Industry anxious about mandatory recycling targets in EU battery law

“The introduction of a mandatory recycling quota can stimulate the recycling industry by artificially creating a scarce commodity with high demand and low supply," said Green MEP Henrike Hahn. [asharkyu / Shutterstock.com]

This article is part of our special report Sustainable sourcing of batteries.

Requiring companies to use recycled metals in new electric vehicle batteries is necessary to prevent manufacturers from opting for cheaper, freshly mined virgin materials, the EU says. Still, the automotive sector, battery makers and the mining industry are all anxious about the upcoming EU battery regulation.

The small quantities of end-of-life batteries currently available is pushing up the cost of recycling batteries, making recovered raw materials more expensive, says Henrike Hahn, a Green Member of the European Parliament.

This makes the business case for recovering precious metals like cobalt, nickel or lithium unattractive as companies prefer cheaper virgin materials over recycled content.

But policymakers can turn this around by forcing battery makers to use recycled content, the German MEP told EURACTIV.

“The introduction of a mandatory recycling quota can stimulate the recycling industry by artificially creating a scarce commodity with high demand and low supply,” she said.

Under the proposed EU battery regulation, the quantity of recycled cobalt, lead, lithium, and nickel in each electric battery must be made public from 2027, with mandatory minimum levels kicking in from 2030.

These levels will be staggered over time, to ensure there are enough recycled batteries in the system to meet the targets, according to the European Commission which tabled the proposal in December last year.

The mandatory recycling requirements will start at 12% for cobalt, 85% for lead, 4% for lithium and 4% for nickel in 2030, and rise to 20% for cobalt, 10% for lithium and 12% for nickel by 2035.

To facilitate this, the EU executive has proposed obligatory recovery targets for valuable materials to be achieved by 2026 and 2030.

The targets are 90% for cobalt, nickel, and copper by the end of 2025, rising to 95% in 2030, while for lithium the figure is 35% by the close of 2025, increasing to 70% in 2030.

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“Mediocre recovery rates”

However, these recovery targets were criticised as insufficient by the clean mobility NGO Transport & Environment, which warned that Europe risks falling behind rivals such as China.

“We know already today, recycling companies outside of Europe are recovering well over 90% of key battery metals including cobalt, nickel, and crucially lithium,” said Alex Keynes, a clean vehicles expert with T&E.

“With this in mind, some of the Commission’s proposed targets are not fit for purpose, specifically the 2026 and 2030 targets for lithium recovery,” he told EURACTIV.

Keynes warned that significant investment into state-of-the-art battery recycling technologies is needed to ensure Europe can extract raw materials at the rate needed, citing the bloc’s current reliance on China for battery recycling.

“Setting comparatively mediocre recovery rates in Europe for 2026 and 2030 when we know that there are companies in other countries already exceeding them today will do little to make Europe’s industry more competitive on the global market and will discourage investments in companies that are aiming higher,” he added.

Recycling targets are only the start

But setting ambitious goals is only the start, industry says. In addition to setting targets, Europe must also be prepared to legislate for the practicalities of recycling raw materials, according to Adam McCarthy, the President of the Cobalt Institute.

McCarthy argued that Europe has so far been content to allow the burden of dealing with hazardous materials to take place outside of the EU. Currently, less than 1% of rare earth elements are recycled in Europe.

Facilities handling hazardous raw materials need safety measures in place to avoid long term exposure of their workforce, McCarthy said.

“At the minute those jobs [mostly] take place in China, as we’ve made it really difficult to do those in Europe,” he explained. “But if you make a political decision that you want to do more of that in Europe, then you need a framework that allows that to happen,” he told EURACTIV.

“I think the regulatory regime still needs to be adapted to a world where actually we’re going to have to work with substances like cobalt, if you want the vertical supply chain in Europe for batteries,” he added.

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Car industry and battery manufacturers concerns

The European Automobile Manufacturers’ Association (ACEA) has taken issue with several of the proposed recycling measures in the EU battery regulation, cautioning that potential shortages of recycled content will harm the competitiveness of European vehicles.

ACEA also criticised the timeline proposed by the Commission as too ambitious given it is not known how many batteries will be available for collection in years to come.

“As of today, it is also close to impossible to predict in which quantities a recycled material will be available 15 years from now, when electric vehicle batteries are returned for recycling purposes – or even later when it includes second‐use batteries,” states a recent ACEA position paper.

“Likewise, it is very difficult to predict what kind of new technologies will be on the market when the recycled material requirements enter into force, and how this will influence demand for and supply of virgin and recycled materials,” the paper continues.

These concerns are broadly shared by the Association of European Automotive and Industrial Battery Manufacturers (Eurobat), who argue that obliging manufacturers to use recovered material could lead to production issues.

Francesco Gattiglio, Eurobat’s director of EU affairs, worries that the automotive sector could experience a shortage of secondary raw materials in 10 to 15 years, comparing it to the current semiconductor shortage which has upended car manufacturing.

“The big uncertainty that this regulation is creating is what do we do if at a certain point there are not enough secondary raw materials available?” he told EURACTIV.

“That’s the risk we are facing,” he added.

Market uncertainty

The uncertain nature of the future market for raw materials was also acknowledged by MEP Henrike Hahn.

“The scenarios [in the regulation] themselves work with assumptions that are often uncertain, as the future market for batteries might be bigger or smaller than assumed and less vehicles might be sold due to changes in behaviour or consumer patterns,” she said.

In addition to questions over the availability of recycled content, the implementation of other aspects of the regulation may prove difficult, according to Eurobat.

The requirement that each battery must contain – and display – a set percentage of recycled material will create a massive administrative burden for battery manufacturers, Gattiglio argued.

“I don’t think the Commission fully realises the amount of work they are creating for us and for market surveillance authorities. [The regulation] means that every factory would have to produce hundreds of certificates every year,” he said.

Rather, Eurobat would like to see the focus of the legislation shift away from individual batteries to require an overall proportion of recycled materials in the manufacturing process.

“Our proposal would be instead of gathering data on each battery, basically to make it a due diligence requirement, so that every company simply has to prove that it is using a certain share of raw materials. And that’s very easy to prove, because you have the invoices of buying the material,” said Gattiglio.

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The raw materials industry

The mining industry is in favour of recycling as a means to increase circularity within Europe but warned that primary materials extraction will continue to be necessary.

“Will we have 20% of cobalt being circular by 2030 [within the EU]? I think that’s probably challenging. Will you have it by 2040 or 2050? That’s probable, as you can get up to a high amount by then. But it will take time to come on stream,” Adam McCarthy told EURACTIV.

McCarthy believes that Europe will become “more and more reliant” on cobalt from recycled sources in the coming years.

“Although you will never completely get rid of the need for some primary supply, you can see that becoming a less important part of the mix, while recycled content increases,” he said.

The Nickel Institute similarly emphasised that the industry is already preparing for the changes outlined in the EU battery regulation.

“Some EU-based nickel producers are already active in recycling – or preparing themselves to recycle electric vehicle batteries once they reach the end of their valuable life,” a Nickel Institute spokesperson told EURACTIV.

“This will become, in the mid to long term, an important additional future source of nickel required by the EU decarbonisation strategy,” they added.

Tabled in December 2020, the draft EU battery regulation is currently being debated by the EU’s co-legislative branches – the European Parliament and the Council representing the EU’s 27 member states.

It replaces the now obsolete battery directive from 2006, updating it to reflect advances in technology and recycling techniques.

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[Edited by Frédéric Simon]

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