After participating in the survey, small workshops have "swept goods" at high prices, and white-listed enterprises are "hard to eat" power battery recycling bodies

The reporter recently found in many places that with the large-scale retirement tide of power batteries, more and more companies have begun to lay out recycling business, and a large number of small workshops have also poured into it.

The cost of whitelisted enterprises is limited, and small workshops rush to collect supplies

The reporter's recent investigation found that driven by the development of the new energy industry, the recycling capacity of power batteries has increased rapidly in recent years, but there has also been disorderly expansion, the proportion of standardized recycling is small, most of them flow into small workshops, and some extensive dismantling has huge potential safety hazards and environmental risks.

Recycling companies in Jiangsu, Henan and other places reported that the recycling price of lithium batteries will skyrocket in 2022, and enterprises from all parties will accelerate the influx of recycling tracks. According to data from the China Business Industry Research Institute, there were only nearly 2,000 registered battery recycling-related enterprises in 2018, and by 2022, the number has exceeded 42,000, an increase of more than 20 times. According to an industry insider, with the addition of non-standard small workshops and traders, there are about 100,000 battery recycling-related institutions.

The reporter inquired about the website of the Ministry of Industry and Information Technology and found that up to now, the list of enterprises (referred to as the "white list") that meet the "Industry Standard Conditions for the Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles" has been released in five batches, with a total of 156. The relevant person in charge of a whitelisted enterprise bluntly said that according to the current number of retirements, the number of whitelisted enterprises has been slightly "excessive".

What's more worrying is that the white list does not have mandatory exclusivity, and informal enterprises "grab" retired batteries through affiliation or unreasonably high prices, and standardize enterprises to be limited by costs, but they are at a disadvantage in the process of competing for supplies, and bad money drives out good money, resulting in a large number of power batteries flowing into non-standard recycling enterprises and even small workshops.

"I participate in several bids a month, and I rarely win bids for more than a year. Some small workshops always bid about 10% more than the normal cost price. "The person in charge of the marketing department of a company in Henan said that although the company has entered the white list, it can only temporarily stop production this year." It is also a loss to receive the goods at a higher price, and it is not cost-effective. ”

According to the relevant person in charge of a white-listed enterprise research institute in East China, the company began to lay out the power battery recycling business around 2015, even if it is located in the Yangtze River Delta region where new energy vehicles are concentrated, some small workshops "rush to collect" have a great impact on normal channel recycling, especially since 2021, the phenomenon of "not enough to eat" is more common in formal recycling enterprises, and the capacity utilization rate of some companies is less than 50%.

A recycled new energy vehicle power battery displayed by a company. Profile photo

A number of industry insiders reminded that some small workshops are deformed and grab goods at high prices not only distort the order of the recycling market, but also hide potential safety and environmental risks. A number of videos provided by an insider show dozens of workers "violently dismantling" with their bare hands next to a few small cutting machines, and there are no environmental protection and firefighting facilities in sight. According to industry insiders, some small workshops make a façade room, find a few people at random, and use scissors, hammers and other tools to do it, and there is a risk of fire and explosion at the scene.

In addition to the chaos of recycling channels, back-end processing is also facing difficulties. Some experts believe that for retired power batteries with relatively high energy density and good performance, it is theoretically feasible and necessary to use electric bicycles and construction machinery and equipment in echelons. However, Lu Jinlong, honorary chairman of the Jiangsu Bicycle and Electric Vehicle Association, said that in recent years, fires in energy storage facilities and lithium batteries for electric bicycles have mostly used batteries for cascade utilization. How to do a good job in echelon utilization urgently needs to be regulated by relevant departments. Wang Huaidong, chairman of Changzhou Houde Renewable Resources Technology Co., Ltd., said that some manufacturers are rapidly iterating power battery technology without fully considering back-end disposal, which also brings huge challenges to recycling companies.

There are three major shortcomings in the recycling system

Interviewed industry insiders said that there are three major shortcomings in the current power battery recycling channels and back-end utilization.

First of all, the relevant laws and regulations are not perfect, and the implementation of policies is alienated. The "Guidelines for the Construction and Operation of New Energy Vehicle Power Battery Recycling Service Outlets" requires enterprises in the production and cascade utilization of new energy vehicles to establish recycling service outlets through self-construction, co-construction, and authorization. However, at the actual implementation level, the threshold of recycling institutions is relatively low, mainly depending on the price, whether the outlets operate in a standardized manner after the successful declaration, and are not strictly supervised.

The reporter's investigation found that in some places, there is a lack of effective administrative management or supporting punishment regulations in response to the chaotic status quo of recycling channels. At the same time, the existing policy does not make mandatory provisions on the transfer channels of retired power batteries, resulting in small workshops often being able to grab the supply of goods at abnormally high prices.

Secondly, the economy of cascade utilization is poor, and there is a lack of unified safety standards. The mainland encourages retired power batteries to carry out cascade utilization in the fields of base station backup, charging and swapping, but due to factors such as relatively immature technology, cascade utilization is still in the demonstration application stage. According to a number of business entities engaged in the cascade utilization of power batteries, with the decline in raw material prices, new battery inventories are large and the prices are low. The echelon utilization of power batteries requires a lot of investment in dismantling, testing and reorganization, and how to reduce the processing cost while ensuring benefits is a major challenge at present. It is also difficult to eliminate potential safety hazards in the process of cascade utilization. Some people in the industry said that many retired power batteries are from unknown sources and are prone to hidden dangers such as internal short circuits and electrolyte leakage. Lu Jinlong revealed that due to the lack of mandatory safety standards for cascade utilization and the lack of standardization for reuse, related products are prone to problems.

In addition, the mainstream process of recycling is prone to pollution, and the producer responsibility system has not been implemented. Gu Yifan, a professor at Beijing University of Technology, said that at present, the mainstream recycling methods of retired power batteries in mainland China have a lengthy technological process, producing a large amount of waste such as iron and aluminum slag, and there is still a lack of economic and reasonable utilization technology and engineering solutions.

A number of interviewees said that because many manufacturers have not implemented the producer responsibility system, the residual value assessment of different brands and different types of batteries lacks consistency, and it is difficult to implement fine disassembly. Gu Yifan revealed that the components, structures and sizes of power batteries recycled by social sources in mainland China are complex and diverse, and the coverage rate of the life cycle database is insufficient. In the future, the export of power batteries in mainland China may face many barriers.

Take multiple measures to improve the level of recycling and reuse

The interviewed industry insiders suggested that the implementation of the power battery producer responsibility system should be promoted, the existing traceability management methods should be upgraded, the information sharing of recycling industry chain enterprises should be strengthened, and the entry threshold and qualification requirements should be strict.

A person in charge of a power battery company suggested that the implementation of the extended producer responsibility system should be strengthened, and incentive measures such as "pre-deposit system", "old for new rewards and subsidies" and "green points" should be adopted to encourage consumers to participate in industrial development and collaborative governance. The competent authorities can promote the exchange and sharing of information between the participants in the power battery recycling industry chain, and establish a rigid constraint system for the subjects that are not in place.

At the same time, strict market access for recycling enterprises. For some small workshops with a foundation, improve technology, go through procedures, incorporate them into management, and promote their formalization; For small workshops with poor basic conditions and no willingness to improve, persuade integration or shut down; Small workshops that violate laws and regulations shall be banned in accordance with the law. A number of industry insiders suggested that the qualification requirements for registered capital, production capacity scale and product quality of power battery recycling enterprises should be improved, and a dynamic and exitable enterprise information disclosure mechanism should be established to improve the market credit system.

In view of the imperfect current recycling system, Gu Yifan suggested that the development roadmap of the power battery recycling industry should be formulated, the proportion of formal recycling and the comprehensive efficiency of reverse logistics should be improved, and a digital and large-scale recycling system could be established in key regions such as Beijing-Tianjin-Hebei, Guangdong-Hong Kong-Macao, and the Yangtze River Delta. Wang Huaidong suggested that it is necessary to build a new energy recycling research and development platform with colleges and universities, and build a major innovation platform with leading enterprises in the industry to improve the utilization efficiency of lithium resources in the whole chain. (Reporter Qin Huajiang, Lu Huadong, Zheng Shengzhu report from Nanjing)