As electric vehicle manufacturing ramps up across the United States, fueled in large part by increased incentives through the Inflation Reduction Act, companies are rushing to secure long term sources of critical materials including lithium, nickel, manganese, and cobalt. Battery recycling is emerging as a tool to develop a domestic supply of these materials, protecting national security interests and reducing their carbon and environmental footprint.

Globally, demand for nickel and lithium are projected to increase by as much as 20 to 40 times, respectively, over 2020 levels by 2040. Recycling critical materials can’t completely bridge the gap, but by 2040 it could help to reduce global demand for newly mined materials by roughly 10 percent. Additionally, since most of the mining and processing of these materials is concentrated in Asian countries, a recycling industry in the United States could provide access to a much-needed and secure domestic supply.

In Ohio, battery manufacturing capacity is accelerating quickly. Since 2019, more than 15 companies have announced over $3.8 billion of investments in battery manufacturing and recycling in the state. This investment builds on Ohio’s existing leadership in the U.S. automotive industry, with a robust automotive supply chain and scrap recycling industry already boosting the state’s economy.

Ohio is central to industrial demand centers around the United States and has robust, multi-modal freight transportation networks including major highways and rail lines. This positions the state well as a hub for battery recycling to repurpose critical materials and manufacture new batteries and other low-carbon products in the state.

Last week, C2ES convened more than 40 stakeholders across business, government, economic development, academia, labor, and nonprofit in a roundtable discussion to explore the opportunity for Ohio of developing a secure, diversified, resilient, and local critical materials supply chain through recycling EV batteries and other clean energy products. Through the discussion, participants highlighted Ohio’s existing manufacturing and innovation competencies, as well as its existing infrastructure and geographic assets, and identified challenges that policymakers should focus on supporting the industry in solving. This included a number of specific policy solutions at all levels of government that can help scale up this industry in the coming years, while benefitting communities and workers across Ohio.

In our discussion, a few key themes emerged:

• Economic viability: Currently, the costs of recycling, lack of collection infrastructure, and relatively low volume of EV batteries at end of life make using recycled content less economically attractive to manufacturers than newly mined materials. Participants suggested funding support to develop collection infrastructure and recycling technology, as well as incentives to consumers and companies for returning and recycling vehicles at the end of their useful life. On the other hand, regulations requiring producers to be responsible for the disposal of their products (extended producer responsibility) can add an additional regulatory driver that can make recycling more economically viable and help to internalize the social cost of disposal. To date, at least ten states have enacted some form of extended producer responsibility for lithium-ion batteries in consumer electronics, and California is exploring options to develop a similar policy extending to EV batteries.
• Community support: New battery recycling facilities can create jobs and bring economic value to communities across Ohio. However, participants expressed a desire for communities’ needs and concerns to be elevated through proactive, comprehensive, transparent community engagement on the part of developers before a project is begun. Participants highlighted the opportunity for municipal and state government to better facilitate this engagement by providing funding support to local government and community groups for outreach and convening where necessary. By engaging communities early and comprehensively, developers can build buy-in, prevent later opposition, and produce a positive investment in their community.
• Design for recycling: Technologies and design across battery and automakers can vary widely, making it difficult to implement efficient processes to safely remove batteries from EVs and extract the valuable critical materials from within. As vehicle volumes increase, companies must design with recyclability in mind to get ahead of a massive logistical challenge and significantly reduce costs on the backend.
• Safety: A major new element introduced by the electric vehicle transition is safety around batteries, especially for consumers and workers in the automotive industry that are used to dealing with internal combustion engine vehicles. EVs have significantly lower risk of fire than gas-powered cars, but have a different set of safety challenges that require thoughtful approaches to managing. Improper handling, damage, submersion, or flawed manufacture can put the battery at risk of thermal runaway. Without proper training, mechanics or workers at scrap yards experienced with internal combustion engine vehicles may put themselves at risk of injury when faced with unfamiliar technology. The Institute of the Motor Industry (IMI) offers levels of accreditation that are accepted by employers in Europe and the United States, and the Institute of Scrap Industries (ISRI) began offering trainings in Columbus last week, but these certifications are voluntary. Across the roundtable, we heard calls for these safety certifications to be standardized, widely accessible, and mandatory.

While today, only a small percentage of vehicles retiring from the American passenger fleet are electric, this number will climb rapidly as the first wave of electric vehicles reaches the end of their useful lives near the end of this decade. This presents both a challenge and opportunity for a new industry.  Ohio companies and workers have a clear, tangible, and sizable opportunity to benefit from being at the forefront of this emerging industry but must be proactive to prepare for the coming demand of tomorrow. Our December 2023 roundtable will inform a forthcoming policy brief summarizing insights from the discussion and offering recommendations for state and federal policymakers to help Ohio become a hub for EV battery and critical materials recycling.