Use of life cycle assessment to evaluate circular economy business models in the case of Li-ion battery remanufacturing

Abstract

Purpose: The purpose of this study is to advance and illustrate how life cycle assessment (LCA) can assess circular economy business models for lithium-ion batteries to verify potential environmental benefits compared to linear business models. Scenarios for battery repurpose are assessed to support future decision-makers regarding the choice of new versus second life batteries for stationary energy storage. A procedure to determine the substitution coefficient for repurpose and reuse of batteries is proposed. Methods: Two different circular economy business models are assessed by applying primary data from two Norwegian companies for the development of a new life cycle inventory. With this new data, the authors compare second life battery (from first life in electric vehicle) scenarios and avoided production potential by performing a complete consequential LCA. Building on earlier work, a procedure to identify the substitution coefficient (i.e., potential for avoided production) for battery life cycle assessments is proposed. Interviews during factory visits were performed to identify a technical and a market factor affecting the substitution coefficient. Results and discussion: This study illustrates how life cycle assessment methodology can detect and thus enhance the potential environmental benefits and trade-offs of circular economy business models. Results show that the CBMs which use second life batteries correspond to 16% (for global warming potential) of manufacturing a new battery. This means that a second life battery must avoid > 16% production of a new battery to become the preferred alternative. Hence, circular economy business models with second life batteries can generate net environmental benefits while the remaining battery capacity and market price are identified factors that can alter the potential environmental benefits. The findings suggest that assumptions concerning the avoided production emissions are crucial for understanding the overall impacts of battery value chains. Conclusions: Circular economy business models which enable second life batteries show lower environmental impacts compared to a new battery when it can partly avoid production of a new battery. Based on the identified technical and market factor affecting this potential, a key message to industry and other organizations is that second life batteries should be chosen over new batteries. This depends on the remaining capacity being satisfactory for the new application, and the investment is not performed because of a low price compared to a new battery. Consequential LCA practitioners adopting a market approach while evaluating battery reuse and repurpose should model and account for the avoided production potential.