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Automakers Charge Headlong Into EV Battery Recovery

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Written by Jonathan D. Cocker, Baker McKenzie

There has certainly been rapid growth in the market for electric vehicles (EV), in part due to their associated (and celebrated) environmental attributes.  What receives much less attention, however, is the looming waste-management challenge, particularly for EV lithium-ion batteries (LIBs).  The proliferation of post-consumer LIBs has yet to fully materialize given the recent installation of long-life LIBs across multiple vehicle industries, but the environmental price for the switch to EV will soon be paid by EV makers.

Currently, brands are scrambling to both develop their EV offerings and determine their resource recovery strategies around LIBs, which will be a source of strategic elements and critical materials for key components in new EVs, as well as a coming materials efficiency compliance obligations internationally.  So just where does LIB recycling stand today?

Re-Use as Energy Storage or Charging Stations

Recently, there has been some positive attention paid to the re-use opportunities for end-of-life LIBS – either as energy storage units or as part of EV charging stations- which Re-use is an accepted method of resource recovery, including under regulated LIB circular economy laws so there may well be a portion (however small) of post-consumer LIBs which are deployed for these projects.

The metals content of LIBs, however, is sufficiently valuable and the coming demand for LIBs is so great that the lithium-ion battery recycling industry will necessarily take the lion’s share of available batteries, even though the content of the LIBs continues to rapidly evolve as the technology develops.  Specific recovery goals applied to LIBs is a moving target right now.

LIBs and Eco-Design

Remanufacturing is permissible, if not encouraged, as a resource recovery activity under most legal regimes. For LIBs, this usually requires the disassembly of the LIB to at least the module level.  This will require high-voltage training and specialized tools to protect the operators and the battery from electrocution and short-circuiting risks, respectively.  There are also potentially toxic gases released in the process.

All of which highlights a key industry question- will there be eco-design rules such as right-to-repair disclosure and accessibility obligations upon the brands and their LIB providers, particularly given the variance in LIBS emerging across the vehicle spectrum.  The EU Right-to-Repair obligations for other e-waste, such as lighting, televisions and large appliances are set to apply within Europe as of April 1st, 2020 under the EU Eco-Design Resource Efficiency Standards.  It can be anticipated that similar accessibility obligations, including perhaps labelling and design data disclosures, could apply to LIBs in spite of the acute safety concerns.

Recycling, But Without Common Standards

The recycling of LIBs is certainly complicated by the myriad of physical configurations, cell types and chemistries, however leading companies are beginning this challenge through innovative process technologies capable of recycling a diverse feed of lithium-ion batteries.  Still, design-for-recycling of LIBs is not likely too far away and there are already state-of-the-art processing facilities in Europe and North America that engage in some recycling combination of stabilization, opening and separation of the LIB.

Proprietary LIB Recycling v. Industry Solution

Like every resource recovery market, there are EV brands which are seeking to develop market leading “closed loop” processes for their materials, through significant direct capital investment and / or strategic partnerships with the LIB maker and the specialized recycler.  These processes involve centralization of receiving and processing, with a heavy reliance on custom automated processing which may permit sorting for some combination of remanufacturing, re-use and recycling.  In the near term, these investments are likely to remain proprietary to the individual brands with limited accessibility to the rest of the industry.

For the remainder of the brands, the resource recovery pull will come either from the LIB maker servicing multiple brands or the local LIB recycling industries quickly growing around the pending demand, whether driven by waste diversion or circular economy requirements.  For now, there is likely more splintering and less convergence in the near term as brands come to fully develop their EV offerings, leaving legacy challenges for LIB recyclers in the years to come.

Two regulatory pushes will eventually bring needed standardization to LIBs: consistency of EV charging as an accessibility right; and circular economy / materials efficiency obligations for end-of-life LIBs as environmental compliance for EV industries.  However, as to when common standards (and common chemistries) are adopted is anyone’s guess.

This article has been republished with the permission of the author. It was first published on the Baker McKenzie website.


About the Author

Jonathan D. Cocker heads Baker McKenzie’s Environmental Practice Group in Canada and is an active member of the firm’s Global Consumer Goods & Retail and Energy, Mining and Infrastructure groups. Mr. Cocker provides advice and representation to multinational companies on a variety of environmental and product compliance matters, including extended producer responsibilities, dangerous goods transportation, GHS, regulated wastes, consumer product and food safety, and contaminated lands matters. He assisted in the founding of one of North America’s first Circular Economy Producer Responsibility Organizations and provides advice and representation to a number of domestic and international industry groups in respect of resource recovery obligations.

Ontario Government’s Proposed E-Waste & Battery Regulations

The Government of Ontario is consulting on proposed regulations for specified waste electrical and electronic equipment (WEEE) and used batteries under the Resource Recovery and Circular Economy Act, 2016.
 
The new regulations will affect participants of the current Waste Electrical and Electronic Equipment Program operated by Ontario Electronic Stewardship (OES).
 
The Ontario government has directed OES to wind up its operations to support the transition of the current waste diversion program for electronics to a new system that makes producers environmentally accountable and financially responsible for their products at end-of-life.

The proposed regulations would require:

  • producers to establish free collection networks for consumers
  • producers to achieve resource recovery (i.e. reduction, reuse and recycling) targets
  • producers to provide promotion and education materials to increase consumer awareness
  • producers and service providers to register, report and keep records and meet other requirements

The regulations would also encourage producers to reduce waste associated with the regulated products they supply into the Ontario market.

Review the draft regulations and register for a consultation webinar.

The Resource Productivity and Recovery Authority will be the regulator mandated by the Government of Ontario to enforce the requirements of the new WEEE and used batteries regulations once they take effect.

Ontario Electronic Stewardship will continue to operate the current program without disruption until the proposed regulations take effect.

Ontario: Electronics & Batteries Producer Responsibility Consultation Ends February 6th, 2019

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As part of the legal directive to transfer current government-overseen waste diversion obligations to a privately-run Individual Producer Responsibility regime (IPR), the Ontario Ministry of the Environment is currently holding consultations with stakeholders in the electronics/electrical equipment (EEE) and batteries industries regarding the coming circular economy regulation for EEE and batteries (and their packaging) and key decisions affecting industry are in the process of being made.

What’s the Mandate?

In understanding the anticipated reach of the EEE/Batteries Regulation, the Ministry is overtly promoting three goals:

  • Improved Environmental Outcomes, including reduction of toxics in landfill and related greenhouse gases;
  • Economic Growth, such as building more “infrastructure for reuse, refurbishment and recycling industries”; and
  • Consistency, Ease, Cost Efficiency and Reduced Burden, with an emphasis on shifting the costs of waste management to individual producers and consumers with the hope that more “competition, innovation and better product design” will result.

To help relieve municipalities of waste handling obligations, and to get itself out of the business of end-of-life product diversion (which it seems intent on doing), the Ministry is giving the EEE/Batteries Regulations a potentially broad and expansionist scope. As of July 1st, 2020, EEE and batteries “producers” will be compelled to resource recover the products (or equivalencies) they put into the Ontario market.

What Could Be Caught under the EEE/Batteries Regulation?

It seems likely that the product categories of one or both of these current diversion programs will be broaden under IPR to include the:

  • likely expansion from the existing 44 types of EEE to capture some or all of:
    • headphones;
    • routers;
    • large and small appliances; and
    • power tools and some categories of lighting.
  • near certain addition of rechargeable batteries;
  • maybe very limited types of EEE and/or batteries embedded in other products; and
  • remote prospect of obligating primary, convenience and/or transportation package used with EEE and/or batteries – given paper/packaging IPR has not yet been implemented in the province.

The addition of products not currently obligated under waste diversion will create immediate needs and opportunities for industries to find new resource recovery solutions to meet these needs.

Who’s Obligated under IPR?

Along with the group of currently obligated producers – namely resident brand owners and resident importers (and, for EEE, assemblers), the Ministry is considering adding one or more other parties which have a “commercial connection” to the products, such as non-resident:

  • importers;
  • wholesalers;
  • licencees;
  • retailers (including on-line out-of-province); and
  • distributors

Many of these companies would not necessarily replace any existing resident parties, but would, instead, be default-obligated for products with no resident “producers”.  The sanctions contemplated for non-compliance under the EEE/Batteries Regulation may well include a prohibition against the sale of products failing to meet their resource recovery targets.

Will it be Like the Tire Regulation?

More than a year ago, stakeholders in the EEE and batteries space were already paying close attention to the Ministry’s implementation of the Tire Regulation, North America’s first comprehensive circular economy law.  Given the breadth of obligations, including the producer’s private obligation to run a reverse supply chain, it’s anticipated that affected companies may respond similarly – coalescing around a limited number of producer responsibility organizations based upon commercial, industry, and market commonalities, to run end-of-life product networks that meet the unique needs of the separate producer groups.

Industry also learned through the Tire Regulation process that critical commercial outcomes can be based upon the content of the regulatory requirements and that full advantage should be taken of the windows of opportunity offered to engage the Ministry on key facets of the coming law.  One such window for EEE and batteries stakeholders is closing on February 6th, 2019.


This has been republished with the permission of Baker MacKenzie. It was first published on the Baker Mackenzie website.

About the Author

Jonathan D. Cocker heads the Baker McKenzie’s Environmental Practice Group in Canada and is an active member of its Global Consumer Goods & Retail and Energy, Mining & Infrastructure groups. He participated in founding one of North America’s first circular economy producer responsibility organizations. Jonathan is a frequent speaker and writer on EHS matters, an active participant on EHS issues in a number of national and international industry associations, and most recently the author of the first edition of The Environment and Climate Change Law Review (Canada chapter) and the upcoming Encyclopedia of Environmental Law (Chemicals chapter).