In 2013, the German waste management and recycling markets totaled approximately EUR 17 billion, representing 17% of the global market volume. The basis for Germany’s leadership in the global recycling industry is the country’s first mover role in waste management law and a business environment that favors innovation and new technologies.
Germany Trade & Invest’s Anne Bräutigam and Flérida Regueira Cortizo spoke to Simon Glöser-Chahoud, Sonja Rosenberg and Sandra Huster from the DeMoBat (“Industrial Disassembly of Battery Modules and E-Motors to Secure Economically Strategic Raw Materials for E-Mobility”) project at the Karlsruhe Institute of Technology about the battery recycling market in Germany.
How do you assess the current status of electric mobility in Germany?
Sales figures of battery electric vehicles (BEVs) and plug-in electric vehicles (PHEVs) have more than tripled in 2020 and currently hold a share of more than 10 percent of overall new vehicle sales in Germany. This share will continuously increase in the coming years and is expected to reach around 30 percent in 2030 – leading to an “in use” stock of 7 to 10 million vehicles in 10 years. Although current EV sales are subsidy driven, electric vehicles are becoming increasingly beneficial from an economic perspective compared to conventional vehicles. To this end, electric mobility in Germany is on the verge of entering the mass market. This is accompanied by high investments in charging infrastructure. While sales figures are strongly increasing, the end-of-life treatment of obsolete traction batteries is still in its very early stages with many technical and organizational challenges to be tackled in the coming years.
Disassembly see the current challenges in battery disassembly
Disassembly is associated with numerous challenges – one of the central ones being the lack of standardization of traction batteries in terms of system design, cell shape and cell technology. This makes automated dismantling and disassembling very difficult. However, automation seems inevitable given the mass flows of spent batteries that must be managed in the coming decades. Manual disassembly – the predominant method to date – is time-consuming and dangerous due to the high voltages involved, the possibility of short circuits, overheating, and fire. This challenge is even greater when disassembly is performed as a preparation step for second-life applications such as repurposing to stationary energy storage. That is because in this case a deep discharging of the battery – which will destroy cell functionality – is not possible. For recycling, the battery components no longer need to be functional after disassembly, which is why the battery can be deeply discharged and destructive disassembly methods can be applied. For second-life applications on the other hand, non-destructive work on an active battery is required. Missing or insufficient information about the battery to be dismantled which could be provided – for example via standardized labels, access to the battery management system or a central database – further complicates disassembling.
What issues are you working on in the DeMoBat project?
A key processing step in the treatment of obsolete battery packs is the disassembly as preparation for further treatment. As indicated before, disassembly in state-of-the-art battery treatment is mainly performed manually – causing high costs and posing risk of injury. The goal of the DeMoBat project is to develop flexible, automated, robot-assisted disassembling processes for EV batteries and drive trains. This poses various technical challenges. Beside the technology development, the project includes different pillars of accompanying research analyzing legal aspects and business models in the context of closed-loop supply chains for EV batteries, reverse logistics, capacity planning, and the assessment of economic and ecological aspects of different processing routes of obsolete batteries. The project is funded by the Ministry of the Environment Baden-Württemberg and coordinated by the Fraunhofer Institute for Manufacturing Engineering and Automation (IPA). Besides KIT, further research partners include the CUTEC Research Center, the University for Applied Sciences Esslingen (HS Esslingen) and the Brandenburg University of Technology (BTU) as well as numerous industry partners.
What business models are conceivable for the recycling of traction batteries?
Potential business models for the treatment of obsolete EV batteries need to be economically feasible and should have ecological advantages. While the economic perspective asks for cost-effective recovery, which is the leading aspect of traditional business models, the environmental perspective is increasingly gaining importance. Keeping products and materials in use as long as possible by reusing them and applying efficient recycling techniques are crucial elements of the overall European circular economy goal. This goal is also addressed in the recently published proposal for an EU battery directive. Potential business models include second-life concepts such as remanufacturing or repurposing before subsequent recycling of obsolete traction batteries. The reuse of traction batteries might include some updating in the form of remanufacturing which asks for industrial recovery standards. Such processes contain at least a partial disassembling and exchange of some components such as the weakest battery modules within a battery pack to regain full functionality. Using remanufactured batteries as spare parts in the after-sales business can be of interest for original equipment manufacturers (OEMs). These business options can be performed best by OEMs or battery suppliers, but if the battery management system (BMS) is accessible to all stakeholders, independent remanufactures could also enter the market.
If obsolete traction batteries or their components are used in further fields of application such as battery energy storage, the corresponding business models focus on repurposing. Some existing pilot projects in this context are based on cooperation between energy companies and OEMs from automotive industries. Beside these pilot projects, some first independent start-ups are currently evolving their business.
Nevertheless, at the latest after their second use, all EV batteries will have to be recycled. In order to meet the expected amount of battery returns from electro-mobility, today’s recycling capacities – which are currently dominated by the treatment of small batteries from consumer electronics – will have to strongly increase. Next to existing recycling companies, new companies and in some cases OEMs focusing on the treatment of their own battery system will enter the market. Recycling technologies that focus on lithium-ion batteries are an active research field. While current recycling is dominated by pyro-metallurgical processing focusing on the recovery of high-value cathode metals such nickel or cobalt, more advanced recycling concepts are currently entering the market. These will include combined mechanical and hydrometallurgical processes that also enable the recovery of battery-grade lithium and direct recycling processes which enable the direct recovery of active electrode materials that can be directly reused in cell production.
What can the future of battery return logistics look like?
The reverse logistics management will develop with the increasing return numbers of obsolete batteries. Various factors will influence the reverse management network. First, legal aspects in the form of regulations form a rough framework for transport and storage conditions. We will have collection points for obsolete batteries – for example at garages or disassembly stations for end-of-life vehicles. Although the company that brings the battery into the market is responsible for its end-of-life treatment, cooperation and networks are expected to be formed to perform the reverse tasks more efficiently. As batteries are hazardous goods, transport and handling can only be pursuit by qualified companies. They will collect batteries and transport them to recovery centers, either disassembly centers that enable further treatment of battery components or recycling companies that focus on material recovery. Because collection points of obsolete batteries are widely spread, intelligent planning of transport is needed to build a cost-effective and safe return management. This will include suitable location planning. While recycling processes usually profit from economies of scale, which will lead to large centralized recycling facilities, disassembly and separation of different battery components could also be performed at various decentralized disassembly stations – which might also be of advantage for consolidation of different fractions for further transportation to respective recovery facilities. Besides transportation, the logistical management includes the (temporary) storage and associated inventory planning which is also costly and subject to various regulations.
What new legal regulations do you expect that could provide new impetus in this market?
First and foremost, the new EU battery regulation, for which a first proposal was released in December 2020, will have an impact. Unlike the current EU battery directive, the new proposal acknowledges traction batteries as a separate category. There are specified target recovery rates for elements like cobalt, lithium and nickel, and new batteries must contain certain amounts of recycled materials. If these regulations are retained in the final version of the proposed regulation, this will impact the recycling industry, because some existent, comparatively robust and low-cost recycling practices such as pyro-metallurgical treatment might not fulfill the requirements, while other more costly recycling processes become competitive due to their higher recycling efficiency. Furthermore, with the suggestion of a legal framework for repurposing and remanufacturing of batteries in the proposal, a previously gray area is tackled. This could fuel the market for second-life batteries and enable new business models, since there would be more security for both the original battery manufacturer and companies that focus on repurposing and remanufacturing of third-party batteries. Besides the new EU battery regulation, it would be desirable that end-of-life vehicle regulations are adjusted to electric vehicles, and that transportation regulations like the ADR (Accord européen relatif au transport international des marchandises Dangereuses par Route) ease the handling of damaged batteries.
What opportunities do you see for international companies to participate in the German value chain?
Vehicle manufacturing is based on a global supply system and production network. The same is expected when establishing closed-loop supply chains in the automotive sector. We expect a close cooperation between automotive industries (OEMs and their suppliers) and recycling industries. This will include international players. As Germany is the largest automotive market within the EU regarding both vehicle manufacturing and sales numbers, we also expect a strong position of Germany in the end-of-life market of EV traction batteries. This includes the entire value chain from collection, disassembly, second-life applications and subsequent recycling. However, it should be considered that currently only around 20% of old vehicles that are deregistered in Germany also enter German car scrapping facilities, while 80% of old vehicles are exported to other countries. Nevertheless, we expect this ratio to change when regarding end-of-life treatment of electric vehicles. This will facilitate the establishment of closed-loop supply chains for EV batteries. Karlsruhe Institute of Technology – Institute for Industrial Production (IIP) Karlsruhe Institute of Technology (KIT) is among Germany’s largest research universities with the specific objective to make significant contributions to global challenges in the fields of energy, mobility, and information. The Institute for Industrial Production (IIP) within the KIT has extensive experience in techno-economic and environmental assessments of innovative technologies. The institute includes the Chair of Business Administration, Production and Operations Management, the Chair of Energy Economics and the French-German Institute for Environmental Research (DFIU). Characteristic of the activities at IIP is the interdisciplinary orientation in research and teaching, especially the conjunction of engineering-economic approaches and quantitative methods of operations research and informatics. Particularly the boundaries between energy system analysis and sustainable industrial production are in the focus of IIP’s research activities.
Simon Glöser-Chahoud graduated from TU Berlin with a diploma in industrial engineering in 2010 and he holds a doctorate degree from TU Clausthal. Before joining IIP, where he currently holds a position as the head of the “Sustainable Value Chains” research group, he worked as a project manager and research associate at Fraunhofer ISI for more than six years. Simon Glöser-Chahoud is coordinating the accompanying research in the DeMoBat project.
Sonja Rosenberg graduated from WFI – Ingolstadt School of Management Catholic University of Eichstätt-Ingolstadt (KU) in 2016 with a master’s degree in Management Science focusing on supply chain management, production and logistics. She joined the DeMoBat project after working on several national and international research projects at the Institute for Industrial Production (IIP).
Sandra Huster graduated from KIT in 2019 with a master’s degree in industrial engineering. Since then she has been working as a research associate at KIT, Institute for Industrial Production (IIP). She is part of the DeMoBat project team examining the industrial dismantling of traction batteries.
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Waste management, recycling, and the circular economy in Germany
Market Development & Legal Framework
Innovations and new technologies are changing the demand for resources worldwide. In Germany, the energy transition, digitization, and a growing awareness among consumers regarding sustainability have increased the potential for innovative international waste management and recycling companies.
The recycling of wind turbine components and carbon fiber composites, rare earth elements, electronics, electric car batteries, packaging, and circular fashion are just some examples of promising new market niches. Between 2008 and 2015, the German circular economy industry grew by 7.3% annually, and it is estimated that it will grow a further 5.2% per year through to 2025 – exceeding expected global market growth of 4.4% p.a. (BMUB/Roland Berger). With a turnover of more than EUR 39.4 billion (Statista, Eurostat, 2019), the German recycling industry is leading in Europe.
The provisions of the German Waste Management Act (KrWG) are the backbone of Germany’s leading circular economy market. The KrWG enshrines the notion of product responsibility by defining responsibilities along the product life cycle and offering incentives to manufacture durable products. The act’s goal is to turn a waste management culture into a resource management culture, minimizing waste generation and maximizing reuse and recycling.
A selection of business opportunities at a glance: Circular fashion
With an estimated turnover of EUR 23.7 billion in 2019, Germany is home to one of the largest clothing markets in Europe (Statista 2020). But let’s take a look into the more distant future: What will fashion look like in 2050? “Environmentally friendly, resource-saving, and recyclable”, is what the Confederation of the German Textile and Fashion Industry says. However, the development of the market for circular fashion and sustainable textiles suggests that the future is now:
sustainability is important or even very important when making a purchasing decision. This offers new opportunities for the development, production, and sale of sustainable textiles and clothing recycling in Germany.
A selection of business opportunities at a glance: Packaging recycling
Demographic changes and new lifestyles, such as the increase of one- or two-person households, an ageing society, a growing tendency to eat out and the rise of mail-order businesses and e-commerce have led to a constant increase in packaging waste in Germany. While in 1991, packaging waste totaled 15.6 million tons and even decreased for some time after that, it then peaked in 2017 at 18.7 million tons (Federal Environment Agency 2019). Of this, only 69.9% was recycled (Federal Environment Agency 2019). The recently introduced German Packaging Act demands higher recycling quotas for packaging in order to close the gap, thus enhancing the need for new and improved plastic recycling technologies.
The need to improve recycling quotas is especially great for plastics, which represent 17 % of all packaging waste in Germany (Federal Environment Agency 2018). The ban on plastics waste imports to China has increased the need for more and improved recycling of plastics within Germany.
Recovery rates for packaging waste in Germany
Minimum recovery rate as of 2019
Minimum recovery rate as of 2022
Plastic packaging
58%
63%
Aluminium
80%
90%
Tinplate and ferrous metals
80%
90%
Paper and cardboard
85%
90%
Glass
80%
90%
Beverage carton
75%
80%
Source: Deutscher Bundestag, Drucksache 18/11274 & BMUB
A selection of business opportunities at a glance: Recycling of construction materials
In 2018, 417 million metric tons of waste was generated in Germany (destatis, 2019). With 228 million metric tons of waste, building and construction materials represent the lion’s share of waste, therefore making it one of the most attractive markets for recycling technologies in Germany.
Within German buildings, 220 million tons of wood, 10.5 billion tons of mineral construction material, and 100 million tons of metal (estimation, Gabriel 2010) are waiting to be extracted and represent a huge potential for reuse and recycling. Innovative solutions and new technologies are therefore needed to meet the pressing demand for construction material recycling in Germany.
A selection of business opportunities at a glance: lithium-ion battery recycling
Although the EV battery recycling market in Germany is not yet mature, the future recycling potential for batteries in Germany and the EU is significant. Germany’s federal government aims to have seven to ten million electric vehicles registered in Germany by 2030. According to studies by Pillot, the lithium-ion battery market should represent 278 GWh/year in 2025. The European Commission is also planning to set binding standards for cell manufacturing – from raw materials and production processes through to cell recycling.
Germany is at the forefront of battery recycling and battery second life research. Prominent German research institutes and universities are involved in end-of-life of lithium-ion battery research projects, mainly within the Horizon 2020 research program framework. Participating institutes include the Fraunhofer-Gesellschaft, RWTH Aachen, the technical universities of Munich and Freiberg, and the University of Münster.
Some of the research projects have resulted in the establishment of whole recycling plants in Germany. Duesenfeld GmbH, for example, established its plant in Wendeburg from the LithoRec project in 2017. Another pioneer in the battery recycling field is Accurec Recycling GmbH, who started operating from their plant in Krefeld in 2016. This plant is set to be expanded in 2021. Redux Recycling GmbH also has long expertise through its plant in Bremerhaven. Further operations and pilot projects are planned by several German companies and research institutes. Many companies also look at international cooperation projects to set up their recycling processes. Germany, with its great industry footprint and sustainability goals, is therefore an ideal base for companies to develop their technologies and set up recycling plants.
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