Battery recycling in Europe is set to become widely profitable by 2025, costing research by Nomura Research Institute (NRI) shows.

The study, presented to delegates at the virtual EU Advanced Automotive Battery Conference (AABC), showed that the European battery recycling market is expected to reach profitability by 2025, catching up with China, which is already able to profit from recycled battery material.

In Europe, the cost of recycling batteries was estimated at $62/kwh in 2020, while in China, NRI estimated it to be around $32/kwh. Revenue generated from the sale of recycled material was estimated at $42/kwh in Europe and China.

In Europe, costs were higher for several parts of the recycling process. Higher costs were generated from metallurgical processes at $21/kwh, because of lower economies of scale than in China, where costs were estimated at $13/kwh.

Transportation and dismantling costs in Europe were also estimated higher at $5/kwh and $15/kwh, respectively. The higher costs were again because of lower economies of scale in transport, owing to the small volumes of material currently being recycled, and high labour costs from dismantling batteries. In China, which transports larger volumes of battery scrap and has invested in dismantling technologies, those costs were lower at $3/kwh for both.

By 2025, because of the advantages scaling up brings, NRI estimates that costs of recycling batteries should fall to around $40/kwh in Europe. Falling costs of transportation, to $3/kwh from $5/kwh, and metallurgical processes, down to $15/kwh from $25/kwh, are largely because of the benefits of scaling up recycling factories. Several large projects are planned in Europe from battery and chemical producers such as Northvolt, BASF and Umicore. A reduction in dismantling costs was also assumed, to $8/kwh from $15/kwh, because of investment in dismantling technology.

NRI estimates that the recycling market for lithium-ion batteries reached 97,000t in 2018. Of this, China accounted for 69pc, South Korea 19pc, and the other 12pc is shared between the US, the EU and Japan. Most recycled content so far has been from LCO batteries from smartphones, which has given China an advantage because of its historical dominance in smartphone production.

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