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HB1972’s proposed battery rule could quash local EV market

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the House Committee on Energy and Environmental Protection on Feb. 6, 2024.
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Feb. 6,  2024, 10 a.m.
Hawaii State Capitol
Conference Room 325 and Videoconference

To: House Committee on Energy and Environmental Protection
      Rep. Nicole E. Lowen, Chair
      Rep. Elle Cochran, Vice-Chair

  From: Grassroot Institute of Hawaii
             Ted Kefalas, Director of Strategic Campaigns

RE: COMMENTS ON HB1972 — RELATING TO ELECTRIC VEHICLE BATTERIES

Aloha Chair and Committee Members,

The Grassroot Institute of Hawaii would like to offer its comments on HB1972, which would establish an electric vehicle battery recycling and disposal program for Hawaii.

Due to the state’s ambitious renewable energy goals, there is a strong push to increase adoption of electric vehicles in the state. However, the incidental effect of that push is that Hawaii must be prepared to handle the recycling of a growing number of lithium-ion batteries, which are highly flammable, dangerous to ship, damaging to the environment, and toxic to humans.[1]

Finding a safe way to recycle these batteries is important. However, one element of HB1972 that is problematic is that it would make the producers of EV batteries responsible for the end-of-life management of those batteries.

“Producers” under this bill are defined as manufacturers, licensees and importers of the electric vehicles, as well as battery manufacturers, remanufacturers and importers. By attempting to make car and battery manufacturers and distributors responsible for the disposal of EV batteries, this bill is likely to frustrate its own goals.

Such a requirement can possibly work in a large state such as California, where business volume is greater and businesses can more easily absorb the sharp cost increases. But businesses in Hawaii do not have the same power.

Our small market and remote location reduces the state’s ability to require compliance from producers and manufacturers, especially if the cost of compliance is so great that it would be more economically efficient to simply stop doing business in Hawaii.

If this program were part of a coordinated effort from multiple states to increase manufacturer responsibility for battery recycling, it would stand a greater chance of success. However, without that higher level of participation, we run the real risk that manufacturers will find it more expedient to simply end all sales and shipments to Hawaii.

Alternatively, this program could increase the price of electric vehicles and batteries to the point that most residents will not be able to afford them, and the state will not be able to rely on EV adoption to meet its sustainability goals.

Finally, there is the fact that the bill would eliminate any pathway to local disposal or the growth of a local processing or treatment industry. That would further increase the costs that must be borne by producers, increase the risks involved with shipping and disposal, and could incentivize illegal disposal.

Nor should the Committee overlook the possibility that federal law may end up further regulating the transport, sales and storage of these batteries — which would create additional complications for the proposed program.

We must find a way to safely recycle these batteries, but the program outlined in HB1972 would likely fail to achieve that goal.

Where the bill might succeed, however, is in reducing the scope of the problem by unintentionally stopping the sale of electric vehicles in Hawaii.

Thank you for the opportunity to testify.

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Taotianchen Wan and Yikai Wang, “The Hazards of Electric Car Batteries and Their Recycling,” IOP Conference Series: Earth and Environmental Science, 2022.

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