SK Ecoplant, TES to enter Japan’s battery recycling market

SK Ecoplant Co., a South Korean construction engineering and waste management firm, said on Tuesday it is entering Japan’s battery recycling market in partnership with Japanese leasing and financing firms.

TES Envirocorp Pte., an SK affiliate and Singapore-based electronic waste recycling company, on Monday signed a memorandum of understanding with Sumitomo Mitsui Finance and Leasing Co. (SMFL) and its affiliate SMFL Rental Co. to cooperate in SK’s battery recycling business in Japan.

Under the initial agreement, TES will use its technology to handle the entire battery recycling process, including used battery collection, pre-treatment and post-treatment.

Pre-treatment refers to disassembling and shredding scrap, a byproduct generated from EV battery manufacturing, and extracting black mass – a black powder that contains nickel, lithium, cobalt and manganese extracted from spent lithium-ion batteries.

The two Japanese companies will provide their sales networks and financial capabilities to help TES collect used batteries from local electric vehicle and battery makers.

SMFL is a leading Japanese leasing and financing company headquartered in Tokyo and an affiliate of Japan's Sumitomo Group.

As of 2022, its sales stood at 2.16 trillion yen ($14.6 billion).

The company is seeking new businesses, including waste battery recycling, to achieve government-set sustainable development goals (SDGs).

Its subsidiary SMFL Rental is engaged in the rental business of various assets ranging from IT devices, including PCs and workstations, to heavy equipment.

TO BUILD USED BATTERY PRE-TREATMENT PLANT IN JAPAN

Once the battery recycling business is up and running, SK and its affiliate TES are planning to build a used battery pre-treatment plant in Japan.

The three partners also agreed to contribute to Japan’s circular economy by establishing a closed-loop system that re-uses battery metals such as lithium, cobalt and nickel recovered from waste batteries in the manufacturing of new batteries.

If their partnership is successful, SK said the three firms would also seek joint projects outside of Japan.

Japan is still in the early stages of vehicle electrification with its EV penetration rate below 1% as of end-2022.

However, EV demand is expected to increase in Japan as internal combustion engine vehicle sales will be banned from 2035.

SK, ECO-FRIENDLY ENERGY FIRM

SK Ecoplant, formerly SK Engineering & Construction Co., has been striving to transform into an eco-friendly energy company from a construction enterprise.

Last November, SK said it developed four core battery-recycling technologies, including recovering nickel and cobalt from spent lithium-ion batteries.

In partnership with SK’s US lithium-ion battery recycling firm Ascend Element Inc., the Korean company also launched a battery recycling joint venture in Kentucky last year.

TES, which SK acquired in 2022, operates 43 plants in 21 countries, with major facilities in Singapore, China, Australia, the UK and Germany.

“Japan is a market with high growth potential in the waste battery recycling sector,” said TES Chief Executive Terence Ng. “Leveraging our technology and in collaboration with SMFL and FMFL Rental, we expect to accelerate our advance into the global waste battery recycling market.”

Write to Sang-Hoon Sung at uphoon@hankyung.com

In-Soo Nam edited this article.