The EU Batteries Regulation, which came into force on February 18, 2024, mandates that new batteries must incorporate a specified proportion of recycled materials beginning in 2031. Originally projected to be below 4GWh by 2025, this legislation is poised to escalate Europe's battery recycling capacity to 200GWh by 2040, catalyzing scrutiny of the battery resource utilization market within the continent and prompting keen interest from stakeholders in South Korea.
As reported by South Korean media outlet The Elec, the Regulation outlines that by 2031, newly manufactured batteries must contain recycled material in the following ratios: nickel 6%, cobalt 16%, lead 85%, lithium 6%. By 2036, these proportions will increase to nickel 15%, cobalt 26%, lead 85%, lithium 12%.
Presently, 70% of Europe's battery recycling equipment supply emanates from local enterprises, with foreign contenders such as Redwood Materials from the United States and SungEel Hitech from South Korea making inroads. Redwood Materials, founded by Tesla's former Chief Technology Officer, recently completed the acquisition of Redux Recycling, a European battery recycling firm boasting an annual production capacity of 10,000 tons.
SungEel Hitech operates two waste battery recycling plants in Hungary, with one processing facility boasting an annual capacity of 10,000 tons, focusing on the waste treatment generated during battery production. The second facility can handle batteries from 20,000 electric vehicles annually, facilitating the recycling of 50,000 tons of battery waste.
Other South Korean firms are also eyeing opportunities in the European battery recycling market. Ecopro has announced collaborative ventures with SK ecoplant and TES-Envirocorp Pte to construct a battery recycling plant in Hungary, slated for completion by the end of 2024.
IS Dongseo's acquisition of European resource utilization company BTS Technology in 2023 grants access to a factory capable of processing batteries from 50,000 electric vehicles annually. Plans are underway to establish a battery processing front-end plant in Europe.
Approximately 48-54% of the components are recyclable for used lithium-ion batteries. A typical electric vehicle battery pack contains around 41 kilograms of nickel, 9 kilograms of cobalt, 12 kilograms of manganese, and 8 kilograms of lithium. However, sourcing materials such as nickel, lithium, and cobalt is constrained to specific countries, presenting procurement challenges.
Consequently, beyond its environmental imperatives, battery recycling holds promise for diversifying the supply chain of crucial battery materials. The Korea Trade-Investment Promotion Agency (KOTRA) estimates that by 2030, the global lithium-ion battery recycling market could reach US$25.3 billion, with approximately 320,000 tons of electric vehicle battery waste sourced from Europe.
