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Abstract

Lithium batteries are pivotal in the global shift toward clean energy. Their demand is escalating due to three primary factors: supportive global policies for a clean energy transition, surging consumer demand for eco-friendly technologies, and leading automakers transitioning their fleets towards electric vehicles. The result is a projected 27% annual increase in demand until 2030, primarily driven by transportation. Scarce materials from lithium, nickel, cobalt, and manganese are pivotal components in the electrochemistry of lithium batteries.

However, the environmental ramifications of lithium battery production and disposal are a looming challenge. The key materials mentioned above need to be mined from the earth, leading to ecological damage. Insufficiently managed end-of-life batteries pose contamination risks, and fires from improper disposal.

The case for lithium battery recycling is not just ecological but also economic. Recycling can ensure a continuous supply of high-value yet scarce battery components while significantly reducing the reliance on mining – potentially reducing lithium mining by 25% and cobalt by 35%.

The recycling process unfolds in several stages, starting with the separation of battery pack components, to extracting the “black mass” containing valuable materials. Three subsequent end-recycling methods, pyrometallurgy, hydrometallurgy, and direct recycling, lead to the extract and isolation of these materials, each having their advantages and disadvantages, leading to many recyclers combining them for flexibility. As of 2022, the global lithium battery recycling capacity was sufficient for approximately 11% of the batteries expected to be available for recycling by 2030. Recycling efforts are led by China, Germany, and the United States but are gaining traction worldwide to meet the growing need.

Main Highlights

The Exponential Demand for Lithium Batteries

● Annual demand of lithium batteries until 2030 is expected to increase by 27% every year, primarily driven by adoption in transportation, driven by policy drivers, consumer demand, and industry transitions of automotive companies towards electric mobility

● Batteries constitute about 30-50% of the cost of an EV, making it the key element for the EV industry.

Lithium Batteries’ Environmental Conundrum

● 29% of all identified mines for transition materials for lithium batteries are in key biodiversity areas, globally; mining can degrade habitats and enable further ecological harm through development, and through toxic byproducts called tailings

● The lifecycle CO2 emissions of lithium batteries across various stages, shows that the manufacturing of raw materials of lithium batteries accounts for a significant majority of CO2 emissions.

● Wastes generated from spent or decommissioned lithium batteries are toxic in nature and can pollute environments and pose a significant fire risk if not maintained properly.

The Case for Lithium Battery Recycling

● Recycling lithium batteries offers an economic opportunity by extracting these commodities. A circular ecosystem for material recycling, once established and scaled, can provide significant cost advantages over virgin material extraction.

● The most critical aspect of lithium battery recycling lies in the anode and cathode, containing high-value and scarce raw materials – lithium, cobalt, manganese, and nickel.

● Recycling involves multi-step processes, starting with the separation of battery components to extract the “black mass,” a composite mixture containing valuable materials like lithium, cobalt, and nickel.

● Three key end-recycling processes include pyrometallurgy, hydrometallurgy, and direct recycling. Each has its advantages and disadvantages, offering varying recycling rates, environmental impacts, and cost considerations.

● As of 2022, current and planned recycling capacity is sufficient for about 11% of lithium batteries expected to be available for recycling by 2030. Recycling efforts are led by China, Germany, and the United States, with adoption growing worldwide.

● Leading recyclers – such as Brunp Recycling Technologies, Redux, Quzhou Huayou, GEM, and Valdi – typically adopt a combination of the three recycling technologies, with 60% utilizing hydrometallurgical processes, either standalone or in combination with　pyrometallurgy, reflecting the high output potential of pyrometallurgical recycling processes.

Impact Statement

● Lithium-ion batteries are a critical component in enabling a clean energy transition globally, by electrifying transportation and strengthening grid storage for renewable energy systems.

● Recycling of lithium batteries can reduce the amount of lithium and cobalt mining by 25% and 35% respectively.

● Recycling technologies have varying levels of cost and environmental impact benefits, but these have to also be measured against commodities extracted – e.g. direct recycling offers the best cost and environmental impacts, but has a recovery rate of about 30%; hydrometallurgy has a higher cost and environmental impact but offers up to a 80 to 90% recycling rate

Systems Perspective

● The increasing adoption of lithium batteries is vital for the world’s energy transition, although its significant environmental impacts in use and in recycling needs to be addressed by technologies that increase the recycling rate with lower impacts

● If this is not realized, the long-term sustainable necessity to reach net-zero may require developing alternative battery chemistries to replace lithium batteries.

Case Overview

Lithium batteries are becoming increasingly popular and in demand due to its ability to store significant amounts of energy in compact, lightweight structures, arising from their high energy density, offering significant advantages over traditional batteries. Lithium batteries use advanced battery technology with lithium as a key component in their electrochemistry.

These are rechargeable batteries with a high energy density and operate by the movement of the Li-ions between the anode and cathode. Certain other materials and components are present in different lithium battery chemistries, which can be more suited to different use cases, as shown in the table below:

Lithium batteries are a critical element in the world’s clean energy transition, and their demand is going to increase primarily due to 3 key factors:

● Global policy drivers that support a clean energy transition around net-zero targets and guidelines, including Europe’s “Fit for 55” program, the US Inflation Reduction Act, the 2035 ban of internal combustion engine (ICE) vehicles in the EU, and India’s Faster Adoption and Manufacture of Hybrid and Electric Vehicles (FAME) Scheme.

● Increased consumer demand for greener technologies and increasing customer adoption rates – electric vehicles are expected to account for up to 90 percent of total passenger car sales in certain countries by 2030.

● Directions taken by 13 of the top 15 automotive OEMs to transition their entire fleet towards electric mobility to achieve new emission-reduction targets.

Figure 1, shows the significant demand growth for lithium batteries. From 2022 to 2030 alone, annual demand is expected to increase by 27% every year, primarily driven by adoption in transportation. Lithium batteries are critical for electric vehicles and their success. Batteries constitute about 30-50% of the cost of an EV, making it the key element for the EV industry.

Figure 1: Global lithium battery demand by 2030, by application and by region/country (Source: McKinsey)

Lithium Batteries’ Environmental Conundrum

Despite the climate positive potential that can be realized through its adoption, lithium batteries have significant environmental issues that need to be tackled in their manufacture and in their end-of-life management.

The first lies in how the key components and metals that are essential for high-performance functioning of batteries are sourced. Materials like lithium, nickel, cobalt, and manganese, are scarce and currently only found in highly concentrated quantities in specific regions. The only route to extract these is through mining which leads to destruction of natural environments where these materials are found. Globally, an estimated 29% of mining areas that are critical for energy transition are found in key biodiversity areas, where with growing demand, even protected reserves could be under threat for the purposes of supporting the world’s clean energy transition. For example, 70% of current cobalt deposits are found in the Democratic Republic of Congo (DRC), which has poor enforcement norms to regulate or mitigate environmental destruction of natural ecosystems where cobalt is found.

The other issue is in how batteries are handled after they have been spent or decommissioned. The metals within these batteries, cobalt, manganese, nickel, and lithium, are toxic and without proper management – isolating and extracting these toxic materials before disposal – can contaminate water supplies and ecosystems. Additionally, fires have been known to occur due to improper disposal of batteries. We are at the early-stage of lithium battery adoption, so adverse effects related to wastes and end-of-life materials have not been witnessed extensively yet, but it is a matter of time as the rate of adoption and decommissioning of batteries increases.

The Case for Lithium Battery Recycling

Aside from mitigating these environmental factors, the case for recycling lithium batteries is also supported by the economic opportunity to extract high-value but scarce components that go into these lithium batteries to reduce scarcity pressures as demand increases. The thinking behind battery recycling is that once the successful circular ecosystem for material recycling is established and is scaled up in line with the growth of the market, then the recycled raw materials can be reused almost infinitely. As shown in the Impact Statement (see Figure X), the 3 main forms of recycling all offer significant cost advantages over virgin material extraction.

Additionally, as lithium batteries are going to play a key part of countries’ clean energy transition, securing access to these materials can be a key part of a nation’s energy security approach. In ones that do not have naturally occurring sources of these scarce materials – which is most countries given the concentrated areas these metals are found – recycling and extraction of materials offers a path to ensure resource security. Recycling the available spent or decommissioned batteries can help to reduce dependence on lithium mining by 25% and cobalt mining by 35%.

Figure 2: Estimated global battery availability for recycling by 2030 and the financial case by 2030 for recycling (Source: McKinsey)

The most critical focus of lithium battery recycling is in the anode and cathode of the batteries that contain the precious and scarce materials outlined earlier.

Before being sent on a recycling process, aging or decommissioned lithium battery packs in high-performance use cases are checked for whether their performance is still suitable for lower consumption applications, or for “second life”, e.g. for powering solar-powered street lights.

The Preliminary Recycling Processes

Battery packs that are not suitable for second-life purposes are sent for recycling. Recycling batteries is a multi-step process that starts with preliminary activities where components of the complete battery pack are separated, in particular getting “black mass” – a composite mixture that contains the precious and valuable materials of lithium, cobalt, nickel, etc. – which will go for further recycling.

Figure 3: The preliminary stages for lithium battery recycling involving the dismantling and battery materials stages (Source: LICO)

Decommissioned battery packs are sent to a mechanical dismantling process generally segregated into plastic, metal parts, electronic components, and cell modules. At this stage, cell modules can be sent for repurposing and further second-life use cases.

Cell modules not suitable for second-life are mechanically shredded resulting in a mixture of metal casings, metal-enriched liquid, connection metals, and battery materials. Materials like copper, aluminum, steel, and electronics are separated after shredding. The remaining cathode and anode materials, known as the ‘black mass’ or ‘black matter,’ contain concentrated battery materials such as nickel, cobalt, lithium, graphite, and manganese – the mixture that is sent for further processing.

The 3 end-recycling processes

Figure 4: The direct, hydrometalllurgy, and pyrometallurgical recycling processes and how they create closed loop systems for lithium battery use (Source: Frontiers)

Figure 4 shows the three recycling processes available for constituents in “black mass” to be recycled further – with an aim for extracting or ensuring utility of the valuable and essential metals for batteries to operate properly – and how they create closed loops at various stages of the battery manufacturing process:

● Pyrometallurgy: This process involves heating the black mass mixture to above 1,450oC to produce alloys of cobalt, copper, iron, and nickel. The process does not require spent lithium batteries to be separated as the heat and melting points of various materials allows for their separation. However, the outputs tend to be of a lower quality level as that required for battery-grade applications, requiring a further process of refining before use

● Hydrometallurgy: A process that offers high-quality battery-grade outputs that do not require further refining, by using aqueous solutions and liquids through a three step process:

○ leaching: black mass is mixed with a leaching agent, a mineral acid such as sulphuric or hydrochloric acid, where the reaction leads to metals in the mixture being converted into ionic solution

○ solution concentration: a chemical process of precipitation or floatation where unwanted materials are separated from the mixture to increase the concentration of valuable materials in the solution

○ metal recovery: the valuable materials are isolated as metals or metal salts through a variety of process including electrolysis and precipitation

● Direct Recycling: is a form of reusing or reconditioning of the cathode component – the costliest part of lithium batteries – without extracting materials. The cathode healing process – a hydrothermal process where an aqueous solution and heat help to regenerate structural and chemical deficiencies from past use to level that is fit for use in new lithium batteries.

Figure 5: A lithium battery hydrometallurgical recycling facility (Source: Primobius)

The nascence of lithium batteries means that materials and final components are often non-standardized, along with new battery chemistries and materials being developed and continually evolving. As a result, most recyclers are opting for a combination of the three processes to ensure viability across a range of potential future developments. Each process has advantages and disadvantages:

The current state of lithium battery recycling

Current and planned battery recycling capacity, as of 2022, is sufficient for about 11% of the lithium batteries available for recycling by 2030. Lithium battery recycling is being led in China, Germany, and the United States, but is fast being adopted by other countries, reflective of this growing need.

Figure 5: Planned and existing lithium battery capacity globally as of 2022 (Source: ACS Energy Letters)

Leading recyclers adopt a mix of the 3 recycling technologies. Out of 27 leading recyclers identified, whose volumes are available, 60% of them utilized hydrometallurgical processes either as stand-alone or in combination with pyrometallurgical processes, reflective of high output potential of pyrometallurgical recycling processes. The 5 leading established recyclers identified, as of 2022, are listed below:

Impact Statement

The Climate Positive Impact of Lithium Batteries

Lithium-ion batteries are a critical component in enabling a clean energy transition globally, by electrifying transportation and strengthening grid storage for renewable energy systems. Transportation currently accounts for 25% of the world’s greenhouse gas emissions. Figure 7 shows the potential that battery EV transportation can reduce GHG emissions compared to other transportation fuel types.

Figure 6: The lifetime GHG emissions of various energy mixes for transportation (Source: International Council on Clean Transportation)

The Adverse Impacts of Material Mining and Lithium Battery Wastes

Lithium batteries, specifically their key material components – lithium, cobalt, manganese, and nickel – have environmentally adverse effects from their sourcing and procurement, to the polluting effects of their wastes. These materials are procured through mining from the earth, in regions that are often in highly biodiverse areas. Figure 7 shows a map that correlates known reserves of these high-value materials – known as transition commodities as they are critical for the world’s clean energy transition. 29% of all identified mines are in key biodiversity areas.

Figure 7: Map of mining areas for key materials for energy transition and key global biodiversity areas (Source: SP Global)

Mining can degrade habitats and harm biodiversity both directly and indirectly. The destruction of natural environments is exacerbated by road and rail infrastructure which increase access and human development to remote, biologically diverse areas that otherwise might not have occurred. Another direct risk to biodiversity comes from a mining waste byproduct called tailings, which is a liquid slurry of rock, water and extraction chemicals that must be treated as they can pollute water systems and natural ecosystems.

Additionally, as mentioned in the main case, the wastes generated from spent or decommissioned lithium batteries are toxic in nature and can pollute environments and pose a significant fire risk if not maintained properly.

Figure 8 gives an outline of the lifecycle CO2 emissions of different lithium batteries across various stages, including a comparison between recycled and non-recycled lithium batteries. The manufacturing of raw materials of lithium batteries accounts for a significant majority of CO2 emissions.

Figure 8: Lifecycle assessment by activity of different lithium battery chemistries in recycled and non-recycling activities (Source: Sage Publication)

The Environmental and Cost Opportunities of Lithium Battery Recycling

Recycling is important for the negative effects it can curtail in reducing the mining of virgin commodities and in managing battery wastes and its components. As shown in Figure 8, the different recycling technologies offer varying levels of cost and environmental impact benefits, but these have to also be measured against the quantity and quality of these high-value commodities that are extracted from spent or decommissioned lithium batteries.

Figure 8: Cost and environmental impact comparison of virgin materials, and recycled materials based on different recycling technologies (Source: World Resources Insitute)

For instance, direct recycling offers the best cost and environmental impacts, but has the lowest recycling and recovery rate among the three recycling processes, at less than 30%. Similarly, hydrometallurgy has a higher cost and environmental impact but offers up to a 80 to 90% recycling rate of precious commodities from lithium batteries.

Systems Perspective

There is no avoiding that lithium batteries are going to be a key component for the world’s energy transition given its ability to shift the world away from fossil fuels and towards cleaner sources of energy. Despite the electrification of transportation being the main adoption use case, lithium batteries also have an important role for stationary grid storage. Grid storage will improve the reliability of renewable energy systems, which today suffers from fluctuating generation and supply of energy that restricts the adoption of renewables as a primary energy source.

However, lithium batteries come with adverse environmental impacts across its value chain, primarily in the extraction and sourcing of the key raw materials of lithium, cobalt, manganese, and nickel; scarce resources that are going to be globally significant for a net-zero transition. Recycling of decommissioned or spent lithium batteries is critical to mitigate these approaches, but recycling technologies are not entirely environmentally friendly, having their own significant impacts.

At this nascent stage, mainstream adoption of lithium batteries through grid storage and mobility is a priority. Proponents of electric vehicles and grid storage seem to be providing greater emphasis on this near-term adoption over the longer-term stability and mitigation of its environmental impacts, which clean energy is intended to solve.

However, there is scrutiny and focus driving recycling, which seems to stem more from economic and resource security factors over ensuring positive environmental impacts across the value chain. New and larger battery recycling facilities are going towards energy intensive hydro- and pyro-metallurgical approaches, aligned towards this economic incentive.

The positive is that recyclers and technology innovators are waking up to ensuring that the positive environmental impact of utilization of lithium batteries is realized across the value chain. There is also a high need to develop a more advanced LIB recycling technology to recover more valuable materials with reduced carbon emission, and approaches such as Fenton oxidation, froth flotation and thermal treatment with a combination of hydrometallurgical process.

Ensuring circularity also has to go back to the design of the battery systems. Lithium-based batteries have commercialized for these use cases, as they have been around for the longest period of time, while other battery chemistries, e.g. metal-air and sodium-based batteries, which do not rely on such scarce materials, are being developed.

If recycling technologies do not improve in their recycling rates and environmental impact, the adoption of these alternatives may be more beneficial for the longer run. The reliance of lithium-based batteries today is driven by today’s urgent need for net-zero transition. However, the long-term solution to the issue of scarcity and environmental damage of lithium batteries may not lie in expanding recycling technologies and capacities, but advancing other battery chemistries to replace lithium batteries.

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Humanity is facing four essential survival challenges (4Revs) – or bottlenecks – which we must overcome to enable the continued flourishing of life on Earth: Food, water, resources, and climate change/energy. These four areas will require revolutionary innovation and, at the same time, provide a treasure trove of new opportunities.

4Revs is a unique, co-creative ecosystem
that aims to help humanity solve these four survival challenges in one generation – between 2020-2050.