Global Fund for EV Battery Recycling [UPSC Notes]

A policy brief submitted to the G20’s Task Force-4 suggests the establishment of a global fund to increase recycling capacities for Lithium-ion batteries used in electric vehicles (EVs). The paper, titled “Building a Resilient EV Battery Value Chain,” highlights the need for improved recycling technologies and cost reduction to meet the rising demand for minerals like Lithium, Cobalt, Nickel, and Graphite.

In this context, this article discusses the proposed global fund for enhancing capacities for electric vehicle battery recycling. This topic is relevant for the IAS exam environment and ecology, as well as economy segments

Global Fund for EV Battery Recycling

The policy paper recommends the creation of a central fund to incentivize the scaling up of recycling facilities worldwide.

• The authors point out that battery recycling is still in its early stages and faces technological challenges in reducing costs and enhancing material recovery capacity.
• The demand for minerals such as Lithium, Cobalt, Nickel, and Graphite is projected to surge in the coming years, outpacing the available supply from existing mines.

Read more on Lithium-ion batteries in the linked article.

Importance of Battery Recycling:

• The transition to EVs and the phasing out of internal combustion engine (ICE) vehicles by many countries, including commitments by the EU until 2035, necessitate an increase in battery materials.
• Battery recycling offers a significant business opportunity, as existing mines cannot meet the growing demand for materials.
• The EU, for example, has set a target for a certain percentage of raw materials used by battery manufacturers to come from recyclers starting in 2025.

Economic Potential:

• The paper highlights that existing battery waste materials have the potential to generate a value of approximately $4,800-5,200 per tonne.
• Cathode materials in Li-ion batteries typically include lithium, aluminium, cobalt, manganese, and nickel, while the anode is made of graphite.
• In India, the recycling and reuse volume of batteries is expected to exceed 20 gigawatt hours (GWh) by 2030, with the potential of reaching 128 GWh by 2030 in the EV segment alone.
• The recycling industry in India could create a profit pool of $6 billion by 2040, with revenue exceeding $40 billion, a three-fold increase from 2030 values.

Government Initiatives:

• India has already passed the Battery Waste Management Act, which places the responsibility for recycling or refurbishing batteries on producers.
• The Act sets targets for recoverable materials from batteries, aiming for 70% by FY25 and 90% by FY27.

Conclusion:

• The G20 policy paper suggests the establishment of a global fund to invest in increasing recycling capacities for EV batteries.
• The paper emphasizes the need for comprehensive battery recycling to meet the growing demand for minerals and highlights the economic potential and environmental benefits of recycling.
• The proposed fund would provide incentives for the expansion of recycling facilities, addressing the challenges of limited availability and concentrated mineral sources across the globe.

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