The global energy sector’s shift from using fossil fuels to renewable sources of energy such as wind, solar and lithium-ion (Li-ion) batteries is inevitable and a need of the hour. Emissions-free electrification means that batteries are the key drivers of this transition and play a vital role to facilitate this transition.
Lithium-ion batteries can power mobile phones, laptops, drones and most importantly electric vehicles (EV). These batteries not only power electric vehicles but are also used for energy storage, which further adds to their immense value. According to data collected by Bloomberg, this will increase 17-fold by 2030, causing the cost of battery storage to go down. India alone imports about 70% of its lithium-ion cell requirements. According to a report, India’s lithium-ion (Li-ion) battery demand is currently 3 GWh and is predicted to grow to 20 GWh by 2026 and 70 GWh by 2030.
In order to meet this rising demand and lessen the reliance on imports, recycling companies in India such as LICO, play an important role. “In order to accelerate India’s EV adoption, it is crucial to nurture a self-reliant ecosystem with investment in R&D, forming global partnerships and boosting local manufacturers and recycling companies”, states Gaurav Dolwani, CEO of LICO.
Recycle and Reuse
With global EV purchases rising from 3 million to about 6.6 million in 2021, there is a huge jump in the demand, according to the International Energy Agency (IEA). But the question still remains, how can we meet this rising demand when there are only reserves concentrated in only certain parts of the world?
One way to combat this is by recycling and reducing battery waste. As the demand for Li-ion batteries skyrockets, the world must ensure that battery waste is handled responsibly and in an environmentally friendly manner. One of the pros of Li-ion batteries is that they can be used by charging them until they reach the end of their life. Once the battery has reached the end of its life, companies like LICO can take it apart and recycle the components to make new batteries. The battery industry showcases a unique circular economy in which critical materials such as lithium, cobalt, manganese, and nickel are recovered to give back to battery manufacturers. LICO aims to support the environment through its zero-waste process of lithium-ion battery recycling. Their battery recycling plant in India recycles e-waste with the primary objective to create a sustainable future.
Lithium Supply
While the world’s lithium reserves may seem theoretically enough to meet the expected demand, this means that all the reserves can be brought into production. However, this may not be likely. Only a few companies are able to produce extremely high-quality and high-purity lithium products. While there are numerous expansion projects, we cannot tell how rapidly they can start production. Additionally, McKinsey has noted that approximately 80% mining projects are completed later than expected. The IEA has noted that by 2025 the world could face lithium shortages and the trajectory of EV sales shows that this could cause a major shortage issue.
As mentioned earlier, lithium resources are concentrated in certain parts of the world. China alone contributes to 60% of the world’s lithium chemical production. As per the US Geological Survey, Australia had the highest production in 2021 with Chile having the world;s largest lithium reserves. Chile, Argentina and Bolivia form the “Lithium Triangle” in South America and about 60% of the Earth’s lithium resources can be found in the three countries.
This is a cause for concern as these are drought-prone areas. Mining is a water-intensive activity and mining companies in Chile have been held responsible for depleting crucial water supplies. Major producing regions like Australia, China and Africa are prone to extreme heat or flooding, which further impacts how sustainable the activity is.
The Possible Solution
Given that producing lithium-ion batteries still has numerous challenges, there is still hope for the future. The electric vehicle market is a relatively new and nascent one, which means that there is a lot of room for invention and technologies.
The emerging second-hand EV market can reduce some of these problems.
A report by the IEA states that end-of-life EV batteries will surge after 2030. Recycling them reduce lithium supply requirements by almost a tenth by 2040. This is where battery recycling will play a huge role in reducing the demand for new raw materials as well. Lithium ion-battery recyclers can recover critical materials to send them back to battery manufacturers, closing the circular loop.
