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Ecopro breaks ground on its cathode plant in Hungary – important component in European recycling

The South Korean battery material manufacturer Ecopro breaked ground of its new 108,000 tonnes per year cathode facility in Debrecen, Hungary on Friday the 21st April. The plant, which is to expected to be operational in 2025 will be the largest cathode plant in Europe and will become a important driver of recycled material volumes in Europe.

The total initial investment amounts to 382.7 billion won ($286M). The goal is that the facility will start commissioning already in 2024 with full production scheduled in 2025. The main customer will be Samsung SDI which operates a battery plant in Göd in Hungary from where it supplies several European automotive manufacturers.

The whole facility is a joint project between the three Ecopro subsidiaries BM (cathode materials), Innovation (lithium hydroxide), and EcoPro AP (high-purity oxygen and nitrogen). Notably EcoPro Materials (precursors) and EcoPro CNG (recycling) are not part of the initial undertakers. Which implies that precursor would be imported to the plant, at least in an initial phase. In the same time Ecopro has outlined a vision to turn their Debrecen campus into the same virtically integrated plant as in Pohang, South Korea, where all steps in the value chain, from recycling to cathode production, are established.

The facility which has been planned for several years will most likely be very important for the European recycling value chain. It's first when cathode production is in place in a region that batteries fully can be recycled and put back into the value chain without being exported, given all other previous steps are present in the market. Currently Umicore's cathode plant in Nysa, Poland, which was commissioned in 2022, is the only plant in operation while BASF and Northvolt is expected start production in the coming years, potentially followed by CNGR and The EV Metals Group which acquired Johnson and Mattheys on-going factory project in Poland. Essentially all cathode manufacturer are planning for, and are investing in recycling processes to be able to use both recycled and primary feedstocks.

We have previously reported that GEM, the large Chinese recycling and cathode manufacturer and long time supplier to Ecopro, signed a cooperation agreement with the Hungarian government last year to investigate an establishment in the country. GEM is Ecopro's joint venture partner in Ecopro Materials and has licensed recycling technology to Ecopro CNG. A potential key player is also Sungeel Hitech which operates two recycling plants in Hungary, of which one is purpose-built for production scrap generated in Samsung's battery plant. Samsung is also a minority owner in Sungeel Hitech and is planning to co-finance a plant with the company in Germany.

In the same time has Ecopro extended its relations with SK On, which also operates plants in Hungary. In North America SK On is Ecopro's most important partner in a joint venture together with both SK On and Ford and the battery maker recently also started a joint venture with Ecopro in South Korea together with GEM, only a few months after it announced a recycling joint venture with Sungeel, also in South Korea. The movements will likely also mean opportunities for the recyclers TES and Ascend Elements which are backed by SK On's sister company SK Ecoplant. Ascend Elements processes battery production scrap from SK On's plant in Georgia, USA and has an off take agreement with Ecopro. The company is also planning to set up operations in the UK and EU. TES has a large footprint in Europe and is on its way to open its first large-scale pre-processing plant in the Netherlands.

We are currently making a signficant update of our database of battery recyclers expected to be published before end of May followed by a deep dive analysis of the market.

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