BWMR and the Cost and Economics of End-of-Life Battery Recycling

With countries all over the world committing to reducing greenhouse gas emissions and attaining net zero, the world is moving to non-fossil fuels and renewable energy sources, especially in the electricity and mobility sectors. Looking at the electric vehicle (EV) sector specifically, there has been a massive surge in popularity for EVs, led by consumers looking to make the switch to clean energy. It is estimated that by 2023, India will have around 50 million EVs on its roads. EVs are predominantly powered by Lithium-Ion Batteries (LIBs), which are also popularly used for consumer electronics. Given the volume of usage, managing the lifecycle of these batteries sustainably, particularly at their end-of-life, becomes a necessity as well as a challenge. This is where the Battery Waste Management Rules (BWMR), introduced by the Indian government in 2022, become significant.

What is Battery Waste Management Rules 2022?

The Ministry of Environment, Forest and Climate Change published the BWMR with the primary goal of ensuring that the management of waste batteries is done in a manner that minimizes the adverse effects of waste material on human health and the environment. It prescribes new technologies, investments, and partnerships in the recycling sector. With the Extended Producer Responsibility (EPR), the rules mandate that the onus lies on the producers and importers of batteries to collect and recycle or refurbish end-of-life batteries from the recovered materials.

The BWMR encourages a symbiotic relationship between battery recyclers and EV manufacturers, among other stakeholders. By mandating the use of recycled materials, the rules work toward ensuring a consistent supply of recycled materials for new battery production, thus creating a closed-loop system. 

But like any other initiative, the BWMR is not without its challenges, particularly when it comes to implementation. While the EPR directs producers to pay a cost for the recycling or disposal of batteries, industry experts rightly argue that the current floor prices for lithium recycling are too low, which might negatively impact the establishment of a sustainable battery recycling system. Setting a higher EPR floor price – aimed at being at par with international standards – will raise the selling price of end products only marginally, while discouraging fraudulent recyclers and ensuring that genuine operators receive fair compensation. This pricing will need to be periodically reviewed and adjusted to align with advancements in technology and external economic factors.

To achieve effective implementation of the rules, we could look at gradual application, starting with bigger sectors like the EV industry before including smaller, unorganized players. Steps like making the entire EPR process user friendly and encouraging collaboration between original equipment manufacturers (OEMs) and smaller operators can be helpful. Accessibility can be another challenge here, so establishing a strong network for battery and material collection across the country, especially in rural or remote areas, can facilitate success for the BWMR.

The Cost and Environmental Compliance

As India's annual battery production capacity is expected to increase from 18 gigawatt hours (GWh) in 2023 to nearly 150 GWh by 2030, an increasing volume of battery waste with heavy metals like cobalt and nickel could end up in landfills or informal recycling stations, causing significant environmental hazards. However, several challenges need to be tackled to make the LIB value chain truly sustainable. The cost consideration, too, remains a major factor.

A well-established, innovative system for recycling is necessary in not just waste management, but cost recovery. Using approaches like hydrometallurgy, as much as 80% of a battery can be recycled. Adopting advanced recycling processes that can avoid energy-intensive steps will help improve efficiency in extracting battery components and reducing costs. Moreover, as the scale of recycling operations increase, economies of scale will further drive down costs.

In fact, the BWMR itself will work toward reducing expenses by creating a stable and predictable market for recycled materials. This, in turn, will encourage investment in recycling infrastructure, ultimately making recycling the most economically feasible option.

The Economics of Recycling

The cost challenge is a major consideration, but when viewed from the lens of the economic rationale, it surely makes a compelling case for battery recycling. Our nation has limited domestic reserves of critical minerals like lithium, cobalt, and nickel – which are required in the manufacturing of batteries. Recycling existing batteries can reduce our dependence on imports and reduce the risk from supply chain vulnerabilities and price volatility in the global market.

Here, we must look at balancing economic growth and sustainability. Improper battery recycling has economic ramifications too, in addition to environmental contamination. Another important factor is the role that recycling plays in creating new economic opportunities – the growing industry will generate substantial employment, which will only be driven further by the constant innovation in advanced technologies for recycling processes.

Supportive policies on the part of the Indian government are also facilitating the shift toward green mobility and recycling. The Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage, which indirectly supports recycling by encouraging domestic manufacturing, is a crucial step. The FAME II scheme and the EV30@30 campaign are other notable instances.

The BWMR undoubtedly provides a strong base for the Indian battery recycling sector. At the same time, there must be strict enforcement – which can be in the form of regular audits, a common platform that ensures transparency in tracking EPR responsibilities, and penalties awarded for non-adherence – to ensure consistent, long-term compliance of the rules. It is imperative to ensure regular feedback from all stakeholders as well as collaboration and knowledge sharing for continuous refinement. No step is too small as we collectively move toward a clean, cost effective, and sustainable future.