Creating a Circular Economy for Critical Materials in Ohio

Global demand for electric vehicles is expected to continue growing in the coming decades. With that, demand for critical materials like lithium, manganese, copper, silicon, and others is set to rise significantly. Recent electric vehicle battery and recycling investments in Ohio build on the state’s existing competencies throughout the automotive and scrap recycling supply chain, making Ohio a key player in the U.S. battery recycling economy of the future. At the same time, legislation like the Bipartisan Infrastructure Law and the Inflation Reduction Act have invested in growing American battery recycling capacity and innovation, creating incentives for domestic recycling through the EV tax credit. This brief provides insights from a C2ES roundtable hosted in Columbus, Ohio, in December 2023 that explored the critical materials recycling opportunity in Ohio and provides policy recommendations for federal, state, and local policymakers to take advantage of this opportunity developed with participants during and following the discussion.

Policy Recommendations

Facilitate recycling, improve recyclability, and promote second-life applications

• Congress should direct U.S. EPA to commission a study to explore the implications of enacting federal-level extended producer responsibility for electric vehicle batteries. This report should identify essential elements of policy design, including whether battery manufacturers or automakers should be responsible for battery recycling or safe disposal, and to what extent responsible parties should fund collection and recycling. The study should include an advisory group with representation from battery manufacturers, automakers, recyclers, and community leaders.
• National Highway Traffic Safety Administration (NHTSA) should enact transparent national minimum safety standards for workers interacting with, repairing, and dismantling electric vehicle batteries and other mobility related high voltage batteries. These should build upon NHTSA’s Battery Safety Initiative and be enforced across the United States.
• U.S. EPA should enact minimum recyclability standards for EVs that support consistent design and ease of battery removal. In the absence of standards developed directly by U.S. EPA, the agency should support the development of a third-party multi-stakeholder consensus-based standard that both the federal government and industry can use.
• Congress, through the Federal Trade Commission and in consultation with U.S. EPA, should create an official minimum definition of “recycled content” as it applies to components within EV batteries.
• In the next revision of Ohio’s Learning Standards, the Ohio Department of Education and Workforce should build competencies on recycling and waste management into science standards at every grade level. Building on the high-school level environmental science standard GP.9, “Waste management (solid and hazardous),” science concepts based on identifying waste and recyclable materials and correctly sorting and disposing of them should be integrated to “Nature of Science” standards for each grade level.[i]
• The Ohio state legislature should direct and fund Ohio EPA to provide guidance to municipalities on best practices for reducing waste and growing the circular economy, periodically updated to include best practices from municipalities across the state.
• Ohio EPA should offer grants to community organizations to support outreach and education of consumers on proper recycling best practices.

Promote data transparency and information sharing

• Congress should require EV batteries sold in the United States to include a digital battery passport indicating battery composition, recycled content, and pertinent information for safe dismantling. Further, Congress should require U.S. EPA to facilitate this data sharing through a secure platform. Congress should provide funding to U.S. EPA to support the development and administration of this program, and to explore alignment with the EU Battery Pass initiative.
• When providing guidance for EV battery collection and labeling, as directed by the IIJA, U.S. EPA should include guidelines for identification of proper battery dismantling procedures based on the location of key components in the battery.
• U.S. EPA should renew and expand the Solid Waste Infrastructure for Recycling Grants for Communities program to provide funding for additional communities to develop accessible recycling infrastructure and data collection. Congress should expand this program, authorized under the Bipartisan Infrastructure Law, to include specific funding for end-of-life battery collection and recycling.
• Congress should provide funding through U.S. EPA to support the development of materials marketplace programs, similar to the Ohio Materials Marketplace convened by Ohio EPA, across all 50 states, as well as coordination among the programs via U.S. EPA.

Support innovation & attract investment

• Innovate Ohio should lead an effort to convene utilities, startups, and battery manufacturers to identify opportunities for end-of-life EV batteries to serve as grid storage resources.
• JobsOhio should add critical materials recycling and circular economy to the targeted industries included covered under its R&D Center Grant program.
• Congress should increase funding for Battery R&D within the Vehicle Technologies Office, to include, at a minimum, the new research priorities identified in DOE’s FY 2025 budget request.
• Cities and counties across Ohio should set sustainability targets, including emissions reduction and recycling goals. These goals help guide companies and communities toward sustainability improvements and make federal grant applications more competitive (especially under the IRA/BIL). Having sustainability targets can inform a city’s economic development plans and support alignment with local businesses. Additionally, a sustainable purchasing policy can demonstrate leadership and kickstart both emissions reductions and demand that can help scale emerging industries locally.

Onshore Critical Materials Capacity

• The Ohio state legislature should create a tax credit for battery manufacturers to use recycled content in their products.
• Ohio EPA should partner with big box retailers and auto mechanics to create accessible, visible collection points for end-of-life lithium-ion batteries, including those in small electric mobility devices like scooters and e-bikes, and electric vehicles.
• Congress, through DOE’s Advanced Materials and Manufacturing Technologies Office, should support the development of critical materials recycling hubs, similar to other models like hydrogen hubs and tech hubs, promoting the geographic co-location of collection, recycling infrastructure, processing, and utilization. Building on the work of the Critical Materials Innovation Hub, these hubs could provide targeted financial support to develop the industry in tandem with the battery production industry, reducing costs and spurring development. The geographic locations of these hubs should be selected through a competitive process prioritizing key metrics such as the presence of existing recycling infrastructure, processing, utilization, and/or manufacturing capacity.
• Local economic development organizations should facilitate partnerships between companies to enable economical end-of life collection, transportation, dismantling and recycling of EV batteries.
• The Ohio state legislature should establish a tax rebate for the recycling of end-of-life electric vehicle batteries equivalent to the average estimated value of the critical minerals contained within it.

Comprehensively and Proactively Engage Communities

• Congress should create a funding program through the Council on Environmental Quality (CEQ) to support municipalities’ capacity to facilitate community engagement. This program should support additional staffing or contract support for municipal governments to conduct community outreach and engagement activities with developers ahead of new projects.

Promote Workforce Development and Safety

• NHTSA and OSHA should set minimum safety standards for battery collection, transport, dismantling, disposal, repair, and processing. These should be consistent for workers across the industry and trainings for certifications in these standards should be widely accessible.
• Companies should offer workforce development programming, including recruitment and training of new entrants to the field; safety training for workers in adjacent industries to be prepared to safely service, remove, and dismantle EV batteries; and diversity, equity, and inclusion efforts to support workers of all backgrounds.

Conclusion

This is a pivotal moment for Ohio’s automotive industry, as companies make plans to build electric vehicle and battery manufacturing facilities and grow the EV supply chain in the state and across the Midwest. Ohio is poised to become a leader on battery recycling, with benefits to both the state’s economic competitiveness and the nation’s ability to secure a domestic supply of critical materials. Participants in our December 2023 regional roundtable were optimistic about this opportunity, while emphasizing that much more work is necessary to truly take advantage of its offerings. They highlighted the need for expanded collection, transport, and recycling infrastructure; significant levels of consumer, business, and policymaker education; investments in worker safety and training; research and development initiatives to improve the economics and recyclability of batteries; and policy development to incentivize and coordinate recycling practices across the industry.

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