Battery Recycling Investment Round-Up: First Investment Into MENA, Further Projects Expected In India

Fitch Solutions / Autos / Global / Tue 16 Aug, 2022

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Key View

  • Over H122, MENA received its first battery recycling investment, while LatAm received its second after the project launched by Gangfeng Lithium in Mexico in December 2020.
  • The eight projects announced in North America, and the eight in Europe, signal that interest in battery recycling continues to increase.
  • Europe and North America's battery recycling capacity rose to 74.3GWh and 34.5Gwh respectively at the end of H122, while Asia continues to lead in total announced capacity for battery recycling in GWh with 103.6GWh.
  • Within Asia, the battery recycling sector continues to be dominated by Mainland China, with over 100GWh in recycling capacity, followed by India and South Korea. We highlight our belief that India's battery recycling market will receive further investments given the growth of the market's EV supply chain.

In our regular round-up of production investments, we track the latest projects from the production side of the industry and analyse regional trends that we see developing. In doing so, we hope to build a picture of any potential hubs that may be developing, as well as company strategy in terms of production bases and export programmes.

Battery Recycling Investment Round-Up H122
Date Region Country State/County Company GWh USD (mn) Description Date Online
Jan-22 North America USA Georgia Ascend Elements 2.4 43 The start-up announced that it would open a plant to produce active cathode materials. This will be the largest recycling site in North America. The facility will be recycling scrap from SK Innovation and Honda. 2022
Jan-22 North America Canada Ontario Stelco 1.47 n/a Under the plan, Stelco will recover up to 18,400 net tons of nickel, manganese and cobalt sulphates, lithium hydroxide and carbonate per year from batteries, and up to 40,000 net tons of scrap steel from the vehicles 2023
Jan-22 Europe UK Minworth, West Midlands Veolia 28 n/a The planned facility will have the capacity to process 20% of the UK’s end-of-life electric vehicle batteries by 2024. 2024
Jan-22 Europe Norway Southern Norway Morrow Batteries, Li-Cycle, ECO STOR 0.8 n/a Within this JV, Morrow will provide the lithium-ion battery manufacturing scrap from its planned battery manufacturing facilities in Norway and Li-Cycle will have the right to 100% of the facility’s production of black mass. 2023
Jan-22 North America Canada Quebec Lithion Recycling 0.6 98 The plant will recycle 7,500 metric tons per year and will create close to 100 jobs in Quebec. 2023
Jan-22 North America US Lordstown, Ohio Ultium Cells and Li-Cycle 1 na This is the company's sixth recycling facility and will be located on the same site as the USD2.3bn Ultium Cells battery manufacturing plant that is currently under construction. Ultium Cells is a JV between LGES and GM. 2023
Jan-22 MENA Morocco Guemssa Glencore and Managem 0.2 n/a Glencore and CTT intend to enter into a 5-year agreement to recycle cobalt, nickel and lithium, and also aim to produce cobalt from the black mass. 2022/3
Feb-22 Europe Belgium Hoboken Umicore & ACC 0.56 n/a Umicore has signed an agreement with ACC, a JV of Stellantis, Total and Mercedes-Benz for battery recycling services for the needs of the ACC pilot plant. 2023
Mar-22 Europe Germany Kuppenheim Mercedes-Benz AG 0.2   The recovered materials would be used to produce more than 50,000 battery modules for new Mercedes-EQ models. 2023
Mar-22 North America Canada Ontario Electra 0.5 3 Electra is building North America's first fully integrated, localized and environmentally sustainable battery materials park. The plant will include cobalt and nickel sulfate production capabilities, a large-scale lithium-ion battery recycling facility, and battery precursor materials production. 2022
Mar-22 Asia China n/a Ronbay New Energy Technology & GEM n/a n/a The recycling plant will focus on repurposing cobalt and nickel from EV batteries. 2023
Mar-22 Europe France TBC Eramet and Veolia 2 n/a Eramet notes that the industrial phase will be launched as early as 2024 for the black mass production step and by 2025-6 refining steps will be introduced to create battery-grade products. 2024
Mar-22 Asia India West Bengal Exide Industries 8.64 n/a The company plans to establish an EV battery recycling plant with a capacity of 108,000 tonnes annually TBC
Mar-22 Latin America Brazil TBC BMW, Tupy, Senai n/a 0.71 BMW will begin recycling batteries in Brazil alongside Tupy and Senai. No additional information has been provided as of yet on the agreement. TBC
Apr-22 Asia Indonesia TBC CATL 2.0 5,005 CATL’s recycling subsidiary Brunp has entered into a partnership with Indonesian companies Antam and IBI. The agreement focuses on nickel mining and processing, battery materials, battery manufacturing and battery recycling. 2023
May-22 Asia India New Delhi Ziptrax and XProEM 1.0 n/a The New Delhi based tech start-up will partner with XProEm, a technology company based in Toronto to establish a metallurgical facility to recycle batteries. 2021
May-22 Asia South Korea TBC Lithion Recycling & IS Dongseo 0.8 n/a The firm will build its first Korean facility capable of processing around 20,000 electric car batteries a year. This first phase will be followed by the construction of a hydrometallurgy plant based on Lithion’s technology, allowing ISD to supply over 15,000 tons of battery-grade materials per year. 2022
May-22 Europe Hungary TBC GEM 2.4 1 The Chinese battery recycling company GEM plans to set up a battery recycling plant. TBC
May-22 Europe, North America, Asia US, Indonesia and TBC TBC Attero 24.0 1,000 Indian battery recycling company Attero is planning on building five plants across three continents to recycle 300,000 tons of battery waste by 2027. Its clients include Hyundai, Tata and Suzuki India. 2023
May-22 North America US Texas ACE Green Recycling 1.6 n/a The firm announced plans to build and operate North America's largest emissions-free and sustainable battery recycling park in Texas, USA. The facility will be able to recycle both lead-acid and lithium-ion batteries when fully operational. 2024
Jun-22 Europe Germany Schwarzheide BASF 1.2 n/a The chemical giant will construct a black-mass plant that will send black mass to BASF's commercial hydrometallurgical refinery. 2024
Jun-22 Asia China Jiangxi Gangfeng Lithium and SVOLT 2 n/a The two parties signed a cooperation framework agreement to construct a battery recycling plant within an eco-industrial park. 2023
Jun-22 North America US Nevada Redwood Materials & Toyota TBC n/a The US start-up announced that Japan's Toyota had become the latest automaker to join its closed-loop battery ecosystem. 2022
Note: na = not available. TBC = to be confirmed. Source: Fitch Solutions

Over H122, we have identified 23 investments into EV battery recycling projects. As many of the ventures remain in the early trial stages, there is a lack of data available that indicates the value in USD of these projects. However, we are able to note the capacity of each project and cumulatively in this round-up, which comes to a total of 81.4GWh, an increase of 37.2% from the total capacity promised by projects announced in H221 (59.GWh). We note that we found eight projects in Europe, eight in North America, six in Asia, one in Latin America (LatAm) and one in the Middle East and North Africa (MENA).

MENA Receives First Battery Recycling Plant, Second for LatAm

In this round-up, MENA received its first battery recycling investment, while LatAm received its second after the project launched by Gangfeng Lithium in Mexico in December 2020. BMW has announced an intention to construct a battery recycling plant alongside autos parts and materials firm Tupy and Senai, an industry educational organisation, in Brazil. The plant will recycle end-of-life batteries from electric BMW branded vehicles in the market. Furthermore, we highlight the first MENA battery recycling investment into Morocco by Glencore and Managem, a local mining company, to recycle EV battery metals and produce cobalt from the black mass (the chemical product of the battery recycling process).

As Morocco is a vital spoke in Europe's autos supply chain, and Brazil is the largest EV market in Latin America, it is no surprise that these markets have been selected as the locations for the first recycling projects in both regions. Regardless, we believe that these investments pose an upside to the EV supply chain in both markets by transforming current supply chains into a 'closed loop' or circular economy. In BMW's case, this will enable the automaker to lower its production costs by localising its EV battery supply chain, decarbonising its supply chain by reducing transportation costs, and by ensuring a stable, reliable supply of the EV battery components. We expect to see this become a key trend in the autos sector over the next decade given the breadth of benefits that this circular economy provides automakers.

We believe that there will be more battery recycling-related investments into both regions in H123 as we expect EV demand in both regions to increase, particularly in MENA, where we believe there will be EV sales growth in Saudi Arabia and the UAE as some incentives are introduced and as local EV production starts in 2024. We note that an increase in EV sales will result in a surge in second-hand EV batteries once the vehicles are retired, requiring local facilities to recycle the batteries. As both regions currently lack any regulation on EV battery recycling, we believe it will fall to automakers to ensure that recycling can happen within the markets, resulting in an increase in investments in the near term.

Recycling Projects In North America, Europe Continue To Expand, But Asia Remains Out Ahead

Over H122, we recorded eight projects announced in North America and another eight in Europe which signal that interest in the sector continues to increase as environmental policies take effect and as the risk of a battery metal shortage grows. Particularly, we highlight a string of investments in the US and Canada; three in Canada, and five in the US. Notably, we have seen Ultium Cells, a battery manufacturing JV between LG Chem and General Motors, announce its second recycling facility with Li-Cycle, a battery recycling industry leader based in Canada. This is the company's sixth recycling facility and will be located on Ultium Cell's battery manufacturing plant in Lordstown, Ohio which is currently under construction. We highlight this project to showcase what we believe will become the standard model for EV battery manufacturing in the long term, namely, that there will be an on-site facility for the recycling of EV battery scrap and retired EVs that will enable battery manufacturers to reuse highly valuable EV battery metals. We see similar projects emerging in Europe this year-half, including joint partnerships between battery recycling firm Umicore and ACC, a battery manufacturer JV between Stellantis and Mercedez-Benz, to establish a recycling plant nearby to ACC's pilot plant in Belgium. While these investments will take Europe and North America's battery recycling capacity to 74.3GWh and 34.5Gwh respectively, an increase from 39.1GWh and 27.2GWh in H221, we note that Asia continues to lead in total announced capacity for battery recycling in GWh with 103.6GWh (see graph below).

Asia Remains Ahead For Battery Recycling Capacity

Total Announced Capacity From Battery Recycling Projects (GWh)

Source: Fitch Solutions

Within Asia, the battery recycling sector continues to be dominated by Mainland China, with over 100GWh in total recycling capacity, followed by India with 12.6GWh and South Korea (5.0GWh). While there have been extensive investments into, and growth of, Mainland China's battery segment in order to manage the second-hand batteries produced by the market's large EV fleet (we estimate the EV fleet will rise to 15.3mn units in 2022) India's battery recycling capacity reflects the market's growing interest in the EV segment. In our recent Investment Round-Up for Asia, we recorded nine EV-related investments in India. Of which, four projects are electric motorcycle related, three are EV supply chain-related and the remaining two are directed towards EV components. We note that the interest in establishing local battery manufacturing facilities is linked to the government's Production Linked Incentive (PLI) scheme which allotted around USD3.5bn to aid the automotive sector's development. According to reports, the Indian government received bids totalling an annual battery production capacity of 130GWh from its tender for 50 GWh in battery production capacity. While not all the tender bids will result in investment, it does highlight that there is strong interest in developing India's local EV supply chain. This includes the planned investment from Exide Industries which aims to establish the market's largest battery recycling plant (8.6GWh) in order to create a circular EV supply chain (see graphic below) in West Bengal. We believe that the growth of India's EV supply chain will symbiotically create opportunities for additional battery recycling investments as EV automakers and battery manufacturers will require on-site facilities to recycle scrap or retired EV batteries.

Players In The Battery Industry Looking To Recycling For Sustainability Boost
The Circular Economy Of LiBs
Source: Fitch Solutions

This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings. Copyright © 2021 Fitch Solutions Group Limited. © Fitch Solutions Group Limited All rights reserved. 30 North Colonnade, London E14 5GN, UK.

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