South Korea launch national battery strategy – reuse and recycling in focus

The 8th of July South Korea's president Moon Jae-in outlined the K-battery development strategy through which batteries will be classified as national strategic technology alongside semiconductors and vaccines.

For the already strong Korean battery industry this means:

- 50% deductions for R&D investments and up to 20% for facility investments.

- 1.5 trillion won($1.3bn) program special financial support

This includes a fund of 80bn won ($70M) to support R&D in battery materials and components targeted to SME's. In total private investments of 40.6 trillion won ($35bn) are expected until 2030 based on commitments from players throughout South Korea's battery industry.

The government has set up targets for advancement in battery technology:

- Lithium-sulfur batteries commercialized by 2025

- All-solid-state batteries by 2027

- Lithium-metal batteries by 2028

In order to reach this R&D projects of 500bn won will be carried out ($436M).

The strategy also includes targets for battery use in various applications such as flying cars (commercialisation 2025), ships, construction machinery and trains.

The strategy also emphasize the importance of a solid sourcing of materials. Reuse and recycling play a key part in this with several new policy implications:

- Increased financial support to R&D in recycling

-Government-funded recycling centers for reuse and recycling of EV batteries (this has been covered here on CES Online).

- Financial support for sourcing of materials (primary and secondary)

- Restrictions on export of waste batteries

- Restrictions on export on used electric vehicles through a certification process

The president also announced that a national strategy will be introduced for leasing and swapping of electric vehicle batteries. This initiative has already got a flying start with several of the players involved in the field already (previously covered here on CES Online).

For a country with a population of 52 million the strategy is very impressive both regarding size and the direct involvement from the country's senior officials.

Given South Korea's dominant position in European battery manufacturing the strategy and following action points will have a big impact not least on the recycling landscape. The combined capacity of the Big 3, LG Energy Solutions, SK Innovation and Samsung SDI, accounts today for 83% of the battery production capacity in Europe. The companies are predominately working with South Korean recyclers and cathode producers such as Sungeel Hitech, POSCO and Ecopro and have also strong ties with the Korean car manufacturers, recyclers which currently are expanding their footprint.

It may also have an effect on the material streams to China. Currently South Korea is serving as gate to China for several recyclers as part of OECD and with several recycling companies capable of processing the material to a state in which it can be imported to China. We have not yet seen the details of the restrictions to verify in what way this trade will be impacted.

Read President Moon Jae-in's full speech in English here.