Battery recycling covers complex and somewhat opaque processes and realities, with different process stages and associated difficulties of scaling up alongside all the industrial stages. It starts with the collection and deactivation of the batteries before they are disassembled and crushed, in a process known as “pretreatment”. This stage produces a powder known as “black mass”. The challenge is then to refine this powder (post-processing) in order to recover its constituent metals, in particular nickel, cobalt and lithium. Normally, the prices at which lithium, nickel and cobalt from primary sources are being traded on international trading platforms (ex. London Metal Exchange) are high enough to incentivize their recycling, and their presence in the content of the black mass can be used to assign a value to it, an estimate which is commonly known in the industry as a “payable”.

Currently, pyrometallurgy (melting of black mass to produce a metallic alloy and remove impurities) and hydrometallurgy (chemical reactions to isolate the metals to be recovered) are the most common methods for material recovery, but others are being explored, like direct recycling. Comparing these methods remains difficult, especially regarding energy consumption or greenhouse gas (GHG) emissions, notably as data and life-cycle assessments on those issues are scarce and existing studies often vary in their findings. Recovered metals are then purified to their metallic form (notably for use in the metallurgical industry) or turned into battery-grade salts to form new battery materials, i.e. pre-active materials (pCAM) and, subsequently, cathode-active materials (CAM).

The EU and the United States are trying to develop their own recycling industries (i.e. EU battery regulation’s obligations on minimum recycling and reincorporation rates; US IRA’s support framework etc.), which proves to be particularly difficult for the post-treatment phase (material recovery from black mass). Based on existing attempts at mapping capacities, Germany takes an important part in the European landscape in terms of installed facilities, with numerous domestic recyclers. Hungary also has significant recycling capacities, especially thanks to the presence of South Korean SungEel. Beyond South Korean actors, North American companies have installed pretreatment facilities in the EU, while Chinese recyclers have not been present so far. While the EU market presents an important share of non-EU recyclers, North America is strongly dominated by domestic actors. 

Lack of accurate data on real capacities installed in Europe is a huge issue for understanding the state of the EU recycling market. Some studies suggest that Europe’s black mass recycling capacities could be of around 300,000 tonnes for pretreatment and 350,000 tonnes for post-treatment, while interviews conducted with industrials lead us to assess Europe’s cumulative capacities at around 200,000 tonnes, with few post-treatment capacities, anecdotal data which seems to be confirmed by the differences of payable levels for black mass between Europe and South Korea (with European black mass prices consistently lower than Korean ones). 

While the black mass is of strategic value, a major challenge is that European markets favor exports of black mass outside EU’s borders, namely to South Korea or South-East Asian nations currently, with anecdotal data indicating that more than 50% of the black mass and factory scrap is currently leaving Europe. This is because of fundamental challenges to build a sustainable business model, starting with the need to secure inputs (gigafactories scrap, end of life batteries) and offtakes (i.e. buyers of recovered materials, notably pCAM and CAM producers), which adds to the issue of energy prices, raw materials prices, technology mastery and capacity to improve outputs quality and recovery.

It is in practice difficult to have a clear view of the precise black mass quantities exported because of the lack of harmonized classification (i.e. product vs. hazardous waste) used to designate black mass by exporters in each Member State, the lack of standardization of secondary metals concentrates and, ultimately, the lack of centralized statistics. 

Asia largely dominates the global battery recycling landscape, led by China, which accounts for 80% of pretreatment and post-treatment recycling capacity. South Korea also plays an important role as a major destination for black mass from Europe and North America, although the volumes and flows involved are not precisely documented. Transboundary trade in waste is governed by the Basel Convention (1989), while the OECD has also established a framework for supervision and control among its members (1992), largely based on the provisions of this convention. Nevertheless, these rules remain porous, and the status of “waste” or “hazardous waste” depends largely on national legislation, which interprets the nature of black mass according to the economic interests of the country concerned.

China used to be a black mass importer from the EU and the US, but the country established imports restrictions on a series of secondary materials, including black mass, in 2013 for environmental purposes. These flows were then redirected towards other Asian countries, especially South Korea (which is an OECD member, and hence benefits from its simplified waste exchange framework) and Southeast Asian countries. Despite this, China has recently shown a willingness to relax these restrictions, probably in order to secure greater supplies for the Chinese recycling industry. Moreover, South Korea’s recycling capacities recently increased, but not in the same proportions as the black mass supply; hence, its main long-term objective appears to be to secure black mass inflows to feed its post-treatment facilities by benefiting from its status as an OECD member.

The development of a competitive and resilient European recycling industry today appears to be a challenge commensurate with Europe's decarbonization ambitions. To achieve this, four points appear key:

1. Develop an accurate and centralized database on black mass flows and recycling capacities (with a distinction made between pretreatment and post-treatment) in Europe, to enable relevant policy-making by public authorities, and a precise understanding of the market and its opportunities by investors.
2. Maximize efforts to keep black mass in Europe. As a first step, establish clearly that black mass and batteries scrap can only be classified as dangerous waste. Secondly, the EU should seek to deploy a pro-active protective shield for the nascent battery recycling, which should at least take the form of an obligation for black mass producers to give priorities to European recycling facilities, while supporting the structuring of pCAM and CAM production in Europe.
3. Strengthen the business model for black mass recycling in Europe through a combined set of actions: including a fee for recycling the price of the EV battery; ensuring the possibility for recycling to have diversified streams for their outputs to increase their resilience in the short term; creating a European CRM Trading Scheme for recycled metals at a basic level of refining (i.e. not battery-grade, but MHP for instance) to create transparency on volumes available and prices and to ensure European off-take for the metals recycled in Europe; bonus/malus scheme; facilitating black mass flows among EU Member States to favor economies of scale; putting in place rules on batteries’ and EVs design that favor disassembly and recyclability. 
4. Pursue, develop and support research into battery recycling in Europe, to enable post-processing techniques (pyrometallurgy, hydrometallurgy) to be improved (i.e. environmental impact, energy consumption, but also regarding other battery components and new chemistries), and build the proper financing ecosystem to support the industrialization of innovations.