In order to qualify for the $7,500 tax credit, the Biden administration’s Inflation Reduction Act (IRA) requires a proportion of battery minerals in EVs to be extracted or processed in the US or free-trade partner countries. But a lot of automakers simply aren’t prepared for that requirement.
Electrek spoke with Megan O’Connor, cofounder and CEO of Nth Cycle, a Beverly, Massachusetts-based metals processing tech company, about how her company can help EV manufacturers address this challenge quickly.
Electrek: How will the IRA positively impact the critical mineral supply chain?
Megan O’Connor: The IRA is the most ambitious climate policy we’ve ever seen in the US and arguably one of the more aggressive policies in the world. It provides strong incentives for the usage of critical minerals that are refined or recycled domestically. We’re calling this the new “compliant supply” of minerals like nickel and cobalt.
Unfortunately, there’s not enough compliant supply today to meet the demand for critical minerals in North America to build electric vehicles. From 2024 to 2028, there’s going to be a major imbalance between compliant supply and demand.
There aren’t enough end-of-life EV batteries to allow recycling at a scale that can bridge the gap, and permitting new mines in North America is a five-plus-year process. We need to move quicker and responsibly on new mining opportunities, and look for new existing sources of critical minerals that can be recycled at home.
Electrek: What’s next for the clean energy transition when it comes to domestic mineral supply?
Megan O’Connor: Flexibility in refining is the next key factor in developing a compliant supply of critical minerals at home. Adding flexibility to the quality and consistency of ores and recycled materials that can be refined at home increases our ability to keep mined ores and recycled metals here when they’re currently shipped overseas for processing.
Additionally, most recyclers today focus on processing end-of-life or manufacturing scrap batteries for critical mineral sources. We expect to see companies and technologies go beyond batteries to find other sources of critical minerals already in circulation at home. Growth of new technologies and market expansion will be needed to address the imbalance between compliant supply and demand.
Electrek: How will domestic manufacturers like VW in Tennessee be able to rectify the issue of mineral components not meeting IRA requirements?
Megan O’Connor: By partnering with Nth Cycle, VW would be able to meet compliance in months, not years.
Electrek: How is Nth Cycle helping to meet the IRA requirements in the electrification transition?
Megan O’Connor: Nth Cycle produces a mixed hydroxide precipitate (MHP), which contains nickel and cobalt. Production of MHP through laterite ore refining is growing in popularity as a precursor chemical for battery cathode manufacturers.
However, 81% of today’s MHP supply is refined in Indonesia, by Chinese companies, through a carbon-intensive hydrometallurgy refining process called HPAL (high-pressure acid leaching). This HPAL-based supply of MHP is harmful to the environment, and as a foreign supply, is not a compliant supply of critical minerals for domestic battery manufacturing under the recently passed Inflation Reduction Act.
Nth Cycle customers can have confidence in a domestic supply of MHP that meets compliance standards for EV tax credits under the Inflation Reduction Act while dramatically reducing the carbon footprint of domestic refining.
We can bring additional compliant supply to the market and close the supply/demand gap of 150,000 tonnes of Ni (equivalent to 340 GWh of batteries) over the next five years.
If we were fully deployed right now, Nth could find 100kt tonnes of Ni per year from within the US that isn’t currently being recycled. We estimate a further shortage of at least 50kt of Ni per year.
Our electro-extraction technology is 92% lower emissions than traditional refining processes in mining today and 44% lower emissions than today’s best-in-class recycling technologies. This is third-party verified.
Photo: Megan O’Connor, Nth Cycle
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