Experts have suggested that in order to revitalize the used battery reuse and recycling industry, it is necessary to establish a full-cycle history information management system, and that, in light of China's case, it is necessary to introduce supplementary measures to ease uncertainty in the initial market and increase soundness.

In a report titled “Direction for Activating the Battery Reuse and Recycling Industry,” Lee Seo-hyun, a senior researcher at the Korea Automobile Research Institute, said that the market size for used batteries is expected to expand significantly around 2030 and that activating the used battery reuse and recycling industry is important for the competitiveness of the electric vehicle industry.

According to SNE Research, the number of global electric vehicle scrappages is expected to increase from 4.11 million units in 2030 to 42.27 million units in 2050, and the size of the global used battery market is expected to increase from approximately KRW 70 trillion in 2030 to approximately KRW 600 trillion in 2050.

Considering the environment, supply chain, and economic feasibility, reuse and recycling of used batteries is essential.

If used batteries are not reused or recycled, waste will continue to increase, and if they are left unattended or buried or incinerated without proper treatment, hazardous substances may be generated, causing environmental pollution.

In addition, key battery raw materials such as lithium, nickel, and cobalt are expensive and have high supply chain risks, but if high-purity raw materials are secured through battery recycling, supply chain diversification and electric vehicle cost reduction are possible. can achieve the following:

In this report, Senior Researcher Lee Seo-hyun emphasized that in order to vitalize the used battery reuse and recycling industry, it is necessary to establish a full-cycle history information management system.

The Korea Environmental Research Institute also reported that in order to vitalize related industries, a history information management system is needed that can monitor the entire life cycle of batteries after use, from the battery receipt stage to battery condition diagnosis results, grade classification, stability testing, and shipping history.

Not only information related to the production, sale, and use of batteries, but also information on the recovery and transportation process can serve as important grounds for evaluating the performance of used batteries and determining reuse and recycling.

Senior Researcher Lee Seo-hyun said that considering the Chinese case, Korea needs to pursue related policies in a direction that guarantees private autonomy as much as possible, while introducing supplementary measures to ease initial market uncertainty and enhance soundness.

▲China New Energy Vehicle National Monitoring and Battery Recycling History Management Platform (Image source: Korea Automobile Research Institute, ‘Battery Reuse and Recycling Industry Activation Direction’ report)

China has also introduced and operated a used battery management system, including a producer responsibility system, establishment of a traceability platform, and selection of qualified companies, since 2018, which is ahead of major countries, and has been evaluating related technologies, recycling expertise, etc. to select 'whitelist companies&' that meet the qualification criteria.We have been pursuing proactive policies such as selecting rsquo;

In January 2018, the 'Interim Measures for the Management of Recycling and Utilization of New Energy Vehicle Batteries' were enacted, placing primary responsibility for recycling used batteries on the automakers and establishing a new energy vehicle national monitoring and battery recycling and utilization history management platform.

The Chinese government is not stopping there. In December 2023, it will enact a law to strengthen the responsibilities of related companies, and the Chinese government will designate companies eligible for battery recovery, reuse, and recycling. However, Chinese automakers are selling used batteries at auctions without considering whether or not they are eligible companies.

Local media analyzed that environmental pollution is caused in the process of non-qualified companies recycling used batteries, and that the development of related technologies and the achievement of economies of scale are delayed because qualified companies cannot procure batteries.

In addition, during the period of rising prices of raw materials such as lithium in 2022, small-scale illegal workshops formed clusters to make short-term profits, and then supplied lithium carbonate and ternary batteries, which were then turned into black powder, which was then purchased and post-processed by battery recycling companies.

Small-scale illegal workshops are unable to properly carry out material recycling and post-processing processes, so the efficiency of raw material recycling is also low.

Local media reported that it is difficult to sanction and manage ineligible companies due to administrative limitations, and as a result, it is difficult for eligible companies to procure high-quality used batteries, resulting in a high rate of idle recycling facilities for eligible companies.

Accordingly, the Chinese government drafted the 'New Energy Vehicle Battery Comprehensive Utilization Management Law' in December 2023, strengthening the responsibilities of related companies and the obligation to provide historical information.

The provisional measures for the management of new energy vehicle battery recycling announced in January 2018 were upgraded to a law, and the measures for battery recycling wereIt strengthened the responsibility of each company and established an inter-ministerial history tracking information sharing mechanism under the leadership of the Ministry of Industry and Information Technology.

Some in the industry argued that in addition to the relevant bill, sanctions and punishments for ineligible companies should be strengthened and tax and financial support benefits for eligible companies should be increased.

Meanwhile, our country's 'Secondary Battery Full Cycle Industry Competitiveness Reinforcement Plan' jointly announced by relevant ministries in December 2023 presented the basic direction of ensuring private autonomous trading of used batteries to the greatest extent possible and preparing supplementary measures in case of market failure.

However, as the battery reuse and recycling sector is in its initial stages and market uncertainty is high, the joint plan of the relevant ministries included provisions to lower regulatory barriers while imposing obligations to comply with minimum safety standards and provide battery history information.

The government announced that it will exempt used batteries that meet remanufacturing and reuse standards from waste regulations by recognizing them as products, and will also recognize intermediate processed products (such as black powder) in the recycling process as recycled products and allow them to pursue business through relaxed business permits.

In addition, a management system for the entire life cycle of used batteries will be established by 2027, and based on this information, policy utilization such as support for private-led transaction markets and reinforcement of supply chains will be promoted. In addition, a law will be made to require battery users and performance evaluators to input information at each stage from manufacturing to circular use (remanufacturing, reuse, recycling).

Meanwhile, since the battery recycling business is currently low in profitability, making it difficult for companies to make large-scale investments, it is necessary to consider increasing tax and financial support benefits to support companies' initial investments.