Electric Vehicle Waste Batteries Beyond Regulation...Emerging Alternative to Supply Chain Issues

[Asia Economy Reporter Oh Hyung-gil] The government has decided to exempt waste regulations on electric vehicle (EV) waste batteries, which are expected to surge with the expansion of EV adoption. Recycling waste batteries is emerging as an alternative for securing materials amid supply chain crises.

The government held the 2nd Economic Regulatory Innovation Task Force (TF) meeting at the Government Seoul Office and announced a plan to revitalize the circular economy on the 5th, which includes these measures.

First, to secure the EV waste battery market expected to reach 420,000 units by 2030, the government decided to completely lift waste regulations.

Waste batteries can be remanufactured into EV batteries depending on their condition or reused as battery components for ESS (Energy Storage Systems) and other applications.

Until now, waste batteries have been subject to various waste regulations during transportation, storage, and distribution, and there were no certification standards for reuse, so in Korea, only the recycling market has grown while remanufacturing and reuse remain at the demonstration stage.

The Ministry of Environment plans not to apply waste regulations to used batteries.

Currently, the recognition criteria for circular resources are set at the business site level, but a pre-recognition system for circular resources will be introduced, designating criteria at the 'item' level. By the first half of next year, EV batteries will be officially designated as pre-recognized items and excluded from waste regulation.

The Ministry of Trade, Industry and Energy will establish a safety inspection system for reused batteries used as components in manufacturing ESS and others, and to reduce inspection burdens, self-inspection by reused battery manufacturers will be allowed. Additionally, the Ministry of Land, Infrastructure and Transport plans to establish a system to separately register and manage batteries when registering EVs within this year.

[Image source=Yonhap News]

The three domestic battery companies are accelerating their waste battery businesses by cooperating with related companies or through vertical integration.

LG Energy Solution, together with LG Chem, secured a 2.6% stake in Li-Cycle, North America's largest battery recycling company, agreeing to supply 20,000 tons of nickel. Also, Ultium Cells, a joint venture with GM, will add battery recycling facilities to its Ohio battery plant in the U.S. in 2023. In China, they plan to establish a joint venture with Huayou Cobalt, the country's top cobalt refining company, to promote waste battery recycling business.

SK is promoting group-level vertical integration of batteries including materials, cells, and modules through affiliates such as SK On, SKC, and SK IE Technology. In addition, SK Ecoplant entered the waste battery recycling business by acquiring TES, a Singapore-based electronic waste specialist, in February. Last month, it acquired shares in Ascent Elements, a U.S. waste battery recycling company, becoming the largest shareholder.

SK On also plans to reuse waste batteries generated at the BlueOvalSK battery plant, a joint venture with Ford in the U.S., by supplying them to recycler Redwood Materials for product manufacturing.

Samsung SDI established a battery scrap recycling circular system last year with specialized companies such as Sungil Hightech. Samsung secured shares in Sungil Hightech through Samsung C&T (6.33%) and Samsung Venture Investment (11.5%).

Not only battery companies but also others have entered the waste battery recycling business. POSCO Holdings recently completed a waste battery recycling plant in Poland with an annual capacity of 7,000 tons. It collects scrap and waste batteries from European battery plants to produce intermediate products called black mass.

GS Engineering & Construction is also pursuing the waste battery business. Through its subsidiary Enerma, GS E&C started construction last year of a 'lithium-ion battery recycling' plant in the regulatory free zone for battery recycling in Pohang, Gyeongbuk Province. The plan is to extract 20,000 tons annually of black powder (a black lump containing lithium, manganese, nickel, etc.) from waste batteries.

As EV usage increases, the waste battery market is expected to grow gradually. According to SNE Research, the global waste battery recycling market is projected to grow rapidly from $794 million (KRW 1.0917 trillion) in 2025 to $5.558 billion (KRW 7.6423 trillion) in 2030, and $57.395 billion (KRW 78.9181 trillion) in 2040.

This content was produced with the assistance of AI translation services.