South Korea’s largest steelmaker POSCO Holdings [005490:KS] and GS Energy Corp, the energy unit of South Korean conglomerate GS Group [078930:KS], have inked an initial agreement to form a battery recycling joint venture (JV), as reported by the Korea Economic Daily on October 6. The two enterprises will inject a total of KRW170bn (USD121m) into the JV by the end of the year, with POSCO and GS Energy respectively holding 51% and 49% equity in the JV. Based on the JV, the two companies will initially focus on disassembling used batteries and extracting minerals such as lithium, nickel, cobalt, and manganese, then launch a Battery as a Service (BaaS) platform that allows customers to lease and exchange batteries for their electric vehicles (EVs).

Battery recycling businesses are prospering amid stricter environmental rules and mounting demand for lithium and cobalt, the major materials of cells and electronics. Mining these materials from the field is harmful to the environment as the process generates huge amounts of carbon emissions, while used batteries also intensify water and air pollution if not properly disposed of. The EU has enacted new rules that will demand auto batteries to have at least 12% recycled cobalt, 4% recycled lithium, and 4% recycled nickel in 2030, and the required proportions will further increase in 2035. According to market tracker SNE Research, the global EV battery recycling market is expected to expand to USD60.5bn in 2040 from USD279m in 2020.

Sources:

https://www.kedglobal.com/batteries/newsView/ked202210060015

https://www.greencarreports.com/news/1135251_raw-material-price-surge-ev-battery-affordability-gains-on-hold-until-2024

https://www.europarl.europa.eu/news/en/headlines/economy/20220228STO24218/new-eu-rules-for-more-sustainable-and-ethical-batteries

https://www.greenly.earth/blog-en/carbon-footprint-battery