The rising demand for electric vehicles has intensified the need for critical minerals like lithium, cobalt, and nickel, making battery recycling a crucial piece of the sustainability puzzle. In this conversation, Manikumar Uppala, Co-Founder and Chief of Industrial Engineering at Metastable Materials, shares insights with Neha Basudkar Ghate on the evolving battery recycling market, the role of policy in shaping the industry, and how innovative recycling technologies can bridge the gap between resource scarcity and a circular economy.
The demand for EV batteries is expected to surge exponentially. How do you see the role of battery recycling in ensuring a stable supply of critical minerals like lithium, cobalt, and nickel?
In the face of the climate crisis, the global fraternity decided to cooperate to achieve net zero GHG emission goals. The transport sector is the fourth largest source of greenhouse gas emissions making it a crucial sector that must align itself to net zero goals. Policy interventions worldwide are enabling the uptake of cleaner technologies in this sector and that is gradually propelling EV sales.
At the core of the adoption of EVs is the issue of critical minerals. According to IEA, an EV uses eight times more critical materials than vehicles with an internal combustion engine (ICE). The adoption of EVs to meet net zero emission goals is set to increase the demand for critical minerals like nickel, cobalt and lithium up to 13X (depending on the mineral). Therefore, the clean energy transition is dependent on and must be supported by a steady supply of these minerals. Sourcing critical minerals includes the traditional method of mining and extracting raw materials and refining them into cathode materials. While energy security depends on these critical minerals, the source and refining capabilities of these minerals are limited to a few countries which are set to dominate the industry due to either having massive reserves (eg. nickel – Indonesia, cobalt- Democratic Republic of Congo) or having refining capabilities (China- Lithium and Cobalt). The supply chain is fraught with issues including human rights abuses, and pollution and is not necessarily low carbon.
Here’s where recycling becomes essential as a source of critical minerals. Hydrometallurgy and pyrometallurgy- processes that were predominantly used for recycling lead acid batteries have been adopted for Li-ion batteries as well; though the technologies are yet to mature when it comes to Li-ion batteries, as these batteries are more complex and there is no standardisation yet when it comes to the chemical composition of these batteries. Why recycling is an essential source of critical minerals can be understood by the batteries’ composition. While battery chemistries can differ vastly based on the cathode (NMC, LCO, LFP, NCA, etc) – the weight of the cathode is roughly 20 to 25% of the battery pack. To quantify further- an average 66kWh battery (430 kgs approx) (Chevy bolt example) can contain approximately 185 kgs of minerals (excluding electrolyte, binder, separator and battery pack casing) of which cathode materials could weigh about 80 kgs approx. A single PEV car battery may have a 50KWh-100KWh battery, and battery recycling, can ensure at least 90% extraction (with present recycling technologies, even up to 95% extraction) of these critical materials from the batteries. Global nickel demand is projected to be approximately 6 million tonnes by 2033 and by then, nickel production from secondary sources (recycling) is projected to be 259k tonnes, which means recycling can meet about 5% of the global need. Similarly, 5% of global cobalt needs could be possibly be met from recycled batteries and 6% of global Lithium Carbonate (LCE) by 2033. Therefore, battery recycling is going to play a key role in meeting the market demand of critical minerals in the coming years.
How do you see the global battery recycling market evolving over the next decade, and what will be your company’s role in this evolution?
As demand for lithium batteries grows (projected to grow 5X by 2033), demand for battery materials will be directly proportional. Since recycling can be a significant source of battery materials, as stated above, in the short term, it will provide security for countries with low primary metal production. By 2040, battery recycling in Europe is stated to grow tenfold as battery gigafactory scrap will also be available along with exponential quantities of end-of-life batteries
By 2033, 2400 Million tonnes of batteries are stated to reach the end of life, including mobiles, laptops, and energy storage. The popular chemistry used is NMC currently, but its begun to shift to LFP, as more and more companies are adopting it. While battery recycling is stated to grow exponentially by 2030 when the first set of end-of-life batteries are ready for recycling, the feedstock changes mean margins are unclear for recycling. Most recycling companies are producing black mass, which does not have a set price. The payables for black mass depend on nickel and cobalt content, but may also be impacted by the impurity percentage in the black mass. Price also depends on supply as it is more expensive in Asia due to higher recovery capabilities in China, South Korea, and others whereas it’s cheaper due to surplus supply in Europe, which does not have enough refining capabilities.
Metastable’s mission has always been to treat the batteries as ores. Producing black mass only cannot answer the global need for metal circularity nor necessarily be profitable. Hence, using our proprietary technology, we produce high-grade commodity metals and do not stop at black mass. This means we do not necessarily want to close the whole loop for the battery supply chain but we are closing the loop for this critical metals supply chain overall. What that means is that our commodity-grade metals can add value at each stage of the metals supply chain as there exist refiners and manufacturers who are familiar with using these metals. Down the road, we can even produce refined metals, which can be used in manufacturing industries, including batteries. Since profitability in recycling, is a game of margins, we have a technology and aim to have a model that answers the global critical mineral needs with high purity and extraction rates while subverting the pitfalls of the complex requirements of existing recycling technologies.
Overall, the recycling industry is nascent, with unclear cost structures, payables and recovery rates, along with mixed feedstocks and throughputs that further complicate the technology process flows. The next few years should see further growth in technological capabilities as well as new technologies that can handle the uncertainties in feedstock as well as business margins.
Many countries are pushing for stringent battery recycling regulations. Where does India stand in terms of policy, and what improvements would you like to see?
India, in 2022 released the Battery Waste Management Rules which mandated that producers be responsible for recycling or refurbishing waste batteries (EPR) and prohibited disposal by incineration or landfills. These rules also stipulate a minimum recovery percentage from waste batteries for recyclers and that new batteries must contain a certain percentage of recycled materials. Penalties for violations can range from fines to closing of units for noncompliance.
While this is a great start, implementation is key and raising awareness that batteries cannot be disposed in the regular fashion is important. Provisions necessitating labelling (in the fashion of the battery passport in EU) of the contents of the battery and its lifecycle will provide recyclers with important data for processing. Standardising batteries for easier end-of-life management is required globally.
Another issue is the viability of recycling as a business. EPR does not comment on the cost of recycling. Down the road, with the adoption of LFP batteries, lithium becomes the only payable for recyclers which means producers charging recyclers for end of life batteries, will make recycling margins too low to be a viable business. For negative value batteries such as LFP, the government must encourage manufacturers to pay for recycling services such as in the EU or the US. There is also a lack of rules for storage, transport and handling of electric vehicle batteries and that may lead to serious safety concerns as the informal sector is heavily involved in waste collection in India. There needs to be safeguards and training for those handling these wastes.
India overall needs to look at other countries which have a more cohesive battery ecosystem. China has heavily incentivised battery recycling to use recycled raw material available within the country. The US allows recycled battery materials (lithium, cobalt, and nickel) to qualify for significant tax credits available through the domestic materials clause. Globally, countries are encouraging processes that make recycling and recycled products attractive and India would do well to follow suit, to ensure the circularity of critical metals which is extremely crucial in the global clean energy transition.
What differentiates your recycling technology from competitors, and how does it address the limitations of existing methods?
Existing recycling methods are pyrometallurgy, hydrometallurgy and direct recycling. Of these hydrometallurgy is the predominantly used method, or it’s a combination of hydro and pyro that is sometimes used.
For a recycling technology to be viable and mature, it must result in high extraction rates, and high purity of extracted materials, while also requiring low capex and processing costs. Since it is a recycling technology, it is ideal for the technology to be green and low carbon in itself, to enable the lifecycle of the product being recycled to be green.
Pyrometallurgy has low lithium recovery, high energy usage and capital cost and can produce toxic gases. Hence it has largely been discarded for lithium battery recycling. Hydrometallurgy and direct recycling have higher chances of preserving the material quality and good extraction rates however, both are highly capex intensive. Hydrometallurgy requires consistent feedstock and the process can be more expensive. Direct recycling has high production costs and has not been commercially proven yet.
Our technology uses the physical properties of the battery materials to break down the batteries, rather than chemicals like in hydrometallurgy. The absence of chemicals vastly simplifies operations. There is no hazardous waste production and significantly lower greenhouse gas emissions. The chemical-free nature of the technology allows for repeated recycling cycles to refine yield purity and suggests lower energy consumption compared to chemically intensive methods. Environmental friendliness and much lower energy consumption also set apart the integrated carbothermal reduction process from other predominant battery recycling processes. Our technology, integrated carbothermal reduction (ICR) , has a zero liquid discharge system, which significantly reduces water usage. The process yields commodity metals, which already have a market fit and infinite demand, meaning one does not have to produce speciality chemicals that can drive up the production cost, along with added complexities.
Can battery recycling emerge as a major employment generator in India’s green economy? What types of jobs will this sector create?
Battery recycling will create a lot of jobs as the entire clean energy sector is set fpr exponential growth. Opportunities lie in unskilled sectors like collection and dismantling. Skilled technicians will also be required for material extraction, quality control, refining, and R&D. Sales, and skilled strategists in a nascent industry to shape its growth trajectory would also be valued. The industry’s employment generation is dependent on the industry’s scale and growth. It is contingent on whether there is enough policy support and funding for recycling and the recycler’s margins.
As international markets compete for critical minerals, do you foresee India leveraging its battery recycling industry to reduce import dependency?
Yes, India must. Seeing as we wholly depend on imports for critical minerals, battery recycling is extremely crucial for India to offset some of that dependence. The government is already looking at securing its critical mineral needs by removing customs duties, exploring critical minerals and their mining, and beneficiation through the Critical Minerals Mission. The Indian government is also incentivising cell production and EV production. Recycling, being key to India’s critical mineral needs and supporting the EV and burgeoning cell manufacturing industry, must be leveraged and realised to its full potential.