“Turning trash into treasure”: treasure hunters who created an urban mine from used batteries in America.
The paradox of eco-responsible electric cars
Interview with Executive Chairman Tim Johnston and President and CEO Ajay Kochhar, co-founders of Li-Cycle, North America’s largest battery recycling company.
There is a strong perception that electric vehicles are “environmentally friendly”. Even though there is “environmental pollution” factor behind it. If the battery is discarded in large quantities, environmental problems will be caused.
To solve this paradox of environmentally friendly electric vehicles, the recycling of used batteries is necessary. However, the technology for recycling used batteries is still in its infancy. In Korea, it is difficult to revitalize the industry due to the lack of related laws.
Business Watch aims to focus on analyzing ways to recycle used batteries through coverage not only in Korea but also in Europe and the United States, where the market for electric vehicles is growing rapidly, and exploring sustainability environmentally friendly electric vehicles.
Tim JohnsonExecutive Chairman of Li-Cycle, said:
We’re pretty down-to-earth engineers, so we never imagined the battery recycling industry would grow so quickly.
“I’m amazed and happy to be in the industry spotlight.”
Gilbert (USA) – Reporter Baek Yu-jin and Kim Dong-hoon – Executive Chairman Tim Johnston and Chairman and CEO Ajay Kochhar founded Li-Cycle in 2016. The company, which started with two engineers, has now become the largest battery recycling company. in North America with more than 360 employees in the United States and Canada. It was listed on the New York Stock Exchange last August.
When the company was founded, the United States was skeptical about sourcing electric vehicles, let alone recycling batteries. The United States has begun to promote the spread of electric vehicles since US President Joe Biden took office last year. President Biden has said he will increase the proportion of electric vehicles in the United States to 50% by 2030.
Ajay KocharPresident and CEO said:
In 2016, when we founded Li-Cycle, no one was interested in battery recycling.
“At that time, just mentioning electric vehicles was an ‘early adaptor’ and most people even questioned the growth potential of electric vehicles.”
Despite market indifference, the two engineers set out on their own thanks to the “submerged grinding” technology developed together.
This technology is characterized by securing safety and environmental properties by eliminating high temperature heat treatment processes in the recycling process. ▷ Related Articles: [Repo] Secret of ‘LG Pick’ battery recycling plant being ‘cool’ despite heatwave (September 27)
The pre-treatment process in which Li-Cycle produces a black mass (black powder mixed with nickel, cobalt and lithium in powder form) is patented in North America. There is also a patent for a post-processing process in which the black mass is purified and converted into chemical raw materials. The confidence to be years ahead of industry competitors comes from here.
“Li-Cycle has built a valuable intellectual property portfolio for six years and anticipates other battery recycling companies by two years,” Johnston said. “Other companies won’t be able to see the problems they face until two years later.”
The experience of previous work has been of great help in the development of such technologies. Johnston and Kochhar are from Hatch, a Canadian engineering company. Johnston majored in mechanical engineering at the University of Queensland in Australia and managed the lithium business project as a senior consultant at Hatch.
Kochhar majored in chemical engineering at the University of Toronto in Canada and was an advisor for the development of metallurgical industry technology at Hatch.
Executive Chairman Johnston said: “I have often seen lithium-ion batteries treated as waste and high value chemical materials were simply thrown away while I was in the mining and smelting related industry. smelting lithium,” adding, “I couldn’t recover the lithium because I burned organic matter and plastic at high temperatures.
He said: “We came into the business because we believed battery recycling solutions were essential for electric vehicle conversion and environmental and economic sustainability.
Recently, the overall battery recycling market environment is favorable for recycling. In particular, the Inflation Reduction Act (IRA), which the United States enacted to establish its global supply chain, has been a boon to the life cycle of securing an inflation-centric corporate structure. ‘North America.
According to the IRA, electric vehicles made in North America will receive subsidies (tax credits) of up to $7,500 (about KRW 10 million) per vehicle. In addition, from next year, more than 40% of minerals such as nickel, cobalt and lithium will be purchased from countries that have signed FTAs (free trade agreements) with the United States. By 2027, the rate will increase to 80%.
More than half of the battery parts will be manufactured in North America starting next year, and 100% will be in use by 2029.
Executive Chairman Johnston said, “The IRA aims to grow the domestic market by providing incentives to manufacturers who have secured supply chains in the United States or North America,” adding, “Li -Cycle is that it processes raw materials, produces and supplies products in its own country.
Chairman and CEO Kochhar also added, “Manufacturers will now consider how to qualify for subsidies and possibly meet incentive requirements for parts and raw materials sourcing in their country. .” The North American-centric business structure alone is said to have given Li-Cycle an advantageous position in global competition.
It is also an advantageous condition that the United States is a large market with a population of over 300 million. There are basically a lot of batteries that can be manipulated. Since electric vehicle batteries have a lifespan of about 10 years, expired used batteries have not yet been released.
Currently, recycling companies mainly deal with defective products, or scrap, from the battery production process. However, Li-Cycle still processes thousands of tons of batteries per year. About a quarter of them are scrap supplies.
Chairman and CEO Kochhar said, “Last year we handled more EV battery waste than expected. Scrap represents the majority of future processing capacity. »
However, there are also challenges as the battery recycling market is in its infancy. Li-Cycle has yet to make proper profits while focusing on facility investment. Li-Cycle’s recently announced third-quarter net loss was $27.52 million, nearly quadrupling from about $6.9 million a year earlier.
This is due to increased operating costs due to the expansion of North American plants and the initial construction of pretreatment plants in Europe. In fact, the amount of investment in Li-Cycle increased from $25 million each in the first and second quarters of this year to $82.11 million in the third quarter.
Chairman and CEO, Kochhar, said, “At this time, it is important to see how quickly Li-Cycle can expand its facilities to increase its processing capacity and muster the workforce needed to begin operating. his factory. As it is in the early stages of the business, there is a need to make aggressive investments now.
“Li-Cycle is investing heavily in building new facilities to pre-prepare the assets needed to respond to a tsunami of lithium-ion batteries,” Johnston said. “We started it when the company was founded, and we will continue to expand our facilities over the next few years.”
One of Li-Cycle’s challenges is to prepare in advance for future technologies as well as the constant expansion of facilities. Indeed, different technologies may be needed to recycle the new generation batteries that will be developed in the future.
Executive Chairman Johnston said, “We have developed technology that can be managed using non-heating processing methods for solid-state batteries, but lithium metal-based batteries present technical hurdles. Next-generation batteries are expected to have a higher recoverable raw material value than conventional lithium-ion batteries. »
Ultimately, Li-Cycle’s long-term goal is to play the role of “global urban mining” through continued technology development and facility expansion. President Johnston said, “We want to lead the world in lithium-ion battery processing as a way to recover the raw materials needed to make new batteries.
“Our role is to deliver long-term value in the marketplace through technology, business and partnerships.”
“Turning trash into treasure”: treasure hunters who created an urban mine from used batteries in America, October 4, 2022