Glossary | Lithium ion Battery Recycling

The demand for lithium ion battery recycling is projected to grow significantly, largely driven by the rising adoption of EVs and expanding battery production. By 2040, the global EV market is expected to expand considerably, resulting in millions of vehicles reaching the end of their operational lives and necessitating enhanced battery recycling efforts to reclaim valuable materials like lithium, cobalt, and nickel.

Although battery production scrap from gigafactories will be the primary source of recyclable battery material in the short-term, after 2028, EV scrap will overtake and will remain the largest contributor to recyclable battery material in upcoming years, according to Benchmark's Recycling Analysis. Furthermore, as battery supply chain challenges and sustainability goals become increasingly prominent, manufacturers are focusing on incorporating recycled content into their products, which will further drive the demand for recycled materials in battery production.

Forecasts indicate that global battery recycling feedstock availability will surpass 0.5 TWh by 2030, with the automotive sector being a significant contributor. To meet this increasing need, efficient collection and battery recycling systems must be developed to manage both post-consumer batteries and pre-consumer feedstocks, such as production scrap from battery manufacturing facilities, or end of life (EOL) EV batteries, swapped batteries, or recalls. Advancements in collection and recycling infrastructure are critical for ensuring a sustainable supply chain within the battery recycling industry. From an investment standpoint, to build the capacity required to recycle the forecasted battery scrap by 2040, over $150 billion is set to be required. Considering all aspects of the supply chain, to plug the gap between today’s battery industry and 2040 battery demand, at least $1.6 trillion of investment is required. 

The global battery recycling capacity is steadily increasing in response to the growing volume of used lithium ion battery cells, with Benchmark forecasting that the total weight of EoL/production scrap available for recycling will exceed 2.5 million metric tons by 2030. This expansion is essential to accommodate the influx of EOL batteries from the EV sector, which is expected to continue its upward trajectory in the coming years. The battery recycling industry is evolving globally, with distinct regional variations in market development and infrastructure.

The development of lithium ion battery recycling infrastructure varies significantly across regions, with notable efforts underway in China, Europe, North America, and India. In Europe and North America, the battery recycling markets have a similar level of maturity, however there are key differences between how black mass is classified and priced in these regions. Throughout 2025, grants accounted for the majority of funding in the battery recycling industry, highlighting the need for government support to expand the recycling infrastructure required in each region.

China

China currently leads the global battery recycling market, driven predominantly by its extensive EV industry, manufacturing capabilities, and supportive government policies. China accounts for over three quarters of battery pre-treatment capacity and greater than 85% of black mass refining capacity as of 2025, solidifying its dominance in the battery recycling sector. Many battery recycling companies are bringing operations online to manage the increasing volume of EOL batteries and production scrap in upcoming years.

Europe

In Europe, battery recycling infrastructure has evolved mainly as a response to regulations such as the EU Battery Regulation and the Critical Raw Materials Act (CRMA), as well as the classification of black mass as hazardous waste to reduce critical mineral leakage. The Battery Regulation replaced the previous battery directive and aims to regulate the entire lifecycle of batteries within the EU to reduce environmental impacts, improve sustainability, and support a circular economy. The regulation stipulates that by 2031, new batteries must contain 6% recycled content for lithium and nickel, and 16% for cobalt. While the CRMA addresses the EU's dependence on imported raw materials which includes battery raw materials, it supports the development of a battery recycling industry. These regulations enforce battery recycling targets and mandate the use of recycled materials in new batteries. Recyclers are establishing commercial-scale battery recycling facilities across the continent to create a closed loop on critical materials. As part of the implementation of the EU Batteries Regulation, each EU member state is working to integrate and implement their regional legislation to the overall law, such as the integration of its national Extended Producer Responsibility (EPR) systems with Producer Responsibility Organisations (PRO). In ex-EU countries, such as the UK, legislation is being introduced to encourage critical mineral security through manufacturing and recycling - as has been outlined in the much anticipated Critical Mineral Strategy: Vision 2035, where the government defined a list of minerals which it has determined as critical and/or important for growth. 

North America

Capacity growth in North America initially developed slower than in Europe or China. However, with the arrival of the Biden Administration Inflation Reduction Act (IRA) and Department of Energy (DOE) support, grant funding into the battery recycling sector increased hugely, with many investments being made to build out battery recycling capacity within North America. To date, capacity development in the sector has largely been led by federal funding, however with the inauguration of President Trump in January 2025, there was significant anticipation into how his presidency would impact the recycling industry, with Trump’s plans to dismantle the IRA being of notable significance. While the IRA has succeeded in supporting the industry through its infancy, with an emphasis on America-first supply chains potentially increasing the need for battery recycling in the US, Trump’s legislation will now focus on critical mineral security and supply chain independence. In the US, black mass is classified as a solid waste and only given a hazardous classification if the material in question can be proven to have hazardous characteristics. Stakeholders are of the opinion that limiting black mass export in North America would be highly beneficial to achieve critical mineral security in the region, although the lack of refining capacity in the region currently means that this is not currently an appropriate solution to limit materials leakage.

India

India is a market that is showing signs of growth in the battery recycling sector. Largely this is through its Battery Waste Management (BWM) Rules, which were issued by the Ministry of Environment, Forest, and Climate Change (MoEFCC) at the beginning of 2025, which prioritises collection and battery recycling to address its growing e-waste and EoL batteries. Differing to China, Europe, and North America, by 2030 the majority of the country's batteries are set to come from eMicromobility & 2&3 Wheeler segments with almost double the GWh of EVs in this year.

Under current regulation, black mass can only be exported from India under a certain HS code once the exporting company has received an export control licence and further permissions from the Indian government, however previously a significant portion of black mass was being exported under alternative codes as a workaround, avoiding the need for additional permits/approvals from the MoEFCC. Towards the end of 2025, the Indian government acknowledged that black mass exporters were circumventing Indian hazardous waste export rules through the use of unrelated HS codes, and have clamped down on this non-compliance, which came as the government was looking to bolster its support for domestic refining capabilities through a $170 million grant scheme.

Development on a smaller scale is also occurring in other regions including Southeast Asia, Oceania, and Japan, as they look to deal with the increasing volume of e-waste and batteries. Collectively, these global efforts signify a clear movement toward sustainable battery supply chains, as each region seeks to enhance access to critical materials while minimising environmental impact.

The lithium ion battery recycling market employs various battery recycling technologies, each with distinct advantages and limitations tailored to specific applications. Effective material recovery typically involves two primary stages: pre-treatment and black mass refining.

Pre-treatment to produce black mass

In the pre-treatment phase, batteries are shredded or crushed into a coarse material known as "black mass" which contains a mix of valuable metals like lithium, cobalt, and nickel. The battery recycling industries in both Europe and North America are skewed towards black mass production through battery waste pretreatment. This stage may include additional processes, such as thermal pre-treatment, which applies controlled heat to facilitate handling, or solvent washing to eliminate impurities. These preparatory steps enhance the efficiency of metal extraction in the subsequent stage.

Black mass refining to produce battery materials

Black mass refining is crucial for producing high-purity materials that meet specifications for battery production, enabling recycled metals to re-enter the battery supply chain as quality resources. Within the industry, battery recycling is achieved using three primary methods: pyrometallurgy, hydrometallurgy, and direct recycling, each with unique processes, benefits, and challenges. For the vast majority of recycling companies, in the refining stage, the black mass undergoes chemical processing using solvents and acids to separate individual metals, otherwise known as hydrometallurgy. 

Hydrometallurgy

Hydrometallurgy relies on leaching agents, ranging from inorganic acids to biological solutions, to dissolve metals into a recoverable form; its recovery rate can reach up to 98% for copper, nickel, and lithium. The battery recycling process begins with shredding or crushing batteries into smaller components, separating valuable substances into a "black mass" rich in critical metals like cobalt, nickel, and manganese. This black mass is further refined to produce high-purity, battery-grade materials capable of re-entering the supply chain, such as lithium carbonate or nickel sulphate. Hydrometallurgy has a lower carbon footprint and requires less energy than pyrometallurgy, making it a more environmentally friendly choice. However, its reliance on hazardous chemicals introduces challenges, including the release of volatile organic compounds and risks of wastewater contamination. Battery recycling companies employing this method often invest in wastewater treatment systems to mitigate these risks, although variability in battery chemistries and sizes still complicates large-scale adoption.

Pyrometallurgy

Pyrometallurgy employs high temperatures to extract and purify metals from end-of-life batteries. It generally begins with thermal treatment at 140°C to 500°C to remove volatile substances such as electrolytes and solvents, followed by smelting at 1400°C to 1700°C, producing cobalt, copper, and nickel alloys alongside a slag containing lithium and aluminium oxides. In some cases, companies recover lithium carbonate using carbon dioxide in the pyrometallurgical process, otherwise known as dry refining. While pyrometallurgy is efficient at processing mixed waste streams and operates with comparably simple steps and faster reaction times, it is adopted less nowadays as traditionally it demands substantial energy and can emit significant amounts of carbon dioxide and toxic gases. Many pyrometallurgical recyclers do so by altering the traditional process to improve material recovery rates, lower the energy consumption and carbon footprint. Additionally, without the correct measures in place, this recycling process can result in the loss of some recoverable critical materials such as lithium during combustion or smelting. Additionally, some companies employ a dual strategy using both pyrometallurgy and hydrometallurgy to capitalise on the advantages of each battery recycling process.

Direct recycling

Direct recycling is the most energy-efficient and environmentally benign method, focusing on preserving the functional structure of battery components. This battery recycling process involves physically disassembling batteries to recover key materials such as cathodes and anodes, with an emphasis on maintaining their integrity. Supplementing lithium-deficient cathodes or regenerating anodes enables their reuse in new batteries without significant degradation in performance. The process reduces energy consumption and downstream processing while yielding high-quality, impurity-free recycled battery materials. Despite its advantages, direct recycling remains technologically immature, with scalability hindered by labour-intensive procedures and the absence of a well-established commercial framework. Overcoming these limitations is essential to unlock its potential as a sustainable solution for battery recycling.

In China, the battery recycling industry is extremely mature, and legislation has been key in shaping this. One crucial piece of legislation is the Chinese battery recycling whitelist, established by China’s Ministry of Industry and Information Technology (MIIT). The Chinese whitelist details companies that are trusted due to their compliance with the MIIT’s strict expectations on these battery recycling companies in order to be included. Such criteria include lithium recovery rates, environmental standards, and utilisation rates that companies must adhere to in order to remain on the list.

The guidelines state that companies failing to meet the new requirements within a one-year adjustment period will be removed from the Whitelist. Despite having the most established battery recycling industry, there are also regulatory gaps in lithium ion battery recycling. Since 2018, China has classified black mass as hazardous waste, banning its import. This restriction has limited the potential volume of black mass available in the domestic battery recycling market.

The government lifted black mass import restrictions on 1 August 2025, recognising the need to secure critical battery raw materials, which has re-routed trade flows and fundamentally reshaped the global black mass recycling market. Despite this, the stringent impurity limits on imported black mass have initially been problematic: a large portion of batches were initially rejected, especially those that did not undergo preliminary screenings or had physical discrepancies, mainly from EOL battery black mass.

In Europe, legislation has been key to the initiating discussion on buildout of infrastructure for the battery recycling industry. The CRMA and the EU battery regulation both impose stringent battery recycling and recovery targets on manufacturers. These measures include mandatory minimum levels of recycled content in new batteries—6% for lithium and nickel, and 16% for cobalt by 2031, rising to 12% for lithium, 15% for nickel, and 26% for cobalt by 2036—and promote many conversations around transparency and traceability throughout the battery supply chain. Such regulations not only ensure responsibly sourced materials but also stimulate demand for recycled battery components, although sometimes lack of definition can leave ambiguity which means that battery materials still leak from the region.

The US currently has no federal legislation governing the life cycle of lithium ion batteries, though the need for recycling infrastructure is paramount. In May 2023, the US Environmental Protection Agency (EPA) issued a memorandum which classified that most lithium ion batteries are likely hazardous waste at the end of their life and should be managed under the universal waste regulations until they reach a recycling facility. The memorandum also states that “black mass is not a universal waste and is no longer a battery”, but “until the recycling process is complete, it would remain a solid waste” and would therefore fall under state and local solid waste regulations.

This therefore means that black mass leakage from the US has been persistent. However, several states such as New Jersey, Pennsylvania, and Illinois have introduced laws providing guidelines for extended producer responsibility (EPR) including EV battery collection, transportation, reuse and battery recycling. Additionally, the Environmental Protection Agency and the Department of Energy have been discussing an optional national EPR framework for all batteries since March 2024, addressing reporting requirements, product design, collection, transportation of collected materials. 

The lithium ion battery recycling market is on the verge of significant growth, propelled by rising EV adoption, legislative mandates, and technological advancements in battery recycling processes. Currently, hydrometallurgy is the preferred battery recycling technology due to its efficiency in recovering a wide range of metals, while direct recycling presents promising potential for future innovations. The expansion of battery recycling capacity, particularly in China, Europe, and North America, is vital to meet the anticipated demand by 2030.

As sustainability and resource security become increasingly important, lithium ion battery recycling will play a critical role in establishing a circular economy for essential materials. By 2040, the combined battery scrap pool is forecast to contain lithium in a quantity equivalent to at least 30 mines, highlighting the immense potential of battery recycling to supplement primary lithium supply. With supportive legislation, increased funding, and ongoing technological advancements, lithium ion battery recycling is set to become a cornerstone of the global transition toward cleaner and more sustainable energy solutions.

To build the capacity required to recycle the forecasted battery scrap by 2040, over $150 billion is set to be required. The investment required for the recycling industry is driven by accelerating EV/ESS adoption and the expected scrap pool composition, regulatory mandates, and advances in hydrometallurgy, pyrometallurgy, and direct recycling technologies.

Explore Benchmark's Battery Recycling & Black Mass intelligence for comprehensive data, forecasts, and analytics on global battery recycling capacity, black mass pricing, and circular economy trends.