Wood Mackenzie pours cold water on Li-ion battery recycling

Wood Mackenzie pours cold water on Li-ion battery recycling

Wood Mackenzie pours cold water on Li-ion battery recycling 150 150 Energy Storage Journal

December 9, 2021: A new report by commodity analyst firm Wood Mackenzie paints a dismal picture of the short-term future for lithium battery recycling, saying there will be no meaningful take-up before 2030.

One problem is a shortage of feedstock, research analyst Max Reid says, partly because EV penetration was not high enough early enough for the 15-year lifespan of most batteries to have been reached yet.

“Underneath the surface of this electric future lies a relatively young supply chain struggling to keep up. The Li-ion battery demand market can fluctuate over months and expanding upstream and midstream to produce battery materials involves lead times of several years,” he says.

“As it is a new industry, there is limited historic capacity to flip the switch on, and yet many see this as a ripe environment for recycling to make a tangible impact.”

The global transition to electric vehicles means demand for batteries will boom, and Reid forecasts that by 2040, 89% of Li-ion battery demand will come from the EV sector — leaving a lot less for the simultaneous demand coming from the energy storage sector.

Another problem is the recycling itself. Whereas portable electronics batteries are easily accessible, EV battery packs take much longer to get out, take apart and mechanically shred. It is cheaper to simply produce new batteries than recycle old ones.

Reid says: “This decade will see the supply chain further establish itself to be able to supply vast quantities of battery-grade chemicals and cathodes to cell manufacturers, while recyclers will struggle with the large mass and complexity of EV-packs.”

He says a new cathode facility will produce 50 kilo-tonnes per annum (ktpa) of NMC (nickel, manganese and cobalt) material, while a recycling facility will typically process 5-10 ktpa of e-waste — the former equating to roughly 400,000 battery EVs annually and the latter taking in just roughly 30,000 EV-packs yearly.

According to Wood Mackenzie’s analysis, the total capacity of planned recycling facilities will still overshoot feedstock in 2030, when end-of-life EV numbers begin to ramp up, and there is likely to be a scramble for used EV batteries in North America and Europe.