Supply chain concerns will drive EV battery recycling policies

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From pv magazine global

When it comes to the reclamation of battery materials such as cobalt, a desire to escape the tyranny of a small number of strategic supply chains is likely to be the chief motivation for governments to ramp up recycling efforts, rather than loftier, environmentally-focused concerns.

That pragmatic verdict was among the findings of a wide-ranging, updated ten-year forecast of the electric vehicle (EV) market produced by the International Energy Agency (IEA) this week.

Using a business-as-usual and a more ambitious scenario in its Global EV Outlook 2020 report, the IEA predicted the 65 kilotons (kt) of nickel, 22kt of manganese, 19kt of cobalt and 17kt of lithium used by the global EV industry last year could mushroom to 925kt, 177kt, 180kt and 185kt, respectively, in ten years’ time, under its ‘stated policies’ model. A Paris Agreement-friendly ‘sustainable development’ future could see those 2030 volumes more than double, according to the report.

The cost conundrum

Such figures are likely to prod governments around the world to incentivize recycling efforts but the IEA’s examination of raw material reclamation efforts has exposed the dilemmas facing policymakers as battery costs continue to plummet in tandem with ever more EVs rolling off production lines.

The updated EV outlook study, published on Monday, estimated batteries cost an average, sales-weighted $156/kWh last year and the IEA expects that figure to fall to $100/kWh or less by 2030. Although falling battery costs are considered crucial for EVs to displace fossil fuel-driven transport, there are fears ever cheaper devices will disincentivize recycling efforts. The paradox is illustrated by the use of cobalt in batteries. Reports of child labor and other heavy social and environmental costs associated with cobalt extraction have prompted manufacturers to reduce the cobalt content of EV batteries. That has in turn driven down costs and further muddied the waters as regards the business case for recycling raw materials rather than just mining them. The end result, said the IEA, is that recycling subsidies and legislation making manufacturers responsible for recycling are likely to continue to be necessary to support a more sustainable supply of battery materials.

Another dilemma concerns the apparently attractive second-life use which repurposed EV batteries offer for stationary energy storage.

With EV batteries having a lifespan of 8-15 years in vehicles – depending on owner driving habits – they can then be used for a further 5-15 years for static energy storage systems, although repurposing costs of around $25-49/kWh and the expense of transporting large quantities of hazardous materials reduce the business case – with the former also raising the question of eco-friendly design.

Circular manufacturing

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The idea EV batteries can continue to be used beyond transport purposes is ostensibly attractive, from a sustainability point of view but also, paradoxically, reduces the urgency for putting in place recycling programs, as it further delays the first significant volumes of end-of-life batteries available on a significant enough scale to attract investment in materials reclamation. A significant chunk of the 100-120 GWh of end-of-life EV batteries anticipated by the IEA by 2030 may first be put into static storage use.

In a survey of recycling policy in the world’s main EV markets, the IEA noted the EU and China have made strides in making battery manufacturers responsible for end-of-use treatment. By contrast, only three U.S. states – California, New York and Minnesota – currently ban the landfilling of lithium-ion batteries and the nation still favors a market-based approach to materials reclamation, rather than making manufacturers bear the burden. India, noted the IEA, has yet to formulate a comprehensive EV and battery recyling policy and any attempts to enforce legislation are likely to be frustrated by the mountains of e-waste illegally arriving in the nation.

Amid interesting tidbits such as the fact EVs in Europe are on average 50% more expensive than in China, and that commercially charging an electric long-haul truck consumes as much energy at present as around 55 EU households, the IEA report also considers the grid benefits which can be unlocked by the EV revolution.

Vehicle-to-grid

The study notes the many limitations on using EVs to supply power to balance electricity networks, including the small number of personal vehicles likely to be dormant during typical 6pm-10pm peak electricity demand hours; DC to AC conversion losses of 10-20%; the fact around a quarter of personal EVs are inappropriate for vehicle-to-grid or ‘V2G’ use; and the negative effects of such use on EV battery life. In fact, the IEA notes scientific consensus needs to be reached on the effects of V2G discharging on EV battery life.

However, states the report, harnessing just 5% of the anticipated global battery capacity available in the world’s major EV markets by 2030 could remove the need to generate 380 TWh for peak supply purposes in China, India, the EU and the U.S. by providing almost 600 GW of flexible grid capacity. Such a development would require change from grid networks, noted the report, as even grid pricing policies tend to be applied at a national level whereas high EV ownership in certain locations could cause bottlenecks in supply.

The report’s authors admit large sections of the study were prepared before the full onset of the Covid-19 crisis and, in terms of the fallout of the pandemic, the IEA considers EV deployment could go one of two ways. The report’s ‘bright future’ scenario is based on the Covid-19-driven experience of clearer air and blue skies prompting lawmakers to attempt to reduce vehicle use as the world recovers from the coronavirus. The alternative, ‘bleak future’ posts a post-Covid world where commuters get back in their cars because of concerns surrounding public transport use and governments wind down EV incentives as they attempt to deal with the economic cost of global industrial shutdowns.

Bright or bleak, though, the IEA confidently states: “Electric cars are likely to have a much better 2020 than the rest of the auto industry.”

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