‘European cobalt supply hinges on circular economy’

With lithium supply chain risks having been identified in a recent report, a new study has highlighted similar concerns related to the supply of cobalt, another staple ingredient in the batteries currently used to power electric vehicles (EVs).

The authors of the cobalt report advise circular economy strategies must be incentivized by policy makers and adopted by businesses to avoid supply of the commodity running dry as EV demand explodes.

Nature Sustainability has published the Circular economy strategies for electric vehicle batteries reduce reliance on raw materials report, written by Joris Baars, and Oliver Heidrich of Newcastle University in the English North East; Teresa Domenech, and Raimund Bleischwitz, from University College London, and Hans Eric Melin, from London-based lithium-ion life cycle consultancy Circular Energy Storage Research.

European cobalt demand currently sites at two kilotons (kt) per year and is expected to rise to 15kt by 2030 and 31kt by mid century. In 2017, almost 219,000 EVs were registered in the European Union – 1.4% of total vehicle sales. That fleet required 1.2kt of cobalt, accounting for 1% of global production. Four years ago, the EU used 34.6kt, with 14.8kt consumed by portable electronics, almost 8kt used for hard metal production and 7.1kt used to make superalloys. However, rapidly rising demand for EVs and stationary energy storage is shifting cobalt demand toward battery production.

The global supply and demand of nickel could face similar pressures, with today's 11kt nickel demand in the EU expected to rise to 172kt by 2030 and 540kt in 20 years' time, thanks to the introduction of high-nickel cathodes to abate cobalt use.

As a result, the England-based researchers modeled five scenarios, including a reference model, to study how the adoption of circular economy principles might ease the looming commodities crunch. A ‘technology-driven substitution' (TDS) scenario considers the replacement of cobalt with a more abundant alternative, such as sodium. The ‘technology-driven reduction' (TDR) model envisages new nickel battery chemistries reducing cobalt content. A ‘business-driven reduction' outlook examines the figures in the event of companies adopting more efficient reuse and recycling of end-of-life batteries and a ‘policy-driven reduction' forecast crunches the numbers from a future where lawmakers drive more effective recycling programs.

“We conclude that more ambitious circular economy strategies, at both government and business levels, are urgently needed to address current and future resource challenges across the supply chain successfully,” the report reads. According to the data presented, all circular economy strategies would significantly reduce demand for the primary raw materials used in European battery production.

In the business-led model, 35kt of cobalt could be recouped by recycling by 2050, compared to 18kt under the reference scenario. That commercially-driven approach would also offer up the direct reuse of 3kt of batteries by mid century, unlike any of the other models. Depending on policy makers instead, would enable the recycling of 32kt of cobalt and the technology-led approach would return just 10kt, according to the study.

Even if Brussels legislators introduce more stringent recycling regimes, however, no significant quantities of cobalt would come back onto the market until 2032 and the supply would only become a dependable resource by 2040, according to the report. That is because of the time required for batteries to cycle through their first and second life usage. Quite how much time would be required for each stage would depend on the business models available to offer manufacturers product value, for instance, it is anticipated batteries could move from a commodity ownership model to batteries-as-a-service usage.

‘Missing vehicles'

The situation is compounded by a relatively low collection rate of EV batteries for reuse and recycling in the EU. The authors of the report state 39% of all vehicles sold in the bloc do not re-enter the European market after their end of life, as they go ‘go missing' with the figure exacerbated by around 10% of vehicles that spent their time on EU roads being exported outside the bloc and its recycling regime. It is unclear what exactly happens to these vehicles, though recycling elsewhere is not per se unlikely. Also, these figures do not relate to EVs only which prompt a different end-of-life value resulting from the value stored in its battery pack.

The study's authors point out volatility in the commodity markets will also have to be straightened out to ensure reuse and recycling is possible – if it is cheaper to mine raw nickel and cobalt than to recycle, the consumption path will continue.

The fact only four nations consume 94% of the world's cobalt – China, with 57kt per year; Japan (10kt); South Korea (8kt) and the U.S. (6kt) – further complicates the picture and ensures that waiting for a technology-driven solution to the cobalt problem, as in the TDS or TDR models above, is likely to prove inadequate for Europe.

Policy

“In unfavorable market conditions, policy action might be required to incentivize recycling and ensure minimization of negative environmental impacts or critical material depletion associated with inadequate end-of-life treatment of EV batteries,” stated the report. “Similar proposals have been made to enhance a circular flow of yttrium recovered from electronic waste and could be expanded to EV batteries.”

With China boasting most of the world's 300kt of annual lithium-ion battery recycling facilities, and Europe just 30kt, it has been estimated Europe would have to increase its capacity by a factor of five by 2035 to ease its cobalt supply exposure. To recycle all the lithium-ion batteries expected to be awaiting recycling in Europe by 2050, that capacity would have to be expanded by a factor of 45.

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