The changing world of automotive recycling

Motor oil is a big business in Canada. On average, Canadian motorists change their engine oil about twice a year and depending on your engine size and the type of oil you choose to buy, it can cost between $50 and $120 for an oil change, or as much as $5000 over the life of your vehicle. In 2022, there were 26 million vehicles on our roads, sustaining a billion dollar oil change industry.

Although other engine fluids and materials are recycled, motor oil is the big-ticket item. The Used Oil Management Association of Canada (UOMA) reports that over 230 million litres of oil was collected across nine provinces in 2022. But with the advent of the electric vehicle (EV) big changes are coming to the automotive recycling industry.

Organizations like British Columbia’s Interchange Recycling see this change on the horizon and are working to prepare for the transition. They’re well aware EVs don’t require oil, antifreeze and many of the regularly serviced components that are found in an internal combustion engine. 

Interchange is a not-for-profit organization that recycles engine fluids, lubricants, oil filters and plastic containers for its members. The program is funded with an environmental handling fee applied when these products are sold. 

In 2023, Interchange collected nearly 50 million litres of used oil in B.C. and also recycled 6.2 million oil filters, 2.3 million litres of antifreeze and 1.8 million kilograms of plastic containers.

Three quarters of the oil collected by Interchange is recycled into new lubricating oil, while the remaining amount is primarily used for industrial purposes such as fuel for pulp mills, cement kilns and asphalt plants. 

Carfax notes that when oil is used as a lubricant, it improves your engine’s performance and efficiency and helps to reduce noxious emissions. However, when the recycled oil is burned, it releases CO2 and other pollutants into the atmosphere. With 23 million litres of used oil consumed in use, there are still significant CO2 emissions despite the impressive recycling effort. 

These engine-oil-related emissions and the energy required for recycling is eliminated as people switch to EVs. David Lawes, CEO of Interchange Recycling, understands the impact electric vehicles (EVs) will have on their business. EVs don’t require antifreeze, engine oil or plastic containers to ship and store these liquids. As consumers embrace EVs, oil changes and radiator flushes will eventually become a thing of the past.

In anticipation of significant changes to their business model, Lawes has been in contact with the major EV manufacturers about the services they will require for battery recycling. Manufacturers are working to create closed loop systems for their products and they will look to establish the most cost-effective system for recovering materials from old batteries and using them in new batteries. Lawes believes Interchange is ideally positioned to provide those services.

Currently, Interchange collects its automotive-waste materials for recycling from the service departments of the largest automakers, as well as third party oil-change companies, including Canadian Tire. Interchange also manages public collection depots located across the province.

Battery recycling will have a much different collection model. In the future, a supply of EV batteries for recycling is likely to come directly from the automakers, as they incorporate circularity into their business models. The high value of materials in EV batteries will provide economic incentives for a robust recycling industry, thereby creating new jobs and investment in the province.

Lawes anticipates a slowdown in the recovery of fluids and materials produced through regular maintenance of internal combustion engines. EVs may eventually trigger a dramatic decline in oil recycling. Predicting when this transition will swing into high gear is a challenge, which is why Interchange has added representatives from the auto industry to its board of directors.

Interchange wants to be ready with battery recycling programs when there is a steady supply of used batteries.  Many EV and grid-storage batteries are still early in their product lifespans and older batteries weren’t designed to optimize the recycling process. For now existing recyclers have the capacity to process retired or damaged batteries, but stockpiles will accumulate as EV adoption and deployment of grid batteries accelerates.

Lawes believes Extended Producer Responsibility (EPR) policies will also be applied to EV battery manufacturers and he expects initial legislation to be in place by 2026. EPR is a policy where product producers are responsible for establishing collection sites and recycling facilities to ensure recovery, reuse and recycling of their end-of-life products. 

The British Columbia government is in the process of updating its EPR policies to support a province-wide system to safely manage used hybrid and EV batteries. It’s reasonable to expect growing EV battery collection and recycling rates to eventually supersede Interface’s current focus on recycling used materials from internal combustion engines.

The advent of EVs and grid batteries will dramatically increase the demand for battery materials. Lithium-ion batteries are 95 per cent recyclable and contain high-value minerals like cobalt, nickel and lithium that are reusable in new batteries. The value of the recovered minerals will provide sufficient economic incentive for recycling, while EPR places further responsibility on manufacturers to recover their materials and foster growth in the battery recycling industry.

British Columbia has a long history of comprehensive waste management and its government has a strong track record of implementing EPR legislation that encourages high rates of recycling. The province also has the facilities and expertise to transition into large-format battery recycling. 

Interchange Recycling and other players in the industry see opportunity in this emerging market and are working to keep the resulting economic activity in the province.

Rob Miller is a retired systems engineer, formerly with General Dynamics Canada, who now volunteers with the Calgary Climate Hub and writes on behalf of Eco-Elders for Climate Action, but any opinions expressed in his work are his own.