From olive stones to battery cells: end-of-life as an opportunity for startups

by Alix Armour, May 09, 2023
as published on LinkedIn.

Last fall I took a leap from urban mobility to explore the world of renewable energy. As it turns out, it was more of a bunny hop since I’ve come back full circle.

I was fresh out of my role as Head of Sustainability at SUPER73, Inc., the electric motorbike company I cofounded 7 years ago. The topics of e-waste reporting, battery recycling logistics, and ESG corporate frameworks were top of mind. However, when I met my now business partner Roxana Piffl earlier that spring in Costa Rica, she mentioned her activity as a scientist and independent bioenergy commodities broker and the types of materials she was dealing with, and I became very intrigued.

How I got into moving hundreds of thousands of tons of renewable energy raw material around the world.

I eventually joined her business Metos Energy and learned about the brokerage world, fascinated by the idea of moving hundreds and thousands of metric tons of so-called “agricultural waste”, also known as agricultural residue, non-woody biomass or bioenergy feedstock. I’m speaking of olives stones from Egypt, bamboo chips from Benin, pistachio shells and cherry stones from California. All this feedstock is at the heart of the energy transition, without which innovation cannot be tested at large scale. We work with entrepreneurs who are in the front line of testing solutions for the energy transition, forward-thinking and determined business leaders who are actively building and innovating in energy.

In the middle of a coal processing plant, dirty with soot everywhere, and tucked through mounds of coal was a test lab looking like an industrial kitchen where they mixed different biomass sources with other compounds. The goal was to find a replacement for charcoal which is made from woody biomass (re latest EU import bans on wood pellets and diligence on illegal deforestation) and avoid coal excavation. Visiting this site, I felt really at the heart of where innovation was happening.

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Note the pink nailpolish please

Gathering sustainability data from the ground up, literally!

There is a lot to say about sustainability here and I will do that in a future post, but the opportunity is evident for an ex-consumer product sustainability role. A large part of the task as a sustainability manager is gathering data. It’s all about building the flow of data from suppliers for social metrics, or manufacturing data for carbon emission calculations in scopes 1-3, data from HR about employees, data from sales about how much weight in e-waste, batteries, fabrics, plastics, and cardboard is imported in European markets.

It is said the hardest part of calculating emissions data is in Scope 3. Why? Usually, because suppliers are located far away from the HQ where reporting managers are, communication can be difficult, and there are a multitude of supplier layers before arriving at final assembly.

What if, from the very beginning of a product’s material production, the data was already embedded in the documentation that follows the material? What if the information needed to calculate carbon emissions is clearly communicated on commercial invoices, packing lists, and Bills of Materials to facilitate accurate reporting of carbon emissions and avoid double-counting (where two parties claim the same carbon removal or emission reduction.?

Some of it already is, but it gets lost. For example, a sustainability manager may be presented with “aluminum” as a material for a certain part. But they need to know what percentage is recycled if any, how it is manufactured since different processes are more carbon intensive than others, and if it is certified. Imagine how time-intensive it is to get in touch with some suppliers just to get accurate data. Luckily, to simplify the task, LCA technology such as Ecochain Technologies and carbon emission calculator Carbon Neutral are gathering industry data and making averages for these specs, refining items over time thanks to more audits pooling data together.

This is why I feel empowered to take advantage of the fact that we’re in direct contact with raw materials suppliers and figuring out ways to include this vital data in all material transactions, facilitating the work of reporting managers a few steps ahead. I’d like to see on commercial invoices, BOMs or packing lists information such as supplier zip code, port of origin, and method of transportation (semi-truck, flatbed, etc), and ensure the net weight follows the product to its next transformation until it is consolidated together. This is where tech innovation for traceability will be very interesting, using blockchain for example to ensure an encrypted and secure data transfer. There are too many documents following products, less the certifications and lab tests that get added along the way.

Is DNA-based traceability to track organic matter an example for the battery industry?

In other industries, this is already happening. In fashion, “Through its farm-to-fashion cotton traceability project with vertically integrated denim and apparel manufacturer Artistic Milliners, blockchain start-up retraced is able to trace every single kilogram of cotton from farm to final garment.” In this app, every actor in the value chain needs to fill out the information, so that still requires data input. What if we didn’t need to manually add information each step of the way? What are the limits of blockchain?

“Digital tools such as blockchain are only as reliable as the data uploaded into them. But, the concern arises when the textile product is blended or exchanged across complex supply chains. This is where blockchain alone would not detect it.” says a note on Texcoms.com.

DNA-based traceability is something I learned about recently, and Haelixa Ltd, Swiss-based startup does just that. It works for products that, well, have an organic matter: “Companies develop a unique DNA marker for every producer, product, or batch, then directly apply it to the fiber at the beginning of the supply chain.” says Texcoms. This type of solution probably comes in handy when the governments ban the import of certain products, such as the U.S. ban on cotton coming from Xinjiang. That must have left quite a few manufacturers puzzled about how to abide by it.

Ok, I’m getting closer to closing this loop. As more regulations come into play, especially in Europe, one of them coming up is an update to the 2006 Battery Directive. In short, it proposed to include a digital record system to enable the transfer of key information between parties – the Battery Passport.

On one hand, this resembles the fashion industry, but also means that the value in the cells is going to be tracked and incentivized for reuse.

Earlier this year, I chatted with companies like NOWOS and Circuli-ion specialized in battery repair & dismantling, and the idea came about to study and find opportunities in secondary markets for the millions of e-mobility battery cells they repurpose. Finding off-takers for valuable waste, is something I am now familiar with, and so we added this to our Metos Energy portfolio of renewable energy commodities.

Lithium-ion battery cell 18650 second life pack
A pack of 18650 NMC cells polished and ready for reuse.

Larger electric trucks and vehicles have larger batteries such as Pouch cells types, or prismatic, but e-mobility have a different type: 18650 Lithium-Nickel-Manganese-Cobalt-Oxide (LiNiMnCoO2) abbreviated as NMC cells. Once they fall below 80% State of Health (SOH) or Residual Capacity, they are no longer ideal for e-mobility but fine for certain applications, such as energy storage systems which require lower voltage power. This brings value to cross-sector stakeholders, including EV/battery manufacturers, EV customers, utilities, grid operators, energy companies, and electricity consumers. According to IDTech, the second-life EV battery market is expected to grow with a CAGR of 23%-25% from 2021 to 2026 and will reach US$7B in value by 2033. One of the leaders in this market is China, who for years have already been receiving a large feedstock of batteries from consumer electronics from customers globally, and thus refined their recycling and remanufacturing techniques.

This business is relatively new in Europe since countries have been exporting much of their battery waste vs recycling it locally. So here I am researching, connecting, and creating supply partnerships between battery repair companies and energy storage companies. The timing is right. Once again, we’re speaking with founders and innovators all hustling and rethinking their business models to incorporate second-life cells into their product development. Some companies have conceived their business model with this in mind, such as betteries AMPS GmbH who since 2018 are n the business of design for upcycling & repair of batteries, building 2nd-life power solutions based on EV (electric vehicle) batteries, and software to go along with it. Love the name too. Gouach is another innovator who has surfaced at the right time, designing their batteries for EVs with easy dismantling, diagnostics, and repurposing into their business model. Their second-life cells go to off-grid solar lighting before landing in a recycling center, where the rest is shredded and turned into powdery fraction called “black mass”.

The opportunity for all players in the value chain is massive. As Circularise puts it: “The European Parliament is pushing to ban the sale of new internal combustion engine cars by 2035, meaning the demand for battery materials will continue to dramatically increase. By 2030 the EU will need 5 times more cobalt and 18 times more lithium compared to the demand in 2018, numbers which exponentially increase when estimating demand in 2050. If electrification is to be a truly sustainable transition, a system-level approach must be taken to ensure sustainable material sourcing, efficient battery production, and effective end-of-life processing.” There are new types of battery chemistries out there, and not all use lithium or cobalt which is good since those precious minerals are low in supply and come with social risk factors. In fact, Lithium batteries may most likely be discontinued, with their second life purpose out of commission in 20 years or so.

What happens once we get these chains rolling?

Companies are already thinking about how they can issue carbon credits for valorization of second-life cells. You can see how this is already established in biodiesel and biofuel industries where “Tickets” are issued to companies who save C02 emissions through the greenhouse as reduction quotas and traded in the biofuel market. Whether we agree with this or not, carbon accounting is already integrating our banking systems (see Ecolytic & VisaING) and regulated by governments. How soon will we personally be tied to it?

Sidenote: Producers of biodiesel such as Sustainable Aviation Fuel (SAF) need feedstock like UCO (Used Cooking Oil). I like using the example of the UCO supply chain as it is literally collected by fleets of small to large trucks that go from restaurants to hotels to factories pumping out the used oil, which is then deposited into collection centers, that transfer it to another plant for filtering, or do it themselves. This system can and has been replicated to all sorts of waste, such as coffee grounds, and the question is: how and at what point can this be considered a “carbon project”?

Final thoughts: operationalizing sustainability

While the puzzle pieces are still falling into place, this just shows that building an end-of-life strategy for products and services at the early stages of a business is going to be increasingly valuable and attractive. Making room for sustainability/ESG metrics in operations and all strategic decision-making will place a business ahead of the game and reduce risk. This is where complex global challenges are forming and where I thrive in brainstorming creative strategies and conceiving new business models.

  • Are you in the energy storage industry or renewables and have some ideas for me? Let’s chat.
  • If you’re in a business where you need to start thinking about implementing a strategy for sustainable operations, let’s set up a call.
  • As an investor, do you consider end-of-life strategies and a company’s knowledge on upcoming regulations and environmental impact in regards to their long term risks and success? Is this visible in their pitch deck?
  • Does it matter? To whom? When does it matter?

What does this mean for you?

I’m curious to know what this means for your business, and what you are doing about it.

  • Is this discussed in your industry work groups?
  • If you have a business with offices around the world, have you found that in some countries this discussion is accelerated, but in other regions it’s an uphill battle?

More links on Second-life:

Next up…

My next article will be on producer responsibility and the recycling fees in EU, Product As A Service (PAAS) models, or “moving from buying components to ‘components as a service’ as Swapfiets puts it and how this business strategy has an advantage over others with a more traditional business model to tackled the end-of-life ownership challenge.

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On a mission, based in Amsterdam

I build companies with social and environmental impact in mind. I work with entrepreneurs and visionaries, and enjoy hardware products and opera

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