Newsletter February ‘25

Battery Recycling: Innovations

UK Launches LFP Recycling: In a positive development, UK-based Altilium began recycling lithium iron phosphate (LFP) batteries in February. Using its new pilot facility in Plymouth, Altilium can process about 300 kg of battery waste (black mass) per day. Its proprietary process recovers over 97% of lithium and 99% of graphite from used LFP batteries – chemistries that historically had low recycling rates due to lower metal value. This innovation supports a circular economy for the newer LFP battery chemistry. Altilium is already recycling nickel-based batteries and plans a much larger plant in Teesside capable of handling scrap from over 150,000 EVs per year. These efforts will help meet sustainability targets and new EU regulations requiring higher battery material recovery in coming years.

Supply Chain Developments Across the Industry

Global Battery Production Shifts: The EV battery supply chain continued its rapid expansion in early 2025. Industry data show Chinese battery giants CATL and BYD together supplied over half of the world’s EV battery capacity in January-February, reflecting Asia’s dominance. Automakers are responding by localizing battery manufacturing. In the United States, Toyota announced its first U.S. battery plant in North Carolina is operational and will begin shipping batteries by April 2025. This nearly $14 billion facility will produce packs for Toyota’s hybrids and EVs and employ about 5,000 workers, bolstering domestic capacity. Meanwhile in Europe, Chinese EV maker BYD accelerated its expansion plans. BYD is establishing a new headquarters and passenger EV plant in Hungary, slated to open by late 2025. This “local-for-local” approach by both Western and Asian companies aims to strengthen supply chain resilience and meet regional demand amid trade and tariff considerations.

Materials Sourcing Deals: Battery material producers struck new partnerships to secure critical inputs. For example, Belgium’s Umicore signed agreements in March to source precursor cathode materials (pCAM) from two suppliers with advanced low-carbon plants in Morocco and South Korea. These deals, which complement Umicore’s own production in Europe and China, will support its cathode factories and ensure a diversified, sustainable supply of nickel and cobalt intermediate products. Such moves are driven by automakers’ contracts and the need for reliable raw materials pipelines as EV demand grows. Ensuring ethical, sustainable sourcing is especially crucial for minerals like cobalt, nickel, and lithium, which face scrutiny over environmental and human rights impacts.

ESG and Traceability Highlights

Transparency Efforts: Companies across the battery supply chain are ramping up traceability and ESG reporting. With the European Union’s Battery Regulation starting to require carbon footprint disclosure for EV batteries, manufacturers are tracking CO₂ emissions per battery pack more closely. Many are implementing digital systems to trace raw material origins. Several automakers like have pioneered “battery passports” that log a battery’s material sources, recycled content, and carbon footprint, well ahead of the EU’s 2027 mandate for battery passports. These passports, accessible via QR code, allow EV buyers and regulators to see into the battery’s lifecycle – an important step for accountability and consumer trust. Other major OEMs and battery makers are involved in pilot programs (under the Global Battery Alliance and other consortia) to standardize battery data and ESG scoring. By investing in traceability tools (such as blockchain-based platforms) and rigorous auditing of their mineral supply chains, the industry is working to ensure that “responsibly sourced” isn’t just a slogan. These initiatives help address concerns about child labor in cobalt mining, environmental damage from lithium extraction, and other sustainability issues, while preparing companies for upcoming reporting regulations.

Policy Watch: The EU’s new Battery Regulation includes strict due diligence rules for battery mineral sourcing and lifecycle emissions. Companies had anticipated detailed guidelines on these requirements by mid-February, but EU officials delayed the guidance’s publication. This delay created some uncertainty for manufacturers trying to implement compliant sourcing strategies. Nonetheless, the direction is clear: starting in 2025, firms will need robust management systems to identify and mitigate social and environmental risks in their battery supply chains. Meanwhile, government incentives in the U.S. (such as the Inflation Reduction Act’s tax credits for EVs using domestically sourced critical minerals) continued to spur investment in local mining, processing, and recycling projects. Across major markets, regulators and industry are increasingly aligned on goals of transparent supply chains, lower carbon batteries, and circular economy principles.

Sources Consulted:

WHEC (2025/02), WXXI News (2025/05/01), Altilium Tech (2025/02/03), CNEVPost (2025/04/08), Toyota Global Newsroom (2025/04), S&P Global Commodity Insights (2025/02/13), Umicore Press Release (2025/03), Compliance & Risks (2025/02)