The boom in the new energy vehicle market and the related supporting policies have accelerated the implementation of the pilot demonstration project of power battery recycling.

On June 16, a wholly-owned subsidiary of Luen Mei Group, Battery Science & Technology implemented its "50,000-ton power battery dismantling project" in Tianjin Ziya Economic and Technological Development Zone. This is China’s first base for “physical dismantling” of electric power battery, as well as one of the 18 pilot demonstration projects for the recycling of power batteries of new energy vehicles in the Beijing-Tianjin-Hebei region announced in July 2019.

On the same day, Guo Qinghua, president of Battery Science & Technology, said in an interview with the Economic Observer that, "This is our first production base. In the future, we will implement such projects in other areas of China. We plan to invest in 5 to 6 such projects so that their production capacity will reach 250,000 to 300,000 tons, accounting for 30% of the total national production capacity."

The confidence Guo Qinghua has in the successful implementation of the projects he will invest in lies in his optimism about China's future market of new energy vehicle.

On June 17, an industry expert told the reporter that in the Beijing-Tianjin-Hebei region, the promotion of new energy vehicles has become an important means of improving air quality. The promotion of a large number of various types of new energy vehicles in this region has been greatly boosted, making this region a rather typical and representative example of new energy vehicle promotion. More than 30,000 tons of power batteries in the region are expected to be out of service this year.

According to a notice issued by seven ministries including the Ministry of Industry and Information Technology in 2018, the pilot project of the recycling of power batteries of new energy vehicles will be carried out in some areas of the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, and the central region so as to propel the implementation of similar projects in surrounding areas.

By 2020, a power battery recycling system should be established and perfected, a number of demonstration production lines for power battery recycling should be built, and a number of demonstration projects for the efficient recycling and high-value utilization of out-of-service power battery should be carried out to promote the development of a number of model enterprises engaging in power battery recycling.

Guo Qinghua said, "At present, our plan is still in the initial stage. Considering that the optimal service radius of power battery dismantling and recycling base is 300 kilometers, we plan to carry out the projects in hot areas where the new energy vehicle industry is booming, such as the Beijing-Tianjin-Hebei region. In the future, we plan to carry out more projects of similar scale in Central China, East China, South China and Southwest China."

Market space

The sales volume of China's new energy vehicles and the number of out-of-service batteries have been increasing rapidly over many years. “New energy vehicle” has been repeatedly mentioned in the Report on the Work of the Government over the past three years. For example, this year’s Report proposes “setting up more charging stations and exchange stations, and promoting new energy vehicles".

Data from the China Association of Automobile Manufacturers show that by the end of 2019, there have been 3.81 million new energy vehicles in China. National Big Data Alliance of New Energy Vehicles estimates that by 2020, about 200,000 tons of batteries will be out of service in China, among which 140,000 tons will be recycled and about 60,000 tons will be scrapped. China Automotive Technology & Research Center Co. Ltd. predicts that by 2025, about 350,000 tons of power batteries will be scrapped in China every year.

Experts in the aforementioned industries believe that in the future, China's recycling market for power battery of new energy vehicles will be huge. As a result, to complete the industrial chain and recycle the battery resources become essential because they will not only create considerable economic benefits for enterprises but also achieve enormous environmental and social benefits.

The person in charge of Tianjin Ziya Economic and Technological Development Zone told the reporter of the Economic Observer that, "We are more concerned about the environmental and social benefits. So we are very supportive of the implementation of such green projects."

Talking about the original intention of carrying out the project, Guo Qinghua said that ecology is a very important part of the whole industry chain, and that if out-of-service power batteries cannot be disposed of properly, environmental pollution and resources waste will be inevitable.

However, at present, China’s battery recycling market is still facing the problems of small and scattered production capacity, incomplete recycling systems, low recycling ratio and imperfect industrial chain.

The Central Committee of China Democratic National Construction Association pointed out in its proposal of “On Speeding up the Recycling of Power Battery of New Energy Vehicle" in this year’s Two Sessions that the current proportion of new energy vehicle power battery recycling is too low in China and the top-level design of recycling needs to be strengthened. In 2018, the volume of power battery recycling only accounted for 7.4% of the volume of the total power battery scrapping in China.

Moreover, the dismantling of out-of-service power batteries of new energy vehicles requires sophisticated techniques. Guo Qinghua said, "Many small and medium-sized enterprises and even self-employed people can dismantle lead-acid batteries, but without the key technologies, they are unable to dismantle power batteries since it requires enterprises to have strong technological strengthen and R&D capacity."

According to the reporter of the Economic Observer, at present, Battery Science & Technology has built a complete battery dismantling and recycling system for out-of-service electric power battery scrapping, electrolyte removal, lithium battery materials sorting and other treatment processes, which is environmental friendly, efficient and safe. Battery Science & Technology is one of the formulators of the eight national standards for the recycling and dismantling of out-of-service power batteries.

Project implementation

Founded in 2016, Battery Science & Technology is one of the enterprises in the environmental protection technology sector of Luen Mei Group. It mainly engages in power battery stepwise utilization and recycling, and the establishment of the ecological chain for power battery recycling. While implementing its first project, the company is seeking to accelerate its industrial expansion into the national market.

The reporter of the Economic Observer learned that the company's project in Tianjin has a total planned investment of 300 million yuan with a production capacity of 50,000 tons, and is expected to be completed in five years. It is estimated that the output value will reach 460 million yuan and the annual tax paid will reach 12 million yuan. According to the plan, by the end of 2020, the project will be the first to create the production lines with the production capacity of 10,000 tons.

Battery Science & Technology said that based on the company's unique production process, the batteries can be scrapped without discharging electricity, so as to prevent electrolyte contamination caused by the discharging process indispensable in the traditional production process. To mitigate the harm of poisonous gas emitted in the process of battery dismantling, the company has created the "Pollution Control Unit" to collect and control unorganized gas emissions.

In addition, Battery Science & Technology’s production line is placed in sealed environment, and the whole production process is fully-automated without human intervention. The company’s production line is able to dismantle all the main types of power batteries commonly seen on the market, and it can process up to six 300Ah cells per minute and the separation and recovery rate of copper, aluminum, diaphragm, anode and cathode powder exceeds 95%. "The remaining battery materials can be used for construction, which has realized the full recycling of waste batteries.

“Considering that the optimal service radius of power battery dismantling and recycling base is 300 kilometers, we plan to carry out the projects in hot areas where the new energy vehicle industry is booming, such as the Beijing-Tianjin-Hebei region. In the future, we plan to carry out more projects of similar scale in Central China, East China, South China and Southwest China." Guo Qinghua told the reporter of the Economic Observer.

Guo Qinghua explained that the biggest difference between Battery Science & Technology and other enterprises is that Battery Science & Technology can physically dismantle electric power batteries and that the base the company has set up has China’s first large-scale production line for electric power battery dismantling.

Guo Qinghua believed that according to the national plan, there should be several model enterprises in the industry responsible for exploring and improving the operation model and technical solutions, and then promote them to the entire industry to achieve industrial scale benefits. In the future, the market will be reserved for enterprises with obvious technical advantages and other comprehensive barrier advantages.

In December 2018, Beijing, Tianjin and Hebei jointly released the "Pilot Plan for Recycling Power Battery of New Energy Vehicles in the Beijing-Tianjin-Hebei Region”. This plan envisaged that by 2020, two to four demonstration enterprises for dismantling out-of-service power batteries and factories for graded utilization of out-of-service power batteries will be built in the region, and that one to two enterprises for the recycling of power battery will be built then.

"The company's overall plan for the next few years is to achieve the production capacity of 250,000-300,000 tons, accounting for 30% of the national market." Guo Qinghua said.