Proposed Recycling Rates Too High
The three major Korean battery cell companies have formed a common front to respond to the EU’s recycling regulations.
Representatives of the three companies -- LG Energy Solution, SK On, and Samsung SDI -- and the Korea Battery Industry Association visited the EU Joint Research Center (JRC) in Brussels, Belgium last month to deliver their opinions about a bill obliging battery makers to recycle raw materials. The JRC is a science and technology policy advisory body under the European Commission.
This marked the first time that the three Korean battery makers jointly delivered their official position on the battery bill to the EU. The European Commission plans to enact the law as early as next year after collecting opinions from the battery industry.
The three Korean battery trio pointed out that the bill sets the recycling rates of battery raw materials too highly. According to the draft, companies producing batteries in the EU must comply with the mandatory recycling of raw materials from 2030. The proposed recycling rates for 2030 are 12 percent for cobalt, 4 percent for lithium, and 4 percent for nickel. From 2035, the required rates will be further raised to 20 percent for cobalt, 10 percent for lithium, and 12 percent for nickel.
LG Energy Solution is operating the world’s largest battery plant in Poland with an annual production capacity of 70GWh, while SK On and Samsung SDI have production bases in Hungary. “Considering the current rate of electric vehicle penetration, the EU regulations are far from realistic,” said an industry insider. “You may be pushed into a situation where you have to recycle both collected waste batteries and newly produced ones within a few years.” The bill, if enacted as it is, will not only increase Korean battery makers’ cost burden but could make it impossible to operate their European battery factories normally within a few years.”
After hearing such concerns, the JRC decided to collect opinions from the three Korean battery companies every month. But the EU may stick to the bill to support Northvolt, which is far behind the Korean battery makers in volume production, but is evaluated to be ahead of them in the recycling process.
Moreover, European countries are calling for building a battery supply chain based on European companies. German Chancellor Olaf Scholz stressed earlier this month that the COVID-19 pandemic and Russia’s invasion of Ukraine have reminded the EU that reliance on Asian companies in the battery supply chain can pose a great risk to it.