Powering tomorrow: Navigating India’s battery landscape

This article is authored by Sandip Chatterjee and Dhawal Gupta.

India stands at the cusp of an energy revolution, with batteries playing an essential role in driving sustainable development across various sectors. As the country aims to lessen its dependence on fossil fuels and transition towards cleaner energy sources, the battery manufacturing and recycling ecosystem is likely to emerge as a critical component of this transformation.

Lithium-ion battery cells (Bloomberg)

Presently, two primary types of batteries dominate the market, namely, lead-acid batteries and lithium-ion batteries (LIBs). While lead-acid batteries have been used in consumer electronics for decades, LIBs on the other hand, have gained significant popularity due to their higher energy density and longer lifespan. The ministry of mines had identified 30 critical minerals in 2023 as risk in supply chain. Among them, lithium (Li), cobalt (Co) and nickel (Ni) are important under clean energy initiative for electric vehicle batteries. The government's further budget announcement to exempt 25 critical minerals from customs duty is likely to boost the production of these advanced battery types, particularly LIBs which rely heavily on such minerals.

As of 2020, the estimated cumulative stock of LIBs in India was approximately 15 GWh, with consumer electronics charting the course at 61%, followed by stationary applications and transportation applications, respectively. India will be a major LIB consumer by 2030, the battery storage demand of 34GW in 2023 will be expected to reach 450GW by 2030. The majority of the rechargeable battery demand currently 90% are driven by automative applications.

The consumer electronics sector, comprising tablets, laptops and smartphones, represents the largest share of LIB demand in India and this market is projected to double in the next two to three years, reaching an estimated value of ₹2 trillion. Demand for electric vehicles (EVs), LIB for electronic gadgets, linked and IoT-based devices, and automation and battery-operated material-handling equipment are the driver for the growth. Major demand LIB (80%) in EVs is seen due to the government’s push to replace 30% existing vehicles with EVs by 2030.

This supremacy is expected to continue in the coming years and given the growing reliance of consumer electronics on LIBs, these batteries are crucial in achieving these projected growth figures. The exponential demand of LIBs system, expected to receive considerable investment in cumulative cell manufacturing capacity of 30GWh, as cell manufacturing cost in India is lowest $ 92.8/ kWh, China $98.2/kWh, Korea $ 98.1/kWh.

Having said that, the current manufacturing focus in India is on assembling battery management systems (BMS) and battery packs with most sub-components produced domestically, except for key elements like some BMS components and thermal pads, which are imported, mostly from China. Currently, Li-ion cells or battery packs are predominantly imported from China, South Korea or Taiwan in India. However, challenges including a lack of key raw materials and limited research and development prevent in scaling up domestic battery cell manufacturing.

The 70 % of the world’s lithium extracted from brine in Bolivia, Argentina, Australia, the United States, Chile and China and extraction is water and energy intensive process. Recently, reserves are found in Salal-Haimana area of the Reasi district in Jammu and Kashmir. The Democratic Republic of Congo houses nearly 47 % of cobalt reserves, nearly 23 % in Australia, nearly 10 % in Indonesia and nearly 20% in rest of the world. Changing the battery chemistry, the manufacturers make a balance the cobalt supply with demand. Cobalt prices have declined by over 31% recently. Nickel-based lithium-ion batteries show a higher energy density than cobalt based one. Nickel reserves is 100 Mn MT, where Indonesia and Australia possess largest shares (21Mn MT).

Due to the limited reserves of critical materials, the Circular Economy (CE) is preferred business model to create as alternative source. Urban mining gives the high returns with effective extraction efficiency, e.g. one tonne of battery grade lithium can be extracted from 750 tonnes of brine or 250 tonnes of ores, whereas, 1T battery graded lithium can easily be extracted from 28 tonnes of discarded LIB. Similarly, one tonne of battery grade cobalt can be recovered from 300 tonnes of ores, whereas, similar quantity of lithium may require five-15 tonnes of discarded lithium ion batteries. Though the scenario will be true only if battery grade recycling happens.

Looking ahead, the total cumulative potential for battery storage in India is estimated to reach an impressive 600 GWh by 2030. Moreover, the estimated energy savings from recycling materials in consumer electronics is projected to be 14.7 GWh between 2022 to 2030. As a result, efficient recycling technologies dedicated to consumer electronics batteries becomes increasingly paramount. While the EV segment is estimated to contribute a large segment, the consumer electronics sector will also play a necessary role in the recycling ecosystem due to the shorter lifespan and higher turnover rate of these devices as compared to a car.

Recognising this importance of battery recycling, the government had implemented various regulations to promote responsible disposal and recycling including the Batteries (Management and Handling) Rules, 2001 and the Battery Waste Management Rules, 2022. These regulations outline the responsibilities of producers, dealers, consumers or entities involved in ensuring proper collection, transportation, and recycling of used batteries, including those from consumer electronics. Additionally, the recent budget announcement on the National Critical Mineral Mission (NCMM) further emphasises this commitment. As announced by finance minister Nirmala Sitharaman, this mission will focus on domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Complementing this mission, a proposed Production Linked Incentive (PLI) scheme for critical mineral recycling is under consideration by the ministry of mines. This scheme seeks to foster a circular economy by incentivising the recovery and reuse of critical minerals, thereby reducing reliance on imports and supporting the growth of domestic supply chain. However, despite these initiatives, challenges remain, including ambitious recycling targets, inadequate infrastructure, and a burdensome compliance process. Issues like daily upload of sales and procurement data and marking of EPR registration numbers are likely to disrupt global chains and make compliance burdensome. Furthermore, the regulations' emphasis on using domestically recycled content adds to the complexity, as India's manufacturing and recycling systems are still in the early phases of development.

The effective addressal of these challenges requires the implementation of specialised recycling facilities and research in recycling technologies. This should be complemented with consumer awareness campaigns on proper battery disposal. Additionally, incentivising manufacturers to design devices with easily removable batteries is another essential component.

To further bolster the battery ecosystem, strategic public-private partnerships (PPPs) can be instrumental. By fostering collaboration between government bodies, industry leaders, and research institutions, India can accelerate innovation and establish robust supply chains. Investments in local manufacturing capabilities and R&D can reduce dependency on imports, thus enhancing self-reliance.

On the international front, India can explore opportunities to engage with global initiatives and frameworks focused on sustainable energy and battery technology. Participation in international collaborations can provide access to advanced technologies, best practices, and funding opportunities.

Furthermore, India must prioritise the development of a skilled workforce capable of driving the battery revolution. Educational and vocational training programs focused on battery technology, recycling processes, and sustainable practices can equip the workforce with the necessary skills to support the industry’s growth.

India's journey towards a sustainable Bharat requires collaboration from stakeholders across sectors including the government, industry, and academia to overcome technological hurdles, establish efficient recycling infrastructure, and create a circular economy. Developing a comprehensive ecosystem for battery recycling will address India's needs and position the country as a global and a self-reliant hub for sustainable technology.

This article is authored by Sandip Chatterjee, senior advisor, Sustainable Electronics Recycling International and adj. professor, IIT, Mandi and Dhawal Gupta, business director, Chase India.