users knew that the costs of dismantling used battery packs and recycling used cells would be higher than the value of the embodied metals.
Now that metal prices have climbed to levels where recycling is attractive, I can’t imagine anybody going to the trouble of spending $XXX to buy, test and refresh old cells, spending another $YYY to mate those used cells with new cooling systems, control electronics and housings, and then spending another $ZZZ to sell and install second life systems.
Over the last five years, dozens of companies have launched stationary battery systems for residential and commercial use. While the hype level has been high, the market’s response has been tepid if not cool. In fact, nobody is even close to a profitable business in the stationary energy storage sector.
Since I don’t believe second life will be a thing and I don’t believe recycling will be a business where technology wins, I don’t see a clear path for investors who want to position their portfolios for the inevitable growth in the sector. When it becomes possible to identify the players who will control the recycling feedstock supply chain, rational investing may be possible. Until then, I think the smartest thing to do is void recycling technology plays.