China is the world's largest EV market with over 5.5 million sold as of March 2021. This
is a good thing in many ways. China has the most cars in the world and these are replacing
harmful greenhouse gases. But these things have their own sustainability concerns.
There have been the concerns about environmental damage resulting from the extraction of elements
like lithium and cobalt. But another concern has to do with the coming problem of waste.
China is starting to experience the leading edge of this problem. In 2020, 200,000 tons
of batteries were decommissioned, and the figure is anticipated to rise to 780,000 tons
by 2025.
In this video, I want to look at China’s looming EV battery waste problem. And what
the world’s biggest EV market is doing about it.
Almost all of China's electric vehicles are powered by lithium-ion batteries. Their light
weight, high energy density and long cycle life make them the first choice for electric
powered cars.
Batteries have three major components - an anode, a cathode and an electrolyte. Of these,
the cathode is the most expensive and significant. We largely distinguish between these batteries
based on their cathodes.
Not to dive too deeply into this, but most of China's EV batteries have cathodes made
of either lithium nickel manganese cobalt oxides, hereby referred to as NMCs for my
own sanity, or lithium iron phosphates. The cathode composition affects the recycling
process, so we will need to come back later to this.
These batteries are retired when their capacity reaches about 80%, corresponding to a service
life of about 8-10 years. This is of course dependent on certain factors like charging
frequency, driving habits, and road conditions.
Tesla, in case you are wondering, sets their threshold at 50%, not 80%. Thought you'd like
to know.
With the first major wave of EVs hitting the road some time in 2010-2011, the infrastructure
for collecting and processing these batteries would need to soon be ready by the end of
the decade. That was the challenge and timeline that the Chinese government had to deal with.
After the Beijing Olympics, the Chinese government began promoting the manufacture and use of
EVs to the general public. At this time, the only regulations they put out dealt with industry
safety standards, since many battery components are quite toxic.
The early 2010s saw a growing uptake of the electric vehicle, and with that the equally
fast growing need for a way to deal with their wastes. In 2012, the government released a
policy guidance for the overall EV industry. In it, for the first time, the guidance stressed
a need for, among other things, a working EV battery recycling system.
In 2016, several ministries joined together to establish a unified direction for the EV
battery waste problem. EV manufacturers would be responsible for recovering their cars'
batteries. They must establish after-sale service networks of their own, or entrust
a third party, to collect waste EV batteries.
The Chinese government has a tendency to first declare a policy guidance or direction before
setting out more specific rules later on. The 2016 declaration effectively signaled
to the EV companies to expect more on this in the coming years.
And as such in 2018, the policy framework follow-up came out, briskly titled the "Interim
Measures for the Management of Recycling and Utilization of Power Batteries of New Energy
Vehicles". New Energy Vehicles, meaning EVs and also hybrids.
The enforcement body would be the Ministry of Industry and Information Technology or
MIIT.
As promised back in 2016, the framework largely places the onus on private entities like the
EV and EV battery makers to deal with this problem. The government will oversee some
technical aspects of the endeavor but they are not going to do it themselves.
This framework is built on top of a general governance policy that the Chinese adopted
called Extended Producer Responsibility or EPR. The spiritual concept is to shift responsibility
upstream from the local and provincial governments to the producers themselves.
The Chinese government adopted EPR (which I believe came out of Western academia) in
the early-2000s as a response to EU directives regarding a growing e-waste problem. And it
makes intuitive sense. If the government is always the one cleaning up all this e-waste,
the companies making them will never be incentivized to make their stuff easier to recycle.
Thus, in the spirit of EPR, all the EV battery makers have to design batteries that are easy
to dissemble and provide technical, end-of-life details to their customers - the EV makers.
And the EV makers in turn have to either set up and run their own battery collection and
recycling networks or outsource them to a third party. The government will help establish
national standards to streamline the process.
The framework seems pretty nice on the surface, but there are some very clear drawbacks. We
will discuss those later. Now that we know the history and policy, we can next dive into
a few technical details about EV battery recycling.
Decommissioned batteries enter the system through two channels: From cars undergoing
a battery replacement, and from cars at the end of their life.
For the latter, the battery is still inside the car and is removed as part of the end-of-life
dismantling process. This remains a very manual process, especially in China.
After that is a step called "pre-treatment". The battery cells have to be pulled out of
the pack and opened, which is a challenge since there is no standard battery pack design.
Thus, it has to be done by hand using specialized tools.
Once the battery is removed, what happens next depends on the type of lithium ion battery
inside the car. Let us start with the NMC battery, the most common in China.
For NMC batteries, recyclers want to recover the cathode's active materials. A 2019 economic
analysis estimates that despite making up only 4% of the battery's weight, they make
up over 60% of the battery's overall salvage value.
NMC recycling technologies are relatively mature. Sony pioneered it in 1999. There are
two major technological methods: Pyrometallurgical and Hydrometallurgical.
Pyrometallurgical. "Pyro" means "fire". The battery is melted into an alloy of iron, copper,
cobalt, and nickel. The good stuff is then retrieved using hydrometallurgical methods.
Pyro methods burn off electrolytes, plastics, and lithium salts, so not everything be recovered.
It releases toxic gases that need to be processed. And it is quite energy intensive. But it has
been widely adopted by the industry.
Hydrometallurgical methods use an aqueous solvent to separate desired materials like
cobalt from the compound. The most commonly used solvents are sulfuric acid and hydrogen
peroxide, but there are many others too.
Neither of these methods are ideal and further work is needed to address their technical
shortcomings.
Lithium iron phosphate batteries make up about 30% of the Chinese EV market, as of 2019.
These batteries' energy densities are not as high as their NMC counterparts, but they
are free of elements like nickel and cobalt. They are also probably safer.
China is also the world leader in the science and commercialization of lithium iron phosphate
battery technologies. Chinese company Contemporary Amperex Technology or CATL is one of the manufacturing
leaders in this area. It should make sense that the country’s industry be able to recycle
these cells too.
That being said, recycling these things has turned out to be more technically difficult
than at first anticipated. This is in part due to them having a more varied mix of materials,
which necessitates additional expensive pre-treatment work.
And then economically, lithium iron phosphate batteries do not have the same valuable metals
like the NMC batteries do. No nickel, copper or cobalt. And it has led to a dearth of investment
in the niche.
There are some promising hydrometallurgical experiments that have been able to leach out
up to 85% of the lithium in the form of lithium carbonate. Speculation is that it would cost
about $650 to process a ton of spent lithium iron phosphate batteries. That includes energy
and material cost, not counting the cost of building the factory.
The potential recovery and resale of lithium could help make recycling more economically
feasible to do. But the jury is still out on this as these methods have yet to be implemented
at commercial scale.
The 2018 framework lays out a lot, but it does leave a few things to be desired. As
we all know in life, not everything gets tied up in a neat little bow. There are a lot of
missing holes here. So let us talk a bit about some policy questions still up in the air.
The headlining statistical goal at release were raw material recovery rates. 98% of nickel,
cobalt, manganese. 85%+ for lithium itself. 97% for rare earth materials.
Theoretically, this is possible. For instance, I just talked about recovering 85% or more
of the lithium from lithium iron phosphate batteries. I also mentioned that it will be
hard to achieve this theoretical maximum due to real-world inefficiencies and differences
on the ground.
Remember, there are a lot of ways that battery cells can be made, packed, sold, and used.
There is nowhere near the standardization that we see with cylindrical batteries sold
in your 7-11.
The policy framework is missing concrete subsidies and national support for making this come
to real life.
Another big concern is economic. The policy framework does not allocate money to incentivize
the collection of used batteries. There are a few buyback pilot programs run by the municipalities,
but nothing at a national level. This could change, perhaps with a levy or a tax, but
right now the private sector players have to fund it themselves.
This is an issue because there is little economic incentive for these big EV makers to collect
and recycle their batteries.
From 2008 to 2015, the cost of manufacturing an EV battery declined from $1,000 USD per
kilowatt hour to $268. That trend is expected to continue over the next few years.
The drop in costs made EVs more accessible than ever. But at the same time, they have
also lowered the incentive to collect and recycle these batteries.
And since these batteries are all so different from each other, it is hard to scale up the
collection, pre-treatment, and recycling processes. So the whole venture turns out to be a cost
drain on their manufacturers, who already work on pretty tight margins to begin with.
Regardless, the EV makers by law are first in line to handle and recycle their old, spent
batteries. And despite the economic unattractiveness of the whole venture, they have been diligent
in partnering with large companies to set up official channels to recycle a battery.
A few large recycling companies have sprouted up. Examples include Taisen Recycling, Zhejiang
Huayou Cobalt, Jiangxi Ganfeng Lithium, Hunan Brunp, and market leader GEM.
But despite the existence of these licensed large companies, the majority of the Chinese
recycling sector is made up of small, unlicensed workshops.
These informal shops do not have the proper tools or training. They basically go to town
on these batteries for their cathode materials, reselling them to the highest bidder and dumping
the rest. Obviously, this is a massive safety and environmental risk.
As a result of this skirting of rules and regulations, these chop shops can pay EV owners
more for their batteries - and as such are preferred over "official channels".
Thus the lithium-ion recycling rate in China remains quite low. In 2015, it was about 2%.
It has since grown to 10% in 2019.
It beats a sharp stick in the eye, but this is still far from ideal. And the 2018 Framework
does not set a target on battery collection rates - a curious omission.
China has been struggling with this problem on another battery front - the venerable lead
acid battery. This 150 year old technology is very commonly used.
In China, they provide all the start power for their automobiles and are still very popular
for E-bikes.
This is despite recent regulations to encourage replacing them with lithium-ion.
Anyway, Chinese recycling of the lead-acid battery falls far short of expectations and
benchmarks. In 2017, less than 30% of the 3.3 million tonnes of lead acid battery waste
generated in China is recycled.
The reasons for this low recycling percentage are very similar to the lithium-ion case.
Informal chop-shops skirt the rules and regulations and thus can afford to pay a whole lot more
for consumers' batteries.
The Romans have made it clear that lead is not exactly the most environmentally friendly
substance out there. China has experienced multiple major lead poisoning incidents in
recent years as a result of this improper handling.
Thus the government has recently pledged to crack down on these informal shops - of which
it is estimated that there are over 200 across the country. The goal is to try and hit a
40% recycling percentage in 2020 and 70% in 2025.
Considering that the lead acid battery recycling percentage in America has been at 99% since
at least 2014, it should not be that difficult.
Considering the technical and economic difficulties associated with recycling EV batteries, the
industry has thought about ways to make more use of these things before sending them to
their grave.
The highest potential option would be to reuse them in power grid projects. These batteries
still have 80% capacity, after all, and can still go for many years before finally conking
out for good.
The United States leads the way here, having experimenting with used car batteries for
stationary energy storage projects since 2002.
But China has done some interesting demonstration projects. One of the longest operating ones
is the Zhangbei wind and solar energy project in the Hebei Province.
The $1.3 billion project springs from a joint effort from Chinese state owned enterprise
State Grid and EV battery maker BYD. It demonstrated the feasibility of using second-life EV batteries
to support and manage a power grid.
More EV battery recycling projects have come up in recent years in Beijing, Jiangsu, Zhejiang,
and Shenzhen. The government is putting a lot of focus on this, but I think ultimately
it more forestalls the recycling problem than solves it. Because the inevitable end of every
battery is either recycling or the landfill.
The Chinese government has done an admirable job in encouraging the creation of this thriving
EV ecosystem. The country is the unquestioned leader in certain aspects of battery technology,
and several EV giants are based there. They have a chance to really bend the curve in
automobile emissions.
So in a way, this recycling issue is a nice problem to have. It is an indication of China's
success. But a problem is still a problem, and the industry has been dragging its feet
in establishing the proper recycling networks, regulations, and technologies.
The Chinese government can look to United States policy for some guidance in incentivizing
and enabling proper consumer recycling habits. And subsidies need to be doled out to enterprises
in the pre-treatment and recycling technology industries. Not just in manufacturing.
Otherwise, the energy usage and environmental damage associated with these battery disposals
will outweigh whatever benefit we get from switching over
to EV.