Under the vision for achieving ‘Atmanirbhar Bharat’, the Centre recently approved the Production Linked Incentive (PLI) Scheme ‘National Programme on Advanced Chemistry Cell Battery Storage’. The scheme outlay of Rs 18,100 crore is intended to establish 50 Giga Watt Hour (GWh) of advanced cell chemistry and 5 GWh of niche advanced cell chemistry capacity. While the scheme outlines an ambitious plan to increase the production of advanced chemistry cells, there could, however, be a few roadblocks in achieving the same.

For example, advanced chemistry cells heavily depend on metals like Lithium (Li) and Cobalt (Co). Since we are pushing towards an electric vehicle ecosystem, it is anticipated that there will be a steep rise in the demand for such metals. According to a Benchmark report, between 2016 and 2018, the cost of Li has increased three-fold, and the cost of Co has increased four-fold. Further, a study by researchers at the University of Freiberg, Germany, highlighted that even the most optimistic scenario projects a shortage of these metals by 2023. In such a scenario, the production cost of the advanced chemistry cell will automatically shoot up.

Another roadblock is the management of waste produced when these batteries inevitably reach their end-of-lives. With the recent policy push towards electric vehicles and now the PLI scheme, the production of advanced cell batteries is expected to grow multifold in the coming few years. A research report by JMK Research estimated that India’s annual lithium-ion battery market is expected to grow at a CAGR of 37.5 per cent to reach 132 GWh in 2030.

At this pace, a large number of advanced cell batteries will reach the end of life stage in the coming 20-25 years. Thus, it is high time we start preparing for the upcoming picture when advanced chemical cells are expected to increase in the waste streams.

Urban mining of waste

For both scenarios, an effective strategy would be to rely on the urban mining of waste. Urban mining is the process that converts waste into potential secondary materials. The concept of urban mining can help us effectively tackle the roadblocks mentioned above. At the same time, it can be an effective way to extract precious metals from batteries and can help in avoiding battery waste going into landfills. Thus, the strategy of urban mining could be a win-win situation as it can provide both economic and environmental benefits.

According to a study carried out by researchers at Worcester Polytechnic Institute, the closed-loop recycling of lithium-ion batteries could save up to 50 per cent of the natural resources required to produce virgin materials. Additionally, it can also avoid the vast environmental impact involved in the mining process of these precious metals. While the process of urban mining seems lucrative, there certainly are challenges to it. The primary challenges for recycling advanced cell chemistry include collecting and sorting Lithium-ion batteries, differing battery chemistries, and the economic viability of the recycling process.

Extended Producers Responsibility

A practical solution to collecting and sorting battery waste could be implementing Extended Producers Responsibility under the battery waste management (2020) rules. Implementing (EPR) could potentially overcome several barriers to collection, transportation, addressing numerous battery chemistries and others. Besides collection, to overcome the barrier of cost dynamics, a policy fund strategy focusing on subsidising the initial recycling costs can help scale up the recycling process. According to a study by researchers at Huazhong University of Science and Technology in a closed-loop supply chain with battery recycling, government subsidy has been found to have a positive impact on the electric vehicle manufacturer’s production

Moreover, when we talk about recycling advanced battery cell chemistries, we need not start from scratch. The history of lead-acid battery recycling provides us valuable insights into the opportunities and challenges involved in the process. We must leverage this experience and develop our advanced battery chemistry recycling strategies. Another critical point is that we cannot work in silos anymore; we must consider working in a closed-loop. For example, suppose we are planning to increase the production of advanced cells. In that case, we must also plan to increase the recycling of the produced advanced cells because the resources available are finite, and need to be used pragmatically.

Finally, to develop the electric vehicle ecosystem in India, schemes like PLI should work in tandem with other policies like battery waste management and FAME II. This would essentially lay a firm foundation for ‘Amtanirbhar Bharat’ and adhere to the long-term goals of sustainability and environmental protection.

( Tarun is a research assistant with the climate change and sustainable development team at ICRIER, New Delhi.)

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