Global battery recycling capacity is steadily increasing in response to the growing volume of used lithium ion battery cells, Benchmark forecasts 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.

The battery recycling industry is also evolving globally with significant variations in infrastructure across regions, notable efforts are 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 infrastructure in each region.

How does China lead the global battery recycling market?

China currently leads the global battery recycling market, driven 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 scrap.

How is Europe developing its battery recycling infrastructure?

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 outlined in the Critical Mineral Strategy: Vision 2035, where the government defined a list of minerals determined as critical and / or important for growth.

What is driving battery recycling capacity in North America?

Capacity growth in North America initially developed slower than in Europe or China. However, with the introduction 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 in the region.

To date, capacity development has largely been led by federal funding, however with the inauguration of President Trump in January 2025, it was unclear how this would be impacted, particularly by plans to dismantle the IRA.

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 such characteristics.

How is India approaching battery recycling?

India's battery recycling sector is showing signs of growth, largely through the Battery Waste Management (BWM) Rules issued in 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.

Under current regulation, black mass can only be exported from India under a certain HS code once the exporting company has an export control licence and permission from the government. 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 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 non-compliance, which came as the government was looking to bolster its support for domestic refining capabilities through a $170 million grant scheme.

Other regions and battery recycling capacity

Development is occurring on a smaller scale in Southeast Asia, Oceania, and Japan - as they look to handle 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.

How has China's legislation shaped its battery recycling market?

China’s battery recycling industry is highly developed, shaped by strict regulation such as the MIIT whitelist, which approves companies based on criteria like lithium recovery rates, environmental standards, and utilisation. Firms that fail to meet these requirements within a year are removed. However, regulatory gaps remain, including the classification of black mass as hazardous waste since 2018, which restricted imports and limited domestic supply.

Import restrictions were lifted on 1 August 2025 to secure critical materials, reshaping global black mass trade. Yet strict impurity standards have caused issues, with many shipments especially from EOL batteries, initially rejected due to insufficient pre-screening or quality inconsistencies.

What regulations are driving battery recycling in Europe?

In Europe, regulation has driven battery recycling infrastructure, with policies like the CRMA and EU Battery Regulation setting strict recovery targets and minimum recycled content requirements in new batteries - 6% for lithium and nickel; 16% for cobalt by 2031, rising to 12% for lithium; 15% for nickel and 26% for cobalt by 2036. They also promote greater transparency and traceability across the supply chain.

These measures aim to ensure responsible sourcing and boost demand for recycled materials, though some ambiguity in definitions still allows materials to leak outside the region.

How is the US regulating lithium-ion battery recycling?

The US currently has no federal law governing the full lifecycle of lithium-ion batteries, despite a clear need for recycling infrastructure. In May 2023, the EPA stated most used lithium-ion batteries are likely hazardous waste and should be managed under universal waste rules until recycling. It also clarified that “black mass” is no longer considered a battery and is regulated as solid waste under state and local laws until processing is complete.

As a result, black mass leakage from the US has continued. Some states, including New Jersey, Pennsylvania, and Illinois, have introduced extended producer responsibility (EPR) laws covering EV battery collection, transport, reuse, and recycling. Meanwhile, since March 2024, the EPA and Department of Energy have been exploring an optional national EPR framework for batteries.

Battery recycling is still evolving, with companies struggling to secure financing and often operating at a loss. They remain reliant on equity and debt while investing in battery recycling technology, capacity, and partnerships.

A major challenge is securing sufficient feedstock. For now, firms depend on gigafactory and EOL portable battery scrap, which supports development but generates limited revenue. Profitability will depend on access to EOL EV batteries over time.

Companies must also manage cash carefully to avoid running out of capital before revenues grow. Fluctuating raw material prices add further pressure, as lower prices reduce income from recycled materials and squeeze margins.

The lithium-ion battery recycling market is set for strong growth, driven by EV adoption, regulation, and improving technologies. Hydrometallurgy currently dominates, while direct recycling shows future promise. Expanding capacity in China, Europe, and North America will be key to meeting demand by 2030.

Recycling will be central to a circular economy, with the 2040 scrap pool expected to exceed 1 million tonnes of lithium carbonate equivalent. Achieving this will require over $150 billion in investment, supported by policy, funding, and advances in 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.