Battery circular economy – a clean energy sector growth opportunity for Australia

21 August 2024 – The key message out of the 2024 Battery Recycling and Manufacturing Summit and followed up at this week’s Queensland Government Renewable Recycling Summit – the sector has the foundations, drawing on Australian innovations and know-how, to be a leader, in clean energy technology and support the low carbon energy transition underway. However, urgent action is required to develop scale.

Rhumbline Advisory Managing Director Chris Allen told the Summit the Federal Government had included the mining of critical minerals as part of its industry development plan, but “there was no mention of the recycling of critical minerals”. It could be argued that battery recycling is just extracting the minerals from batteries rather than mining them from the earth. The development of battery recycling capabilities in Australia touches across a number of Government funding initiatives including, renewable energy, critical minerals and manufacturing.

Mr Allen, who has a long history working in the energy and renewable sectors, said it was one of the biggest challenges facing the industry when seeking funding support. This challenge impacts the development of Australian capabilities and facilities when competing with the billions of dollars of government assistance being provided globally to kick start the sector.

Mr Allen said global investors were looking to maximise their risk adjusted returns. Capital is globally and sector fungible. It will generally gravitate where investors believe that they have the greatest chance of success and where they can generate an appropriate risk adjusted return on their capital deployed.

“The businesses and sectors that will flourish will be those that can optimise their risk adjusted returns,” he said.

“I think part of the role of Australian Government funding is to assist supporting developing sectors to increase the likelihood of success and for investors to receive a return on their investments. By reducing the risks with government support, the chance of success increases, the investment risk is reduced, the expected returns may be reduced and the ultimate cost of the product should be reduced to be competitive in a global market. Without this support capital will go somewhere else.”

The Federal Government announced earlier this year its Future Made in Australia policy which is targeted to address the major structural and strategic challenges that the Australian economy faces.

It said that Government support was needed to crowd-in the necessary private investment to scale up priority industries that will help the Australian economy navigate and prosper through these challenges.

The policy includes the Net Zero Transformation Stream, industries where Australia will have a comparative advantage as the global economy transitions to net zero.

ABRI President Nicholas Assef said the sold-out and highly successful Summit showcased the tremendous opportunity that existed for the industry, but it required assistance to commercialise ahead of the large volume of batteries coming through for recycling.

“We have a rapidly increasing volume of used commercial & consumer batteries coming down the pipeline and the private sector is investing in meeting this urgent challenge,” Mr Assef said.

“But we have to get the policy framework and government support right, and that’s not a job for tomorrow, but today, otherwise we are going to be left with growing stockpiles of batteries which will likely end up in landfill, not feeding back into a circular economy. As discussed at the Summit the American Government as an example has now extended over US$3 billion in grants since October 2022 for the battery recycling sector. This is the reality of the competitive landscape Australian companies need to do business on,” Mr Assef concluded.