Policies supporting recycling should prioritize second-life applications for batteries, where feasible, to prevent premature recycling. Given the fast-changing landscape of battery chemistries, policies must be adaptable enough to manage a variety of battery types and future developments in both battery chemistry and recycling technologies, such as direct recycling. This balance is essential to support sustainable growth in EVB recycling without causing industry uncertainty. What levers can be used to facilitate this change? Enact extended producer responsibility (EPR) provisions to address the economic barriers to recycling. EPR requires producers to take responsibility for EOL management of their products – though definitions of “producer” may vary. In the EU Battery Regulation, for instance, the producer is defined as “any person in a Member State that… places batteries or accumulators, including those incorporated into appliances or vehicles, on the market for the first time within the territory of that Member State on a professional basis”;90 this could apply to a battery manufacturer, automaker, dealership, importer or other entity. EPR has become the central policy for LIB management in the EU and will be the central policy in China.91 While EPR is an effective tool for redistributing costs and managing EOL processes, it requires careful fee design to be effective. To raise the level of ambition and potentially deepen the impact of EPR, policy-makers may consider a modulated fee, in which producers pay for EOL management for their specific battery design rather than an industry average. Modulated fees require a high level of traceability and are more challenging to implement than traditional EPR. Yet they can affect design (in addition to covering the costs of EOL management) by providing an economic incentive to battery OEMs to design for extended life and responsible EOL management, or an incentive to automotive OEMs to prioritize this in their purchase decisions. However, it is worth noting that eco-modulated fees have not been found to have any direct impact on battery design for consumer electronics, at least in the short term; as a relatively new concept, more study is needed.92 Another consideration for EPR is that the policy could require producers to have adequate EOL investment and capacity to handle the EVBs they sell in the countries in which they are sold. This would avoid producers shifting the EOL management responsibilities to countries without adequate EOL management resources. This EOL management capacity may include authorized third parties, with direct technical support from producers. Examples of EPR for EVBs BOX 4 –EU: The EU Battery Regulation requires producers to “have extended producer responsibility for the management of their batteries at the end-of-life stage. Accordingly, they should finance the costs of collecting, treating and recycling all collected batteries; carrying out compositional surveys of mixed collected municipal waste; reporting on batteries and waste batteries; and providing information to end-users and waste operators about batteries and appropriate reuse and management of waste batteries.”93 –China : As explained by the International Council on Clean Transportation (ICCT), “vehicle manufacturers are required to provide technical support to [battery dismantling and recycling enterprises] and are responsible for selling batteries to a qualified handler for reuse or recycling. A unique code is attached to every battery produced in or imported into China for use in electric vehicles to allow for tracking and proper processing at the end of the battery’s first life.”94 –India : The country’s Battery Waste Management Rules state that producers “have the obligation of Extended Producer Responsibility for the Battery that they introduce in the market to ensure the attainment of the recycling or refurbishing obligations”, which includes collecting and refurbishing or recycling a certain percentage of batteries the producer puts on the market, and explicitly precludes the producer from landfilling or incinerating any batteries. Compliance is tracked through an online registry maintained by the Central Pollution Control Board.95 Implement regulations and incentives to address technical and financial barriers to second life. Conflicting priorities among value-chain players and the uncertain economics of second-life applications can hinder the realization of their social and environmental benefits. EV OEMs lack financial motivation to collaborate with second-life battery providers and are additionally deterred by liability concerns and reputational risks associated with the safety of second-life usage. To encourage cooperation among stakeholders with varying interests, national policy-makers can implement measures such as right-to-repair regulations, frameworks for transferring liability across value-chain participants and regions, take-back mechanisms and incentives designed to unlock system-level benefits. Powering the Future: Overcoming Battery Supply Chain Challenges with Circularity 24

Powering the Future 2025