The Importance of Battery Recycling and Reuse

As the world shifts towards sustainable energy, lithium-ion batteries (LIBs) are increasingly being used in electric vehicles (EVs) and grid-connected storage applications. India is no exception, with the government pushing for local manufacturing of lithium cells to meet the growing demand. However, there are several challenges in making the LIB value chain sustainable, including limited resources, environmental hazards, and geopolitical risks. Promoting recycling can overcome these challenges and create a circular economy for LIBs in India.

Recycling of batteries can generate a source of rare metals, which are required for the cell component manufacturing but not readily available locally. By using recycling technologies, 95% of metals can be recycled for use in manufacturing new batteries, reducing the dependence on imports. However, India is not yet prepared for the waste that will be generated by the use of LIBs in EVs and grid-connected storage applications. The current pieces of legislation that are in effect do not include a strict set of rules for the safe disposal of EV batteries. Without a well-established recycling ecosystem, these batteries could end up in landfill and contaminate the soil and groundwater.

Moreover, informal recycling could contribute to environmental hazards since toxic gases are released during pre-treatment and treatment processes. On the other hand, a well-established recycling ecosystem could help in price discovery for end-of-life (EOL) batteries, which in turn will encourage the key stakeholders along the LIB value chain to participate in the recycling and avoid the unsafe disposal of batteries in the country. Thus, battery recycling can help avoid the negative effects of batteries on the environment.

Geopolitical risks are also a significant challenge in making the LIB value chain sustainable. China leads LIB cell manufacturing with around a 51% share in global cell manufacturing capacity. The country also manufactures a significant amount of cathode materials, anode materials, and electrolyte materials globally. Without current manufacturing facilities for cell components, India is expected to depend on imports from neighbouring and developed countries to cater to the growing LIB market. Metal prices could fluctuate as a result of supply chain disruptions, political instability, pandemics, etc., which could directly affect the price of batteries and associated products.

The pandemic has exposed business risks as a result of disruptions in the global supply chain, especially from China, resulting in a long lead time for raw material deliveries. However, India could take advantage of these situations by attracting both global and domestic recyclers to set up LIB recycling facilities in India. The recent war between Russia and Ukraine has also affected the supply chain of key battery metals like nickel and aluminium, along with crude oil. The dependence on imports for these key materials will certainly impact the local supply chain of batteries.

A well-established recycling ecosystem can overcome these challenges and also lead to better price discovery of resale value of EVs (also second life of batteries). Therefore, the need of the hour is to establish a battery reuse/recycle ecosystem that can create a circular economy for LIBs in India. The recent draft rules – the E-Waste (Management and Handling) Rules 2020 – include LIBs for recycling under extended producer responsibilities but these are yet to be implemented.

In conclusion, battery recycling and reuse are crucial in creating a sustainable and circular economy for LIBs in India. By promoting recycling, the dependence on imports for rare metals can be reduced, and the negative effects of batteries on the environment can be avoided. A well-established recycling ecosystem can also help in price discovery, making it economically feasible for the key stakeholders along the LIB value chain to participate in the recycling and avoid the unsafe disposal of batteries. India must prioritize the establishment of a battery reuse/recycle ecosystem to achieve its sustainable energy targets and reduce its dependence on imports.

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