The collective capacity of lithium-ion batteries in India across various sectors is projected to reach approximately 600 GWh by 2030, according to a report by NITI Aayog and the Green Growth Equity Fund Technical Cooperation Facility.

By 2030, it is anticipated that around 128 GWh of these batteries will be recycled, with nearly 59 GWh originating specifically from the electric vehicle (EV) sector.

Furthermore, the batteries extracted from EVs can find secondary usage towards the end of their lifecycle. This approach could potentially lead to a cumulative reuse capacity of about 49 GWh by 2030 in the nation.

Given the increasing worries about supply chain stability and raw material needs, the report emphasizes the establishment of a robust recycling framework.

The report also points out that achieving sustainability within the lithium-ion battery value chain presents several hurdles. These include resource constraints, potential environmental risks, and geopolitical uncertainties.

The report lists the following key drivers for battery recycling and reuse in India:

Raw Material Availability

As the need for batteries continues to rise, there is an accompanying surge in the requirement for raw materials. According to BNEF, the worldwide utilization of key lithium-ion battery components like cobalt, lithium, and copper is projected to escalate by a factor of 20 by 2030.

Challenges for Recyclers

Lithium-ion batteries are deemed perilous due to their corrosive, inflammable, toxic, and potentially explosive attributes. The majority of battery collection occurs via informal channels, resulting in a deficiency of established protocols for their gathering and transportation. As a result, the recycling and repurposing of lithium-ion batteries present a complex undertaking for recycling entities.

Manufacturers do not typically furnish detailed diagrams of battery systems, step-by-step disassembly procedures, recommended tools, cell quantities, and essential cautionary notices. The provision of such information could contribute to safeguarding the efficient retrieval of materials and the well-being of those involved in the handling of end-of-life and discarded batteries.

While India’s waste management policy draft emphasizes battery recycling, it overlooks the significant facet of battery reuse, which holds paramount importance in realizing a circular economy, especially concerning batteries originating from the EV domain.

The economic viability of battery recycling hinges primarily on the specific battery chemistry in use. Despite the widespread use of lithium iron phosphate as battery chemistry, the returns associated with recycling it is not particularly attractive to recyclers due to its comparatively lower economic value and the elevated costs associated with its recycling.

Establishing a resilient ecosystem for battery recycling and disposal within the nation is imperative to enhancing the battery recycling infrastructure. India has the potential to attract global investments in the field of battery recycling and reuse to strengthen this network further.

Key Recommendations

Extended Producer Responsibility

The report points out that it is essential to guarantee the successful enactment of the Extended Producer Responsibility (EPR) framework outlined in the Battery Waste Management Rules 2022. This measure is crucial for managing the escalating pollution resulting from battery waste. This involves the mandatory adherence of all EV manufacturers to the prescribed EPR benchmarks specified in the updated regulations. Moreover, it entails facilitating the secondary utilization of these batteries prior to their submission for recycling to mitigate environmental impact further.

Incentives for Recycling

Lithium iron phosphate is one of the most widely adopted battery chemistries, contributing substantially to the recycling sector. Nonetheless, the recycling of lithium iron phosphate faces challenges due to its relatively lower economic value and the associated elevated recycling expenses. Consequently, the recycling of this chemistry doesn’t present recyclers with particularly appealing profit margins. To address this, incentives such as viability gap funding could be introduced to render lithium iron phosphate recycling a financially viable endeavor.

The emphasis of the state government should be on enticing investments by means of efficient policies and procedures that prioritize a streamlined approach. This includes facilitating a single-window clearance system, addressing challenges related to land acquisition, fostering the development of essential infrastructure, establishing manufacturing clusters, and ensuring affordable and uninterrupted power supply.

PLI Program for Recycling

In addition to non-monetary benefits provided by states, the Indian government could introduce a production-linked incentive (PLI) program similar to the Advanced Chemistry Cell (ACC) PLI initiative offered to cell manufacturers. Such a measure would support domestic recyclers and prove beneficial for the cell manufacturers chosen within the ACC PLI program.

Transportation and Handling of Used Batteries

Failure to observe safety precautions during the transportation and disposal of lithium-ion batteries could result in damage during transit or when subjected to processing and sorting machinery. This, in turn, could potentially lead to fire hazards and explosions. Consequently, it is imperative to transport used lithium-ion batteries in accordance with rigorous safety protocols. This underscores the necessity for establishing industry-standard transportation guidelines tailored for those handling the logistics of these batteries.

Reuse Targets

Utilizing batteries sourced from EVs presents opportunities for diverse secondary applications. Consequently, setting specific goals for reuse in passenger and commercial vehicles, as well as electric buses, could contribute to fulfilling the escalating battery requisites within the stationary storage domain. This approach can potentially furnish approximately 37 GWh of storage capacity by 2030.

Secondary Life Applications

Distinctly, the government should establish distinct directives and correlated benchmarks for battery reuse within the nation. Collaborating with industry participants, they should formulate a framework to authenticate refurbishers, formulate gauges to evaluate performance criteria and create incentives that encourage inventive methods for secondary applications.

Projects to Encourage BESS

To stimulate the demand for repurposed batteries and foster the expansion of the reuse sector within the nation, policies should be aimed at promoting the adoption of battery energy storage systems (BESS). This could involve pilot projects demonstrating their technical viability, enticing stakeholders to invest in research and development within this domain.

Earlier this year, NITI Aayog, in collaboration with the Rocky Mountain Institute, published a report which stated that India’s annual battery market could surpass $15 billion (~₹1.12 trillion) by 2030, and the battery demand in India is expected to rise to 260 GWh in the ‘accelerated scenario’ by 2030.

The Ministry of Heavy Industries recently announced that it would re-issue the tender for manufacturing the unallocated 20 GWh ACC for energy storage under the PLI program. The initial bidding for the ACC Energy Storage PLI Program concluded in March 2022.