Since individual countries will probably not have complete value chains, batteries and battery materials will still need to cross borders. Countries will want to control the EOL movement of batteries to mitigate social and environmental harms due to improper disposal. These guardrails would need to be balanced to ensure non-hazardous material, like shredded batteries, is not subject to the same level of trade controls as EOL batteries, which are more hazardous. Additionally, considering EV import/export trends, used batteries (in the form of used EVs) will continue to move across borders. Precautions must be taken to ensure that the batteries being exported have sufficient remaining useful life to avoid an influx of battery waste in the guise of secondary use. What levers can be used to facilitate this change? Capitalize on synergies among current and future processes, infrastructure and skillsets when building regional value chains. All regions expecting EV uptake will need to build out collection networks and preprocessing infrastructure to process EOL EVBs into black mass, the powder created when batteries are shredded before hydrometallurgical recycling. Identifying synergies between a region’s existing role in the EVB value chain and its future needs in a circular battery economy, and capitalizing on overlapping processes, infrastructure and skillsets, can help do so efficiently. For example, in regions with a regulated lead-acid battery recycling framework like Brazil, the US and the EU, auto OEMs, dealers, dismantlers and salvage entities are well-positioned to manage the collection and reverse logistics of batteries.107 In addition to building collection networks and preprocessing infrastructure, developing battery recycling hubs that recover battery minerals from black mass is critical for expanding a region’s role in a circular battery economy and creating regional, circular value chains. At the same time, since metal recovery facilities are capital-intensive, require high utilization to be profitable, and demand specialized expertise, investments must be allocated efficiently. Locating these battery recycling hubs in or near the following markets can support efficiency while diversifying the value chain: –Raw metal refining markets: New facilities can be designed to handle both ore and recycling feedstocks, as the processes, infrastructure and skillsets required are similar.108 This approach helps future-proof the facilities and workforce development, as both current and future feedstocks can be managed with the same processes. It also addresses challenges related to underutilization of recycling infrastructure during the scaling period by enabling recyclers to supplement recycling feedstocks with mined materials, thereby scaling essential refining capacity while improving the economics. Although current recycling investments are geographically concentrated in China, this approach can be adopted by mineral-rich countries with planned refining capacity projects, such as Chile, Argentina, Australia and Indonesia.109 –Midstream manufacturing markets: Regions with existing midstream manufacturing capabilities can utilize recovered battery materials and therefore are well-suited to reintegrate recycled materials back into the production process. This is an advantage that exists in Asian markets today.110 This strategy will be useful in regions with plans to expand into cathode manufacturing, such as the US, Europe,111 India112 and Morocco.113 Close synergies between recycling and cathode manufacturing can also help reduce steps in the process and improve recycling economics, a strategy adopted by some recyclers.114 –Used EV markets: During 2015-2018, 40% of used light-duty vehicles exported by the three main exporting countries were imported by African countries.115 If current trends continue, Africa will see significant numbers of used EVs in the years ahead – and therefore, eventually, EOL EVBs. There is an opportunity to locate battery recycling hubs in these markets, as they are likely to have the feedstock volumes needed for these facilities to operate efficiently. Furthermore, co-locating EVB manufacturing in these regions can capitalize on the amount of raw material that will be returned to the value chain, while diversifying the value chain and allowing former raw material extraction markets to transition into a new role in the value chain. Direct international development investment towards building recycling and manufacturing capacity in emerging economies. Existing international development partnerships and capacity-building initiatives should prioritize developing battery recycling and manufacturing capacities in developing countries. For example, the EU Global Gateway – a plan for EU member states to invest up to €300 billion between 2021 and 2027 in sustainable, high-quality projects that have lasting community impacts116 – could dedicate a portion of its climate and energy or transportation portfolio to focus on build-out of battery value-chain infrastructure in the Global South. Multilateral development banks (MDBs) can also contribute to supporting investment and growth of local value chains in developing countries.117 The World Economic Forum previously examined the role of MDBs and development finance institutions (DFIs) in advancing battery energy-storage systems in developing countries and found that, by virtue of their climate and development mandate and better credit ratings than companies in developing countries, MDIs and DFIs can create an impact-multiplier Powering the Future: Overcoming Battery Supply Chain Challenges with Circularity 29

Powering the Future 2025