BASF Delays Battery Recycling Project in Tarragona Due to European Market Conditions

German chemicals group BASF has paused its planned battery recycling project at its Tarragona site in Spain. The company cited delays in the expansion of battery manufacturing facilities across Europe as the primary reason for this decision.

In its second-quarter 2024 report, BASF stated, “We have also decided to pause our large-scale metal refinery project for battery recycling at BASF’s Tarragona site in Spain. We are ready to start as soon as the build-up of cell capacities and the spread of electric cars regain momentum in Europe.” BASF CEO Markus Kamieth echoed these remarks during a conference call.

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The project, announced in July 2023, was part of a broader EU initiative that included €3.6 billion in funding for clean-tech projects, including a battery recycling facility in Spain. The planned recycling plant aimed to employ advanced technologies to achieve high lithium recovery rates.

However, BASF’s decision comes in response to slower-than-expected growth in the electric vehicle (EV) sector. Electric car batteries are lasting longer than initially forecasted, leading to a smaller proportion of used batteries available for recycling. Additionally, delays in battery cell factory projects by major companies such as Volkswagen’s PowerCo have reduced the supply of material for recycling plants.

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Despite the pause, BASF remains optimistic about the future of the electric vehicle market. Kamieth noted, “We are confident that the trend toward electric vehicles will continue and that battery materials remain a significant growth opportunity for the chemical industry.” He also acknowledged that recent market dynamics have led to a slowdown in EV market penetration outside of China.

BASF continues to operate a prototype metal refinery in Schwarzheide, Germany, where it is developing and optimizing recycling processes. The company also produces cathode materials at this facility. Although BASF’s Finnish battery precursor plant in Harjavalta has faced licensing delays, production in Schwarzheide is progressing, with future volumes secured through external contracts.

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