How Alternative Recycling Models Like The One Offered By Aqua Metals (NASDAQ: AQMS) Could Be Key To The Shift To EVs And Sustainable Transportation

The U.S.’s battery economy is without doubt far behind the likes of China and other countries that have prioritized building clean energy industries. The global expansion of the electric vehicle (EV) market in particular is a major driving force behind the importance of developing a strong battery sector. As the demand for EVs continues to rise due to environmental concerns and the shift towards more sustainable transportation, there is a growing need for a reliable supply of lithium-ion batteries, which are the primary energy storage technology in EVs. 

To ensure a consistent battery supply of critical minerals for the growing EV market, the United States must invest in the development of a robust domestic supply chain to meet soaring demand as the U.S. battery manufacturing sector is expected to rise to almost 1 terawatt-hour by 2030, up from just 90 gigawatt-hours (GWh) in 2022. Investing in the domestic market can reduce dependence on foreign sources, stimulate economic growth and support the transition to electrification and a clean energy economy. However, many experts are keen to draw attention to recycled materials and the crucial role they will play in the development of the sector and building a circular supply chain. 

The global demand for lithium-ion batteries seems set to skyrocket, with projections indicating a sevenfold increase between 2022 and 2030. These batteries are essential in various applications, including EVs, energy storage systems and portable electronics, marking them as a critical component of our increasingly electrified world. However, a significant challenge arises in the recycling of these batteries. Currently, the recycling process predominantly relies on end-of-life (EOL) batteries. This approach presents a potential bottleneck in the supply chain, as there is a waiting period for these batteries to reach their EOL. For instance, considering the 1.2 million EVs sold in the U.S., most of these vehicles will likely still be operational in 2033, delaying the availability of their batteries for recycling. This scenario underscores the need for innovative recycling strategies that can efficiently handle the impending surge in lithium-ion battery usage while ensuring a sustainable approach to battery lifecycle management.

This is why alternative recycling models can be so crucial to a thriving domestic economy. Aqua Metals Inc. AQMS is a company pioneering a new form of lithium-ion battery recycling. At the core of Aqua Metals' innovation is the AquaRefining process, a sophisticated system that transforms lithium battery ‘black mass’ – the industry term for the composite of shredded battery metals and manufacturing scraps ready to be recycled – into high-purity, reclaimed materials ready to be delivered back into the supply chain.

In the upcoming years, a significant portion of recyclable materials is expected to come from scrap materials generated during manufacturing operations rather than from EOL batteries or totaled EVs. Lithium battery ‘gigafactories’ and manufacturing operations can produce around 10-15% scrap materials. Projecting out to 2030, this could amount to 100-150 gigawatt-hours of battery scrap material each year in the U.S. alone, which is equivalent to enough material for approximately 2.5 million EV batteries.

Scrap materials are readily available to recyclers like Aqua Metals and contain relatively high concentrations of valuable and critical materials like lithium, cobalt, nickel and manganese. Since these materials were never part of a complete battery, they won't have the usual content of plastics, binders and structural steel that typically make it to recycling supply streams.

By 2030, approximately 750,000 tonnes of critical battery material will need to be recycled annually in the U.S. alone. Aqua Metals has already announced plans for a 10,000-tonne facility at the Sierra ARC. Additionally, the company has plans for a co-located facility with its partners at 6K Energy, adding another 8,000 tonnes per year, and has announced plans to license its proprietary technology to international partners to increase global AquaRefining capacity even further.

Each tonne of end-of-life batteries and scrap material, which is collectively known as "black mass," contains approximately $20,000 worth of valuable materials. With 750,000 tonnes of scrap each year, the worth of these materials could reach up to $15 billion annually. Aqua Metals, with its processing capacity of 18,000 tonnes per year, could potentially process as much as $360 million worth of critical battery metals each year. 

Companies like Aqua Metals are at the forefront of battery technology, redefining the recycling landscape with innovative technologies that are delivering a clear path to a sustainable domestic battery economy.

Featured photo by Adrian Newell on Unsplash.

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