Battery recycling is set to become profitable in Europe by 2025, based on the current market trajectory, catching up with China where recycling is already commercially workable, according to Japan's Nomura Research Institute.
The cost of recycling an 80kWh nickel-manganese-cobalt-oxide battery pack is expected to become profitable as economies of scale allow for more efficient battery recycling.
"The recycling business is very difficult to make a profit at this moment, because of the dismantling cost, transport cost and the metallurgical cost," Akihito Fujita, senior manager at Nomura, told delegates at this week's Advanced Automotive Battery Conference in Mainz, Germany. "It is partly because the processing capacity in Europe is less than 10,000t a year. As capacity is expanded, probably we will see this activity become profitable. As the EV market turns to a profitable market, so will the recycling market."
Higher labour and transportation costs, as well as regulation and energy costs all put Europe at a disadvantage to China when it comes to battery recycling. In China, recycling a similar battery pack is already profitable. There are about 47 companies in China currently recycling batteries, according to Nomura.
"They already achieved profitable recycling in China, especially because the processing capacity is already above 50,000t, and for some Chinese players it's over 100,000t," Fujita added.
One underlying assumption was that the cost of buying the spent battery packs would remain the same for battery recyclers. Delegates asked whether this could change in the coming years as scrap merchants, EV owners and OEMs became more aware of the material value of the packs in their used cars.
"This has actually happened in China," said Fujita. "From 2017-19, the OEMs were paying to process the spent battery, but now it has become the opposite, the recycler is paying. Supply and demand will decide whether the recycler or the OEMs will pay."
The need for battery recycling is expected to grow exponentially over the coming decade. By 2030, Onto technology, a US-based recycling firm, expects the amount of available battery material for recycling to be 2mn t, up from below 300,000t globally this year. The US department of Energy estimates that currently less than 5pc of that material is recycled.
