Toward a circular economy for lithium-ion batteries
Lithium-ion power is gaining traction in the material handling market, just as the supply chain is stepping up with recycling services and sourcing initiatives that support a greener energy landscape.
Victoria Kickham, an editor at large for Supply Chain Quarterly, started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for Supply Chain Quarterly's sister publication, DC Velocity.
If you’ve transitioned some of your forklifts to lithium-ion (li-ion) battery power recently, you may be wondering what happens to those batteries at the end of their life. Sure, they’ve likely got years before you have to worry about it, and the manufacturer will take them back when they reach their end point, but what happens next? An increasingly environmentally conscious business world wants to know, driven by companies’ desire to meet internal sustainability goals and address supply chain sourcing concerns. Recycling can help address both issues, but until recently there hasn’t been much activity, and the lithium-ion recycling business remains in its infancy.
“What’s missing is that there wasn’t a huge business case [for recycling these products] a few years back,” explains Vincent Caron, director of legal affairs forUgoWork, a Quebec City-based provider of lithium-ion batteries and energy-management solutions. He points to the growing popularity of li-ion batteries for use in automotive and material handling applications as a catalyst for change. “Now, it’s a very, very huge market. Recyclers are trying to capture that.”
A long and successful history of recycling forklift batteries, especially the lead-acid variety, is also a factor. All forklift batteries are large and chemically complex, and they can’t just be thrown in the trash when their useful life ends. Rules and regulations surrounding lead-acid have given way to a circular economy for those products; they are virtually 100% recyclable today. As demand for li-ion builds, so do expectations for recycling them, and Caron says a growing number of companies are trying to get ahead of that demand as more of the products enter the market—some researchers predict double-digit growth in li-ion battery use over the next five to seven years. As a result, battery makers and end-users are beginning to form partnerships with recyclers to make the circular economy a reality for these increasingly popular products.
As the process unfolds, here are three things to know about li-ion battery recycling.
1. THE BUSINESS CASE IS GROWING
Demand for li-ion recycling has been intensifying over the last 10 years or so, driven by the proliferation of personal electronics and, more recently, electric vehicles, all of which rely on advanced battery technology, according to Peter Geantil, special projects manager for li-ion battery makerFlux Power, based in San Diego. But the process for recycling li-ion batteries can bedifficult and expensive.
There are several reasons for that. For one thing, the design of some batteries can make it tough to access and extract the lithium and other elements inside. For another, it requires finding a recycler that handles that particular battery’s type of “chemistry.” There are different battery chemistries that fall under the li-ion umbrella, and manufacturers choose which to produce based on how well they work for a particular application. (Nickel manganese cobalt, or NMC, and lithium iron phosphate, LFP, are two examples of common chemistries used in material handling applications.) Recyclers don’t always handle the gamut of chemistries on the market, making it difficult to find the right partner for the type of battery you want to recycle.
“[Because] you have these different chemistries, you have to find a recycler that can take any lithium-ion battery and extract whatever valuable materials it can from it,” Geantil explains, adding that such sources are beginning to emerge. “As lithium began to be deployed throughout our economy, people realized they needed to figure out how to recycle it. Initial recycling rates were low—they weren’t even capturing the lithium. Nowadays, they are getting more out of it.”
Also complicating the issue is that li-ion batteries for material handling are one part of a larger system that includes electronic components, steel, wires, and other elements, all of which are involved in the recycling or repurposing process, according to Marcio Oliveira, vice president for global quality and sustainability at battery and energy systems makerEnerSys, based in Reading, Pennsylvania.
“The recycling process will require deconstructing the batteries,” he explains. “The real point, though, when it comes to [sustainability], is that the opportunity is much bigger than just the li-ion battery portion and [actually extends to] the recycling of all the other materials that are part of the whole system.”
Like other battery makers, EnerSys is working with recyclers to handle the various aspects of the process and looking to develop partnerships down the road. Oliveira says the company has not yet had to take back any of its li-ion forklift batteries—they were recently launched and are all still in service—but is working with local recyclers to handle the scrap generated from the production process, another aspect of the growing li-ion recycling market.
And like Geantil and Caron, he agrees that the growing volume of li-ion batteries in automotive and industrial applications is helping to drive the business case for change.
“The cost of recyclability is dependent both on the volume to be recycled and also the chemistry used in the batteries,” Oliveira says. “The more those business segments increase [their use of li-ion technology], the easier it will be for the recyclability to become a net positive.”
2. INFRASTRUCTURE DEVELOPMENT IS UNDERWAY
The global lithium-ion battery market was valued at $32.9 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 13% from 2020 to 2027, according toa 2020 market report from research firm Grand View Research. Investors are digging in to capture a piece of that pie, and many are helping to lay the groundwork for a lithium-ion recycling infrastructure.
Canadian firmLi-Cycle is a key part of that growing infrastructure. Launched in 2016, the company aims to make li-ion batteries a circular and sustainable product; the firm has developed technology that can recover the resources in any type of li-ion battery chemistry and produce battery-grade li-ion chemicals for use in new products. Li-Cycle recycles thousands of tons of li-ion batteries every year and claims it can recover 95% of all critical materials inside them. The company announced plans to go public earlier this year through a merger with Peridot Acquisition Corp., a publicly traded special purpose acquisition company (SPAC). The deal was expected to close in the second quarter.
Li-Cycle operates two facilities in North America, with a third planned to open early next year. The firm’s expansion illustrates the growing market for li-ion recycling as well as larger goals for creating that circular economy, according to Geantil.
“We should have a closed ecosystem,” Geantil says, pointing to the growing number of li-ion batteries in the market. “Everyone knows there are valuable materials in them. The economics are there, the desire is there. We’re already doing it; it’s just that we’re getting better and better. People are focusing on it now.”
A host of other projects underscore the growing infrastructure. Earlier this year,Ultium Cells LLC, a joint venture between General Motors andLG Energy Solution, formed apartnership with Li-Cycleto recycle up to 100% of the material scrap from battery cell manufacturing.Redwood Materials, a recycling startup led by former Tesla executive J.B. Straubel, is also making headlines,recently announcing the triplingof its operations in Nevada to scale up recovery of lithium, cobalt, nickel, and other metals it then sells to makers of lithium-ion batteries for electric vehicles. And earlier this year, Canada-basedLithion Recyclingannounced a partnership with Hyundai Canadato recover and recycle high-voltage batteries from its hybrid, plug-in hybrid, and electric vehicles. Lithion Recycling is one of UgoWork’s recycling partners, according to Caron.
[subhead] 3. A HOLISTIC APPROACH RULES THE DAY
Battery makers are quick to point out that recycling is just one part of the larger drive toward decarbonization, and that li-ion battery technology plays a big role in that process.
“We really believe that the main challenge in lithium-ion is how to get the industry to the broader transition to lower carbon [emissions],” EnerSys’s Oliveira explains. “Lithium technology will be part of this decarbonization process.”
Caron and his colleague, Director of Marketing Jean-Francois Marchand, agree and point to other considerations when developing a green energy strategy, such as the logistics and transportation issues around both sourcing and end-of-life processes.
“If we want to limit the carbon footprint, does it make sense to send huge battery packs [for recycling] all over the continent and [create] a lot of transportation and carbon-dioxide emissions? We need to optimize the supply chain logistics,” Caron says, adding that some recyclers are tackling this issue by creating local collection options where they crush the lithium into “black mass,”a mixture that contains a blend of all the battery materials from which recyclable metals can be extracted and then sold back to the battery makers for use in new products. This is what Li-Cycle and others do. “If we have clients in Texas, Washington, and all over Canada, we’re looking for someone able to support our various locations in a way that’s environmentally friendly.”
And, increasingly, that’s what end-users tell battery makers they want as well.
“More and more, [sustainability] is one of the top priorities of our customers,” says Marchand, adding that how UgoWork handles end-of-life for its products is “definitely one of [customers’] decision criteria. One thing, though, is they don’t know how to handle this. They don’t want to take care of it themselves. We anticipate that this [will become] a trend, and that more customers will be concerned about this issue and will ask about it.”
The Port of Oakland has been awarded $50 million from the U.S. Department of Transportation’s Maritime Administration (MARAD) to modernize wharves and terminal infrastructure at its Outer Harbor facility, the port said today.
Those upgrades would enable the Outer Harbor to accommodate Ultra Large Container Vessels (ULCVs), which are now a regular part of the shipping fleet calling on West Coast ports. Each of these ships has a handling capacity of up to 24,000 TEUs (20-foot containers) but are currently restricted at portions of Oakland’s Outer Harbor by aging wharves which were originally designed for smaller ships.
According to the port, those changes will let it handle newer, larger vessels, which are more efficient, cost effective, and environmentally cleaner to operate than older ships. Specific investments for the project will include: wharf strengthening, structural repairs, replacing container crane rails, adding support piles, strengthening support beams, and replacing electrical bus bar system to accommodate larger ship-to-shore cranes.
Commercial fleet operators are steadily increasing their use of GPS fleet tracking, in-cab video solutions, and predictive analytics, driven by rising costs, evolving regulations, and competitive pressures, according to an industry report from Verizon Connect.
Those conclusions come from the company’s fifth annual “Fleet Technology Trends Report,” conducted in partnership with Bobit Business Media, and based on responses from 543 fleet management professionals.
The study showed that for five consecutive years, at least four out of five respondents have reported using at least one form of fleet technology, said Atlanta-based Verizon Connect, which provides fleet and mobile workforce management software platforms, embedded OEM hardware, and a connected vehicle device called Hum by Verizon.
The most commonly used of those technologies is GPS fleet tracking, with 69% of fleets across industries reporting its use, the survey showed. Of those users, 72% find it extremely or very beneficial, citing improved efficiency (62%) and a reduction in harsh driving/speeding events (49%).
Respondents also reported a focus on safety, with 57% of respondents citing improved driver safety as a key benefit of GPS fleet tracking. And 68% of users said in-cab video solutions are extremely or very beneficial. Together, those technologies help reduce distracted driving incidents, improve coaching sessions, and help reduce accident and insurance costs, Verizon Connect said.
Looking at the future, fleet management software is evolving to meet emerging challenges, including sustainability and electrification, the company said. "The findings from this year's Fleet Technology Trends Report highlight a strong commitment across industries to embracing fleet technology, with GPS tracking and in-cab video solutions consistently delivering measurable results,” Peter Mitchell, General Manager, Verizon Connect, said in a release. “As fleets face rising costs and increased regulatory pressures, these technologies are proving to be indispensable in helping organizations optimize their operations, reduce expenses, and navigate the path toward a more sustainable future.”
Businesses engaged in international trade face three major supply chain hurdles as they head into 2025: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products that could be imposed by the incoming Trump Administration, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), according to an analysis from trucking and logistics provider Averitt.
Each of those factors could lead to significant shipping delays, production slowdowns, and increased costs, Averitt said.
First, Chinese New Year 2025 begins on January 29, prompting factories across China and other regions to shut down for weeks, typically causing production to halt and freight demand to skyrocket. The ripple effects can range from increased shipping costs to extended lead times, disrupting even the most well-planned operations. To prepare for that event, shippers should place orders early, build inventory buffers, secure freight space in advance, diversify shipping modes, and communicate with logistics providers, Averitt said.
Second, new or increased tariffs on foreign-made goods could drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. In turn, shippers may face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. To navigate these challenges, shippers should prepare advance shipments and inventory stockpiling, diversity sourcing, negotiate supplier agreements, explore domestic production, and leverage financial strategies.
Third, unresolved contract negotiations between the ILA and the USMX will come to a head by January 15, when the current contract expires. Labor action or strikes could cause severe disruptions at East and Gulf Coast ports, triggering widespread delays and bottlenecks across the supply chain. To prepare for the worst, shippers should adopt a similar strategy to the other potential January threats: collaborate early, secure freight, diversify supply chains, and monitor policy changes.
According to Averitt, companies can cushion the impact of all three challenges by deploying a seamless, end-to-end solution covering the entire path from customs clearance to final-mile delivery. That strategy can help businesses to store inventory closer to their customers, mitigate delays, and reduce costs associated with supply chain disruptions. And combined with proactive communication and real-time visibility tools, the approach allows companies to maintain control and keep their supply chains resilient in the face of global uncertainties, Averitt said.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.