POOLE, England, July 21 (Reuters) – A little-publicized clause in the U.S. Inflation Reduction Act has companies scrambling to recycle electric vehicle batteries in North America, putting the region at the forefront of a global race to undermine China’s dominance of the field.
The IRA includes a clause that automatically qualifies EV battery materials recycled in the U.S. as American-made for subsidies, regardless of their origin. That is important because it qualifies automakers using U.S.-recycled battery materials for EV production incentives.
Reuters interviewed more than a dozen industry officials and experts who say that is kicking off a U.S. factory building boom, encouraging automakers to research more recyclable batteries, and could eventually make it harder for buyers in developing countries to buy old used EVs.
China handles virtually all EV battery recycling in a global market projected to grow from $11 billion in 2022 to $18 billion by 2028, according to research firm EMR. As more EVs are introduced and age out of the vehicle fleet, that business will grow.
The minerals in those batteries - primarily lithium, cobalt and nickel – are worth on average between 1,000 euros ($1,123) to 2,000 euros per car, BMW (BMWG.DE) sustainability chief Thomas Becker told Reuters.
Those materials could be in short supply within a few years as automakers boost EV production, but “can be recycled infinity times and not lose their power,” said Louie Diaz, vice president at Canadian battery recycling firm Li-Cycle (LICY.N), which received a $375 million U.S government loan for a New York plant slated to open later this year. That funding helped bring forward the investment decision for the plant, Diaz said.
JB Straubel, CEO of Redwood Materials, which was awarded a $2 billion U.S. government loan in February to build out a battery material recycling and remanufacturing complex in Nevada, said the IRA treats recycled battery materials as locally ”urban mined,” or materials recovered from scrap rather than obtained from mining.
That has encouraged U.S. companies to move faster on recycling efforts than their counterparts in the European Union, which has focused instead on mandates, including minimum amounts of recycled materials in future EV batteries.
Recycling firms Ascend Elements, Li-Cycle and others are planning European plants in the next few years, but access to funding and the made-in-America incentive means several U.S. plants are already being built.
“What it (the IRA) does is change the demand equation for battery materials,” said Mike O’Kronley, CEO of Ascend Elements, which already has one recycling plant open in Georgia and has received nearly $500 million in Energy Department grants under the infrastructure law for a plant in Kentucky slated to open in late 2023. “We need to keep those valuable materials… so we can put them right back into EVs.”
The race is on to build “closed-loop supply chains” where recycled minerals are put into locally…
Original from www.reuters.com