Why Asia is dominating the lithium-ion battery recycling market

Today, at the Battery Show in Hanover, I presented new data from Circular Energy Storage’s latest report which will be available next week, on the lithium-ion battery end-of-life market. It’s a report that tells a story very different from what most researchers and companies usually share; like that recycling would barely happen, batteries would be sent to landfill and that second life is still in research stage.

Our research rather shows that recycling already is becoming an important source of material for battery makers and that second life has become a core strategy for many car and battery makers.

In the new report we list 54 recyclers with current or planned capacity to recycle lithium-ion batteries. 24 of them are based in China which is where more than three quarters of all batteries are recycled today. In contrast to the rest of the world, batteries in China, and increasingly in South Korea and Japan, are not recycled by independent recyclers. Instead it is manufacturers of batteries and battery materials that use the materials from recycled batteries in precursors and cathode materials. Two thirds of that industry is based in China and a large part of the remaining third is found in South Korea and Japan.

The driver of recycling is primarily to secure supply when the the markets for cobalt and lithium are getting more and more squeezed. The strong demand has triggered scale up of several plants based on advanced technology and has made Chinese recyclers world leaders. It has brought up the global recycling rate (in relation to what is reaching end-of-life) up to 42 per cent. Not 3 per cent you usually read about in media. And the batteries they recycle are to large extent sourced from Europe, North America and the rest of the world, through the rapidly expanding reuse industry for portable electronics which is centered around Hong Kong and Shenzhen.

In fact you can rest assure that a significant portion of the batteries you have been using will be recycled. They will only not be recycled in Europe or North America, but in China and South Korea.

We also list 43 companies which are actively involved in second life activities. Even here Asian companies, first of all in China, stand out with vertically integrated value chains in which battery modules made for electric cars and buses later can be transferred to the companies energy storage divisions. Retained control over the batteries, partnerships through out the entire value chain and increased use of remote connectivity for diagnostics and cell monitoring are increasingly common themes in China.

What is becoming more and more clear is that the biggest challenge for second life is neither the quality of the batteries (which normally is fine), nor to find suitable applications. It’s to make sure batteries are coming back.