INTERVIEW | William Bergh: One word to describe the future of the circular economy is ‘liquidity’

As the world accelerates its shift toward electrification, the challenge of sustainably managing batteries at the end of their life has never been more urgent or more exciting. At the forefront of solving this is William Bergh, founder and CEO of Cling Systems, a company dedicated to leading the global transition to battery circularity. With a mission to guide batteries toward reuse, repurposing, and recycling, Cling is building the digital and logistical infrastructure necessary to unlock scalable, circular supply chains. In this conversation, William shares his perspective on how the battery value chain will evolve over the next decade, the challenges of second-life applications, and why “liquidity” might just be the key to the future of the circular economy.

Enjoy!

How do you see the global battery value chain evolving over the next five to ten years, especially with growing pressures around sustainability and resource security?

Continued growth in the global battery value chain. My optimistic view is that China-US tensions have an off-ramp, and even with some tariffs, there will be continued widespread adoption of li-ion battery cells across BESS systems, and mobility – with Chinese manufacturing excellence resulting in ICE-EV cost parity becoming commonplace in several regions (starting with western EU and North America). There will be continued build out of giga factories in Europe although expectations will be more realistic, and this will likely be using a JV approach with some degree of tech transfer from Chinese players. This may also take place in the US. Although current events make that feel like a remote possibility, positions can change quickly.

Determining when recycling starts to be a significant contributor in terms of feed stock is very hard, but a useful date to bear in mind is from 2030 onwards. Sustainability and resource security play a significant part in flipping perceptions of what is waste into a valuable resource. Also, just as important is any lithium supply deficit, where demand catches up with current oversupply, with greater value being attributed to recycling feedstock due to higher lithium prices.

What are currently the biggest technical or logistical challenges preventing large-scale second-life battery applications?

Technically, there is a bit of a mismatch between the chemistry of the supply that is mostly available on the market – NMC – and the supply that the market is coalescing around for (first life) energy storage – LFP. Added to this, access to BMS or protocols is still not as standard, with OEMs hesitant to share commercially sensitive information. So, building a BESS fleet at scale must overcome those hurdles.

Another key factor is that if you’re a company looking to build a BESS portfolio at MWh level, then you need to have access to the same or similar sort of supply so that integration is easier and somewhat consistent. Accessing that sort of supply is difficult unless you have strong relations with OEMs. The logistical piece becomes very apparent here when coordinating shipments across countries or continents and reconciling the preferences of the seller, with the preferences of the buyer.

So, for now second life is a niche market, and niche markets can grow to become quite sizable, but to what extent is unclear.

In your view, how important is it to design batteries with circularity in mind from the very beginning and are OEMs moving fast enough in this direction?

Very important. We must be realistic though that inevitably, there will be variation of design as battery OEMs have their own pressures to build products that beat their competition on performance and cost. So, any designing for circularity either will come secondary to the performance and cost priorities or will have to be mandated by regulation in some way. The recent Chinese changes on improving safety standards and black mass imports are interesting frameworks.

Perhaps similar frameworks could be applied for designing for circularity? It’s hard to see though how battery OEMs would willingly surrender any technical/performance advantages, and they would most likely make the argument that it is incumbent upon the recycling or end of life value chain to increase innovation, recovery rates, and efficiency.

Maybe consolidation amongst battery producers is another outcome, where there are a smaller number of companies and the ones that remain designed for circularity? Let’s scrutinize my predictions five years from now.

With EV adoption rising sharply worldwide, how prepared is the industry for the wave of batteries reaching end-of-life in the next decade?

Well, I can assure any readers of this piece that we are getting prepared and invite industry to come along on the journey with us! Putting the Cling sales pitch to one side, there is significant regional variation. Some places have prepared and implemented solutions or already have structures in place to determine the best path for any end-of-life batteries. The ultimate boost for this kind of action is major players seeing this supply as a source of profit and energy security and orchestrating their strategy around that.

William Bergh

Right now, everyone is still figuring out A), when will this supply come to end of life, and B) what is the best partnership or structure to handle that. For now, A) takes up more attention than B) and we must recognize that industry players also have other priorities like preserving their industrial base and transitioning off ICE vehicles (in the case of Europe) or navigating a politically volatile situation (in the case of the US).

The car dismantling/breaker market is very mature in most of the world. So, you’d expect some consolidation or greater attention being paid to those players as that typically is the first entry point at end of life.

LFP batteries are gaining strong momentum due to their safety, longevity, and cost advantages. How do you see LFP chemistry reshaping the second life and recycling landscape compared to other chemistries like NMC or LCO? 

Yes, this is why I referenced it in the answer to question 2 also. The fact remains that the second life and recycling players build their processes around what is available or likely to be available in the short/medium term. As greater volumes of LFP become available, there could be a shift occurring but right now that is not happening throughout the value chain.

There are some exceptions, as there are recyclers on the market who prefer LFP, simply because there is lots of competition for NMC. There is of course the absence of Nickel and Cobalt in LFP, and even though there is depressed prices for both of these compared to historical averages, it’s important to keep an open mind on what supply chain disruptions come into play – for example export controls in the DRC or Indonesia, or floods in Indonesia meaning greater scrutiny on tailings dams that come from the mining process.

LCO is still quite rare, for us anyways.

How will the rise of alternative chemistries like LFP or sodium-ion affect second-life opportunities and the recycling market?

LFP was covered in the previous answer. Na-ion is still a big unknown and because of Sodium’s abundance, there is much less value attached to it from a feedstock perspective.

We rarely hear of Na-ion from either sellers or buyers but never say never, if there’s a trade to be done, we would want to provide the means to make that a reality if the market needs it.

How do you see the growth of utility-scale battery energy storage systems (BESS) impacting recycling strategies and circular economy models?

Mainly from the end-of-life management perspective, where BESS builders or those in that part of the value chain generally want to have a way of generating a positive economic outcome for those systems as they approach the end of their first use. Because BESS is still an emerging technology, this is still quite far away from becoming a widespread problem or job to be done.

But when it is, we will be there to guide players through that process and any resulting trades and transportation. An interesting dynamic at play is that institutional capital and infrastructure capital is typically at play at the utility scale, so those kinds of investors or lenders could give a greater degree of urgency or clarity to those discussions.

I think that’s a good thing overall and look forward to talking with an evolving capital stack. That’s what makes this industry so exciting and dynamic.

What role do you think government policies, like the EU Battery Regulation or US IRA incentives, will play in shaping a truly circular battery industry? 

They are important in setting the direction of travel, but the market will always be the main driver in shaping a truly circular battery industry. We shouldn’t rely on regulation as the thing that manifests a truly circular battery industry, and I doubt policy makers think that either.

Sensible regulation is important though and also the ability to roll back or tweak measures that are needlessly prohibitive or are counterproductive to circularity. For example, considering black mass shipments being treated as a hazardous waste, or Lithium’s 1A toxic classification, and then comparing that to the Draghi report’s call to create a “true single market”.

Where do you see Cling Systems fitting into the future battery ecosystem: more as a data enabler, a logistics hub, or a broader platform for circularity?  One word to describe the future of the circular economy? 🙂

I think you could have elements of all three of those into our future place in the battery ecosystem. Ultimately, we want to significantly reduce the complexity of transactions and provide the tools to the ecosystem that are fundamental to that trade. There are so many idle batteries, and this inventory has no efficient outlet, so that’s what we are doing.

One word to describe the future of the circular economy is ‘liquidity’. We are building a liquid and functioning market. At the moment, it is illiquid and opaque and when the volumes really increase, we will be there to make it possible for those batteries not to be seen as a ‘problem’ on either the supply or demand side.

What new solutions or innovations are you most excited about that Cling Systems is working on to accelerate circular supply chains?

We’ve got so many exciting things in the pipeline and our product and tech team are phenomenal.

Right now, we have S1 which stands for System 1 and is our product designed specifically to accelerate transactions of idle battery inventory. Personally, I find our Deal Room very exciting where we will guide both buyers and sellers through every step of a transaction, flagging discrepancies and points where a trade has room for negotiation. For example, pricing, Incoterms, payment terms, inspection period etc. It’s being built out to simplify communication within teams and between the buyers and sellers, as well as to integrate both logistics and payments.

Recommendation for the Next Interview – If you could nominate one person for us to interview next, who would it be, and why?

I would be curious about what any of Evan Horetsky, Chris Berry or Henry Sanderson would have to say. Let’s hear Chinese perspective!

Read previous interview here.