Meet the recycling startup hustling to maintain EV batteries out of landfills

This story initially appeared in Company Knights and is republished right here as a part of Protecting Local weather Now, a world journalistic collaboration to strengthen protection of the local weather story.

There’s no scarcity of proof that the electrical automobile market hit some form of inflection level within the final 12 months or so. However for Ajay Kochhar, CEO and co-founder of Li-Cycle, the telling element was purchaser response to Basic Motors’ first e-Silverado. The preliminary manufacturing run bought out in 12 minutes the day it went up on the market in early January — and that is for a pickup that received’t roll off the meeting line till 2024. “Customers,” as he says, “are talking.”

And Kochhar is listening. Simply 4 years after launching a small pilot plant in Kingston, Ontario, Li-Cycle has emerged as a formidable participant within the nascent EV-battery recycling business. Now publicly traded (LICY: NYSE), the corporate rapidly raised greater than $500 million from traders. Final 12 months, it secured $150 million extra in strategic infusions from international battery-maker LG Power Resolution, a associate in a newly introduced $4.9-billion EV-battery plant in Windsor, Ontario, and Koch Strategic Platforms to construct three massive services in Alabama, Arizona and upstate New York. (Whereas the oil and fuel empire run by the Koch household has lobbied closely towards local weather motion, Koch corporations have been investing in a variety of renewable sector start-ups of late.)

With early-stage backing from Carnelian Power Capital, a Houston enterprise fund, final spring the corporate additionally inked a take care of Ultium, the sprawling EV-battery three way partnership established by GM and LG Chem, to arrange a processing facility inside an enormous new Ohio battery-plant complicated. The worth of its deliberate capital investments is now nearly half a billion {dollars}. As Li-Cycle has advised traders, it expects to be recovering battery-grade supplies from the equal of 60,000 tonnes of lithium-ion batteries yearly by 2023.

Traders aren’t the one ones paying consideration. In its nationwide blueprint for lithium batteries for 2021 to 2030, the U.S. authorities places a heavy strategic emphasis on recycling lithium-ion EV batteries, citing analysis exhibiting that batteries that use recycled supplies can minimize prices by 40 p.c, water consumption within the manufacturing course of by 77 p.c and power use by 82 p.c.

Not surprisingly, Li-Cycle’s sector is quickly turning into a really crowded house, attracting China’s battery big CATL (which claims to recycle sufficient lithium for 200,000 EVs per 12 months), in addition to enormous investments by multinationals equivalent to Nissan, BASF and Tesla, by way of Redwood Supplies, a battery-recycling firm based by a Tesla co-founder. All this exercise is being pushed partially by the relative shortage of each lithium and cobalt, one other ingredient of lithium-ion batteries, in addition to the automotive business’s efforts to attain carbon discount targets. Assembly these targets pivots on transitioning to electrical energy but in addition on contending with the air pollution and emissions related to mountains of used batteries. “It’s a make-or-break second for the OEMs [original equipment manufacturers],” says Kochhar. “They’re taking a look at recycling as a method to attain net-zero and have a home provide supply as an alternative of going to the ends of the earth.”

It’s a make-or-break second. They’re taking a look at recycling as a method to attain net-zero and have a home provide supply as an alternative of going to the ends of the earth [for minerals].

Lithium, a steel present in abundance in Chile, Australia and China, has lengthy been acknowledged for its means to pack numerous power into comparatively small volumes — therefore its widespread use in shopper electronics. When Elon Musk started constructing EVs, he reckoned he might use lithium-ion batteries to energy his automobiles, with modules consisting of stacks of the types of batteries utilized in laptops. For the reason that authentic Tesla debuted in 2006, demand for lithium has been climbing a steep development curve. “In 2019 the put in capability of lithium-ion batteries on the planet exceeded 700 [gigawatt hours],” famous a 2021 life-cycle-analysis report ready by Round Power Storage, a U.Ok. consultancy. “Of this 51 perent was put in in gentle or heavy responsibility electrical automobiles. The identical quantity in 2015 was 19 p.c and in 2010 it was lower than 1 p.c.” Commodity costs for clear power minerals have additionally soared, setting off one thing of a geopolitical dash to safe entry to each lithium and cobalt, the lion’s share of which is present in mines within the Republic of Congo. China has been busy snapping up international lithium assets (it just lately acquired a Canadian lithium mine).

New mines typically face heavy opposition (environmental protests in Serbia earlier this 12 months over a proposed Rio Tinto lithium mine led to cancellation of the undertaking). With surging EV demand over the subsequent decade, the key problem, in response to a 2021 paper in Nature, shall be scaling up the mining and manufacturing of lithium, which is itself an power intensive course of. And a bit additional out, the buildup of out-of-service batteries might start to seem like one more geyser of post-consumer waste.

Briefly, the theoretical case for recycling appears apparent and necessary, not only for environmental causes however to mitigate the geopolitical conflicts related to lithium and cobalt mining.

Nonetheless, EV battery recycling is a sophisticated proposition, for each electrochemical and logistical causes. “This was a continuing query for us,” says Kochhar, a chemical engineer who led a lithium research for a cleantech consulting arm of Hatch, the engineering big, earlier than co-founding Li-Cycle. “Individuals would ask, what would occur with the used batteries?”

Not like standard automotive batteries, used EV batteries should not a uniform measurement, typically weigh lots of of kilograms and, in lots of instances, are built-in right into a automobile’s chassis or energy practice. Whereas an EV battery might final greater than a decade, the spent model nonetheless comprises loads of power, sufficient to inflict severe hurt on handlers. The primary order of enterprise for recyclers, subsequently, is to empty the residual energy, which might be accomplished in varied methods, together with submerging them in an electrolyte, as Li-Cycle does. Recyclers then have to take away the plastic casing and reprocess the battery’s uncovered innards, together with the metals they’re made from: lithium; cobalt; nickel; and different components.

There are numerous strategies: exposing this materials to extraordinarily excessive warmth or, as Li-Cycle does, “shredding” it into what’s often known as a “black mass” — a confection of metallic crumbs that may be separated into its element metals and used as feedstock to make new batteries. However earlier than any of this could happen, recycling companies have to safe provides of used EV batteries. Though that course of could also be extra simple than has been the case with shopper electronics, which regularly don’t find yourself in a recycling stream in any respect.

That is reverse logistics. You don’t wish to be transporting these large batteries cross-country.

Li-Cycle’s secret sauce, which seems to have attracted investor consideration, has extra to do with the logistics of recycling heavy automotive batteries than with the electrochemical processes concerned. The corporate opted to parse the entire course of into what it calls a “spoke and hub” mannequin. A number of the firm’s crops — the “spokes” — will accumulate, drain and mechanically shred spent batteries, with the precious residue — the black mass — shipped to a big centralized metallurgical facility in Rochester, New York, the place that materials is separated again into its element metals. These will then be bought again to the battery producers or carmakers.

“That is reverse logistics,” Kochhar explains. “You don’t wish to be transporting these large batteries cross-country. It’s going to value rather a lot, received’t be protected, and our clients like LG and GM — they received’t do this, proper? That’s the place our spoke is available in.”

This method, he provides, has been designed to attenuate emissions — rather a lot much less transport, no burning, and reclaiming the scrap generated by the shredding course of. The corporate’s technique is to assemble 20 spoke crops and 4 hub services worldwide over the subsequent three years. Li-Cycle additionally claims that its course of generates 25 to 30 p.c much less life-cycle carbon than different battery recycling strategies.

For all of Li-Cycle’s bullishness about its future, there are nonetheless many robust questions hovering over this piece of the EV revolution. Amongst them: will recycling present sufficient lithium and cobalt to fulfill future demand, or whether or not reprocessing getting older EV batteries is best for the planet than different makes use of for the residual energy in these objects, equivalent to stationary energy-storage purposes equivalent to back-up energy as an alternative of diesel mills.

Lastly, we have to ask what position public coverage performs on this story. The European Union will part in robust recycling necessities by 2030. The Biden administration, as a part of its lithium battery blueprint, requires incentives to attain 90 p.c recycling for shopper electronics, EVs and grid storage batteries by 2030, in addition to federal necessities to make sure that recycled metals are actually used to make new ones. (Clear Power Canada, a Simon Fraser College suppose tank, has known as for the same coverage framework for an EV-battery provide chain that, so far, doesn’t exist).

Kochhar, for his half, needs Li-Cycle to be pushed by market forces and never subsidies. Which is truthful sufficient, nevertheless it’s troublesome to argue that public coverage shouldn’t play some position in making certain that these heavy, chemically unstable objects keep out of landfills — the ultimate vacation spot of numerous numbers of smartphone batteries.

“How do you get these supplies again from customers?” he says. “That’s a giant problem.”