The successive release of power battery recycling policies has forced power battery recycling companies to further improve their technology and accelerate their deployment.
On November 7, the Ministry of Industry and Information Technology issued the “Guidelines for the Construction and Operation of New Energy Vehicle Power Battery Recycling Service Networks”, requiring new energy vehicle production and step utilization companies to build or authorize recycling service sites; strengthen the tracking of used power batteries and recycle them. Service outlets must not dismantle them without authorization; set up guidance information such as obvious prompt information and a schematic diagram of the operating process specification; recycling service outlets must keep records of battery type, source, quantity and other related information for three years for inspection.
On December 3, the Ministry of Industry and Information Technology planned that in the next fifteen years, China should encourage qualified enterprises to improve the ability to guarantee key resources such as lithium, nickel, cobalt, and platinum; and improve the recycling system for power battery recovery, cascade utilization and re-recycling. Encourage joint construction of shared recycling channels.
As shown in Figure 1, the five major provinces and cities all set targets for power battery recycling, among which there are certain threshold requirements for environmental protection and technology.
From the background of the policy release, the main reasons are that the current power battery recycling companies' efficiency in step utilization and raw material decomposition and recycling, the amount of batteries flowing into compliance recycling companies, and their efforts to protect the environment are not high enough.
The policy implementation goal is to eliminate recycling companies with extensive development models, backward technology and weak environmental protection awareness. Accelerate the upstream and downstream cooperation in the power battery industry chain to allow more decommissioned batteries to flow into compliance recycling enterprises and achieve healthy development, which is conducive to environmental protection, energy conservation and emission reduction, and improve the profitability of enterprises.
However, with the general increase in policy requirements, in actual operation, a well-known industry insider informed high-tech lithium batteries, which may increase the cost of power battery recycling companies, and increase the difficulty of market profitability.
It is nearing the end of the year, and Lithium Power Engineering believes that it is necessary to analyze and review the current status of power battery recycling, corporate feedback on policies, and the possibility of policy implementation.
Current status of power battery recycling
Due to some associations, the media's one-sided, exaggerated, and even wrong publicity and selective interpretation of policy guidelines, power battery recycling companies have not been guided by real market capacity. This has led to the construction and planning of power battery recycling companies' total processing capacity far exceeding the theoretical number of used batteries to be eliminated.
Among them, due to non-compliance of the industrial chain, transportation costs, storage costs and labor dismantling costs are low. At the same time, it does not have a series of responsibilities such as environmental protection and production safety, and its profitability is strong.
Compliance companies have invested heavily in environmental protection, safety, automation equipment, factory buildings, and personnel. At the same time, due to the scattered supply of retired power batteries, the corresponding recovery and treatment costs are high. If the scale and technology cannot keep up, the economy will be much worse.
Regarding the prospects of the power battery recycling industry, at the recently concluded 2019 Annual Lithium Battery & Electric Vehicle Annual Conference, China Tower Energy Wang Dinggan said that the cumulative decommissioning of power batteries by 2020 will reach 200,000 tons (about 25GWh) and the cumulative decommissioning by 2025 It will exceed 780,000 tons (about 116GWh). The market space for power battery utilization and recycling in 2019-2025 is expected to exceed 60 billion yuan.
In addition, Wang Dinggan also believes that although the country has successively issued relevant documents regarding the recovery of power batteries, for example, the storage and logistics of decommissioned lithium batteries need to be managed in accordance with the ninth category of dangerous goods, and the echelon processing enterprises must be included in the Ministry of Industry and Information Technology traceability management system, Purchasing and sales are still market-oriented.
Business feedback on policy
The policy increases the entry threshold for power battery recycling, which is conducive to industrial chain cooperation and technological innovation. But in the end, the actual effect depends on the game of market forces.
A senior industry source told Gaogong Lithium Battery that the advantage of the high policy requirement is that the operator will consider more policy risks when selling batteries, which will help recycling companies to acquire more batteries.
The disadvantage is that non-compliant companies may drill holes and further take advantage of low costs to acquire more batteries to maintain profitability.
In addition, high policy requirements are only advocacy and suggestions, not mandatory laws and regulations. For the enterprise itself, in terms of power battery recycling, it is still a free choice of the market, and there is no obstacle such as administrative monopoly.
Chen Jinzhao, general manager of Zhongtianhong Li, said that the power battery recycling policy has promoted the close cooperation between the tier-utilization enterprises and new energy automobile factories, thereby allowing more retired tier-level use of power batteries.
In terms of the market, the first-tier enterprises will further enhance their strength to meet the policy compliance requirements and accelerate the elimination of backward production capacity.
Policy implementation possibilities
As far as the policy content is concerned, it is raising the threshold for power battery recycling.
Specifically, it increases the expenditure costs of power battery companies in terms of policies, environmental protection, and safety. However, for power battery recycling channels, policy guarantees have increased, and legal compliance has become clearer.
Many industry insiders have feedback that the policy will, to a certain extent, force recycling companies to increase technological innovation and business model improvements, further reduce costs and improve economic efficiency.
However, due to loopholes in the implementation of the policy, some non-compliant companies may increase their efforts to gain more profits.
In fact, policy is only one aspect, and the most fundamental thing still depends on market games.
If this is the case, end consumers are demanding more environmentally friendly and safer power battery recycling. Those recycling companies that want to survive and develop will definitely try their best to follow the market trend and work towards a more demanding battery recycling system. The remaining recycling companies that cannot meet the requirements of the terminal will naturally be eliminated by the market.