Recycling lithium-ion batteries involves the collection and processing of materials from batteries that have reached the end of their useful life, to recover valuable components and metals. The objective of this recycling process is to reduce environmental harm, save resources, and establish a more sustainable material supply chain for battery manufacturing.
By recycling, the need for new raw materials decreases, diminishing the environmental degradation linked with extraction processes, and tackling the issue of hazardous waste disposal associated with batteries. This approach supports a circular economy, where reclaimed materials are reintroduced into the production cycle, minimizing waste and preserving natural resources.
The market for recycling lithium-ion batteries has seen significant growth, primarily fueled by the boom in electric vehicle production that depends on these batteries. This expansion is propelled by a combination of factors, including governmental policies promoting recycling, the escalating demand for sustainable resource use, heightened environmental awareness, and the financial benefits of reclaiming materials like lithium, cobalt, nickel, and other metals.
As per the BIS Research report, the lithium-ion battery recycling market was valued at $3.54 billion in 2023, and it is expected to grow at a CAGR of 21.08% and reach $23.96 billion by 2033.
Furthermore, ongoing improvements in recycling technologies are enhancing the efficiency and cost-effectiveness of the process. The market for recycling lithium-ion batteries is set for continued growth, driven by the escalating demand for electric vehicles and energy storage systems. Advances in recycling technologies, along with enhanced partnerships between industry players and government bodies, are anticipated to further propel this expansion.
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The growth in the lithium-ion battery recycling market is attributable to the increasing demand for electric vehicles (EVs), portable electronics, and renewable energy storage systems.
Segmentation 1: by Battery Chemistry
• Lithium-Cobalt Oxide (LCO)
• Lithium-nickel manganese Cobalt (Li-NMC)
• Lithium-Manganese Oxide (LMO)
• Lithium-Iron Phosphate (LFP)
• Lithium-Nickel Cobalt Aluminum Oxide (NCA)
• Others
Segmentation 2: by Source
• Automotive
• Non-Automotive
o Consumer Electronics
o Energy Storage Systems
o Others
Segmentation 3: by Recycling Process
• Hydrometallurgy
• Pyrometallurgy
• Direct Recycling
Segmentation 4: by Region
• North America: U.S., Canada, and Mexico
• Europe: Germany, France, Italy, U.K., and Rest-of-Europe
• Asia-Pacific: China, Japan, South Korea, India, and Rest-of-Asia-Pacific
• Rest-of-the-World: South America and Middle East and Africa
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In October 2023, American Battery Technology Company commercialized its technologies for the manufacturing of primary battery minerals and the recycling of secondary batteries.
In September 2023, Business Finland granted funding to Fortum Battery Recycling to establish a new test production facility for battery material to test a novel and more effective process for making cathode and anode materials, which are essential components of battery cells.
In July 2023, Fortum Battery Recycling began to investigate the viability of setting up a production facility for sustainable secondary battery materials in the industrial area of Artern, Thuringia, Germany.
In March 2023, Li-Cycle and KION Group entered a strategic partnership for global lithium-ion battery recycling.
In February 2022, Umicore signed a battery recycling services agreement with Automotive Cells Company (ACC) to meet the requirements of the ACC pilot plant located in Nersac, France.
In contrast, the U.S. focuses on the lithium-ion battery recycling sector to secure raw materials essential for renewable energy transition, predominantly using hydrometallurgical methods for metal recovery. The U.S. Department of Energy launched a $335 million battery recycling initiative in 2022 to enhance domestic recycling capabilities, seeking input through a Request for Information.
The diversity in battery chemistries complicates lithium-ion recycling, as it hinders standardization and requires meticulous separation and processing. The varied cathode compositions and complex disassembly processes pose significant challenges for efficient recycling.
The International Energy Agency indicates that meeting the Paris Agreement's climate goals will require significant increases in the supply of critical minerals: copper and rare earth elements by 40%, nickel and cobalt by 70%, and lithium by nearly 90% by 2030. The ambition is to create a circular economy for battery packs through closed-loop recycling.
The European Commission is drafting legislation to mandate the use of recycled materials in electric vehicle batteries, with standards for recycled content applying to all batteries in the European market and mandatory disclosure of recycled material percentages starting in 2025.
The market for recycling lithium-ion batteries is expected to expand significantly soon, fueled by surging demand for electric vehicles, consumer electronics, and renewable energy storage systems. This growth is propelled by the imperative to sustainably handle the increasing amount of spent lithium-ion batteries, diminish the dependence on virgin raw materials, and lessen the environmental footprint.
