Recycling Can Cut Lithium, Nickel Demand By 25% Globally By 2050: IEA

The recycling of battery metals is emerging as a significant commercial opportunity, with the production of recycled metals such as nickel, cobalt, and lithium witnessing rapid growth, albeit from a low base.

According to the recent report by International Energy Agency (IEA) recovered metal volumes rates relative to the available feedstock for recycling surged to over 40% for nickel and cobalt and 20% for lithium in 2023. This increased the market value of recycled battery metals nearly 11-fold between 2015 and 2023, with more than half of this growth occurring in the last three years. Although electric vehicle (EV) batteries are not yet available for recycling at scale, these developments indicate vast potential for expanding recycling efforts.

Mandate For Using Lithium-ion Battery

The report recommended mandatory collection of used lithium-ion batteries from electric vehicles, with collection rates increasing from 0.5% in 2024 to 65% by 2044. The Indian government has previously issued policies such as the Battery Waste Management Rules and E-Waste Management Rules. These require the collection and recycling of EV batteries and e-waste, alongside increasing recovery targets and mandating the minimum use of domestically recycled materials. Similarly, South Africa’s Second-Hand Goods Act and EPR Regulations also address these concerns.

In India, domestic capacity meets only 5% of the available feedstock, indicating a major capacity deficit. This is one of the key reasons for significant black mass exports to East Asia from these regions due to the current lack of material recovery infrastructure. Despite China’s de facto black mass import ban under its hazardous waste classification, black mass still enters via other Southeast Asian countries, such as Malaysia, the Philippines, and Thailand, where some processing is done to remove elements like lead before shipping it to China for recycling under the mixed hydroxide precipitate (MHP) classification.

Europe demonstrates relatively balanced copper scrap trade, importing and exporting significant volumes in 2022, with around 1.5 Mt of copper scrap traded both within Europe and across external borders. Over half of Europe’s total copper consumption comes from scrap, much higher than the global average. Most of this trade is intra-European, with only a quarter involving non-European countries. The largest share of exports from Europe flows to China (around half in 2022), followed by India.

Asia (excluding China) is a key region for copper scrap trade, with 45% of the region’s consumption met by scrap. This is driven by high scrap demand in Japan and Korea, which have significant processing capacity. Around 1 Mt of copper scrap is imported and exported across the region. Key importers include Japan, Korea, and India, with Malaysia, Vietnam, India, and Thailand previously taking low-grade scrap before China’s import restrictions. However, recent restrictions on low-grade scrap imports in these regions highlight the need to develop processing capacity for such materials in Europe and the United States.

The lack of low-grade copper recycling capacity in the United States and Europe, coupled with tightening import regulations in China, Malaysia, India, Vietnam, and Thailand, means fewer regions can accept low-grade scrap for processing. Without sufficient domestic capacity to upgrade or process such scrap, more of it may end up in landfills.