Lithium Australia’s (ASX: LIT) subsidiary Envirostream Australia is anticipating a “significant increase” in spent batteries to feed its Melbourne battery recycling plant now that a national battery recovery scheme has been approved.
The Australian Competition and Consumer Commission (ACCC) on Friday authorised the Battery Stewardship Council (BSC) to establish and operate a national stewardship scheme for managing end-of-life (EOL) batteries.
The scheme has been granted for a period of five years and covers all types of EOL batteries, with the exception of lead-acid batteries and those already captured by existing schemes.
It works by imposing a levy on batteries at their point of sale, with the funds generated to subsidise their collection and recycling. This value inputted by the levy will provide a commercial incentive to divert batteries from landfill, thus anticipating a positive environmental outcome.
Spent battery feed volumes expected to increase
Lithium Australia managing director Adrian Griffin said the company’s 90% owned subsidiary Envirostream is “well placed to capitalise on the scheme” as Australia’s only mixed battery recycler.
“The levy on batteries will commoditise EOL batteries, currently considered waste material, and the value created will be a strong incentive to divert them from landfill.
“We are anticipating a significant increase in feed material for Envirostream, and the more it gets, the greater the benefit for the environment,” he said.
The approval has been good news for the company, which previously forecast a “significant” increase in Envirostream’s collected spent batteries volumes in the event of the scheme’s introduction.
Levy passed onto consumers
The BSC’s scheme will be primarily funded by imposing an annual levy on all imported eligible batteries, calculated on total weight. The price has initially been set at $0.04 per equivalent battery unit (EBU) and will apply to companies that import more than 1,000 EBU a year.
According to Lithium Australia, the levy is estimated to raise about $22 million a year. It will be passed through the supply chain to consumers in a transparent manner as a visible fee.
Environmental and social benefits
The BSC’s aim of the scheme is to unite battery supply chain companies in efforts to significantly reduce the volume of toxic EOL batteries being disposed of as waste to landfill, and to maximise resource recovery by increasing collection and recycling rates and developing a domestic battery reprocessing capacity.
“The scheme should encourage more sustainable use of critical materials used in the manufacture of batteries, reducing reliance on primary production which, in some cases, relies on child labour and supply from conflict zones,” Mr Griffin added.