Recycling can become a dependable supplier of critical minerals, but it is not an immediate substitute for primary mining, nor should it be. Disciplined policy, streamlining of logistics, preprocessing, developing downstream refining with the help of investment and tech innovation can help recyclers supply critical minerals reliably and reduce dependencies on imports. This outcome depends on the technical capability of recycling along with timing, and overall maturity of the EV industry.
Let us examine the present scenario.
Firstly, the scale potential of recycling is real but nascent. Global trends suggest that battery recycling could supply 20 to 30% of lithium, nickel and cobalt by 2050, provided collection and capture improve vastly. (IEA). Global recycling capacity has been announced and black mass production is growing, but utilisation, collections, traceability remain far from optimum. Industry analysis shows that recycling throughput could match EOL volumes by 2030 with only near perfect collection but in actuality, today’s operational throughput is a fraction of what is required. Many operators stop at black mass today which is more of an intermediate concentrate that still needs capital and technology intensive refining to turn into critical raw materials.
Of matters of concern for the recyclers, first is the chemistry shifts in the market and mixed feedstock. LFP(Lithium Iron Phosphate – a battery chemistry which is becoming increasingly popular in the market) reduces metal value density per pack compared to NMC (Nickel Manganese Cobalt) and adds pressure on the economics of lithium and graphite recovery. Recyclers must quickly adapt to the ṣtrends in the battery market. Another issue is collection loss to the informal sector, which undermines feedstock security and auditability, making recycling yield less predictable.
Policy is a key accelerator. Under a fast policy, fast capital scenario i.e. with strong EPR (Extended Producer Responsibility) enforcement and targeted subsidy for battery recycling (like the recent Rs 1500 crore subsidy announcement), recyclers could supply 10 to 25% of critical materials as a strategic, non fungible domestic source of minerals. EU Batteries regulation is mandating recycled content for manufacturing and recovery targets (2027 to 2031 phased targets), which will result in demand for high quality recycled materials as OEMs (Original Equipment Manufacturer) and refiners will be forced to internalise secondary supply. Conversely, weak enforcement will leave recyclers producing low value intermediaries and secondary/ scrap copper and aluminium, bound for export and refining, failing to close the value chain domestically.
For recyclers, the future proof move would be vertical integration, i.e. investing in collection, preprocessing and refining, which will capture most value and reliably supply critical materials.
Recycling will be a large, next generation, dependable secondary (supplementary) supplier of critical minerals, and unlock resilience, green jobs and lower lifecycle emissions of vehicles when treated as manufacturing, rather than waste management. Policymakers must enforce EPR, battery passports , while building domestic capabilities. OEMs must design for recyclability and industry must invest in downstream refining.
