BusinessCircular Economy

What’s missing to create a circular battery economy

From transparency to incentives to monitoring. Everything you need for a circular battery economy

(sustainabilityenvironment.com) – Adopting a circular battery economy, where batteries are recycled or reused, may have unexpected benefits. This is confirmed by an analysis by the Rocky Mountain Institute, which estimates the impact in a reduction in the demand for raw materials by almost two thirds. In addition, a positive side effect would be a strengthening of supply chains for electric vehicle manufacturers.

Disconnecting from supplies of important but centralized raw materials such as lithium and other rare earths is crucial. It would help minimize the risk of supply chain disruptions due to changing trade alliances, geopolitics and climate change.

The Rocky Mountain Institute lists the homework that authorities should do to build a true circular battery economy. Focusing on the United States, analysts believe that a federal compliance approach and a harmonisation of rules and regulations that must be extended to international supply chains is needed. Global rules should be uniform and encourage companies to ensure traceability of the supply chain. Policies must also facilitate the strengthening of the main nodes in the supply chain: transport, storage, production, recycling and reuse. Finally, we need rules setting out the parameters and indicators on the basis of which companies can monitor compliance.

We are still far from an optimal system. Today it is often convenient to produce new batteries in a logic of linear economy. At most, recycling focuses on lithium, nickel and cobalt, the rare times it happens. If adequate regulatory frameworks are not put in place, the Institute predicts, the sector is in danger of ending up like plastic. Today only 9% of the plastic produced is recycled, a figure that worries the whole world.

The models to follow: Korea and the European Union

Following the European example could be a good path for the United States. The Union has taken a significant step towards improving the traceability of the supply chain by adopting a regulation on batteries that requires the recycling of an increasing percentage of the weight of accumulators. Manufacturers must also disclose the carbon footprint and the recycled content. The materials that make it up must also be traced, to avoid human rights violations along the chain. Upstream actors must then undergo third-party inspections in their mines.

To promote the circular economy of batteries, it is also necessary to cut transport costs. Used accumulators must be transported and stored. Storage and transportation account for 40-60% of recycling costs at the moment, which is why the private sector is reluctant to invest in plants. It is necessary to stimulate this transition chain according to the Rocky Mountain Institute.
Another example to follow for the United States is the Korean one. South Korea has in fact issued rules and approved funding to set recycling targets and donate funds for research and development. These activities must focus in particular on ecodesign, that is, a design for recycling. The extraction and reuse of materials contained in batteries can reduce the demand for raw materials by up to 64% by 2050.

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