As the demand for clean energy in the form of electric vehicles and advanced technologies continues to grow, Lithium-ion batteries have become indispensable. However, with this progress comes a hidden cost: battery waste. In fact, battery waste can provide a business opportunity worth billions of dollars in the next 5 years for investors. That’s why Indian companies like Exigo, Attero, Batx, Li-Circle and many others have already set up plants and begun recycling!

MARKET DRIVERS

1, The Lithium-ion Boom: Exponential Growth, Emerging Challenges

The lithium-ion battery market is experiencing exponential growth. In 2023, the global market was projected at $3.54 billion and is expected to grow to $24 billion by 2033. As per a research report jointly published by NITI Aayog and PwC, this demand for batteries has grown at a CAGR of 25% in the last decade and is expected to increase fivefold by 2023. With the rise of electric vehicles leading the charge and consumer electronics such as mobile phones and laptops remaining reliant on these powerful batteries, the lithium-ion battery market poses a market opportunity of ~$1300 billion annually. 

In India alone, the market is expected to reach a staggering 220 GWh by 2030, translating into 1100 MT waste, a 50% increase from its 2022 level.

2. The policy landscape - A push for cleaner energy from the government

The government of India (GOI) is focussing its efforts on developing an efficient value chain for battery cells, and through its schemes and initiatives is encouraging local manufacturing of lithium-ion cells. It also aims to have 30% of all new vehicle registrations as electric. Some initiatives by the government are - 

1. Exempt Custom Duties- In the 2024 budget, GOI fully exempted customs duties on 25 critical minerals and reduced basic customs duty on ferro-nickel and blister copper, elements essential for sectors like nuclear energy, renewable energy, space etc.

1. Electric Mobility Promotion Scheme 2024 (EMPS 2024)- An INR 500 crore initiative by the Ministry of Heavy Industries, offering subsidies for electric two-wheelers and three-wheelers to boost adoption from April 1 to July 31, 2024. It aligns with the Atma Nirbhar Bharat initiative to strengthen India's EV industry.

1. Extended Producer Responsibility (EPR)- A policy approach that assigns producers responsibility for dealing with batteries efficiently throughout their lifecycle. They are designed to ensure that batteries are collected at the end of their lives and are recycled by registered recyclers.

1. Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India (FAME I, II)- The FAME I scheme was launched in 2015 with a budget of Rs.895 Cr to promote EV transportation over other conventional vehicles. FAME II began in 2019 with a budget of Rs. 10,000 Cr and aimed to provide incentives in the form of subsidies to buyers of electric vehicles for greater adoption of this technology. 

3. Why Lithium-ion is Supreme: Unparalleled Performance

Lithium-ion batteries have become the undisputed choice for powering our electronics due to their superior performance:

• Unmatched Energy Density: They boast a remarkable ability to pack significant power into a lightweight package, making them ideal for portable devices. This translates to longer operating times and sleeker designs for consumers.
• Extended Cycle Life: Unlike their predecessors, lithium-ion batteries can endure hundreds to thousands of charge cycles before requiring replacement. This translates to reduced waste and extended lifespans for your devices.
• Minimal Self-Discharge Rate: Lithium-ion batteries hold their charge efficiently even when not in use for extended periods. This ensures you can pick up your camera or gaming console without worrying about a dead battery, even after extended storage.

The Pressing Need for Battery Recycling 

With a typical lifespan of 2-3 years, a massive number of lithium-ion batteries reach their end-of-life annually. By 2030, the annual retiring volume of batteries will reach a staggering 160 GWh, which is approximately equal to 138000 metric tonnes of waste. 

Today, only 5% of this waste is recycled. Continuing on this path poses a triple threat:

• Resource Depletion: According to BloombergNEF, the global consumption of lithium-ion battery raw materials such as cobalt, lithium, and copper is expected to increase 20 times by 2030. However, most of these elements are depleting at a whopping rate, and elements like nickel, despite being plentiful, are difficult to extract from the Earth. It takes a large investment to even set a nickel mining project into motion. If recycled, recovered materials from used batteries can be reintroduced into the battery manufacturing process, reducing the burden on resource extraction.

• Imports: India is highly dependent on imports for sourcing critical elements like lithium, cobalt, and nickel from countries like China, Australia, DRC etc. This reduces our country’s supply chain stability and also creates pressure on India’s Balance of Trade since the import bill is as high as Cr 24000 annually. With studies suggesting the demand for lithium to surpass 2.4 million tonnes of lithium carbonate in 2030, self-reliance on raw materials becomes essential for India. 

Beyond Economic Benefits:

• Environmental Hazards: Improper disposal of lithium-ion batteries in landfills can lead to ecological catastrophe. Landfilled batteries can leak toxic chemicals, contaminating soil and water sources. Additionally, this waste can get absorbed and accumulated in edible plants and can enter the food chain, thereby causing various genetic, reproductive, and gastrointestinal problems. Recycling keeps these hazardous materials out of landfills and prevents them from harming our environment. 

• Human Health Risks: In the absence of formal recycling options, communities resort to unsafe methods of disposing of used batteries. Slums in Delhi and Mumbai bear the brunt of informal E-waste management. Workers, including children, handle toxic battery waste in the absence of any protective equipment which increases the chances of developing serious health risks to those involved in the process. 

Lithium-ion battery chemistries and their usages

Lithium-ion batteries have a variety of applications, each requiring a distinct battery chemistry based on their chemical makeup and intended use. Shoonya intends to venture large on LCO, taking into account the portable electronics market and the shift in battery usage in the EV segment. Tabulated below are the 6 most common lithium-ion battery chemistries-

The lithium-ion battery boom creates a double-edged sword. While vital for electric energy and technology, their growing use throws battery waste into sharp focus. It makes us rethink our clean energy revolution, how clean it really is. Recycling offers a solution. It conserves resources, protects our planet, and creates a circular economy. Work has already begun in this industry. Let’s fuel this fire even more, and come together to build a sustainable future, profitably. 

REFERENCES-

NITI Aayog and Green Growth Equity Fund Technical Cooperation Facility, Advanced Chemistry Cell Battery Reuse and Recycling Market in India, May 2022.