Toyota & Cirba join forces for US battery recycling
The agreement just signed between Toyota and Cirba Solutions allows Toyota to regionalise its battery collection loops from the Midwest and East Coast regions. Processing will take place at Cirba Solutions’ Lancaster, Ohio facility. Toyota already has recycling agreements with Redwood, which has a plant in Nevada that covers regional activity on the West Coast. Regionalising not only reduces Toyota’s costs but also scope 1, 2, and 3 emissions, which are important in environment, social and governance (ESG) reporting stipulations upcoming in the US and internationally.
Cirba Solutions’ Lancaster, Ohio facility can extract critical minerals from scrap and end-of-life batteries with an up to 95 per cent recovery rate to supply battery-grade metals for new EV batteries. Cirba Solutions’ Lancaster, Ohio facility recently received an $82+ million Department of Energy grant as part of the Bi-Partisan Infrastructure Law.
As part of the Inflation Reduction Act (IRA) and Bi-Partisan Infrastructure Law, the US Treasury recently published amendments to stipulations on electric vehicle batteries and their raw materials bound to government subsidies in the form of electric vehicle purchase tax rebates. This includes stipulations on recycling.
Although the Treasury document excludes materials “recycled by a foreign entity of concern” (FEOC), there is potential for battery materials to become eligible once they have been recycled by any country outside of the FEOC. If a battery with materials from China – primarily targeted by FEOC regulations – is recycled within the USA, the new vehicles containing those new batteries will become eligible for full subsidies.
This means great prospects for electric vehicle battery recycling activity in the USA. Just over a year ago, Cirba extended its recycling deal with General Motors, for the supply of end-of-life batteries. Cirba stated at the time that it aims to increase its lithium-ion battery processing capacity by approximately 600% over the next few years and open multiple additional processing facilities throughout North America. The company is investing $300 million in a new recycling factory in South Carolina with plans to start construction near Columbia in Richland County this year and begin operations by the end of 2024.
Volume of batteries in US lifecycle loops
Although Toyota has been tardy to produce fully electric vehicles, the Japanese carmaking giant was the first to Western markets with fully hybrid vehicles (HEV). The legacy carmaker followed up with a primary focus on plug-in hybrid vehicles (PHEV). In North America, Toyota says it has sold more than 6.2 million combined PHEVs and HEVs since 2000.
Batteries installed in new vehicles now won’t be ready for recycling for another 6-8 years, and if these are properly repurposed in second-life applications, which can give them further use for another 4-8 years, they won’t be hitting recycling markets for some potentially 16 years later. Toyota’s early foray into electric vehicles, even if half-cocked with hybrid vehicles, has given it an edge in being able to provide some volume of batteries ready for recycling right away.
Toyota says it collects approximately 25,000 used automotive batteries from its dealership network annually. These are primarily nickel-metal hydride batteries found in its hybrid electric vehicles. The company expects the number of batteries, particularly end-of-life lithium-ion batteries, to rise as the number of battery electric vehicles it sells increases. Toyota only released its first fully battery electric car on US markets in late 2021.
Toyota does not mention its plans for second-life uses in the USA, such as stationary storage applications to support grid stability. At least, on their website, Toyota states, “We are focused not only on the collection, testing and recycling of batteries into raw materials to create a sustainable supply chain but also on the development of second-life opportunities for remanufactured and repurposed Toyota hybrid electric vehicle batteries.” What happens in this rather significant and potentially lucrative aspect of the battery lifecycle remains to be seen. Certainly, the US government appears to have overlooked the issue in the IRA – something at least noted several times in EU policies on batteries and their industrial lifecycle loops.
Once battery materials are recycled, this material can be used for new batteries. Toyota is capitalizing on these opportunities with a new US plant for automotive batteries, Toyota Battery Manufacturing North Carolina (TBMNC), currently under construction, which is anticipated to go online in 2025 and has a total announced investment of nearly $14 billion. Originally announced in 2021, the North Carolina facility will have a phased ramp-up to support vehicles assembled in North America.
Reducing scope 1, 2 and 3 emissions
Another significant benefit of Toyota’s new deal with Cirba is that it can immediately begin shortening the transport distances between the battery lifecycle processing locations in the USA. Through the agreement with Cirba Solutions, Toyota expects to reduce its overall transportation and logistics costs by at least 70 per cent. Used batteries from the mid-west and east coast can now be processed within the region, reducing the average miles driven for collection and recycling from 1,251 to 582, based on 2022 data, according to Toyota. For example, batteries coming from the Cincinnati region will have a reduction of the total mileage driven for battery lifecycle journeys by what Toyota say is approximately 94 per cent.
The company notes that by reducing the number of miles driven for collection and recycling activities, it will be able to reduce transportation-related emissions significantly. This will markedly reduce the company’s scope 1, 2 & 3 emissions and improve subsequent environmental, social, and governance (ESG) ratings. ESG reporting is now considered as important for a company’s financial health as its annual financial reports. Apart from being considered a signal of a company’s overall performance, therefore attracting investor interest, ESG reporting also affects a company’s eligibility for some government support schemes in the USA and globally.
Christopher Yang, group vice president responsible for business development Toyota Motor North America summarised, “Cirba Solutions’ large and well-established transportation and recycling network ensures Toyota has nationwide battery collection and recycling to reduce both our costs as well as our operational carbon footprint.” This aligns with US strategic goals to keep critical raw materials within the country and build battery industry capacity, and benefits Toyota, too. “This moves us closer to our ultimate goal of creating a sustainable, closed-loop ecosystem for our automotive batteries,” notes Yang.
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