A few weeks back R3 Lithium’s CEO Linh Austin was in Vietnam having high-level meetings with the government about investments and possible partnerships for lithium-ion recycling, I have been watching and, when I can sneak it in, reading about the lithium-ion industry there.
The National Assembly’s Committee on Science, Technology and Environment has released a draft law that would amend current laws and regulations. This is not the first time the Vietnamese government has used amendments to streamline the updating of its countries regulations when it comes to the handling and recycling of waste and products over the last couple of years.
I read a few of them, and upon what I have read, they have created a very extensive blueprint to build out an entire recycling infrastructure in the country from products to waste. Included in the current draft of amendments are changes to extended producer responsibilities (EPR) that put in place a recycling quota for lithium-ion manufacturers and those who import them for domestic sale.
Right now, the laws for EPR do not require a company to recycle any cells. With the new changes, they will have to recycle an 8% weight quota starting in 2029, and by 2031 the rate will be 15%. Many companies in the country have publicly stated that recycling volumes of this level are impossible for them due to the lack of feedstock, but there is a clause that allows them to keep carrying over the shortfall for 5 years.
There is, however, another problem when it comes to companies meeting this level of recycling throughput that the government is looking to mandate, and really it has to do with the lack of domestic processing and not the lack of feedstock. The proposed law includes a clause to allow for the export of the feedstock out of the country for recycling.
But by going down this path, it increases the costs associated with transport, which is one of the highest expenses when it comes to lithium-ion recycling. A draft study by SafeLoop, a European Union-funded research consortium, titled Cost-Performance Assessment and Circular Business Models evaluated several models for profitability in the EU for lithium-ion recycling and found that transport was indeed one of the key contributors to the overall costs of lithium-ion recycling.
To illustrate, the interim analysis has shown that the transportation of waste batteries to a recycling plant leads to significant logistical costs. This is because the batteries are classified as dangerous goods and, on average, are 16 times more expensive to transport than non-dangerous cargo
That is why I am sure R3 Lithium was in country having meetings with the government, and they are most likely the first of several other recycling/refinement companies that will be meeting with representatives of the Vietnamese government.
As for the rest of the changes they have done over the last few years, there was one item that was amended into their laws on environmental protection that caught my eye:
Recycled materials meeting environmental protection requirements prescribed by the Government used as production raw materials, fuels, and materials are not required to be managed per waste regulations.
Under the laws of many countries and even under international treaties, not only are end-of-life batteries considered hazardous waste, but even black mass, the intermediate product created from the mechanical stage, is classified as hazardous waste. Many countries, including the United States, are working to implement language just like what Vietnam has already added to their laws governing that waste.
For the United States, if the BRACE Act gets signed into law, it has already passed the House, it would allow lithium-ion recyclers to treat end-of-life and scrap as the valuable strategic asset it is, instead of being forced to treat it as waste under a framework built for disposal rather than recycling.
Cutting Red Tape: New Congressional Bill Aims to Streamline Lithium-ion Recycling
Over the last year, and really the last six months, we have seen a focus from institutions and government agencies like the Department of Defense and Department of Interior on how the United States can use secondary sources to help develop a domestic supply chain for critical minerals.
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