Source| reprinted from China Economic Weekly
Reporter | Lu Jiangtao and Song Jie | Reported by Beijing and Shanghai
More than 10 years ago, new energy vehicles began to gradually enter the homes of Chinese people. By 2015, driven by the two wheels of policy and market, the production and sales of new energy vehicles in the mainland have increased rapidly, with the output of more than 340,000 units in that year, an increase of 330% year-on-year.
2015 is known as the first year of the outbreak of new energy vehicle production and sales in the mainland, and in the following years, the production and sales level of new energy vehicles in the mainland has continued to rise, ranking first in the world.
As the "heart" of new energy vehicles, the performance of the power battery will decay with the increase of the number of charges, and the service life is generally 5 to 8 years, while the real effective life is often only 4 to 6 years. Therefore, a large number of new energy vehicles produced around 2015 have ushered in the "retirement period" of power batteries.
A large number of power batteries are decommissioned, the first thing to consider is the environmental pressure, because the heavy metals in the battery, electrolyte solutes, organic solvents, etc. are polluting. How to avoid the "explosive growth" of new energy vehicles instead brings "explosive pollution" is worth vigilance.
On the other hand, the price of battery raw materials continues to increase rapidly, and there are still scarce substances such as recyclable precious metals in decommissioned batteries. Where did the decommissioned batteries go? How to properly dispose of these waste batteries? How to turn waste into treasure, continue to tap the value of these decommissioned batteries, and realize resource recycling? These are important problems that car companies, power battery manufacturers, and third-party recycling agencies have to face.
The sales volume of new energy vehicles "blowout", the annual retirement of power batteries exceeded 200,000 tons
"The car that cost more than 130,000 yuan to buy that year can only sell for less than 6,000 yuan now, and pure electric vehicles are too worthless." Mr. Shi of Beijing told the "China Economic Weekly" reporter that his new energy vehicle was purchased in 2016, the nominal mileage of more than 250 kilometers, which was quite good in that year, but now the winter air conditioner can only run to the early 100 kilometers, which can not meet the demand, and the vehicle has driven more than 120,000 kilometers, exceeding the warranty mileage stipulated by the manufacturer, and the cost of replacing the battery at own expense is more than 60,000 yuan.
Mr. Shi said that now the endurance of the new car is generally five or six hundred kilometers, and it is not as cost-effective to replace the battery at your own expense, the old car is really painful, and the fuel cost saved is finally "returned" in the residual value of the old car.
"I went to the 4S shop in the summer of 2021 to ask, selling used cars does not exceed 6,000 yuan, in 2022 many car companies have a replacement subsidy policy, old cars can also be sold to second-hand car dealers, manufacturers and then give an additional replacement subsidy of about 5,000 yuan, but the retention rate of pure electric vehicles is still much lower than that of fuel vehicles." Mr. Shi said.
From the perspective of the whole country, there are many more situations like Mr. Shi, and there will be more and more.
According to the data released by the Association of Passenger Vehicles, the total sales of new energy passenger vehicles in 2016 were about 330,000 units, and the sales volume from 2017 to 2020 was about 560,000 units, 1.01 million units, 1.06 million units and 1.17 million units, respectively. In the first 11 months of 2021, new energy passenger car sales exceeded 2.8 million units, an increase of 190.2% year-on-year, and total sales for the full year of 2021 are expected to exceed 3.3 million units.
Cui Dongshu, secretary general of the Association, said that with the increase in scale and cost reduction capabilities, the increase in new energy vehicles in 2022 will be very large. It was originally expected that the sales of new energy passenger vehicles in 2022 would be 4.8 million units, but now it should be adjusted to more than 5.5 million units, and the penetration rate of new energy passenger cars will reach about 25%.
Under normal circumstances, the capacity of the power battery is lower than the initial 80%, it no longer meets the standards for the use of electric vehicles, and the service life of new energy vehicles is generally 5 to 8 years, while the real effective life is only 4 to 6 years. With the "blowout" of new energy vehicle sales, the number of decommissioned power batteries will also usher in explosive growth.
According to the China Automotive Technology and Research Center, the cumulative decommissioning of continental power batteries in 2020 will be about 200,000 tons, and by 2025, this figure will rise to about 780,000 tons.
"Now it seems that this prediction may still be conservative, because of the advancement of technology, the battery of a new energy vehicle is much larger than in previous years, and the new energy vehicle is more like an electronic consumer goods, the replacement speed is fast, many people may not drive to four or five years to replace the new car, there will be more power batteries retired in advance." Cui Dongshu told the "China Economic Weekly" reporter.
The new energy vehicle market continues to expand, and the pressure on the environment of decommissioned power batteries will gradually expand. A 20-gram mobile phone battery is enough to pollute 1 square kilometer of land for about 50 years, while the battery of each new energy vehicle weighs hundreds of kilograms, which may pose a greater threat to the environment.
Li Zizhuo, an analyst at East Asia Qianhai Securities, said that the main pollutants contained in lithium-ion batteries are its cathode materials and electrolytes, of which in the cathode materials, the cobalt element in the ternary cathode is a toxic substance, while nickel, manganese and other metal elements will also cause pollution to the soil; in the electrolyte, the currently commonly used electrolyte lithium hexafluorophosphate will produce hydrogen chloride substances after encountering water, causing environmental pollution, and dmc in organic solvents is also harmful to the environment. Therefore, if the decommissioned battery is not recycled, it will cause more serious environmental problems, which will also force the regulator and related enterprises to pay more attention to battery recycling.
From the perspective of resource supply security, Huabao Securities pointed out in the research report that with the growth of new energy vehicle sales, the demand for metals for power batteries has also continued to grow, and the prices of lithium carbonate and lithium hydroxide have more than doubled in the past year. In addition, the demand for nickel under the high nickel ternary trend also continues to grow, due to the domestic lithium, cobalt, nickel mines are fewer, mostly imported from Australia (lithium), Indonesia (nickel), Australia Africa (cobalt), lithium batteries need metals with high external dependence, and actively layout the power battery recycling system to help reduce the demand for corresponding battery metals, thereby ensuring a certain supply security.
Ladder utilization, from demonstration to maturity will take time
How to properly handle decommissioned power batteries? How to turn waste into treasure and realize resource recycling? Mo Ke, the founder of True Lithium Research, told reporters that decommissioning does not mean that the power battery has been completely scrapped, and many of the materials in it can be recycled. The ideal power battery recycling model has two paths: cascade utilization and recycling of raw materials. The former is to dismantle and reassemble the decommissioned power battery and apply it to areas where the energy density of the battery is not high, such as energy storage; the latter is to extract expensive metal materials such as cobalt and nickel from the scrapped battery.
Among them, for the use of ladders, many people in the industry have great expectations. According to the "China Economic Weekly" reporter, the decommissioned batteries used by the echelon are currently mainly used in energy storage, telecom base stations, low-speed electric vehicles and other fields. In the field of energy storage, the current more successful projects are the battery whole package cascade utilization project of BAK Battery in August 2019, which will be decommissioned lithium iron phosphate batteries and ternary batteries for mixed use, which has a leading demonstration significance in China; in terms of base station power supply, decommissioned lithium iron phosphate batteries have more advantages than ordinary lead-acid batteries in terms of volume and outdoor condition use efficiency, and China Tower has unified procurement of cascade utilization batteries for its base stations from 2018 In terms of low-speed electric vehicles, Hangzhou Gongbu Technology and state grid Zhejiang Electric Power Company have applied the ladder use of batteries to electric tricycles and electric bicycles.
However, there are also industry experts who are cautious about the echelon utilization of batteries. Zhang Xiang, a researcher at the Automotive Innovation Center of North China University of Technology, said in an interview with the "China Economic Weekly" reporter that the overall utilization of domestic decommissioned power batteries is still in the experimental exploration stage, especially the industry's most optimistic energy storage projects, the early echelon utilization is mostly demonstration projects, regardless of cost input, the battery cells are disassembled into a single section for evaluation, and then grouped and reused, the cost input is very high.
In addition to the high cost, security is also an issue that cannot be ignored. On April 16, 2021, an explosion occurred at the energy storage power station of Beijing Guoxuan Fuweis Optical Storage and Charging Technology Co., Ltd. in Dahongmen, Fengtai District, Beijing, resulting in the death of 2 firefighters and the injury of 1 firefighter.
Shortly thereafter, on June 22, 2021, the National Energy Administration announced the "New Energy Storage Project Management Specifications (Interim) (Draft for Comment)". The document points out that before the battery consistency management technology has made a key breakthrough and the power battery performance monitoring and evaluation system is sound, in principle, no new large-scale power battery cascade utilization energy storage project should be built. Completed and put into operation projects should regularly evaluate battery performance, strengthen monitoring, and strengthen supervision.
The reason why the use of power battery ladders has been stopped in energy storage projects is the lack of consistency management technology. Because the battery sources used in the cascade are more complex, both the integrator and the final operator currently lack battery-related upstream data. The prediction of the life of the battery, including its value evaluation, is currently difficult to support by a systematic system.
If product consistency cannot be guaranteed, energy storage projects that use cascade power batteries may have higher safety hazards than energy storage projects with new batteries.
Although there are still certain technical limitations in the use of power batteries in the echelon, and the economic benefits are not obvious, the industry is still optimistic about its future growth space. After breakthroughs in key technologies including health status and residual value assessment, rapid sorting, effective balancing, application scenario analysis, and re-decommissioning assessment, the economy of power battery cascade utilization and recycling will gradually become prominent.
Liu Ruotong, a researcher at the Engineering Research Center for Energy Storage Technology of North China University of Technology and Beijing HaiboSilicon Technology Co., Ltd., said that by charging and discharging the 18650 lithium iron phosphate power battery at room temperature, the cycle life is 1200 times when the usable capacity of the power battery is reduced to no longer suitable for electric vehicle standards. The mainland's requirements for vehicle power batteries are that within 8 years or 120,000 kilometers, the capacity attenuation does not exceed 20% of the rated capacity. If the average driving of new energy vehicles is 300 kilometers as a single charge of the power battery to calculate, the cycle life of new energy vehicles traveling for 8 years or 120,000 kilometers is about 270 to 400 times, and the remaining cycle life of the power battery when decommissioned far exceeds the national requirements for the cycle life of the new energy vehicle power battery, which shows that the echelon utilization of the decommissioned power battery has a high utilization benefit.
Dismantling and recycling, wet thermal method have their own advantages and disadvantages
Compared with cascade utilization, the scrap dismantling and recycling process is relatively simple, and it is also the main technical means of power battery recycling at present. According to the "China Economic Weekly" reporter, in the power battery scrap recycling process, its industrial process mainly includes pre-discharge, disassembly, screening, stripping, purification, reproduction and other processes, and its process eliminates many processes such as detection, repair, reorganization, and certification than the echelon utilization of batteries.
Because the technical process of scrap recycling is relatively simple, and the battery after cascade utilization still needs to be treated through scrap dismantling, battery recycling enterprises are currently engaged in dismantling and recycling. According to Huabao Securities, the recovery of lithium/cobalt/nickel/manganese in ternary lithium battery materials in 2025/2030 will reach 0.61/2.92/0.85/1.03 and 2.33/12.02/2.73/302 million tons, respectively, and the recovery of lithium in lithium iron phosphate batteries will reach 0.3/0.7 million tons, and the market space for battery material recycling in 2030 will exceed 100 billion yuan, with a vast market space.
In the face of broad market prospects, many companies have laid out in advance.
On December 4, 2021, the groundbreaking ceremony of the Ningde Times Bangpu Integrated New Energy Industry Project was held in Baiyang Industrial Park, Yichang High-tech Zone. It is understood that the Ningde Times Bangpu integrated new energy industry project takes the cathode material of the new energy vehicle power battery as the core, and integrates the "phosphate ore - raw material - precursor - cathode material - battery recycling" and other links of business, covering the whole life cycle of the battery. And this is no longer the Ningde era (300750. SZ) laid out the power battery recycling business for the first time. In 2013, CATL acquired Bangpu Cycle and entered the battery recycling business; in 2018, SAIC Motor and CATL reached a strategic cooperation to jointly promote the recycling and reuse of new energy vehicle power batteries.
In addition to the CATL era, there are also a number of listed companies involved in this business. On December 2, 2021, Huayou Cobalt (603799. SH) announced that it and Fu Neng Technology (688567. SH) signed a Strategic Cooperation Agreement, which includes waste and battery recycling, procurement and cooperation of ternary precursors, etc.; in November 2021, Grammy (002340. SZ) signed a cooperation agreement with Ruipu Energy to achieve safe recycling, storage and green disposal of lithium-ion batteries, and before that, Grammy has signed power battery recycling agreements with more than 200 OEMs and battery factories around 300919 the world; SZ) and many other lithium battery industry chain manufacturers have previously said that they will gradually increase the layout of the power battery recycling business. In addition, SK Innovation, a battery production subsidiary of SK Group, announced as early as 2019 that the company's new technology can recover high concentrations of lithium hydroxide from discarded electric vehicle battery anode materials.
From the perspective of market share, the current relatively high is the Kunde era of Bangpu Cycle and Grammy, the market share of about 25% and 15% respectively, but there is no absolute giant appearing. Among them, Bangpu Cycle is the largest waste battery recycling base in China, with a total annual recycling of more than 6,000 tons of waste batteries.
From the perspective of recycling methods, the most mainstream recovery methods for decommissioned power batteries are wet recovery and thermal recovery. Among them, wet recycling is the use of acid and alkali solutions to extract solid metal substances in the electrode material, and it is also the most widely used recovery technology. In the wet recovery process, the waste lithium-ion batteries are first sorted and sorted, hulled and dissolved in the acid-base solution, and then the valuable metal elements are extracted from the solution, and finally valuable metals such as cobalt sulfate and lithium carbonate are extracted by ion exchange method and electrodeposition.
The advantages and disadvantages of wet recycling technology are obvious. The advantage is that the process is relatively more mature and the recovery efficiency of the metal substances in the battery is high; the disadvantage is that the process is relatively long, and the use of corrosive solvents such as hydrochloric acid is involved in the recovery process, so there is a higher cost in pollution control.
Thermal recovery is mainly through high temperature means from the waste battery to extract metals and their compounds. Through high-temperature incineration, the organic binder in the waste power battery can be converted into a gas form for removal, while the metal and various compounds in the battery will undergo a redox reaction at high temperature, and then be gradually classified by condensation. Finally, the waste battery residue after high-temperature incineration will be further purified by magnetic separation and other methods.
The heat recovery process is simple and suitable for large-scale treatment. The advantage is that the process flow is short and relatively simple to operate, and it is suitable for large-scale waste battery disposal. The disadvantage is that it is easy to emit a certain amount of harmful gases when disposing of waste batteries on a large scale, and it is necessary to support the corresponding exhaust gas recovery equipment. In addition, thermal recovery technology is relatively higher in terms of electricity consumption.
The "regular army" still has to work harder not to let the battery flow into the black workshop
In the field of battery front-end recycling, there are currently many participants, including car companies, battery manufacturers, third-party recycling enterprises and small workshops.
The "Interim Measures for the Management of The Recycling and Utilization of New Energy Vehicle Power Batteries" issued by the Ministry of Industry and Information Technology in 2018 requires that automobile manufacturers should bear the main responsibility for the recycling of power batteries. Since 2018, a total of 27 companies have entered the list of the Ministry of Industry and Information Technology that meets the "industry specification conditions for the comprehensive utilization of waste power batteries for new energy vehicles", which is also known as the "white list" in the industry.
The reality is that third-party recycling is the most mainstream recycling model at present, because third-party companies specialize in battery recycling business, and their recycling professionalism may be stronger than battery companies or automobile manufacturers. However, due to the lack of professional and efficient battery recycling channels in the early stage of the industry, the competition for this business model is quite fierce.
It is quite embarrassing that whether it is a car company, a battery manufacturer, or a third-party recycling company, the "regular army" seems to be unable to fight a small workshop. Taking the data of 2018 as an example, the total number of decommissioned power batteries in that year reached 74,000 tons, but the first five "white list" companies on the list in the country only recovered about 0.5 million tons in total. This means that most of the remaining 60,000 tons of power batteries may flow to enterprises outside the "white list".
Mr. Shi told reporters that now the major network platforms have blocked keywords such as "recycling power batteries", but keywords such as "car chassis recycling" can still search for the phone number, WeChat and other information of the recycler, and the recycler claims to be able to recycle the whole country, and the price is indeed higher than that of the regular recycling channel, and the battery of his current car can sell for nearly 10,000 yuan.
In this regard, Zhang Tianren, chairman of Tianneng Holding Group, told the "China Economic Weekly" reporter that there are many reasons for this. Because the current lithium battery recycling industry is still in the early stage of development, the industrial norms are relatively lagging behind, the policies and regulations are still not perfect, the entire lithium battery recycling market still belongs to the seller's market, who has more money, you can get more power battery resources.
"Compared with the regular battery recycling enterprises in infrastructure and environmental protection and other aspects of a large amount of costs, some small workshops in the recycling process to abandon the key links such as power detection, discharge and environmental protection treatment, operating costs are much lower, so in the recycling process has a greater bargaining space, which has a huge profit prompting small workshops to accelerate the recovery of power batteries, price gouging, not only lead to formal enterprises facing the 'no rice cooking' dilemma, but also disrupt the normal market order of the battery recycling industry." Zhang Tianren said.
In addition, because the ownership of electric vehicles in the mainland after the sale belongs to consumers, and there is no relevant regulation in China that requires the compulsory recycling of power batteries, some car owners either want to be convenient or sell a little more money, and directly hand over the scrapped new energy vehicles to the second-hand car dealers for scrapping procedures. After many second-hand car dealers receive the car, they will take down the power battery and sell it separately, while the regular recycling enterprises face no battery to collect.
Many regular recycling companies are not willing to recycle scrapped new energy vehicles.
Jiang Zihan, an environmental protection industry insider who once founded a recycling company, calculated an account for the reporter of China Economic Weekly: an ordinary household fuel vehicle with a 4-cylinder engine has an engine plus gearbox weight of about 200 to 300 kilograms, and the vehicle weight of this vehicle is about 1500 kilograms, and the weight of the engine accounts for 20%. In contrast, the battery weight ratio of electric vehicles, calculated by an 80kWh battery, the total weight of the battery cells of the ternary lithium battery is 400 kg, while the total weight of the battery cells of the lithium iron phosphate battery can reach 485 kg. In addition to the battery structure other than the battery cell, such as the weight of the battery top/bottom shell, insulation layer, CMC, cooling system and other components, the proportion is about 40%. The recycling value of the battery is concentrated in the positive electrode and housing of the battery. Other components are either too cheap or have no recycling value at all, and cannot be discarded directly because they can contaminate the environment.
"In such a comparison, the cost performance of regular recycling enterprises in recycling pure trams is very low, and the same recovery of 2,000 kilograms of cars, spending the same manpower and material resources, the economic value and recovery of fuel vehicles are very different." And those informal recycling enterprises, they themselves do not have relevant qualifications, the biggest profit point after dismantling is most of the waste parts when the dismantling parts through the informal channel into the car aftermarket, its value is definitely far more than the price of scrap metal sold. Jiang Zihan said that after calculating a simple economic account, it can be intuitively discovered why regular recycling companies are not particularly willing to recycle scrapped pure electric vehicles.
To protect the commercial interests of recycling enterprises, relevant policies need to be further refined and implemented
The low willingness of consumers to recycle, the high cost of enterprise recycling, and the difficulty of battery classification and treatment have formed a blockage point for the recycling of batteries of retired new energy vehicles in the mainland. How can we achieve a green cycle from production to recycling?
In this regard, as early as 2018, the Ministry of Industry and Information Technology and other seven ministries and commissions jointly issued a series of policies such as the "Interim Measures for the Management of Recycling and Utilization of New Energy Vehicle Power Batteries", and initially established an extended producer responsibility system based on automobile manufacturers.
In 2020, the Ministry of Industry and Information Technology issued the "New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry Specification Conditions (2019 Version)", which added the provision that the comprehensive recovery rate of nickel, cobalt and manganese should not be less than 98%, and the comprehensive recovery rate of other major valuable metals such as rare earths should not be less than 97%. Strengthening the requirements for environmental protection and recycling rates has raised the industry access threshold to a certain extent, forced enterprises to upgrade their technology, and improved the traceability management of power batteries to ensure certain commercial interests of participating enterprises.
In early July 2021, the National Development and Reform Commission issued the "Notice on Printing and Distributing the 14th Five-Year Plan for the Development of the Circular Economy", which included the "Waste Power Battery Recycling Action" as a key project and action, proposed to strengthen the construction of a new energy vehicle power battery traceability management platform, and improve the new energy vehicle power battery recycling traceability management system.
On August 19, the Ministry of Industry and Information Technology and other five departments jointly issued the "Administrative Measures for the Echelon Utilization of New Energy Vehicle Power Batteries", encouraging upstream and downstream enterprises in the industry to strengthen information sharing, and requiring enterprises to test power batteries according to the given standards and actual data, assess the residual value, and improve product performance, reliability and economy.
The policy has been introduced, but it may take time to see results. In the view of many people in the industry, the current relevant policy documents are still mainly encouraged and guided, lack of mandatory constraints, and the relevant content needs to be further refined and implemented.
Jiang Zihan told reporters that power battery recycling is a systematic project, relying on the government, car companies, battery companies, recycling companies and other collaborative establishment. First of all, the government must play a leading role, formulating policies, systems, etc., more important than mandatory regulations, channeling, giving encouragement and subsidies. "Of course, we certainly can't increase this economic pressure on consumers, so that our efforts to encourage everyone to buy new energy vehicles through subsidies in recent years have completely failed." In this process, I think the most important link must be the car company. Jiang Zihan believes that recycling enterprises should play an initiative in this system, take the initiative to share due social responsibilities with upstream car companies and battery companies, optimize their own recycling systems and business processes, and no longer let criminals take advantage.
In this regard, the spokesperson of the Ministry of Industry and Information Technology said in response to the "power battery recycling problem" that in the next step, the Ministry of Industry and Information Technology will accelerate the recycling of new energy vehicle power batteries from the aspects of regulations, policies, technologies, standards, and industries, including accelerating the promotion of power battery recycling legislation, improving the recycling system, strengthening technological innovation, and deepening pilot demonstrations.
For the current problems such as the traceability of decommissioned power batteries, the mixing of recycling enterprises, the rampant small workshops, black market transactions, and the ineffectiveness of car recycling outlets, the Ministry of Industry and Information Technology also said that in the future, the following aspects of work will be focused: First, accelerate the promotion of power battery recycling legislation, improve regulatory measures, and increase binding force; second, improve the recycling system, strengthen online and offline collaborative traceability supervision, and urge relevant entities to implement traceability management responsibilities; third, strengthen technological innovation, break through the consistency of decommissioned batteries, The technical bottlenecks that still exist such as automated dismantling continue to promote the release of a number of national standards and industry standards; the fourth is to deepen pilot demonstrations, innovate business models, accelerate the construction of echelon utilization demonstration projects such as power backup, and continue to cultivate backbone enterprises for cascade utilization and recycling.