Just over a month ago, the U.S. Department of Energy announced a $2 million investment in Lithium-ion battery recycling. You can find these batteries in almost anything that is rechargeable – power tools, phones, laptops, electric vehicles, and more. But what makes recycling them such a big deal and, according to the DOE, worthy of investment?

Lithium-ion, or Li-ion, batteries are rechargeable batteries mostly consisting of cobalt, graphite, lithium, and occasionally nickel and manganese. One of the greatest advantages of the battery is that they have a very high energy density at around 100 to 265 Watt-hours per kilogram. This means that lithium-ion batteries can store large amounts of energy in a relatively small space. As a result, they can be used to power small devices, such as a smartphone, or something larger and more energy-intensive, such as an electric vehicle, with multiple batteries. Additionally, these batteries have a low self-discharge rate of about 1.5-2 percent per month, meaning they don’t lose much charge while not in use. Due to these strengths, among others, Li-ion battery demand is expected to increase elevenfold by 2030.

As this demand rises, two important considerations come to mind. First, we need access to the resources necessary to produce the batteries; and second, we need to find a way to dispose of them properly. As the DOE and many others have identified, recycling can be a solution to both of these problems, despite only around 5 percent of end-of-life Li-ion batteries being recycled in the U.S. today. 

The market for recycling these batteries struggles for a couple of reasons. The recycling process is made difficult and costly because of both the hazard risks and the complex chemistry of the battery. Additionally, many types of Li-ion batteries have differing compositions and designs that would require unique disassembly processes, making a commonly efficient recycling process difficult. However, recycled materials can be sold to offset the costs. Overall, according to a 2021 study, Li-ion battery recycling results in between a profit of $21.91 per kilowatt hour and a loss of $21.43 per kilowatt hour, depending on wages, transportation distance, battery design, and recycling method. Adding to the uncertainty, this variation in profit doesn’t account for the market volatility of the recycled minerals such as cobalt and lithium.

While the profitability of recycling Li-ion batteries remains in question, there are some benefits of the practice: recycling the batteries leads to a slight increase in the supply of minerals without mineral extraction. Lithium mining, for example, has many drawbacks. It is not environmentally friendly, with 15 metric tons of CO2 released per metric ton of lithium mined. However, it is important to note that the energy-intensive process of Li-ion battery recycling can pollute as well through electricity generation. On the net,  the carbon emissions of producing Li-ion batteries with recycled materials are around 51.8 percent lower than with raw materials due to the absence of mining and refining.

Lithium mining is also extremely water intensive. The 12 to 18-month mining process uses about 500,000 gallons of water per metric ton of lithium – enough water to supply the average American household for about 4.5 years. Additionally, lithium mining can reduce biodiversity, as seen with decrease in the Chilean flamingo population.

When it comes to remanufactured batteries, there is some evidence that shows that Li-ion batteries made with recycled materials are more effective than those made with raw materials. This is because of the unique microstructure of the materials and other factors such as increased surface area. As a result, these recycled batteries can both last longer and charge faster.

Recycling Li-ion batteries also keeps them out of landfills. According to the EPA, used Lithium-ion batteries are considered hazardous waste and can release pollutants into the air, water, and soil that are harmful to humans. The batteries are also a fire hazard, making proper disposal integral for both businesses and individuals. Poor disposal practices have led to numerous fires in landfills across the country, such as the Pacific Northwest Landfill, which has suffered from 124 fires caused by Li-ion batteries. Information on these incidents along with many others can be found in this 2021 EPA report.

As more begin to realize the importance of Li-ion battery recycling, the practices continue to be improved. With incentives from the government, including a $5.5 million recycling prize from the DOE, companies such as Battery Resources are expanding their Li-ion battery recycling efforts. The Company combines metal compounds to create new cathode material that can make recycling easier and cheaper. The DOE’s ReCell Center is working on direct recycling, a method that would recover Li-ion battery materials without breaking down the chemical structure, also lowering costs. 

Cleaning up the disposal of Li-ion batteries and producing a more environmentally friendly supply are both important objectives that recycling can aid in achieving. While the cost-effectiveness remains uncertain, the technology is being constantly researched to improve efficiency. As many EVs, smartphones, and other devices containing Li-ion batteries reach the end of their life, and even more are being produced, it is necessary to continue thinking about the best policy and practices for encouraging effective and efficient recycling.


Written by Andrew Barton, Public Policy Intern


The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.