The exciting global transition to clean energy and electric mobility, is also forcing the world to face the fact that mineral supply is essential for survival and mining alone may not feed the world’s demand for critical minerals like lithium, nickel, cobalt and graphite. The International Energy Agency predicts that demand for clean energy technologies will rise between 3x to 7x by 2040 and copper demand alone could hit 36 million tonnes by 2031 and leave the world with a supply deficit. Battery recycling is quickly emerging as the fastest, greenest, most predictable and cost effective way to close this gap.
Recycling economics have been improving and stabilizing over the last few years, unlike mining which has been mostly predictably unpredictable. Battery recycling can now recover 95 to 98% cobalt and nickel and process optimizations have reduced operating costs by at least 20-30%. The bigger shift in recycling economics has been market driven. Battery prices dipped to a low in 23-24, which created pressure on preprocessors due to black mass value being temporarily softened. But as metals prices remain volatile, producers increasingly prefer recycled feedstock due to availability being predictable. Additionally, copper, which is arguably the most valuable metal for electronics, is projected to breach $12,000/tonne by 2026, making copper-centric recycling models economically compelling. Recycling smooths out commodity cycles, it can thrive when metal prices are high and capture value and survive the low price years due to steady raw material (scrap) inflow and lower energy use versus mining.
Technological advancements have made this section smarter. Predicting the state of health of batteries is easier and so is stabilizing yield across feedstock. The EU’s battery passport initiative is ushering in an era of traceability where every gram of nickel, lithium and other minerals in batteries will be tracked through its lifecycle and will create verified recycled metals. Recycling is also becoming greener as technological advancements have made extraction possible with lower emissions, closed loop water circuits, and so on. Extended producer responsibility (EPR) is tightening and recyclers have to demonstrate recovery efficiency which will define competitive advantage in the coming decade.
For India, this is particularly strategic as the country is set to generate over hundreds of thousands of tonnes of battery waste every year, making it one of the fastest growing recycling markets. WIth startups optimizing process flows, innovating and commercialising new technologies for batteries, and extracting copper and critical minerals at industrial scale; sustainable supply for OEMS and India’s goals for Make In India as well as lower emissions will be supported well in the coming times. This can help India position as a regional hub for circular raw materials with the ecosystem being nudged to move towards refining via the critical minerals mission’s recycling initiative.
Battery recycling is no longer a subplot of the EV transition or a waste management function. It is the core supply chain infrastructure and smarter, greener, systems, cost effective processing and high recovery efficiency will define the winners.
