U.S. Energy Department Finalizes $445 Million Loan for Lithium Battery Recycling Facility in New York

The U.S. Energy Department on Nov. 7 announced the closing of a $445 million loan to Li-Cycle U.S. Inc. to support the first-of-its-kind lithium-ion battery resource recovery facility to be built in New York. The project aims to produce up to 180,000 electric vehicles (EVs) annually using recycled materials, while also supporting efforts to onshore and re-shore supply chains for EVs and critical minerals. The initiative would help meet rising demand for EVs and strengthen domestic supply chains for critical resources. This volume of EVs could decrease gasoline consumption by up to 71 million gallons per year, cutting more than 633,000 metric tons of CO2 emissions annually.

Lithium is a critical material that will play a crucial role in meeting increasing demand for EVs. Li-Cycle will use a proprietary hydrometallurgical process to recover critical battery materials that will optimize efficiency and minimize energy consumption.

The department announced a conditional commitment for Li-Cycle’s Rochester facility in February 2023.  The company received an initial loan commitment of $375 million, which increased to $475 million in the latest closing agreement with the department.

Li-cycle will collect end-of-life EV batteries and scrap at three of its sites in New York, Arizona, and Alabama. Currently, the company has commercial agreements with battery companies such as LG Energy Solution Ltd. to collect battery source material. The three sites will then process the scrap into a feedstock called “black mass,” which will then be sent to the Rochester facility for further processing. Li-Cycle will recover lithium carbonate from the black mass for use in new EV batteries.

Administered by the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, the loan is one of several to support a domestic supply of critical minerals, particularly lithium, and EV battery production. Recently, the department also closed a $2.26 billion loan with Lithium Americas to construct a lithium processing facility in Humboldt County, Nevada.