Thе White Paper summarizes in a clear and comprehensible way the policies and practices of Monbat AD related to the application of the circular economic principles to the operation of the Company. It gives an overview of all aspects of the activity by presenting indepth information in order to meet the information needs of all groups of stakeholders.
There are infographics, diagrams and other visual materials to illustrate the most important information.
The role and specifics of this White Paper are not limited to providing well-structured and easily accessible information about the principles of Monbat’s circular business model. Its purpose is to serve as a regularly updated document, i.e., to be updated with all novelties related to the activity and the impact of the company on the society, the economy of Bulgaria, the EU and the environment in general.
A major premise in Monbat’s corporate policy is to uphold the hierarchy of sustainable development seeking to attain sustainable balance between social and environmental principles and aiming to ensure stable economic development. Similar to the majority of companies operating on a global scale, Monbat aspires to build efficient capacity and increase the human and corporate capital to achieve sustainability – thus, the sustainability specialists and expert teams (technologists, environmentalists, internal auditors, etc.) have already become part of the main structure of the company. A significant portion of the Group’s profit is invested in the improvement of technologies aiming to reduce the pollution risk of recycling and battery production. Achieving a “close to 100%” recycling of waste lead-acid batteries is not merely a vision, but rather a strategy for the Group and its implementation involves synergistically all companies in the Group.
Business Profile of Monbat AD
The Monbat Group of companies produces starter and industrial lead-acid batteries for transport vehicles, vessels, military equipment, telecommunication systems and installations for solar energy production. It is the biggest battery producer in the Balkans and the fourth biggest in Europe. The batteries produced by Monbat and its subsidiaries are sold on more than 70 markets on 5 continents. The business of the Group follows afully vertically integrated model, i.e., it includes the recycling of waste batteries, the production and the trade of new batteries. Monbat is part of the pan-European sector for production of batteries that comprises 15 EU Member States and employs more than 20 thousand people. Data provided by the International Lead Association (ILA) show that in the past 10 years these producers have invested more than EUR 2 billion in innovations so as to improve the characteristics and quality of the produced batteries and extend their lifecycle, thus reducing the volume of used batteries that account for hazardous waste. The sector is ambitious to reach by 2025 a net value of EUR 250 billion per year at the market of competitive and sustainable energy solutions related to the production and use of batteries.
Implementing the principles of circular economy – the example and experience of Monbat AD
Furthermore, in the end of January 2021, the European Commission approved of additional EU aid at the amount of EUR 2,9 billion for public investments in the battery production sector, targeted to support research and innovations across this strategic value chain. The project covers the entire ecosystem in the context of circular economy – from the supply of raw materials, through the production of battery cells and packages, to the recycling and production of secondary raw materials. The EU support is expected to channel in additional investments of EUR 9 billion from private investors, or the project will pool a total of EUR 12 billion for the development of the battery production sector.
The vertically integrated business model of the Monbat Group includes four major functions across the entire supply chain – from the extraction of the raw materials for recycling, through the logistic processes for supply to the recycling facilities, the recycling process itself (lead and lead alloys and polypropylene), to the production and sale of batteries on the market. The premise behind this type of organization of economic activities is based on the principles of circular economy.
It is consistent with one of the main principles of industrial development in the EU, more specifically – the provision of affordable and sufficient volumes of secondary raw materials by way of recycling for the needs of the producers. The production and the options to make changes in the application and recycling of lead-acid batteries is an example of the most comprehensive and successful implementation of circular principles.
The further development of circular economy as a leading economic principle for Monbat Group depends not only on the legislation and public support, but primarily on the mobilization of private capital and financing, resulting in the efficient reusing of resources. The integration and sustainable development across the entire value chain leads to an improved predictability and quality of processes in all Group companies. The new requirements for the origin of raw materials and other supplies and the responsibility for their use as early as their release on the market till the end of the product lifecycle require new methods of monitoring and control over all material suppliers and all users and customers, which are to be exercised expediently and in compliance with the good business practice.
The primary goal of Monbat circular model is a systematic change
The company aspires to implement it across the entire supply chain and the entire industry. From the product design and technology, through the new business models and new approaches to conservation of natural resources (extending battery life by 30-35% over the past 20 years), the transformation of waste into resources (recycling as much as possible of the raw materials applied in the batteries) to the models of consumer behavior gaining wider acceptance – the entire industrial context has been steering in a direction followed by Monbat over the past 21 years already.
An objective overview of the company’s activities shows that for the past 7 years it has already significantly exceeded the current average share of recycled raw materials used in the EU (about 65%) and typically covers the minimum share to be required in the EU as from 2030 for recycled lead in lead-acid batteries produced domestically, which is 95% (in the high-level-of-ambition scenario). Furthermore, the lead-acid batteries have a price-driven and environmental advantage over the lithium-ion batteries, as the latter belong to Class 9 of the Dangerous goods classification for transport and cannot be transported by air.
Battery production is very resource-intensive and once batteries become obsolete in the end of their lifecycle, they turn into hazardous waste, thus recycling appears to be the safest and the most cost-effective option for their disposal. The organization of chains for collection and safe disposal of used lead-acid batteries (both starter and industrial) and the organization of continuous flow process for the extraction of raw materials are necessary fit for the process of production by way of recycling. Furthermore, in the case of industrial batteries and batteries for electric vehicles, the principles of circular economy review recycling as the least preferable option, focusing rather on reusing or repurposing of batteries. What is more, during the R&D process of new battery models, the engineers at Monbat strive to design the batteries so that recycling at the end of their life cycle could be as easy as possible.
Monbat is part of the integrated supply chain in lead-acid batteries segment in the EU, which is economically sustainable and produces recycled lead at the amount of EUR 2 billion per year. The technological development of all types of batteries and their sustainable production is among the strategic imperatives ahead of the EU and Bulgaria, in particular. This is conditioned by the rapid development of electric vehicles and their increasingly wide-spread penetration into the market, as well as their acceptance by users. Nevertheless, the main part of the motor fleet globally comprises of internal combustion engine vehicles, using two main types of starter batteries, both produced by Monbat and Start – enhanced flooded batteries
(EFB) and absorbent glass mat batteries (AGM).
The latter are used primary in the cars equipped with start-stop systems, regenerative braking systems and in motorbikes (due to vibration resistance). Also, despite the main application of lithium-ion batteries as traction system, all electric vehicles use 12-volt more powerful (AUX) batteries necessary for the normal and well-balanced functioning of the systems, not related to the traction system. It can be noted that the application of all types of lead-acid batteries in all types of motor transport vehicles remains unchanged, resp., the demand for these continues to grow as steady as the number of transport vehicles on a global scale. This further requires well-organized and efficient operating systems to pull them off use at the end of their lifecycle, following the example of Monbat’s vertical integrated model.
This further requires well-organized and efficient operating systems to pull them off use at the end of their lifecycle, following the example of Monbat’s vertical integrated model. On a European and global scale, the advance of electric cars and sometimes poorer demand for conventional starter batteries is compensated by the wider application of lead-acid industrial (stationery) batteries in the industry, in the households, etc. The need for “stored” electricity produced from RES has increased the demand for efficient and sustainable batteries and entire systems of interconnected solutions based on various types of batteries, currently with a priority mainly on lead-acid batteries. The wave of the Fourth Industrial Revolution (Industry 4.0) further prompts a wider use of such systems, due to their cost-effectiveness and good electricity generation capacities. The same holds true for securing of the 5G internet technology advance (with an average of 3 times higher energy consumption than 4G networks) with a reliable powersource, independent of the networks, which will require new equipment and additional energy supply infrastructure.
Based on World Economic Forum data, the global batteries production should increase 19 times to implement effectively the transition to a low-carbon economy. Moreover, the development of the start-stop technology in ICE vehicles further contributes to the reduction of harmful emissions and the improvement of air quality. Estimates suggest that the global capacity demand for fixed and mobile applications will triple – from 4,67 terawatt-hours needed in 2017 to 15 terawatt-hours in 2030.
The production of batteries is a process with high investment costs – for research and development, economically justified production, saturation of markets with products at a price affordable for all consumers and last but not least – their sustainable and safe storage and recycling at the end of their “life”. Recycling of batteries is a collective term for tenths or even thousandths of technological processes, resulting in an economically justifiable process, in which the scrap obtains the qualities of viable raw materials to be used in production.
The advantage of Monbat circular model is related to its practical and financially efficient integration. The capacity to produce independently most of the materials and items needed for the end product are consistent with the principles of ensuring 100%
autonomy for raw material supplies from third parties (non-EU).
Lead and Lead Alloys
Lead and lead alloys are among the main raw materials used at Monbat in the production process – they account for between 51 and 91% of the battery mass (the average share in the current product range of Monbat is 57%). It should be noted that lead is one of the best-fitted metals for recycling (with low losses and invariant quantities), resp. it is extremely apt for creating circular economic cycles. The main raw material in the batteries produced by Monbat (between 90 and 100%) is lead from secondary production. As early as 2000, Monbat launched and commissioned the first installation for the recycling of lead-acid batteries in Montana. The advantage of this activity comes not only from ensuring a sustainable and reliable source of the main raw material used in the production, but also from the fact that the obsolete lead-acid batteries can be utilized almost fully (between 96 and 98% of the battery mass). Thanks to this process no lead and lead alloys from discarded batteries leak into the environment and/or unscrupulous methods for lead extraction – e.g., separating the lead cells from the box and allowing electrolyte discharge into the sewerage system or directly into the environment. The economic and environmental effect of the investment has been immediate and tangible – in the period 2001-2003 the company produced new batteries using approximately 54% of recycled lead.