Listen: Building from scrap: Fueling EV batteries with recycled materials

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Taylor Kuykendall:

Hello, and welcome to Energy Evolution, the podcast bringing new insights and analysis on the energy transition. I'm Taylor Kuykendall, co-host for this podcast, alongside Dan Testa.

Dan Testa:

Hey, Taylor, we've got another exciting episode teed up for everybody today. We're going to be looking at recycling the materials that go into electric vehicle batteries. Now, to talk more about this, let's bring in our correspondent, Camellia Moors. Hey, Camellia.

Camellia Moors:

Hey, guys. I recently talked with two experts focused on different parts of battery materials recycling, one rare earths, which is a set of several minerals that go into key energy technologies like batteries, and one battery cathode active materials. Here's the CEO of Cyclic Materials, a rare earths recycler based in Canada.

Ahmad Ghahreman:

It's great to be here. My name is Ahmad Ghahreman. I'm a hydrometallurgist by training, got my PhD at University of British Columbia on extraction of metals or hydrometallurgy. Then, worked for a gold company, Barrick Gold, for quite some time. And after that, I was a professor at Queen's University in Kingston, Ontario, Canada. Then, started Cyclic Materials back in 2021, focusing on recycling of rare earths elements, which are the most critical metals that are on our planet.

On how Cyclic Materials started basically, I saw two trends in the market. Number one, rare earths elements, which we use a lot of those in energy transition applications including electric vehicles, we were consuming a lot of those, and we were selling a lot of electric vehicles as well. But the second data prototype I found in those days, and it really didn't sit well with me, was that less than 1% of rare earths elements globally, were being recycled, making rare earths elements, which are the most critical metals, least circular metals that we have on our planet. So, those two together, I decided that Cyclic Materials have to exist, and we started a company.

Taylor Kuykendall:

So, how does the recovery process for these rare earths actually work?

Camellia Moors:

Yeah, so it's going to be a little bit different than say, recycling an aluminum can, for example, in part because these rare earths are frequently part of magnets and electronic devices including batteries. Here's Ahmad for more on that.

Ahmad Ghahreman:

When it comes to separation of rare earths elements from end-of-life products, which is at core, what we do, there are two steps in our process. The first step is to isolate magnets from end-of-life products. End-of-life products actually have the magnets well embedded in those. For instance, let's think of a traction motor or electric motor that drives an electric vehicle, traction electric motor. So, magnets are embedded inside the rotor of those electric motors. And separation of those magnets is really the way conventionally is done and very, very limited scale. Manually mostly is really not scalable. So, our first innovation was on how we can separate those magnets with minimum cost and at scale? That's our very first technology.

The second technology is now that we have isolated magnets and we have magnets in a separate bucket, let's say, how we process those and produce raw materials that one could use and produce fresh set of magnets or fresh magnets out of it. Basically, what we produce is a drop-in replacement for a material that would come from mining industry. Those are raw materials and includes rare earths oxide, an industry called mixed rare earths oxide. And that basically is the final out product of our second technology. Put the two technologies together is our whole process and the pipeline. So, we start with truly end-of-life product, and we don't differentiate between different end-of-life products. We process from very small end-of-life product like hard disk drives, all the way to larger traction motor of electric vehicles, and then, separate copper aluminum steel, as well as magnets from them, and then, the magnet would go to our second technology that refines the magnet to raw materials.

Camellia Moors:

I also asked Ahmad about what kinds of end-product Cyclic Materials processes rare earths from.

Ahmad Ghahreman:

So, that's a great question. There are multiple different categories of feed stock that we have identified within our company. To be more specific, we have created 10 different categories of feed stock in the company, most important ones for Cyclic Materials. And the larger portion ones are the ones that already collection scheme for those ones exist. Again, one big example would be recycling of small or larger motors from vehicles. Either those are ICE cars, internal combustion engine cars or they're electric vehicles we use. Wind turbines, we know how those are treated, and wind turbines actually, in their generators, specifically offshore wind turbines carry quite significant amount of magnets, MRIs, and other applications. Those are some of the applications that we know how to collect them in the industry as a collective industry. And we do actually a good job on that, and Cyclic Materials can tap into the same collection scheme and collect those materials and bring to our operations and process.

But there are some categories in our feed stock that we are not tackling right now because the first step for us is to help the industry to create that supply chain first and collection points first. And after that, we can tap into those ones and work on those ones. We have actually taken on a couple of those studies and projects with some of our most amazing partners to look into how we can, for instance, recycle power tools, what can we do in there? Some big box stores are happy to be part of solution as well, which is cool to see.

Camellia Moors:

And these recycled materials can then go back into the same kinds of products initially came from, forming a kind of feedback loop.

Ahmad Ghahreman:

This is a great question, and sometimes, comes back to us through OEMs. All the global manufacturers, and everybody else said, "The magnet raw material that you produced, are they drop-in replacement for virgin materials that come from mining industry?" And the answer is exactly yes. For instance, let's take mixed rare earths oxide, rarest product that you produce. It's the most valuable product that we produce in our pipeline. And that product with the offtake that we are finalizing right now, is actually going to be mixed with rare earths elements from mining industry at some point and separated through the same or defined through the same process. So, given that really, our material doesn't have a difference with the material that comes from mining industry, so you could use that material to make fresh magnets and put those in electric vehicles or any other application, but some of those rare earths elements that we produce also could find home in catalysts, in screens, and in batteries, and different applications. But our expectations based on the market size of magnets is that majority of the material that we recycle eventually will end up in production of fresh magnets.

Dan Testa:

So, how does all of this work at scale? Especially for EVs, if we want new electric vehicles to use recycled content, where are they going to get it from?

Camellia Moors:

There's currently a pretty interesting interplay going on between EV retirements, which is one place you can get these materials from, and new EV demand. RMI, an energy research organization, estimates that in 2024, there'll be 0.9 gigawatt hours worth of end-of-life EV batteries in the US that will require recycling. That's compared to 667 gigawatt hours in 2040. They also have some statistics on the percentage of US battery material demand that can theoretically be met by recycled content, although admittedly not for rare earths. In 2024, when we have a small feed stock, they estimate that roughly 0.5% of lithium carbonate equivalent or LCE, 0.7% of nickel, and 0.9% of cobalt demand for EV batteries can be recovered from end-of-life batteries. Compare that again to 2040, where RMI estimates approximately 44% of LCE, 51% of nickel, and 54% of cobalt demand could be met with recycled materials from old batteries in the US.

Taylor Kuykendall:

I think it's also important to note here, this is all happening while battery material demand itself is actually going up, right?

Camellia Moors:

Exactly right. To be consistent and use some US numbers here, S&P global market intelligence data estimates US passenger EV sales will grow 174% between this year and 2028. That's about four and a half million passenger EV sales in 2028, and all of those cars, new batteries. But building out a recycling network doesn't happen overnight.

Ahmad Ghahreman:

This is part of the magnet supply chain that pains me a bit. The carbon footprint of rare earths elements, which is the key ingredient of magnet, rare earths elements carbon footprint when we mine those is really large, and majority of the material is processed somewhere in Asia, and then, it's shipped as a magnet or a final product to North America. We consume it here in North America. And then, at the end, the rare earths elements are basically placed in a tailing site, in landfill, and that basically is not the right way to do it. With that in mind, the true rare earths recycling from end-of-life products today sits less than 1% of the total rare earths sentiments that we put into the market. That's really not a good metric on that side, and that has to be changed and what Cyclic Materials is working on that.

Now, when it comes to recycling companies, Camellia, you have really a good point. Recycling companies live 10 years ago. What was produced 10 years ago, we are recycling today. So, the market for us today is the same size of market that was 10 years ago, but there's another aspect of it or vector of it, and that's basically the magnet manufacturing waste. When you produce fresh magnets, believe it or not, somewhere between 20 to 40 percentage of that magnet becomes space, and that also needs to be recycled. And we are working on that one as well so we can recycle those materials as well.

Basically, the material that we can recycle today is combination of what it was produced 10 years ago or within 10 years ago, plus the magnet manufacturing waste that is being produced today. Cyclic Materials, with the current plans, and that can change at different times, will basically be recycling around 2% of the rare earths magnets that are going to be produced in 2030. So, that will give you an indication of how big the A&D operations of Cyclic Materials will be at scale. We don't believe it'll be just Cyclic Materials recycling magnets at the end. Partnerships in this space are going to be critical. Different jurisdictions will have different companies to work on that site. But at the core, what is important is to basically recycle these metals and avoid putting them into the landfills. And that's what we're trying for.

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Camellia Moors:

It's not only rare earths that can be recycled though. I also spoke with Julian Proelss over at battery chemistry company, BASF, which has a partnership with Nanotech Energy to produce cathode active materials from recycled metals for use in EV batteries.

Julian Proelss:

I'm responsible for business management in BASF for this section of battery recycling. That's a super exciting topic, which is a kind of startup within BASF. We're just about to build up the business. And I'm with BASF in many different functions for many, many years since 22 years, BSF, engineering as a training and went through a couple of startup opportunities, then BSF and business buildup. So, that's my background. BSF is originally in the battery field active by producing cathode active material, which is one critical component in each lithium ion battery. And we have been manufacturing these batteries or these battery materials since, I think one and a half decades in the US, locally together with our partner Toter, who is located in Canada, who produces a precursor for it. And typically, you have key materials like nickel, and lithium, and cobalt going into these precursors and into the cathode active materials. And these materials are normally shipped from overseas, so from other continents to US and North America to produce these materials.

Now, we see increasing companies building factories for batteries in North America, which is in the large scale and in the extent, quite new and mainly driven by the boom for electrical mobility. One of these companies is Nodatec, and they have been approaching us to discuss about whether it would be possible to produce not only these chem materials for them, but actually, also using their waste streams and to remanufacture them to bring in the valuable materials, which they're having as off-spec materials back into the chain. So, we reached out to partners. Together with partners, we are now able to offer closed-loop, which means we're taking the scrap materials, we are taking them mechanically apart, and then, we are processing them chemically in order to regain the metals and feeding them back into the precursors and into the cathode active materials, and bringing it back to Nodatec. It's a great thing because you're having minor losses of these metals, and you are having a very high efficiency, and you can import less of the metals, keep them in North America, and you can reuse them.

Camellia Moors:

As with recycle rare earths, those recycled cathode active materials can also go right back into new batteries.

Julian Proelss:

The charming part is the metals, they undergo the same qualification process like virgin materials from mines. So, the materials which coming out of refinery have to fit the same specifications, which means the production process for the precursors is not negatively influenced by recycling content.

Camellia Moors:

And also, like with recycled rare earths, the market is small, but growing.

Julian Proelss:

Driven by the electromobility and the huge increase of batteries used for that, we assume that the already very, very large growth rates, larger double-digit percentages will continue. And we are expecting the market of recycling material to increase to more than 1.5 million tons by 2030. So, between 1.5 and 2 million tons of materials for recycling. As I said, double-digit growth rates in the order between 20 and 50% for North America in these years. Recycling is an essential part of the growth story of batteries, as such. If you look into the recycling content in batteries today, it's a smaller one-digit percentage number worldwide.

Camellia Moors:

There are also environmental incentives to use more recycled materials.

Julian Proelss:

If you look into the huge environmental impact of the virgin route of the mining, if you look into the CO₂ footprint and the related costs, we believe that in the long run, the recycling will take over approximately 20 to 30%, and in the long, long run, even more of the content of all critical materials in a battery. So, we believe that only with the recycling, you will be able to develop a sustainable supply of lithium ion batteries for electromobility. You're saving a lot of emissions of carbon dioxide if you recycle the metals because if you look for the virgin route, you have a lot of materials to be moved, similar segregation processes to be run through, but at much higher CO₂ footprint costs, so to say. And you have a lot of shipment because the materials come from overseas. So, the overall CO₂ footprint looks much better if you go for cathode active material based on recycling. We assume today, that the footprint is about 25% better compared to recycling metals, compared to virgin materials.

Camellia Moors:

Outside of environmental benefits, the incentives for battery makers to use recycled content might differ based on location.

Julian Proelss:

In China and Korea, it's common practice as they have grown the recycling with the industry, with the battery industry, that they're already having huge recycling rates. In Europe, you will see a huge recycling rate, which is driven mainly by regulation. In the US, you will see a lot of recycling capacities driven mainly by incentives with the aim to have resilient value chains. If you would achieve 20 to 30% recycling content in the batteries, it's volumes which you would not have to import from other continents, and that would be good for North America as such.

Camellia Moors:

Ultimately, more widespread use of recycled battery materials will probably go hand-in-hand with a more concrete structure for end-use equipment collection.

Ahmad Ghahreman:

A lot of products that we do recycle already have a collection scheme, so they are collected at some point. For instance, traction motor of electric vehicles, those are collected, and we can recycle those at some point. Some other different applications of rare earths element, products that contain rare earths element or magnets. For instance, let's think of power tools that use in our household to put up a art on the wall or whatnot. Those kind of power tools actually are not recycled properly or collected properly in the industry at the moment. But those also could carry quite a bit of various magnets in them as well that we could recycle with our process. So, creating some of those supply chains or collection schemes at some point will be really beneficial for Cyclic Materials.

On one other level is the government policies and how they can support improvements in recycling. When we talk about government policies, last few years have been phenomenal with IRAs and things like that, CHIPS Act and all that. Government has been really supportive. Climate tech and clean tech industry overall and has been providing a lot of help. Equivalent of that has been happening in Canada, and Europe, and Germany, and England, everywhere. But overall, in North America, US, Canada, for instance, the total percentage of a car that we recycle in North America, which I believe is around 80 to 85% of the total mass of a car that we recycle in North America is far less than what our European partners today can recycle, over 90%. And that mostly goes back to the policies internally in those countries or in European Union on how much of a car, what percent of a car, and which parts of a car has to be recycled? Those are some aspects of basically ensuring that recycling is done right and Cyclic Materials' job is to be an element of support and help with that story.

Now, when it comes to consumption of material by manufacturers also, they could support us as well. And the support would not be only for the companies, would be for our planet basically, by consuming a bit more of the recycled materials for all the good reasons that there exist out there. And some of that is simply the recycled material carry much less carbon dioxide footprint, carry far less waste footprint, and that basically helps with their story as well. And the products they produce is just nicer to the environment. So, we want to be part of that story as well. Those are the part of the things that would really help recycling industry to flourish in North America, Europe, and all the jurisdictions.

Camellia Moors:

But newly mined materials are still likely going to play a role in EV battery production.

Ahmad Ghahreman:

When we recycle rare earths elements through our process, we consume only 2% of the water that mining industry would consume to produce same amount of product. That's a gigantic difference right there. Our carbon footprint will be less than 25% of mining industry. And this number, I'm optimistic, we are finalizing our life cycle analysis, LCA, with a third-party company. And my expectation is this number will be even smaller, far smaller, but that's the number that our initial calculations internally points to. So, doing so, we will produce almost next to nothing solid waste.

Just to give you an idea, mining industry produces over 2,000 tons of waste to finally produce one ton of neodymium oxide. And that's significant amount of waste. And radioactive waste is above and beyond those numbers. And at Cyclic Materials, we have none of that. So, from environmental and carbon footprint perspective, there are vast differences between mining industry and recycling. But the reality is recycling industry is not a, I'm going to say significant competition to mining industry, simply because we should coexist together. Our consumption of rare earths element are increasing rapidly year after year. And recycling alone is not going to be able to fill in all the needs for rare earths element in the market. So, mining industry has to be there, but improving their environmental metrics would go a long way as well.

Dan Testa:

Okay. It's definitely been interesting to hear about some of the developments in this space, Camellia. Thank you for bringing in those interviews.

Camellia Moors:

Of course. And thank you so much to both of our speakers.

Taylor Kuykendall:

All right, listeners, thank you so much for listening to the latest episode of Energy Evolution. I want to give a special shout out to our incredible podcast team members. I am once again Taylor Kuykendall, but other people behind this podcast include Dan Testa, Camellia Moors, Christopher Coats, Karen Willenbrecht, and our wonderful agency partner, The 199. To stay up-to-date with our upcoming episodes, be sure to subscribe to Energy Evolution on your favorite platform. If you have any ideas for future themes or guests, we'd love to hear from you. All you have to do is shoot us an email at energyevolution@spglobal.com. And look, if you liked what you heard today, do consider sharing the podcast with others or leaving a review on your preferred podcast platform. We can't wait to bring you more fascinating discussions in the future. Until next time, take care and stay tuned for more from Energy Evolution.