What is happening in the EU with batteries?
Lawmakers across the pond have set rules and regulations at the beginning of December that would impact the creation of batteries. These laws tend to aim for decarbonization and a better environment.
One of these points was to have the creation of all types of batteries from industrial to electric vehicles to have a minimal amount of recycled material. To be specific, these material percentages are 16% for cobalt, 85% for lead, 6% for lithium and 6% for nickel.
The reason for this is the upcoming demand for batteries in the near future.
How does this legislation impact raw material prices?
In recent years, there has been increasing demand for battery raw materials, particularly for lithium and cobalt, as the use of electric vehicles and other electrified products has grown.
This has led to concerns about the sustainability and ethical sourcing of these materials, as well as efforts to find alternative raw materials that are more plentiful and environmentally friendly. This is the exact reason for this new legislation.
This would likely impact the prices for the raw materials to a degree. Recycling batteries would mean that there is an extra supply line and therefore a lower price on these raw materials.
Is recycling batteries a viable future idea?
Because a lot of investments are sensitive to emotion, news like this could scare the market. However, it is worth noting that there is also huge concerns about the feedstock for the recycling of batteries.
This means that in actuality it would be very hard to reach these percentages and reuse the raw materials in new batteries. Data from Fastmarket Research, shows that recycled battery raw material only covers a small portion of demand on a gigawatt per hour basis.
This means that if we look past the law and into reality, the investments made are most likely not going to be hugely impacted in a negative way by this legislation in the EU.