Bringing electric vehicle batteries into the circular economy can have a huge impact on the sustainability of both EVs and energy storage. Tania Saxby, Head of Sustainability at second life battery expert Connected Energy, explains why.
The transition to electric vehicles presents a significant opportunity towards a cleaner and more sustainable future for transportation, moving away from fossil fuels and decarbonising the transport sector. However, it also presents a significant challenge. The production and disposal of the lithium-ion batteries that power these EVs come at an environmental cost.
As demand for EVs grows, mineral extraction increases. At the same time, early electric vehicle models are coming to the end of their life, with the next five years set to see a significant increase in the volume of batteries retiring from a vehicle. While the lithium battery recycling industry is growing, it does not yet have the capacity to process these volumes at the scale that we will see in future years.
At the same time, the drive to decarbonise energy is moving fast, leading to an increased deployment of renewable energy. Energy storage is being increasingly relied upon to support this transition to renewables, ensuring we capture and optimise the benefits of cleaner power.
By applying circular economy principles, we can take batteries from end-of-life EVs and repurpose them in energy storage applications. This has the potential to not only significantly improve the sustainability of EVs and energy storage, but also to create economic value.
Mineral extraction
The growing demand for batteries to power the energy transition places a contradictory strain on the principles of sustainable supply chains, as it requires the mining and refining of large volumes of critical minerals.
Analysis by Statista estimates that global sales of EVs are anticipated to reach 17 million units by 2028. Batteries will grow exponentially, as uptake of electric buses and trucks increases – these vehicles require much larger battery packs than cars and vans.
In conjunction, demand for critical minerals is rising. Lithium-ion batteries use several critical minerals including lithium, graphite, cobalt and nickel, some of which are subject to dubious mineral extraction practices.
Since 2015, EVs and battery storage have surpassed consumer electronics to become the largest consumers of lithium, together accounting for 30% of total current demand.
Experts at the International Energy Agency (IEA) forecast that mineral demand from EVs and battery storage will increase between 10 and 30 times by 2040, from a baseline of 2021. By weight, mineral demand in 2040 is dominated by graphite, copper and nickel. Lithium sees the fastest growth rate, with demand potentially growing by over 40 times.
Energy storage is also growing at a rapid rate, as it is rolled out to support the transition to renewables. According to research by Deloitte for the IEA, in 2023, the battery energy storage sector was the fastest growing energy technology, with deployment more than doubling year-on-year. BloombergNEF predicts that the global market will grow by 21% annually up to 2030.
Second life stacks up
Against this backdrop, the benefits that second life systems can deliver are hugely exciting. Firstly, they have much smaller carbon footprints than first life energy storage. Research commissioned by Connected Energy from the University of Lancaster concluded that second life storage units provide a positive carbon benefit of 450 tonnes of CO2 emissions for every 1MWh installed.
Repurposing batteries in this way also provides some much-needed breathing room for the burgeoning lithium recycling industry. A recent IEA report estimates that total global capacity for recycling EV batteries stands at just 180,000t per year. It warns that, by 2040, there could be 1,300 GWh worth of batteries no longer suitable for EV use, far exceeding the recycling industry’s current capabilities.
Batteries in EVs face demanding operating cycles, resulting in a useful life of eight – 15 years. After this, the battery can still hold around 80% of its original capacity. This results in a reduction in vehicle range, but means the batteries still have a lot to give. A lighter duty application such as stationary energy storage is ideal for these batteries. And with the right management, they can work in these applications for another decade or more.
The numbers certainly stack up. For example, 800 million tonnes of batteries amounts to circa 90 million MWh of second life battery capacity. Assuming even 25% of these batteries are reusable, that would deliver estimated CO2 savings of 10,1250 million tonnes compared to using first life batteries.
Ultimately, a battery will reach the end of its useful life within an energy storage system. At this point, recycling is the best conclusion. And the industry is already working on ways to better understand and develop sustainable and environmentally responsible business models for the repurposing and recycling of EV batteries.
Additional benefits
Along with helping to conserve critical minerals and reduce the carbon costs of stationary energy storage, second life offers other benefits.
Firstly, it can help us to build more resilient economies that are less reliant on mineral extraction from regions with geopolitical risk. It can also help create a new sustainability industry, bringing with it jobs and prosperity.
Secondly, it is cost-effective. Giving a battery a second life value can improve the economics of EVs as well as enabling lower cost energy storage. A recent study by Deloitte estimated that adopting a multi-life cycle model for EV batteries has the potential to reduce car battery costs by up to €3,000, making EVs more affordable.
Time for action
If we want the UK to reap these benefits by becoming a global leader in second life energy storage, then we have to act now. Government and industry must collaborate to incentivise and standardise the repurposing of batteries to extend their life before recycling. We need regulation, stronger supply chain development, and better battery traceability.
As increasing numbers of EV batteries come to the end of their life in a vehicle, this is even more pressing. Second-life batteries offer a truly transformative opportunity to create a more sustainable and circular economy for the battery industry. By promoting “Second Life First” practices, governments, businesses, and consumers can work together to maximise battery lifespan, minimise environmental impact, and pave the way for a clean energy future.
