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South Korea to establish state-operated reuse and refurbishment centers for EV batteries

The Korea Environment Corporation, a quango under the Korean Ministry of the Environment is about to open four centres for repair, refurbishment and reuse of EV batteries. The centres are located in Siheung, Gyeonggi (Seoul), Hongseong, Chungnam (Chungcheong), Jeongeup, Jeonbuk (Honam), and Dalseo, Daegu (Yeongnam).

The refurbishment centers, in which the government has invested over 17 billion won (15MUSD), will be responsible for take-back of EV batteries in South Korea at their end-of-life, as car dismantlers are obliged to hand over the batteries due to paid subsidies for electric vehicles. The batteries will undergo repair, remanufacturing and will then be sold back to the private market if possible. The centers are also responsible for reuse activities, using EOL batteries for stationary energy storage.

The centers will start operation in August in pilot scale and expect to fully operate from the year end when the batteries will start to be offered to the private market. A few hundred batteries are already stored today, a number the government expect to see increase to over 1,000 this year. As a part of the package there has also been a change in legislation in which EV batteries have become a particular category in the Resource Circulation of Electrical/Electronic Products and Vehicles Act (similar to the EU WEE and ELV directives) which are permitted to be remanufactured and repurposed.

State-owned refurbishment centers which sell their products to the private market is a unique phenomena in the world. Not even in China are their similar initiatives. The enabler is the agreement between the South Korean government and the EV-owners that in the event of a crash or that the battery of some reason would reach end of life after the warranty has expired, they must return the battery to the government, if they have received subsidies when purchasing the vehicle.

The establishment of the state-owned refurbishment centers is happening in tandem with a strong push from the government for reuse of batteries also by OEMs and battery manufacturers which all recently have launched different initiatives. Only a week before the announcement of the new legislation 18 companies and organisations, including the big three battery makers LG Energy Solutions, SK Innovation and Samsung SDI as well as Hyundai and the refurbishment company Earthtech, broke ground for a new joint reuse and recycling industrialisation center for EV batteries at the Naju Innovation Industrial Complex, in the South Jeolla province. The companies have invested 23 billion won (22 MUSD) in the 8,600㎡ center which will be able to process more than 1,000 EV battery packs per year in 2024. The aim is to produce new high-value products based on the reused EV batteries.

There have also been several initiatives launched by the different car makers like Kia and battery manufacturers like LG and SKI on Batttery-as-a-service (BaaS) business models, which also enables the consolidation of batteries for reuse and repurposing.

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