With high thermal stability, long cycle life, and effective cost-performance, Lithium Iron Phosphate (LFP) batteries are ideal for applications such as low to mid-range EVs and energy storage systems. As demand for LFP batteries soars, recovering lithium from end-of-life LFP batteries presents both a sustainability imperative and a significant economic opportunity.
However, LFP recycling rates are low due to poor unit economics. Recyclers currently favor Nickel Manganese Cobalt (NMC) batteries for its higher inherent value. Consequently, this means that end-of-life LFP are sold at negligible value or disposed of as hazardous waste.
Addressing this growing waste stream will require expanding recycling infrastructure and innovating on existing technologies for the advancement of a circular economy.
The economics of battery recycling is heavily influenced by market dynamics and the technologies employed in the recycling process. The market price of the extracted metals must at least offset recycling costs to ensure the financial viability of recycling. Without this incentive, scaling recycling processes will remain a challenge.
Nickel and cobalt are two of the main critical materials used in NMC batteries, and their market prices are significantly higher than those of lithium. Whereas in LFP batteries, the only main material is lithium. As a result, battery manufacturers and recyclers often prioritize NMC batteries, which offers a much higher return on investment.
Due to its finite supply and growing demand from various industries, the price of cobalt and nickel has trended upward over time. With the Democratic Republic of Congo producing >70% of the world’s cobalt, battery manufacturers relying on imported cobalt are more susceptible to disruptions in the supply chain due to regulatory changes, trade restrictions, and political instability.
Hydrometallurgical methods are often considered an effective way to reclaim valuable metals from spent batteries. However, the extraction of lithium can increase costs and add complexity to the process. Producing battery-grade lithium is highly demanding, as stringent purity standards are essential for optimal battery performance and longevity. Further refining can therefore lead to reduced profits.
Adding to that, hydrometallurgy often uses excess chemicals that generate significant wastewater and toxic gases. These by-products require additional treatments, including filtration and neutralization with chemicals, to ensure safe discharge.
Pyrometallurgical, another traditional recycling method, involves high-temperature smelting, producing an alloy as the primary output. Lithium’s high reactivity and oxygen affinity forms an oxide in the slag, preventing its recovery as part of the metal alloy.
Critical advancements are needed to overcome recycling LFP batteries at a commercial scale and unlock the full potential of LFP recycling. Making LFP recycling viable—ensuring profitability, scalability, and adherence to strict standards—is crucial. Innovation in this space will be the cornerstone of a circular battery economy.
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NEU Battery Materials closely collaborates with manufacturers, gigafactories, asset owners, and recycling companies to pave the way for lithium circularity through sustainable, clean, and efficient recycling of LFP batteries. By supplying battery-grade recycled lithium, we also help companies meet regulatory requirements and embrace sustainable practices.
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