After Becoming EV Nation, Norway Seeks Battery Recycling Crown

Highlights :

  • To incentivize EV in Norway, taxes lowered on EVs to keep the prices down
  • Increased taxes on traditional vehicles
  • Norway’s 96 percent of energy needs come from hydroelectric power

Norway, a country of barely 5.4 million citizens, has shown a commitment to EVs that is quite simply, unmatched in the developing world. It was the country with the most electric vehicles per person in January last year. The European nation has been a frontrunner in the world EV market right through 2021. Even in January 2022, the country’s EV market share improved to 90.5%, a near-record. It’s interesting to speculate what makes the Norwegian approach so EV-friendly.

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What’s happening in Norway?

Norway, in 2021, saw more EVs on its roads than ICE vehicles. And this love for EVs goes well beyond cars. It has  formed an electric network of buses, trains, and trams, in addition to lots of electric bikes.

For any nation’s direction of development, its government’s policy forms the backbone. For starters, the country aims to switch to 100% zero-emission cars (new sales) by 2025, a very doable target, as compared to most other countries that are struggling.

Taxes and Incentives

To incentivize EVs in Norway, the government lowered taxes on EVs to keep the prices down. There have also been exemptions to road tolls as an extra incentive. ICE vehicles on the other hand were slapped with an extra 25% VAT tax, a carbon tax close to 20%, and smaller amounts for weight tax, NOX tax, and a car scrapping fee.

Range anxiety, that bugbear for EVs till now has not been an issue, thanks to lesser travel distances, and a well established charging network.

Cheap Electricity

Norway fulfills 96 percent of its energy needs from relatively cheap hydroelectric power. This comes from 1500 plants around the country. Impressively, many of these are low-impact designs called run-of-river plants that don’t require dam building.

On the back of a brilliant infrastructure to harness and transmit, the prices of electricity are one of the cheapest in the world. Based on per kWh in USD, the 2020 price of electricity in Norway is around 16 cents for households and about half that for businesses – compared with an EU household average of about 25 cents/ kWh.

Further, Norway has been building up a very good base of onshore and offshore wind farms. Almost 300 hundred wind turbines have recently started up in Fosen Vind. It is the largest onshore wind venture in Europe. All this in a country that has been a large exporter of oil and natural gas for decades, and probably one of the standout examples of saving up those earnings for a rainy day with its sovereign wealth fund. At last count, the government pension fund global, also known as the oil fund, has almost $1.4 trillion dollars under management. Or Over $250,000 per Norwegian citizen.

The Manufacturing Push

In many ways, Europe’s push for battery manufacturing within the EU area depends on Norway for success.

Norway is already a producer of several of the raw materials used in battery production. It currently supplies 21 per cent of the EU’s primary aluminium, 13 per cent of its nickel and 8 per cent of its cobalt raw material imports. With its grid almost completely powered by renewable energy,  production of battery cells, precursors and battery raw materials in Norway helps reduce the total carbon footprint of battery production in Europe, a key expectation in the continent,

Norwegian firm Freyr is planning to build a 32 GWH Li-ion battery cell factory at Mo Industrial Park, with production to start in 2023. In March 2020, Morrow Batteries, announced plans to build a giga-cell factory.

The Norwegian government, understanding their strengths and limitations best, have gone big on recycling. Not a bad idea, with the value of recycled Lithium ion batteries projected to hit $700 per tonne or higher

The most significant work on battery reuse and recycling is currently being done by the EYDE Cluster – the Norwegian Centre of Expertise (NCE) for Sustainable Process Industry.

The cluster consists of local suppliers and MNC’s that deliver to the global market, as well as research organisations and educational institutions.

A major battery recycling milestone was reached in 2020 when Norsk Hydro joined forces with Swedish battery giant NorthVolt on a joint venture for battery recycling and urban mining. The new company, called Hydro Volt, is building a pilot recycling facility in Fredrikstad, Norway, which will begin operations soon this year. The facility will have the capacity to process more than 8 000 metric tons of batteries per year, crushing and sorting them to retrieve aluminium and other metals.

Similarly, you have Canada-based Ly-Cycle that has formed a joint venture with Norwegian-headquartered strategic partners Eco Stor and Morrow Batteries to build a new commercial lithium-ion battery recycling facility in southern Norway. This facility will be capable of recycling 10,000 tonnes per annum.

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