Breakdown of a FOIA for American Battery Technology Company’s Second Lithium-Ion Recycling Facility: Part Two
As I posted in this note, thanks to a long-term investor, we have some documents that give us a bit more information about American Battery Technology Company ABAT 0.00%↑ second lithium-ion recycling facility.
A lot of it still needs to be broken down, and as stated in the note, the names, phone numbers, and emails of the people involved were not redacted. I do not have permission from the investor to post the full documents, nor do I want to, simply because of all the private information left in them and I have no desire to manually redact any of it.
If you are curious where Part One is you can find it here, it covered the documents from a FOIA for the grant application.
For now I just want to cover one topic, and that is how they plan to operate the second site. This information comes from multiple correspondences over the last few months with the State of South Carolina Department of Environmental Services (DES).
Depending on how they want to approach the waste handling regulations, they may have to purchase a second property, and this could be one of the reasons for no real progress updates.
Unlike Nevada, where facilities have up to 30 days before material is considered storage and feedstock is delivered and processed within 24-hours, South Carolina’s just-in-time window is 8-hours, leaving significantly less flexibility on processing feedstock.
ABAT has two options, and the documents make this distinction clear:
Option 1: Operate as a destination facility. All incoming feedstock must be processed within 8-hours of receipt. No storage permit is required, and the facility avoids EPA Treatment, Storage, and Disposal Facility (TSDF) certification and the heavier regulatory burden that comes with it.
Option 2: Cannot meet the 8-hour window, if that is the case DES stated this directly:
If you cannot process the waste within 8 hours of receipt you fall into storage and must get a storage permit.
That means a Resource Conservation and Recovery Act (RCRA) storage permit and full EPA TSDF certification, with location standards and additional fees.
Under this pathway ABAT would look to have the actual processing equipment, including shredding, slurry processing, and hydrometallurgical treatment tanks, classified as exempt recycling units under RCRA, meaning the machinery itself would not require its own permit. The storage of the batteries prior to processing would still fall under the full weight of TSDF regulations.
However that 8-hour rule is not federal law. As DES explained:
This is an interpretation from the department from the federal regulations. It was established as a precedent that they set with facilities operating in their state for the expectation of being staged vs stored.
The 8-hour requirement does not seem like a major issue at first. To be clear, this does not mean the facility can only operate for 8 hours a day. What it means is that from the moment any feedstock enters the facility it must be fully processed within 8 hours of arrival.
The issue comes when you get to the question of feedstock storage, and what happens when they cannot meet that window. ABAT asked what the regulations on a separate parcel for a Large Quantity Handler (LQH) storage property are:
An intermediate storage facility cannot be on the same property as the destination facility. In the past, the required separation would typically be around a half mile to meet the destination facility definition.
So even under Option 1, ABAT could possibly need a second site for buffer storage, and that storage property would still need to be permitted as a TSDF. So the company is not fully escaping the TSDF burden either way, they are just potentially limiting it to the storage property rather than the processing facility itself.
The original assumption by some of us was that local partners would be able to hold their waste until ABAT was ready to process it, effectively handling at least a portion of the storage burden, this timeline changes everything.
Not all feedstock will come from local partners, incoming material from other sources would still be subject to the 8-hour clock upon arrival, making a second property likely unavoidable, or processing limits would have to be worked into the just-in-time schedule to allow for delays due to unforeseen circumstances. That kind of limit could cut into yearly throughput and overall profitability of the site.
On the question of fees, the picture is not yet complete. What is known is that a TSDF carries an annual fee of $600.00 per year. However, as DES noted:
For storage of wastes, [redacted] will follow up with additional SC DES team to determine if a set storage fee would apply for storage or waste onsite.
That question remains open, meaning there is a potential additional cost that has not yet been resolved. And that is before you factor in the cost difference between building a smaller facility dedicated purely to storage versus an all-in-one solution that combines storage and processing under one roof.
That all-in-one approach would be a much larger and more complicated build, and with many states including South Carolina taking a harder look at how lithium-ion batteries are stored following the 2024 CMR fire, the larger facility requirements alone could make that option cost prohibitive without state and local incentives.
That harder regulatory stance is not new. Back in 2024 companies were trying to use the Commercial Chemical Product (CCP) exemption under 40 CFR 261.2(c)(3), which allows off-spec batteries that never made it into service, either because they failed quality testing or were damaged in transport, to be managed as a product being reclaimed rather than as hazardous waste.
Several of the new lithium-ion recyclers wanting to set up in South Carolina, many of whom were planning to use EV manufacturer reject batteries as their primary initial feedstock, were looking to route that material through the CCP exemption to sidestep RCRA hazardous waste regulation entirely.
The fact that the current correspondence is focused on destination facility requirements and TSDF certification and has nothing at all about CCP tells you that approach did not gain traction with South Carolina regulators.
On the cost front again it was brought up by an agent of the South Carolina Department of Commerce in one of the correspondences, that North Carolina does not charge tonnage fees for a TSDF. If DES comes back with an unfavorable answer on storage fees, South Carolina becomes a more expensive regulatory environment than at least one neighboring state.
There is one item that is actually good news on the siting front. On setbacks and air permitting, DES was straightforward:
For a Title V Air Permit there are no set back requirements. As a part of the construction process, the department would want to see air dispersion modeling from the system itself. As long as you can show compliance with standards at the property boundary no additional set backs would be required.
That means ABAT has more options for where they can actually put the facility without running into regulatory distance requirements from neighboring properties or wetlands. While no locations were given, it was stated in one email that they were looking at three locations, so proximity of a suitable parcel for storage may be the only real factor.
When ABAT asked about formally establishing a destination facility in South Carolina, the response was:
[Redacted] will have to ask the hazwaste compliance staffing associated with this process to establish a Destination Facility within the state.
That tells us the destination facility pathway, which is the regulatory route that would allow ABAT to avoid the heavier TSDF permitting burden by processing all incoming material within 8-hours of receipt, is not yet an established process in South Carolina, at least for lithium-ion recycling. This is backed up by a separate correspondence about the national regulatory landscape for lithium-ion battery recycling from an employee of the South Carolina Department of Health and Environmental Control (DHEC).
I read back through the chain of emails here from last year and am interested to know if there are any destination facilities that have received a RCRA Permit in any state yet?
It appears that the processing model ABAT is looking to use, a clone of the Nevada facility, is simply not something South Carolina regulators are familiar with. If that is the route the company wants to take, it means they are essentially helping to write the rulebook as they go, and that goes a long way toward explaining the absence of any timelines or progress updates from the company. They are still sorting it out.
There are a couple more topics to cover that are in the documents and I will get back to ABAT’s second lithium-ion recycling location, which they are calling Project Hidden Spring, at a later date.
If you found this article valuable, consider becoming a subscriber. The Critical Materials Bulletin is supported by readers, and for $5 a month or $55 a year you can help fund research that produces clear, no nonsense reporting that informs and advances the discussion on critical materials and battery metals.
DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.