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The circular economy brings new requirements for the battery industry

The high growth battery industry offers new business opportunities for various operators. In Europe, the battery industry needs to co-evolve with the circular economy.


2. September 2021

Jani Kiuru, Chief Technology Officer, Finnish Minerals Group
Sanja-Maria Olli, Chemist, Finnish Minerals Group

In Finland, companies, research organisations and cities have eagerly joined extensive collaboration projects for developing the battery industry. The reason is the growing demand for batteries and battery materials, for which sustainable solutions must be sought.

One of the current focus areas of the development work is to improve material cycles. Efforts have also been made to improve the efficiency of the production processes and to develop the properties of active materials when using recycled raw materials. New business opportunities will also be opening up in the coming years.

The changes are brought on by Europe’s slow transition from a linear to a circular economy.

Using recycled materials in batteries

The European circular economy model is based on product design that uses materials as efficiently as possible. For lithium-ion batteries, this means, for instance, increasing the energy efficiency of batteries. Also the amount of waste must be minimised at every stage of the value chain.

For example, when a lithium-ion battery reaches the end of its lifecycle in its original application, it may still be usable in another application. In the end, however, used products will be collected and broken down, either back to raw materials or for use in another part of the production chain. Depending on the product, some raw materials may be returned to the natural cycle.

While the circular economy sounds sensible, its challenges must be turned into commercially viable activities. For this reason, a lot of research and development is needed, especially with respect to battery industry development, which is gaining momentum in the EU. On the other hand, starting with a clean slate is often more attractive than the transformation of existing industrial solutions.

Upcoming regulation encourages new development

The proposed new regulation designed to modernise the EU’s regulatory framework for batteries is expected to be adopted in a few years’ time. Based on the draft regulation, it can be concluded that requirements will be imposed for the recycling of lithium-ion batteries and the materials used in them. Such regulation will also soon lead to new requirements on the use of recycled materials alongside raw materials extracted from mines.

The obligations to provide information will also increase. The future regulation will include provisions on the reporting of the carbon footprint of batteries. Also the reporting of the recycled content of products is included in the draft version of the proposed regulation.

The requirements concerning the supply chain due diligence process are under consideration. If the supply chain due diligence process becomes mandatory, requirements will be set for assessing the social and environmental risks related to the production, further processing and trading of certain raw materials and for including the relevant indicators on the production chain of batteries.

Finnish industry prepares for the change

The EU regulatory framework for batteries is one example of the measures that are now being taken to steer European industry towards a circular economy. Strict as the requirements may be, the transition will also provide a solid foundation for development work, innovation and new business ideas. In Finland, the challenges and opportunities have been tackled through broad-based co-operation within the battery ecosystem.

Highly industrialised Finland has strong expertise in metal processing, which means that we have a special interest and the ability to develop metallurgical recycling processes and pursue the integration of recycled materials to battery value chain products. We can support this work by developing digital solutions for the identification of the origin of raw materials.

The transition to the circular economy is also accelerated through industrial production side streams, whose productisation is considered a worthy target for research and development in Finland. In addition, we are committed to enhancing the efficiency of the internal cycles of industrial processes.

If the draft regulation on batteries is adopted, the calculation of the carbon footprint of batteries, and perhaps even the due diligence process for raw materials, will create a demand for new kinds of services and service providers that our start-up culture will surely be able to produce.


2. September 2021