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Study on battery recycling in the EU: €9B needed by 2035, circular economy by 2040 seems unrealistic

Shortly before the updated EU Battery Regulation comes into force, the chair “Production Engineering of E-Mobility Components” (PEM) of RWTH Aachen University has published a study on the European battery recycling market. Due to high investment costs, the current structure of the value chain will move toward large recycling centers, according to the analysis published jointly with PwC Strategy&.

The EU will create legal framework conditions for battery recycling throughout Europe from 2023 with its revised Battery Directive. The directive sets such things as higher recovery targets and recycling efficiencies, as well as a minimum proportion of recovered material in new batteries.

According to the analysis, after initial overcapacities, the recycling market will be fully utilized from 2030 onwards, requiring investments of more than €2.2 billion for the annual processing of around 570,000 tons of battery material.

The general increase in electrification and the growing battery production due to electric mobility will drive the recycling market in Europe. In order to still be able to process all recyclable materials from 2035, market players will have to spend another seven billion euros on their recycling capacities.

—PEM Director Professor Achim Kampker, co-author of the study The EU Recycling Market – A Viable and Sustainable Business

Currently, a value chain is being built up consisting of the preparation, pretreatment and main processing segments of battery materials. Further technological specialization, for example, could reduce the high total investment by up to 50%, according to the analysis.

Recycled material could account for up to 30 percent of the demand for lithium, nickel, and cobalt in battery cell production in 2035 and could double this share by as early as 2040. This suggests that a completely closed battery market will not emerge in the next 20 years.

—Dr Jörn Neuhausen, co-author and Senior Director E-Mobility at Strategy& Germany

The team of authors expects the combination of high material volumes and low recycling costs to create an ideal market environment for the battery industry.

Recycling of batteries will be a profitable and sustainable business in Europe even before 2035.

—Dr Jörn Neuhausen


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