As the global push towards next generation energy supply chains intensifies, the demand for critical minerals is on a super surge. The Indian Economic Survey 2022-23 highlights the increasing importance of rare earth elements and critical minerals, terming them as potential future “geopolitical battlegrounds”, akin to crude oil in the past. Critical minerals, including lithium, graphite, cobalt, titanium, and rare earth elements (REE), are crucial for the global transition to a low-carbon economy and renewable energy technologies needed to meet ‘Net Zero 2050’ commitments. They are essential for economic development and national security, with their scarcity or concentration in specific nations posing significant supply chain risks. Different countries have their own lists of critical minerals based on strategic considerations and India too has recently listed 30 of them as of strategic national economic importance.
Underpinning its vitality for multiple sectors, identifying and developing diverse supply chains for critical minerals is imperative for national interest.
According to a report by the International Energy Agency (IEA), Electric cars use significantly more metal overall. While a conventional car uses roughly 30 kg of the metals (Copper, Lithium, Nickel, Manganese and Cobalt among others), an electric car uses around 200 kg. Battery production drives the difference. The most significant metal components in the electric car are copper, lithium, nickel, manganese, cobalt, and graphite – all key materials in battery production.Conventional cars primarily use copper and manganese.
So, while electric cars have an environmental advantage in terms of emissions, they require a much larger amount of mined metals, highlighting the importance of sustainable sourcing and recycling practices.
The global demand for lithium is expected to surpass 2.4 million metric tons of lithium carbonate equivalent by 2030. With India aiming for 30% EV adoption by that time and with limited domestic reserves of critical materials, it faces the challenge of ensuring a stable supply as the pressure mounts. As battery demand grows, recycling can provide rare metals needed for cell manufacturing, addressing limited availability and concentration in few nations. This also supports a sustainable circular economy in the lithium-ion battery supply chain for critical material recovery.
Accountability and Integrity in Sourcing
As per a Niti Aayog estimate, critical minerals and their active materials, integral to lithium-ion battery (LIB) production, contribute to about 33%-48% of the total pack cost, making it crucial to have a domestic reserve to depend on. India has found Lithium reserves in Jammu & Kashmir and Chhattisgarh recently and plans to earmark half of its upcoming domestic mining exploration projects to other critical minerals, and also actively acquiring mining blocks across the world through trade partnerships. However, the same also necessitates the need to establish diverse and reliable value chains for sourcing critical minerals, with considerations for their impact on environmental and social sustainability.
Without recycling, meeting battery cell material demand solely through mining will cause severe environmental harm, including deforestation, GHG emissions, ecological imbalance, and water depletion. The burgeoning market for EVs and renewable energy has pushed India’s focus on establishing next generation energy supply chains.
Unlocking alternatives to address restricted availability
To mitigate the pressure on sourcing these minerals from natural sources, recyclers play a pivotal role in addressing potential scarcity. Turning waste into a valuable resource by extracting valuable minerals from end-of-life batteries and electronic waste can make a significant difference.
The UN reports that electronic waste generation is increasing five times faster than documented recycling efforts. Unfortunately, e-waste recycling meets just one percent of the global REE demand. As per NITI Aayog, India will have a recycling volume requirement of 128 GWh by 2030, basis demand generated from domestic batteries, which provides a large addressable market for recyclers.
Here’s a breakdown:
- Nickel: Projected to see the most significant increase in demand. By 2040, it’s expected to make up around 9% of the total demand, a significant jump from 2030.
- Copper: Demand remains relatively stable as a percentage of the total, hovering around 3% in both 2030 and 2040.
- Lithium: Demand increases moderately from 2030 to 2040, both in kilotons and as a percentage of total demand.
- Cobalt: Shows a slight increase in demand from 2030 to 2040 in kilotons, but its share of the total demand remains relatively stable at around 1%.
India ranks as the world’s third-largest e-waste generator, producing 1.6 million tonnes in 2021-2022, with projections indicating a 32% rise to 82 million tonnes by 2030. Yet, merely 10 percent of this waste undergoes formal recycling as the process is water, cost and time intensive. Globally, Universities and private companies are working towards more efficient techniques of segregation from mixed metal streams.
However, the recycling sector for battery and e-waste in India currently faces significant challenges:
- Limited Public Awareness: There is a significant gap in public understanding regarding battery and electronic waste recycling, and general waste segregation. This results in improper disposal, contributing to environmental hazards and material loss in landfills.
- Disorganized Collection: There is a lack of systematic approach to battery waste collection, particularly outside urban areas. Informal recycling sectors dominate, fostering inefficient and unsafe practices. The limited collection network beyond metros further hampers battery recycling availability.
- Technological and Infrastructure Gaps: Advanced recycling technologies are not widely available, and existing infrastructure is often outdated. This limits the efficiency of material recovery and the capacity to handle large volumes of waste.
- Policy Constraints: Despite frameworks like Extended Producer Responsibility (EPR), weak enforcement and low compliance persist. To assist Indian recyclers in building capacities and improving technologies, positive policies fostering innovation, investment, and sustainable practices within the recycling sector are crucial.
Employing new and improved techniques, alongside robust collection networks – can boost recovery rates and decrease reliance on imports. While numerous Indian firms are extracting critical minerals from e-waste, scaling to process greater waste volumes remains a goal.
Time for an overhaul
In the coming years, offering financial incentives to recyclers to mitigate initial costs and risks related to adopting new technologies is important. Tax breaks, low-interest loans, and subsidies can incentivize businesses to invest in advanced recycling technologies and infrastructure. Government-led endeavors to establish organized collection systems will streamline recycling processes and improve material recovery rates.
Implementing and enforcing robust regulations, such as the Extended Producer Responsibility (EPR) framework, ensures that manufacturers take responsibility for the end-of-life management of their products. Additionally, raising public awareness can bolster participation in recycling and material segregation efforts. Collaborative partnerships among municipalities, private entities, and NGOs can broaden outreach and further streamline battery return processes, while educational initiatives – spanning schools, community programs, and media campaigns, are pivotal for implementing e-waste management best practices.
Mitigating India’s restricted availability of critical minerals necessitates a multifaceted approach involving robust recycling initiatives, advanced technology investments, and effective public policies. India must aggressively pursue these strategies, as failure to act decisively now will not only jeopardize the nation’s ambitious EV adoption goals but also risk falling behind in the global technological race. By taking bold and proactive measures, India can transform its critical minerals challenge into an opportunity for leadership in sustainable resource management, ensuring national economic resilience and technological advancement in the face of growing global demands.
The author is Founder and CEO, LICO Materials
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
