Malaysia sets for growth in EV battery, e-waste recycling market
24 Sep 2024
The expansion of EV and recycling sectors is expected to create 30,000 to 50,000 high-skilled jobs in the coming decade
THE global electric vehicle (EV) battery recycling market is projected to hit US$6.5 billion (RM27.56 billion) by 2030, growing at a 37.1% compound annual growth rate.
This is due to rising electric EV demand, recycling regulations and resource concerns. The International Energy Agency (IEA) Global EV Outlook 2024 reports a continued rise in EV sales, expecting 17 million sold in 2024, accounting for over 20% of all global car sales.
This growth builds on the strong performance of 2023, during which EVs represented 18% of total car sales, marking a 35% year-on-year increase.
In the local context, the Malaysian Investment Development Authority (MIDA) reported that the battery market is expected to grow at an annual rate of 5.28% from 2022 to 2027 in Malaysia.
Pertinent to the matter, Malaysia is set to become a key player in EV battery production and e-waste recycling, due to its strong electronics industry and supportive government policies.
Universiti Malaya Faculty of Business and Economics Deputy Dean (Development) Goh Lim Thye highlighted that the country’s focus on building EV infrastructure and promoting recycling would strengthen its position in both domestic and regional markets.
Malaysia has set a goal of having 1.5 million EVs on the road by 2040, representing 6% to 7% of the total vehicle fleet. While ambitious, Goh believes the target is achievable.
In 2023, Malaysia saw a 286% increase in EV sales, reaching 10,159 units, while Southeast Asia as a whole sold 153,500 EVs, with Thailand leading the region.
“The expansion of EV and recycling sectors is expected to create 30,000 to 50,000 high-skilled jobs in the coming decade, contributing significantly to our economy, particularly in research and development, manufacturing and technology development.
“Malaysia has successfully attracted more than RM5 billion in foreign direct investment (FDI), securing investments from key global players like Tesla Inc, BYD Co Ltd, and Zhejiang Geely Holding Group Co Ltd, further solidifying our role as a regional leader,” he told The Malaysian Reserve (TMR).
Despite the economic potential of the EV battery and e-waste recycling industry, assistance is required in terms of supply chain development, infrastructure, competition and lack of a skilled workforce.
Malaysia faces challenges in achieving cost-competitive battery production due to a lack of a fully integrated local supply chain for essential raw materials like lithium, cobalt and nickel.
Despite the progress, there are only 2,000 charging stations in the country, although the target is to reach 10,000 by 2025.
Goh suggested innovating and enhancing the country’s manufacturing and recycling capabilities to maintain competitiveness.
On the other hand, a skilled workforce is crucial for driving innovation in battery technology and recycling processes.
Goh said Malaysia’s strong electronics manufacturing base enables the adopting of advanced technologies like artificial intelligence (AI)-driven e-waste sorting systems, battery recycling processes and smart grid integration for cost reduction and sustainability.
The country’s substantial initial capital investments in green technologies and infrastructure are crucial for achieving long-term economic and environmental benefits.
“Malaysia will not only reduce its carbon footprint but also enhance its attractiveness as a destination for green investments.
“By investing today, we set the foundation for sustainable growth that aligns with our net-zero emissions goals while securing our economic future,” he added.
Learn from Others
On June 26, Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad announced that the guidelines for the disposal of EV batteries are currently in development. This is due to concerns surrounding its disposal which could harm the environment.
Automotive EV-HUB director, senior EV technology consultant and specialist director Joseph Alexander Ebrahmian welcomed the ministry’s proposal and hoped that it would be supported by all original equipment manufacturers.
EV batteries typically last about 10 years but in case of accidents or unforeseen reasons, they need to be disposed of.
“Cell disposal is very hazardous as they are flammable and toxic. Having facilities to recycle the cells and extract the valuable ingredients would be a good move,” he told TMR.
Unfortunately, Malaysia has yet to have the technical capacity to manage large-scale EV battery disposal and recycling.
Therefore, Ebrahmian suggested that the government should look at countries which have a large adoption of EVs, specifically the US and Korea.
“Their environmental laws are very restrictive and good to be followed. Also, some factories and companies would be willing to invest themselves and set up operations in Malaysia to cover the ASEAN region,” he added.
The EV battery recycling business has a lot of potential as it can generate a profit margin. Ebrahmian proposed to repackage older batteries as an energy storage system (ESS) for rural and residential areas, similar to how Tesla Powerwall units are utilised.
The Powerwall batteries are rechargeable home batteries that do not require huge energy transfers.
“Connect them to the power grid or solar array and we are done. Also, we can give battery replacement deadlines of eight years maximum while giving them a full inspection in five years to ensure they are safe to use,” he said.
Sometimes, the same material can be repackaged as drone battery modules that are smaller in size. Ebrahmian suggested examining countries that have succeeded in this area.
In the ASEAN region, Singapore and Thailand are leading in battery disposal and recycling.
Singapore, through companies like TESAMmm Singapore Pte Ltd, has advanced facilities for recycling lithium-ion batteries and recovering valuable materials like lithium, cobalt and nickel. These efforts are part of Singapore’s goal to become a green economy hub.
Similarly, Thailand is progressing with companies like SCG International Corporation, developing EV battery recycling systems, supported by government incentives and regulations that promote sustainability.
On the other hand, Ebrahmian warned that Malaysia has to deal with challenges such as funding, location, logistics and political games.
There will also be parties where they would want to monopoly the EV battery recycling industry.
“Licences must be given to proper industry players, even overseas companies with experience should be allowed to take part,” he suggested.
Ebrahmian further explained that Malaysia is still lacking professional EV experts who know the subject well.
“EV batteries are different from normal lead acid 12V batteries and no one becomes an expert by searching Google for answers.
“We need to get the right people to lead the proposal and project, and make the necessary planning away from politics and consider all sorts of post-life use for battery packs and cells,” he stressed.
An Industry Still in its Infant Stage
On the other hand, Blueshark Malaysia head of product & aftersales Thevaraj Bala was optimistic that battery standards and guidelines are expected to enhance interoperability among manufacturers.
In turn, this will lead to a unified initiative with clear goals and policies for nationwide battery disposal.
“Achieving interoperability is challenging due to the presence of diverse standards and competing interests in the energy and battery sectors.
“However, by implementing a government-led national two-wheeled EV battery standard, we could potentially harmonise charging and battery solutions, paving the way for widespread adoption and streamlined energy solutions,” he told TMR.
Implementing an integrated solution for first-to-last mile electrification can help fleet operators meet environmental, social and governance targets, reducing the total cost of ownership, capital expenditure or operational expenditure, and carbon footprint while enhancing their green credentials.
Since the company is still less than two years in the market, Blueshark has yet to reach a point where large-scale battery operations are needed. Currently, all of its batteries are still new and in active circulation.
The EV tech mobility company, which is a subsidiary of China-based Sharkgulf Technologies Group, only penetrated the local market in March 2023. Their focus is on selling two-wheeled EVs which include motorcycles and scooters.
The company is a member of the National Standards Committee on Transport’s BSS Working Group formed by the Trade and Investments Ministry to develop standards and guidelines for two-wheeled EVs in Malaysia.
Nevertheless, Bala said the company is ready to provide seamless service to its customers while reducing its environmental impact.
“Our plans include a comprehensive battery second-life initiative, with eventual recycling as a key part of our strategy,” he added.
The company strives to establish Malaysia as the manufacturing and assembly hub for its products in the ASEAN market.
However, Bala also anticipates a significant increase in battery volumes from neighbouring countries with higher EV adoption rates, such as Thailand, Vietnam, and Indonesia, owing to the region’s emphasis on decarbonisation and EV expansion.
For this, Blueshark is open to partnering with local recycling facilities to create efficient processes for recycling used batteries as part of its sustainability efforts.
“We are committed to reducing our carbon footprint in all areas of production, operations, and energy efficiency.
“We are also exploring partnerships to assemble our batteries locally, further lowering our environmental impact,” he said.
The company uses an Internet-of-Vehicles (IoV)-enabled backend system to optimise battery management in Malaysia.
This provides real-time data on usage, charging patterns, and health across its network of riders and batteries. In turn, it benefits both customers and business operations.
Blueshark’s batteries have a dual lifecy- cle which provides utility beyond automotive use. Thus, it plans for battery recycling as part of its renewable energy strategy.
“Once the batteries reach the end of their automotive lifecycle, they can still be repurposed for other energy needs,” Bala said.
He noted its usage as energy storage for businesses, small homes, or machinery, especially in remote or off-grid areas, supporting sustainable energy practices even after their original use.
He also said Blueshark implements policies for safe disposal and recycling of used EV batteries.
As its nationwide expansion continues, the company also anticipates a significant increase in battery usage and has implemented internal policies to manage this growth while adhering to government regulations.
With the fast growth of the domestic EV market, the company expects EV adoption to double, driven by better infrastructure, more consumer choices, and the likely removal of fuel subsidies.
“To support this, we are working with the government and corporations to elec- trify motorcycle fleets and expand our battery-swapping infrastructure to encourage the use of two-wheel EVs,” he added.
Ensuring the Waste is Safely Taken Care of
MIDA’s report, “Chemical Industry Innovations Driving Sustainable Mobility,” notes that Malaysia is in the early stages of lithium-ion battery production but is progressing steadily by integrating the entire supply chain, from cell manufacturing to pack assembly.
The government is supporting this growth with incentives and grants to boost the development of advanced batteries and promote a circular economy.
However, the disposal of used batteries is a major concern due to their toxic components, which can contaminate the environment if not recycled properly.
Recycling is crucial to recover valuable materials like lithium, cobalt, and nickel, which can be reused to produce new batteries and ensure a sustainable resource cycle.
The 2021 IEA report “The Role of Critical Minerals in Clean Energy Transitions” highlights that EVs use six times more minerals than gasoline cars, with lithium, nickel, cobalt and copper posing environmental and economic challenges due to their toxicity and high costs.
Mining these materials, particularly nickel and lithium, causes deforestation, depletes water supplies, and contributes to human rights concerns in regions like the Democratic Republic of Congo.
Despite the growing efforts to recycle EV batteries, only a small percentage are currently recycled, unlike gasoline vehicle batteries, which have a 90% recycling rate.
The lack of standardisation in battery designs complicates recycling processes, making dismantling costly and dangerous.
While up to 95% of materials like nickel and cobalt can be recovered through recycling, the rising demand for EVs will still necessitate new mining operations.
Similarly, a 2021 study cited by Earth. org confirms that many EV batteries end up in landfills, leaking harmful chemicals and that current recycling methods, such as high-temperature smelting, are costly and inefficient.
Although repurposing batteries is less common, it plays an important role in reducing the need for new mining.
The ongoing lack of standardisation in battery designs continues to pose significant challenges for recycling efforts.
This highlights the critical need for improved recycling technologies and more sustainable mining practices to support the expanding EV market.
In Malaysia, the Environmental Quality (Scheduled Wastes) Regulations 2005 classify e-waste and EV batteries as hazardous wastes, requiring strict management to prevent environmental contamination and health risks.
These wastes must be disposed of at licensed facilities and stored securely to prevent leakage or harm.
Proper labelling, record-keeping, and transportation by licensed carriers are mandatory, ensuring safe handling.
Additionally, the regulations demand that companies track and report waste handling to the Department of Environment (DOE).
DOE predicts that Malaysia will generate 24.5 million units of e-waste by 2025.
For the general battery recycling, research and consulting firm, Cleantech Group in its battery recycling report highlighted that different recycling methods target specific battery chemistries for economic efficiency.
Direct recycling works best for low-cobalt batteries with cheaper repair costs.
Hydrometallurgy is suited for high lithium batteries and competes with pyrometallurgy, which is ideal for processing mixed waste with low lithium content.
In the long term, the report stated that direct recycling is expected to dominate due to its high recovery rates, while hydrometallurgy and pyrometallurgy will be complementary for more complex waste.
Globally, companies like Umicore NV, BASF SE and Glencore plc are expanding into recycling, and major battery manufacturers like Contemporary Amperex Technology Co (CATL) and Panasonic Holdings Corporation are integrating on-site recycling to strengthen their supply chains.
Though direct recycling has advantages, current challenges with sorting allow hydro-metallurgy to capture the market faster.
The report further noted that battery recycling saw over US$8 billion in investments from 2021 to 2023, driven by price fluctuations in cobalt, nickel, and lithium.
With the growing market of EVs, lies an opportunity for Malaysia to tap into the e-waste and EV battery disposal and recycling sector. Nevertheless, the industry needs support to develop and improve the whole ecosystem, but there is still a big chunk of the cake for Malaysia in the region.
Safety, Operational Standards Enforcement
The Department of Environment (DOE) in Malaysia ensures that e-waste management aligns with the country’s sustainability goals by enforcing safety and operational standards. E-waste, classified as Scheduled Waste under Code SW110, includes hazardous materials from electronic devices, such as batteries and certain toxic metals.
According to DOE DG Datuk Wan Abdul Latiff Wan Jaffar, e-waste primarily comes from industrial processes and consumers. While industrial e-waste is regulated under the 2005 Environmental Quality Regulations, the government is developing a system to manage consumer e-waste.
Improper handling of e-waste can lead to severe environmental issues, including air and water pollution, soil contamination, and ozone layer damage. These problems pose significant health risks, such as heart and lung diseases, liver and kidney damage, and increased cancer risk.
To promote environmentally sound management of e-waste, the DOE requires each waste generator to take full responsibility for their waste.
“They must register and report their e-waste through the Electronic Scheduled Waste Information System (eSWIS), developed by the DOE to track the movement of scheduled waste. E-waste must be sent to licensed premises prescribed by the DOE for proper disposal.
“Under Section 49A of the Environmental Quality Act 1974, waste generators are required to have a competent person overseeing waste management at their premises,” said Wan Abdul Latiff.
The DOE is working to strengthen regulations as e-waste grows due to advancing technology and increased demand for electronic devices. To combat illegal e-waste dumping, like the incident at Westports, the DOE has enhanced collaboration with agencies such as the Royal Customs Department, Port Authority, SIRIM and SWCorp.
A special task force now inspects containers at national entry points. Cooperation between federal and state governments is essential to stop illegal e-waste imports and protect the environment. For the 175 licensed e-waste processing facilities in Malaysia, the DOE ensures they meet regulatory standards and can safely manage materials like solar panels and EV batteries.
According to Wan Abdul Latiff, solar panel waste is classified as SW 110 and EV battery waste as SW 103 under the Environmental Quality (Scheduled Waste) Regulations 2005. Facilities managing these types of waste must follow the guidelines outlined in the Environmental Quality (Environmental Impact Assessment) Order 2015, which details the necessary processes, equipment and environmental impacts. Once the Environmental Impact Assessment (EIA) is approved, DOE issues licenses for the facilities.
The DOE monitors these facilities by ensuring they meet licence and EIA requirements, such as installing Continuous Emission Monitoring Systems, Waste Water Treatment Plants, and tracking waste movements through the eSWIS system. Facilities must also have proper storage, an Emergency Response Plan and trained staff to manage pollution and reduce environmental risks. DOE enforces compliance through inspections, audits and monitoring.
Additionally, DOE encourages facilities to adopt new technologies to improve the recovery of valuable materials from hazardous waste, supporting a circular economy.
The DOE is actively developing and enforcing guidelines for the disposal of solar panels and EV batteries. Both are classified as scheduled waste under codes SW 110 and SW 103 according to the Environmental Quality (Scheduled Wastes) Regulations 2005, and waste generators must comply with these regulations.
“DOE is preparing a technical guideline focused on the reuse and recovery of these wastes, expected to be published by 2025. This guideline will support the DOE’s efforts to promote a circular economy for scheduled wastes in Malaysia,” Wan Abdul Latiff added.
To ensure both formal and informal waste collectors adhere to the new disposal guidelines, DOE mandates that all waste generators send their solar panel and EV battery waste to licensed facilities.
As Malaysia moves forward in the lithium-ion battery production sector, there is increasing concern over the disposal of used batteries due to their toxic components.
The growing EV market presents an opportunity for Malaysia to further tap into the e-waste and battery recycling sector. With adequate support and the development of a proper ecosystem, Malaysia can play a significant role in the region’s e-waste and EV battery disposal industry.
Source: The Malaysian Reserve
