$880 million awarded in grants to recycling projects by US Department of Energy

In the second round of US Department of Energy's investments in battery manufacturing, processing and recycling projects a total amount of $880M was directed to recycling-relating projects with seven recipients which are to build both pre-processing and material recovery facilities.

The seven awarded recycling projects were:

• ABTC – $150M for a second material recovery plant in South Carolina

• Ascend Elements – $125M for graphite recovery plant in either Kentucky or Lousiana

• Blue Whale Materials – $55.2M for expansion of pre-processing plant in Oklahoma

• Cirba Solutions – $200M for the company's second material recovery plant, in South Carolina

• Clarios Circular Solutions – $150M for a material recovery plant in South Carolina

• Li Industries – $55.2M for material recovery plant in Ohio

• Revex Technologies – $145M for material recovery plant in Michigan based on both mined and recycled materials

The funding follows a previous round in which $75M were awarded to Cirba Solutions for the company's first material recovery plant in Lancaster, Ohio and a total of $480M to Ascend Element for its plant Hopkinsville in Kentucky which will produce cathode material from recycled feedstock. Also ABTC was awarded $57.7M in the first round, for a lithium hydroxide conversion project.

The competitive grants awarded in both first and second round requires 50% co-funding at a minimum. That means that the companies still need to use or raise at least as much as they have been awarded. Ascend Elements raised $842M in equity and $100M in debt following its grants awarded in the first round and shortly there after another $162M in new equity. Similarly, Cirba Solutions secured two equity investments of $245M and $50M respectively shortly after its awarded grant in the first round.

Whether the investor appetite this year remains the same is too early say but the actual grant awards should indicate that funding is secured or close to be secured. Over the last year several companies have however walked away from awarded grants when the market conditions changed.

In total the US Department of Energy has made close to $4.9Bn available for battery reycycling plants, services and technology, an amount which is unparalleled in the global recycling industry.

The competitive grant funding which comes from the Office of Manufacturing and Energy Supply Chains within the Department of Energy currently totals to $4.82 billion of which 31% has been awarded to recycling-related projects or companies. An additional $125M has been awarded through the "Bipartisan Infrastructure Law Battery Recycling, Reprocessing, and Battery Collection Funding Opportunity" through which six recycling projects and four projects for reuse of batteries were funded. $60M has been set aside to fund universities and National Laboratory partners which comes on top of the initial $15M to the Recell Center. Department of Energy has also announced another $7.4M of funding to the Battery Prize for innovative solutions in battery collection, sorting and processing which previously was funded with $5.

The Department of Energy has also through its Loan Program Office issued a $2Bn conditional loan to Redwood Materials and may still issue another loan to Li-Cycle of $375M.

Additionally, the Department of Energy has issued tax credits through its 48C program of $800M to companies within recycling and refining. Recipients of tax credits need to submit their project information within two years from March 2024 and don't need to disclose the project before that. So far ABTC has disclosed a total of $60M for the company's first and second recycling facility.

In comparison with the US public investments in European recycling are far behind. For a long time recycling projects have been financed in a large number of multip-player EU projects through which each player rarely receives more than a million Euros. Lately several different initiatives have however boosted the industry. Both BASF and Eramet have been awarded grants from the Euopean Innovation Fund, with €100M ($109.5M) and €67.7M ($73.9M) respectively directed towards the companies' recycling plants. The European Bank for Reconstruction and Development, EBRD, has financed a new plant by Polish e-waste and battery recycler Elemental Holding with a total of €152M ($166.5M) in loan and equity and part of a €350M ($383M) loan from The European Investment Bank, EIB, to battery material producer Umicore, is supposed to be used for research in battery recycling.

Besides these investments the amounts have been signficantly lower and spread out over the European investment system and through national levels in the member countries. Northvolt's recycling company Revolt received SEK150M (€13.9M/$15.2M) from Swedish Environmental Protection Agency and an equity investment from EU-connected EIT Innoenergy of €5.8M ($6.4M). EIT Innoenergy has also invested in the French recycling startup Mecaware. The World Fund, a venture capital company backed by the European Investment Fund has lead the investments rounds in German recycling startup Cylib.