While there are numerous types of battery chemistries, two types are commonly used in energy storage and would be regularly used to support energy storage for renewable assets. Unlike other batteries, lithium iron phosphate (LFP) batteries don’t require cobalt, which is a costly component. Over time, nickel manganese cobalt oxide (NMC) batteries have been developed to incorporate more nickel and less cobalt, helping to reduce costs.
Recycling lithium-ion batteries has some obvious advantages, including mitigating potential supply chain issues while reducing the fossil fuel consumption required for mining and refining critical raw materials. Unfortunately, recycling lithium-ion batteries poses challenges, including the use of hazardous chemicals and requiring higher temperatures.
The following methods can be used to recycle lithium-ion batteries:
- Thermal recycling: This recycling method utilizes controlled incineration to deactivate the battery. Waste leftover from the incineration process is smelted to recover raw materials. This approach to lithium-ion battery recycling is highly efficient and requires very little physical space. However, it’s important to consider that exposing LFP or NMC batteries to high temperatures can generate hydrogen fluoride, an inorganic compound that is both highly corrosive and poisonous. Additionally, a portion of the lithium found in batteries is lost during the typical thermal recycling process.
- Chemical recycling: By leaching the lithium-ion batteries in acid, rare and raw metals can be recovered and recycled. However, before leaching the battery in an aqueous solution, a pre-treatment process is required to classify, separate and discharge the battery properly. Avoiding the pre-treatment process could result in the battery short-circuiting or exploding. Although chemical recycling allows facilities to recover a significant amount of metals and raw materials, this recycling method also generates hazardous chemicals and it is difficult to implement on a commercial scale.
- Direct recycling: The process of direct recycling employs both thermal and chemical processes to recover and regenerate cathode material. The cathode material can be used again in new batteries, thus promoting circularity while mitigating potential environmental damage from mining. Unfortunately, to implement this process on a commercial scale, batteries need standardized chemistry. Presently, most batteries have different chemistries, which makes it challenging to adopt this approach.
While all three approaches could be used to recycle lithium-ion batteries, thermal and chemical recycling methods can be employed without direct recycling, but this depends on how the recycling facility deactivates batteries.
The Infrastructure Investment and Jobs Act and the Inflation Reduction Act (IRA) have changed the economics of renewable asset recycling. While not explicitly providing funding for recycling facilities, these laws provide tax abatements for utilities and developers who purchase batteries, wind turbines and solar panels that use materials sourced or recycled in the United States. The developers seeking these abatements as well as end-of-life disposal opportunities will be searching the market for recycling facilities. In the current market, transporting and recycling renewable energy technologies isn’t cost competitive when compared to landfill tipping fees, even with the cost to recycle renewable assets and technologies is expected to go down in the next decade. Whether a recycling firm wants to establish a new facility or an asset owner wants to dispose of renewable assets, distance is often a priority. The most cost-effective recycling option typically depends on the distance from the project site to the recycling facility. Since passage of the IRA, more than $2 billion has been invested in recycling efforts for renewable assets, with funding coming from both governmental and private sources.
Market demand for recycling facilities is set to grow. When recycling methods become more economically viable and recycling facilities promulgate, asset owners will have more options to explore. Currently, utilities and asset owners concerned about recycling can allocate funds for end-of-life decommissioning and recycling of major components by incorporating a standardized clause in power purchase agreements.