The US Department of Energy Announces $192 Million for IRA Battery Recycling Funding
IRA Battery Recycling Funding is now part of the funding for green technology included in the Inflation Reduction Act; the Department of Energy has announced that $192 million is available for companies and entrepreneurs working to enhance battery recycling in the United States.
The Change is Happening
The widescale adoption of electric vehicle technology is already underway. The transition is happening, and while this is great news, the supply chain in the US needed to support this change is still not quite at the level it needs to be.
The market is expected to grow significantly in the coming years due to the increasing popularity of electric vehicles. In 2022, there were an estimated 1.2 million EVs on the road in the US, and this number is expected to reach 25 million by 2030. As more EVs are sold, more EV batteries will reach the end of their lifespan and need to be recycled.
According to Statisitca: The electric vehicle (EV) battery reuse and recycling market was estimated at 1.4 billion U.S. dollars in 2021. This sector is forecast to grow significantly over the coming years, reaching 8.4 billion dollars in 2026. As more EVs enter the global vehicle fleet, massive amounts of retired EV batteries will be available for repurposing and/or as sources for the materials needed for further battery production.
The main driver of growth in the market is the increasing demand for lithium-ion batteries. Lithium-ion batteries are the most common type of battery used in EVs, and they contain valuable materials such as lithium, cobalt, and nickel. These materials can be recycled and reused, which helps to reduce the environmental impact of EV production.
The market is also being driven by government regulations. In recent years, several states have implemented laws requiring zero-emission automotive transportation and that EV manufacturers must recycle their batteries.
The passenger cars segment is expected to emerge with the fastest growth due to the increasing popularity of EVs in the US, as well as the fact that passenger cars account for the majority of EV sales in the country.
This is why the Department of Energy, prompted by the Biden-Harris administration, is providing $192 million in funding for electric vehicle IRA battery recycling in the United States.
How Does it Work?
This new round of funding comes as part of the Inflation Reduction Act, which authorized $400 billion through grants, tax incentives, and loan guarantees.
The IRA battery recycling funding program will be divided into three categories; $125 million for establishing more robust consumer electronics recycling, $60 million for advanced battery research and development, and $7.4 million for the Lithium Ion Battery Recycling Prize.
For consumer electronics recycling, the IRA battery recycling funding is intended to develop and educate consumers on how, where, and what to recycle, improve the economics of battery recycling, assist states in the establishment of battery recycling protocols and programs, and help retailers to collect, store, and transport consumer electronics batteries.
This batch of IRA Battery recycling funding will be administered by the DOE’s Vehicle Technologies Office and the Office of Manufacturing and Energy Supply Chains.
As for research and development, the IRA battery recycling funding will be administered to US universities, National Laboratories partners, and mineral and material stakeholders to facilitate the growth of technology that will make consumer electronics battery recycling easier and more efficient.
Founded in 2019, the Lithium Ion Battery Recycling Prize has awarded $5.5 million for solutions to collecting, sorting, storing, and transporting spent and discarded lithium-ion batteries. The prize incentivizes entrepreneurs to put new solutions into practice for the recycling of batteries.
This Funding is Essential
For the automotive industry, electric vehicles present a fresh start in the way they do business. As we move towards a cleaner, brighter future, it is imperative that we implement strategies to enhance sustainability where we can and institute a circular economy to keep the growth of our nations on track.
Funding is a key component of this; many players established in their respective industries will be shaken from their dominant position as some won’t be able to adapt as quickly as new companies. Providing the jolt as it were to these new companies to get them going will allow them to do what is necessary to bring about the new future consumers are demanding.
The United States is a major power in our world, and as they make these changes, it will be no surprise that other countries will follow suit in funding programs for their respective domestic industries.