At the International Congress for Battery Recycling (ICBR) in Basel, Switzerland, on September 12, 2024, industry experts discussed a significant challenge facing the lithium-ion battery recycling market: consumers remain hesitant to pay a premium for lithium salts of recycled origin. Claas Hoffend, Project Manager for Lithium Salts at AMG Lithium, highlighted the reluctance among car manufacturers to pay extra for recycled lithium during a panel discussion.
Hoffend pointed out that while the 2023 EU Battery Regulation mandates at least 6% recycled lithium content in new batteries by 2031, many manufacturers may resist paying a premium for this material. He added that lithium recycling still competes with the costs of primary lithium production, and without competitive pricing, buyers are unlikely to opt for recycled lithium. Additionally, the current recycling infrastructure in Europe lacks the capacity to meet future demands, though Hoffend predicts this will improve by the end of the decade.
Another challenge lies in the quality of recycled lithium. Recycled lithium salts tend to have higher impurity levels compared to lithium carbonate from primary sources, requiring costly purification steps to meet battery-grade standards. This quality gap has led some producers to question whether recycled lithium can be widely used in batteries without being mixed with primary lithium to maintain consistent quality.
The European lithium recycling market is still in its early stages, with many facilities only beginning to produce recycled lithium at a commercial scale. Most recycled lithium carbonate currently produced falls short of battery-grade requirements, further complicating efforts to justify a price premium for recycled materials.
Some market participants, including those from the automotive sector, believe that without significant government incentives, paying more for recycled lithium will not be viable. Eric Frederickson, Vice President of Call2Recycle, noted that tax incentives for using recycled materials may be phased out, making it harder to justify a price increase for such products. However, an obligation to meet recycled content targets could motivate the industry to prioritize recycled lithium.
Price assessments by Platts reveal that recycled lithium carbonate remains priced slightly lower than battery-grade lithium carbonate from primary sources. As of September 13, recycled lithium carbonate in North Asia was assessed at $10,200/mt, compared to $10,500/mt for primary lithium, highlighting the ongoing pricing disparity.
In contrast, the more developed Asian battery recycling market has made progress in producing battery-grade recycled lithium, showing potential for the global market to follow suit as infrastructure and processes improve. However, until prices and quality are aligned with primary production, the industry remains cautious about paying a ‘green’ premium.
Source: www.spglobal.com
