How the Circular Economy Supports Sustainability

January 21, 2025
Circular Economy: Key to a Sustainable Energy Future infographic; lithium circularity

The Importance of Circularity in Critical Metal Recycling

To meet the exponential growth in demand for critical metals, recycling metals at their End-of-Life (EoL) has become a crucial strategy for many countries. The circular economy refers to the “sharing, leasing, reusing, repairing, refurbishing, and recycling of existing materials and products” to extend their lifecycle (European Parliament, 20231). This approach reduces dependency on primary sources and mitigates environmental and geopolitical challenges.

The Lifecycle of a Lithium Iron Phosphate (LFP) Battery

When an LFP battery is no longer viable for use in electric vehicles, these batteries can be repurposed in second-life applications, such as stationary energy storage. Once the battery is no longer useful for commercial applications, each cell is discharged, dismantled, and shredded.

The result is a fine powder known as black mass, which contains materials such as lithium and iron phosphate. Using advanced extraction technologies, critical lithium is recovered from the black mass. These materials are then reintroduced into the supply chain for the manufacturing of new batteries. This process forms the backbone of the circular battery economy.

The Growing Demand for Lithium and Recycling

The International Energy Agency (IEA) estimates that by 2040, recycling and reuse of EV and storage batteries could reduce the primary supply requirement for lithium by ~7% (IEA, 20212). This is significant given that lithium demand is projected to exceed total supply in 2027 (Fastmarkets, 20243) and lithium recycling is often faced with economic and technical challenges.  

Overcoming Challenges in Lithium Recycling

LFP batteries may not be prioritized during recycling due to the complexity and cost of extracting lithium through traditional methods of pyrometallurgy and hydrometallurgy. Recyclers would rather focus on the nickel and cobalt from nickel manganese cobalt (NMC) lithium batteries as they carry a higher value.

However, lithium is also a very valuable and precious material. Today, there are new pathways to lithium circularity, through innovations in recycling technologies that unlock cheaper, cleaner, more efficient extraction of lithium, even from LFP. 

NEU Battery Materials’ patented electrochemical redox recycling process is revolutionizing LFP battery recycling using only electricity and water – a world first. With 5x lower CO₂ emissions and lesser energy and water consumption compared to traditional recycling methods, we are driving a sustainable circular battery economy by producing battery-grade recycled lithium through innovative end-of-life solutions for LFP batteries. 

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Sources:

European Parliament. (2023, May 24). Circular economy: Definition, importance and benefits: Topics: European parliament. Topics | European Parliament. 

2 Page 187, IEA (2021), The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris 

3 Page 18, Fastmarkets. (2024, September). Battery recycling | 10-year forecast | Q3 2024. Retrieved January 2025.