LFP Batteries Reveal Recyclers' Shaky Foundations
LFP batteries are set to transform the EV industry, but the feature which makes them irresistible to automakers makes them unfeasible for recyclers
This piece is part of a series written in collaboration with the popular mining and climate newsletter Green Rocks. In this series, we’re drilling down into the recycling of EV batteries — a technology that some of the world’s most valuable companies plan to roll out in the hundreds of millions. Together we’re investigating the technology, policy, companies, and science that underlie the fledgling business of lithium-ion battery recycling.
Yes, LFP Batteries
It may seem unlikely that LFP — a cathode chemistry long maligned for its poor cold-weather performance and low range — poses a threat to battery recycling efforts. LFP (short for lithium iron phosphate) is undergoing a resurgence thanks to its safety, low cost, and impressive cycle life. The main advantage of LFP lies not in what it has, but what it lacks: nickel and cobalt.
LFP batteries are a remedy for fears of nickel and cobalt shortages. They're cheaper and rely on more abundant materials. For environmentalists persuading drivers to abandon their gas-guzzlers, LFP cars are a lower cost hurdle.
Recent sales figures support the notion of an LFP boom. The share of EVs sold with LFP batteries jumped to 18% of total sales in January, from just 1% a year before. Nickel and cobalt aren't going anywhere, but LFP is taking up more and more space in the market, potentially amounting to sales in the tens of millions by 2030.
How Recyclers Do (And Don’t) Make Money
For recyclers, however, the lack of nickel and cobalt pulls the rug out from under their business: How are they supposed to make money from recovering dirt-cheap iron?
If the current sales boom continues (EV giants Tesla and Volkswagen show no signs of slowing things down) recyclers will need to find an entirely new business model. As Gavin Harper, recycling expert at the University of Birmingham, puts it:
“As the cobalt content of battery chemistries reduces over time, and materials like LFP gain in popularity, the value that can be recovered from materials drops. This makes the economics of recycling more challenging."
The majority of recyclers, including buzzy startups Li-Cycle and Redwood Materials, don’t have much financial incentive to recycle the cheap iron and phosphate found in LFP batteries.
On the other side of the problem, most battery makers aren't incentivized to make sure their packs can be recycled in the first place. Today, the majority of NMC and NCA batteries are recycled using processes called pyrometallurgy and hydrometallurgy.
In hydrometallurgy, the electrodes from batteries are dissolved in acid. Individual metals can then be precipitated out by adjusting the pH of the solution. In pyrometallurgy, the battery is simply burned in a high-temperature oven, recovering only a small fraction of metals in the cathode. It’s rare that hydrometallurgical recyclers don’t use some kind of pyrometallurgy in their processes; and conversely, pyrometallurgical recyclers see an opportunity to post-process some of their waste with hydro methods.
For the majority of recyclers, both techniques require the destruction of an entire pack, mixing every polymer, electrolyte, electrode material, and current collector together. At that point, retrieving any metal, let alone the cheaper plastics and additives, is a daunting task. So, recyclers focus on the pot of gold at the end of the rainbow (or needle in the haystack, pick your metaphor): cobalt and nickel. Copper and aluminum can also be targets.
A paper Harper authored in 2019 clearly describes what is recovered from that mass of material with pyro and hydro methods. Cobalt and nickel are recovered, but less-valuable metals, such as manganese, are left to waste:
Scientists generally know how to recover the rest of the materials — and regenerate them into battery-grade components — but recyclers face formidable financial barriers: If a mine can produce it more cheaply, they won't have a chance in the market.
And for LFP, mines have spent centuries perfecting the extraction of the core materials. Recyclers won't be able to compete. According to Rob Sommerville, another recycling expert at the University of Birmingham:
“The battery recycling industry, if left to its own devices, is likely to recycle only the most valuable components. This is great for reducing reliance on cobalt mined under unsustainable conditions, but less so for cheaper materials such as graphite, or materials present in low concentrations such as Li."
In the absence of a new business model, the batteries may end up in landfill, be sold abroad to less demanding customers, or be shredded by a recycler and mostly turned into toxic waste products. If the once-energetic LFP battery is sold into the construction industry as slag, hopes of a circular economy dwindle.
This cuts to the core of what recycling’s purpose should be: Is it to exploit the untapped reserve of precious metals in battery waste, or is it to responsibly un-make the finely tuned chemical reactors that power EVs so they don’t pose a threat to the environment? Ideally, you would achieve both, but that isn’t what’s driving the development of new recycling startups.
Even if NMC remains a major player in EVs, and it likely will with luxury vehicles, the question of what happens to LFP packs remains. The current model means there’s no value in recycling LFP down to its constituent metals in a costly hydro process, which leads to the possibility of millions of EV packs winding up in smelters or landfills. This problem persists for many of the components in profitable NMC and NCA. Recyclers tend not to mention where the separator, electrolyte, and binder end up in their facilities, even though there is tremendous built-in value to these highly engineered components. New ownership models for EV batteries are needed to make recycling possible.
Recyclers in China — where LFP has long dominated the market — do appear to be recycling scrap LFP batteries using traditional methods. However, they seem unable or unwilling to recover any materials besides cell casings, copper current collectors, and lithium, according to a report from Avicenne Energy, a consultancy. Even though production scrap and end-of-life battery waste has reached a critical mass of 20,000 metric tons per year, recyclers are eager for subsidies from the Chinese government to help finance the low-profit business of recycling LFP.
How To Fix Things
There is a huge opportunity on the part of regulators and battery makers to establish new business models which can support a circular economy of battery materials. Back to Sommerville:
"Regulatory intervention through extended producer responsibility or re-shaping the market through different EV ownership models could deliver a circular economy in EV batteries.”
Consider China, which began forcing EV makers to think about recycling a few years ago. Last year, EV maker BYD unveiled the Blade Battery, an LFP-based model which is easily deconstructed. If recyclers can more easily access individual cells, direct recycling — a more robust method of recovering all components in a battery — becomes a lot easier, as does competing with the price point of newly mined materials.
There is hope, too, in a new regulatory framework/ownership model known as “Batteries as a Service” or BaaS. BaaS sees the ownership of the battery pack lie with the automaker and battery manufacturer. This way, end-of-life battery packs are guaranteed to return to the people who made them, rather than the current Wild West which can see a pack sold to the highest bidder, wherever they may be. This means packs are more easily organized, disassembled, reused (if possible), and recycled in a way that can recover every component in a far more cost-effective way.
China and South Korea are leading the way with BaaS measures, with SK Innovation and Kia Motors recently agreeing to recover end-of-life battery packs from Kia’s vehicles through new leasing and renting models. The agreement sees battery packs returned to Kia, where they’re evaluated for second-life use in energy storage systems, before eventually being recycled by SK.
The impacts of LFP battery waste aren't being felt yet in North America and Europe, but decisions made now will impact batteries that will be recycled in 7-14 years. Everyone from battery makers to governments to consumers has a role to play in preparing to manage the millions of battery packs sold today but reaching end-of-life in several years. Otherwise, a key climate technology will struggle with its environmental footprint.
Be sure to check out Green Rocks for more posts in this series.
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About the writers: Andrew is a PhD researcher at the University of Oxford (@ndrewwang). Nicholas is a business manager at UCL Business and Venture Fellow with Berkeley SkyDeck (@nicholasyiu). Ethan is a battery scientist who’s set to join the Jeff Dahn Research Group this September (@ethandalter).