Toward a circular economy for lithium-ion batteries
Lithium-ion power is gaining traction in the material handling market, just as the supply chain is stepping up with recycling services and sourcing initiatives that support a greener energy landscape.
Victoria Kickham, an editor at large for Supply Chain Quarterly, started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for Supply Chain Quarterly's sister publication, DC Velocity.
If you’ve transitioned some of your forklifts to lithium-ion (li-ion) battery power recently, you may be wondering what happens to those batteries at the end of their life. Sure, they’ve likely got years before you have to worry about it, and the manufacturer will take them back when they reach their end point, but what happens next? An increasingly environmentally conscious business world wants to know, driven by companies’ desire to meet internal sustainability goals and address supply chain sourcing concerns. Recycling can help address both issues, but until recently there hasn’t been much activity, and the lithium-ion recycling business remains in its infancy.
“What’s missing is that there wasn’t a huge business case [for recycling these products] a few years back,” explains Vincent Caron, director of legal affairs forUgoWork, a Quebec City-based provider of lithium-ion batteries and energy-management solutions. He points to the growing popularity of li-ion batteries for use in automotive and material handling applications as a catalyst for change. “Now, it’s a very, very huge market. Recyclers are trying to capture that.”
A long and successful history of recycling forklift batteries, especially the lead-acid variety, is also a factor. All forklift batteries are large and chemically complex, and they can’t just be thrown in the trash when their useful life ends. Rules and regulations surrounding lead-acid have given way to a circular economy for those products; they are virtually 100% recyclable today. As demand for li-ion builds, so do expectations for recycling them, and Caron says a growing number of companies are trying to get ahead of that demand as more of the products enter the market—some researchers predict double-digit growth in li-ion battery use over the next five to seven years. As a result, battery makers and end-users are beginning to form partnerships with recyclers to make the circular economy a reality for these increasingly popular products.
As the process unfolds, here are three things to know about li-ion battery recycling.
1. THE BUSINESS CASE IS GROWING
Demand for li-ion recycling has been intensifying over the last 10 years or so, driven by the proliferation of personal electronics and, more recently, electric vehicles, all of which rely on advanced battery technology, according to Peter Geantil, special projects manager for li-ion battery makerFlux Power, based in San Diego. But the process for recycling li-ion batteries can bedifficult and expensive.
There are several reasons for that. For one thing, the design of some batteries can make it tough to access and extract the lithium and other elements inside. For another, it requires finding a recycler that handles that particular battery’s type of “chemistry.” There are different battery chemistries that fall under the li-ion umbrella, and manufacturers choose which to produce based on how well they work for a particular application. (Nickel manganese cobalt, or NMC, and lithium iron phosphate, LFP, are two examples of common chemistries used in material handling applications.) Recyclers don’t always handle the gamut of chemistries on the market, making it difficult to find the right partner for the type of battery you want to recycle.
“[Because] you have these different chemistries, you have to find a recycler that can take any lithium-ion battery and extract whatever valuable materials it can from it,” Geantil explains, adding that such sources are beginning to emerge. “As lithium began to be deployed throughout our economy, people realized they needed to figure out how to recycle it. Initial recycling rates were low—they weren’t even capturing the lithium. Nowadays, they are getting more out of it.”
Also complicating the issue is that li-ion batteries for material handling are one part of a larger system that includes electronic components, steel, wires, and other elements, all of which are involved in the recycling or repurposing process, according to Marcio Oliveira, vice president for global quality and sustainability at battery and energy systems makerEnerSys, based in Reading, Pennsylvania.
“The recycling process will require deconstructing the batteries,” he explains. “The real point, though, when it comes to [sustainability], is that the opportunity is much bigger than just the li-ion battery portion and [actually extends to] the recycling of all the other materials that are part of the whole system.”
Like other battery makers, EnerSys is working with recyclers to handle the various aspects of the process and looking to develop partnerships down the road. Oliveira says the company has not yet had to take back any of its li-ion forklift batteries—they were recently launched and are all still in service—but is working with local recyclers to handle the scrap generated from the production process, another aspect of the growing li-ion recycling market.
And like Geantil and Caron, he agrees that the growing volume of li-ion batteries in automotive and industrial applications is helping to drive the business case for change.
“The cost of recyclability is dependent both on the volume to be recycled and also the chemistry used in the batteries,” Oliveira says. “The more those business segments increase [their use of li-ion technology], the easier it will be for the recyclability to become a net positive.”
2. INFRASTRUCTURE DEVELOPMENT IS UNDERWAY
The global lithium-ion battery market was valued at $32.9 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 13% from 2020 to 2027, according toa 2020 market report from research firm Grand View Research. Investors are digging in to capture a piece of that pie, and many are helping to lay the groundwork for a lithium-ion recycling infrastructure.
Canadian firmLi-Cycle is a key part of that growing infrastructure. Launched in 2016, the company aims to make li-ion batteries a circular and sustainable product; the firm has developed technology that can recover the resources in any type of li-ion battery chemistry and produce battery-grade li-ion chemicals for use in new products. Li-Cycle recycles thousands of tons of li-ion batteries every year and claims it can recover 95% of all critical materials inside them. The company announced plans to go public earlier this year through a merger with Peridot Acquisition Corp., a publicly traded special purpose acquisition company (SPAC). The deal was expected to close in the second quarter.
Li-Cycle operates two facilities in North America, with a third planned to open early next year. The firm’s expansion illustrates the growing market for li-ion recycling as well as larger goals for creating that circular economy, according to Geantil.
“We should have a closed ecosystem,” Geantil says, pointing to the growing number of li-ion batteries in the market. “Everyone knows there are valuable materials in them. The economics are there, the desire is there. We’re already doing it; it’s just that we’re getting better and better. People are focusing on it now.”
A host of other projects underscore the growing infrastructure. Earlier this year,Ultium Cells LLC, a joint venture between General Motors andLG Energy Solution, formed apartnership with Li-Cycleto recycle up to 100% of the material scrap from battery cell manufacturing.Redwood Materials, a recycling startup led by former Tesla executive J.B. Straubel, is also making headlines,recently announcing the triplingof its operations in Nevada to scale up recovery of lithium, cobalt, nickel, and other metals it then sells to makers of lithium-ion batteries for electric vehicles. And earlier this year, Canada-basedLithion Recyclingannounced a partnership with Hyundai Canadato recover and recycle high-voltage batteries from its hybrid, plug-in hybrid, and electric vehicles. Lithion Recycling is one of UgoWork’s recycling partners, according to Caron.
[subhead] 3. A HOLISTIC APPROACH RULES THE DAY
Battery makers are quick to point out that recycling is just one part of the larger drive toward decarbonization, and that li-ion battery technology plays a big role in that process.
“We really believe that the main challenge in lithium-ion is how to get the industry to the broader transition to lower carbon [emissions],” EnerSys’s Oliveira explains. “Lithium technology will be part of this decarbonization process.”
Caron and his colleague, Director of Marketing Jean-Francois Marchand, agree and point to other considerations when developing a green energy strategy, such as the logistics and transportation issues around both sourcing and end-of-life processes.
“If we want to limit the carbon footprint, does it make sense to send huge battery packs [for recycling] all over the continent and [create] a lot of transportation and carbon-dioxide emissions? We need to optimize the supply chain logistics,” Caron says, adding that some recyclers are tackling this issue by creating local collection options where they crush the lithium into “black mass,”a mixture that contains a blend of all the battery materials from which recyclable metals can be extracted and then sold back to the battery makers for use in new products. This is what Li-Cycle and others do. “If we have clients in Texas, Washington, and all over Canada, we’re looking for someone able to support our various locations in a way that’s environmentally friendly.”
And, increasingly, that’s what end-users tell battery makers they want as well.
“More and more, [sustainability] is one of the top priorities of our customers,” says Marchand, adding that how UgoWork handles end-of-life for its products is “definitely one of [customers’] decision criteria. One thing, though, is they don’t know how to handle this. They don’t want to take care of it themselves. We anticipate that this [will become] a trend, and that more customers will be concerned about this issue and will ask about it.”
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.