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So, Tom, what's the question we're asking today?
Could recycling be the remedy to upcoming shortages in metals critical to the green energy transition?
As we make the transition to green energy all those wind turbines, electric car batteries, and transmission lines are really going to need a lot of metals. We're talking about metals such as copper and nickel and lithium, and far more than is produced today.
Take lithium. According to a 2023 report from the Energy Transitions Commission, by 2030 demand for the metal is expected to soar sixfold from current production levels. In fact, in a base-case scenario, by 2030, lithium demand will be 30 per cent higher than projected supply. By 2030 copper demand will outstrip supply by 10 per cent.
Now, one way to attack these shortages could be through improved recycling and use of materials. For example, the Energy Transitions Commission report states that if we look at the predicted 30 per cent supply shortage of lithium by 2030, with extensive recycling and using less lithium in future batteries, that 30 per cent gap could narrow to just 10 per cent.
So that sounds great, but current recycling levels are pretty low. In the US, less than 5 per cent of used lithium ion batteries are recycled. Meanwhile, globally, only around 1 per cent of the 15 elements that make up the rare earth metals group are recycled. One reason for this is that they are often used in small quantities that recyclers believe are too expensive to recover.
The good news is, as the amount of recyclable material in the system grows, the more effective and significant recycling will become. According to the Energy Transitions Commission, up to 2030, less than 10 per cent of demand from the energy transition is likely to be met through recycling. But by 2050 it's plausible that the majority of new demand from clean energy technologies could be met through recycling.
And new recycling techniques are emerging. For example, researchers in France's atomic programme have developed a process that can recover lithium, nickel, cobalt, and graphite from the black mass that comes from crushing automobile electric battery cells.
But key recycling policies and strategies are also needed. These include regulations on the level of recycled content in end products and on final recovery rates for materials at end of life. Encouraging the standardisation and simplification of key components in clean energy technologies, or implementing strong regulations to avoid recycling processes getting channelled to countries with lower environmental standards.
Now, recycling regulations are being introduced. In Europe, the Critical Raw Materials Act has a target that 15 per cent of demand in 2030 for certain metals be met by recycled supply. China has outlined requirements for the end of life for batteries. In the United States, they passed the Inflation Reduction Act in 2022. This includes EV tax credits with domestic production requirements that also include materials recycled in North America.
Recycling is not going to single handedly solve the mineral supply problem. Even the authors of the Energy Transition's Commission report acknowledged that the energy transition will require a vast number of new mines. As many as 40 copper mines, 55 nickel mines, and 65 lithium mines could be required by 2030.
But with the right policies in place on the development of new recycling technologies and processes and the way we handle products through their entire life cycle, it could make a significant difference.
