Battery Waste Management Rules, 2022 : A Much-Awaited Change for the EV Sector

Lithium, a popular metal in today’s times is also known as “white gold”. Lithium-Ion Batteries (LIBs) are the most popular battery technologies existing in the clean energy space. With the energy demand in India increasing coupled with the country’s high import dependence, there is a need to focus on the recycling aspect of lithium-ion batteries. The rapid technology evolution also provides a boost to support the growth of the lithium battery and the EV sector.

Globally, the battery market demand is likely to grow four fold from 2020 to 2030 to reach 3100 GWh. Meanwhile for India, the battery market has a potential to reach 600GWh by 2030. EVs, stationary storage, and consumer electronics are major markets of lithium-ion batteries in India. Reports suggest there will be 80 million EVs on the Indian roads by 2030, which translates to 46 per cent (125GWh) of battery recycling volume from EVs alone.

Availability of Raw Materials for Lithium-Ion Batteries

Lithium-ion battery packs are typically either imported entirety, or the cells are imported and assembled into battery packs in India. In 2020-21, the overall India LIB import bill was at $1,193 million, with China and Hong Kong together accounting for 87 per cent of this. In addition to lithium, India is also dependent on imports for other key elements like cobalt, graphite and nickel. More than 70 per cent of the world’s cobalt comes from Congo, whereas China and Mozambique together produce 70 per cent of the world’s natural graphite.

Concerns

High battery price is an issue that could result from low availability and high demand of battery raw materials. Estimates suggest that the battery cell prices could surge by 22 per cent from 2023 to 2026 due to supply constraints, as opposed to popular projections stating that battery prices will substantially decrease by the end of the decade to about $65/unit.

The Need for Recycling

To assuage concerns of rising battery demand, limited raw material availability in the country, projected rising battery prices, and aid India’s journey to self-reliance, recycling is the need of the hour. Recycling can feed raw materials back into the battery manufacturing process, thus contributing to a circular economy of batteries.

Honourable Prime Minister Shri Narendra Modi has highlighted the nation’s focus on circular economy in his address at a post-budget webinar on March 4, 2022. On these lines, the Ministry of Environment, Forest and Climate Change (MOEFCC) launched the Battery Waste Management Rules, 2022 (BWMR, or ‘Rules’) on August 24, 2022. The rules focus on encouraging recycling of spent batteries by mandating Extended Producer Responsibility (EPR) and are applicable to multiple battery technologies.

The History of Battery Waste Management Rules

Batteries (Management and Handling) 2001 was notified by the Central Pollution Control Board (CPCB) to deal with collection and recycling of used lead acid batteries, amended to Battery (Management and Handling) Rules in 2010.

On August 24, 2022, the MOEFCC notified the Battery Waste Management Rules, 2022, which consist of the following prominent additions over its predecessors :

• The Rules expands to all other battery technologies like lithium-ion batteries, Redox Flow batteries, etc.
• Extended Producer Responsibility (EPR) was added to the draft rules to address the need for recycling of batteries across portable, automotive, industrial, and electric vehicle battery industries.
• EPR mandates manufacturers and producers to be accountable for the collection, storage, transportation, recycling, and disposal of spent batteries.

Impact of BWMR on Recycling

• Sets minimum yearly recovery targets for EPR – 70 per cent in 2024-25; 80 per cent in 2025-26 and 90 per cent from 2026-2027 and onwards.
• Prohibits the producer from sending batteries to landfilling or incineration, but for recycling and refurbishment.
• Works as a potential stick approach to ensure recycling by all the target stakeholders—manufacturers, producers, collection centres, importers, re-conditioners, re-furbishers, dismantlers, assemblers, dealers, recyclers, auctioneers, vehicle service centres, consumer and bulk consumers.
• Reinforces the stand of several state EV policies which lay emphasis on battery recycling and ‘urban mining’ through establishment of working groups, incentives, or subsidies. Few of these states include Tamil Nadu, Madhya Pradesh, Uttar Pradesh, Delhi, Punjab, Maharashtra and Telangana.

Global Mandates for Recycling of Batteries

• The EU currently mandates 50 per cent of a battery’s weight to be recycled, increasing to 70 per cent 2030 onwards.
• Specific recycling requirements implemented for batteries containing lithium, cobalt, copper, nickel, or lead. For instance, the required recycling rate for lithium will rise from 35 per cent to 70 per cent between 2026 and 2030. A 90 per cent recycling rate will be achieved for cobalt, copper, nickel, and lead from 2026.
• By 2027, the proposed EU legislation will require manufacturers to provide transparent information on the amount of recycled cobalt, lithium, nickel, and lead in new car batteries.
• Several countries like USA, Canada, Chile, Colombia, Japan, south Korea, Singapore, etc. have implemented EPR legislation

Gaps and Recommendations for Implementation of Battery Recycling

• With the lack of government backed guidelines on the extent of recycling for all battery technologies, measures should be taken by policy makers to bring the recycling industry under an organised market. This will contribute towards obtaining an understanding of existing scenario of battery recycling.
• Cobalt and lithium have recovery rates greater than 95 per cent (99 per cent in some cases) under the hydrometallurgical recycling process. However, the cost of installing hydrometallurgical technology equipment for a recycling plant with 1 GWh annual capacity is around USD 5 million.
  Further Research and Development is required on sustainable technologies for reducing recycling costs.
• A spent battery travels 800km to reach the recycling plant, leading to heavy cost of transportation. Strategically planned recycling plant locations can significantly reduce such travel costs.
• There is a critical shortage of skilled workforce in recycling industry. As a result, skilling initiatives must be prioritised. Recyclers, manufacturers and academic institutions can collaborate to conduct skill development programmes for the semi-skilled and unskilled workforce in the EV supply chain.

With the effective implementation of the BWMR, 2022, India will be on its way to achieve a self-reliant India, providing support to indigenous manufacturing, by giving rise to a circular economy for the battery ecosystem.