Powering the Future 2025

effect on two fronts: generating a “pull factor” for substantially increasing the scale of funding; and ensuring judicious capital allocation across the clean energy value chain and geographic areas. The same logic can be applied to the development of battery value-chain infrastructure, indicating the potential role of MDBs and DFIs in financing infrastructure build- out in the Global South.118 Form multinational partnerships to support regional value chain growth through technology transfer and knowledge sharing. In 2023, the EU and the Republic of Zambia signed a memorandum of understanding to establish a partnership on sustainable raw materials value chains. This partnership includes promoting and investing in the recycling, reuse and remanufacturing of critical raw materials, such as through technology transfer between the two countries, and cooperating on skills, capacity-building and competencies necessary to develop a circular economy.119 While some other countries have also formed strategic partnerships to strengthen critical minerals supply chains, they have largely focused on reducing supply gaps and increasing resilience of the supply chain. The EU-Zambia partnership could serve as a model for how to build circularity into critical minerals partnerships, especially in the Global South. Deepen public-private dialogue and regulatory coordination to facilitate responsible movement of EVBs and materials across borders. Even within regions, trade barriers need to be addressed to make possible the regional business models suggested above. An analysis by the National Board of Trade Sweden found two sets of rules that are most applicable to the trade of used LIBs, which could pose challenges: –Rules governing trade in waste – specifically, the Basel Convention on the Control of Trans- boundary Movements of Hazardous Wastes and their Disposal (“Basel Convention”). –Rules governing the transport of waste, including the Agreement concerning the International Carriage of Dangerous Goods by Road (ADR) that applies in Europe; the Convention concerning International Carriage by Rail (COTIF) that is applicable in Europe, the Maghreb and the Middle East; and related agreements covering transport by sea and air.120 The Basel Convention is an inter-governmental agreement on hazardous and hazardous- equivalent waste trade controls. Lithium-ion batteries may be covered by the Basel Convention, but heterogeneity in country-level interpretation creates trade compliance complexities. Further, the Basel Convention’s trade controls are not well understood or implemented consistently at borders. Countries need clearer standards, consistent implementation and transparency through T&T tools like DPPs. In addition, the Basel Convention’s Prior Informed Consent process must be digitalized and streamlined. As the study by the National Board of Trade Sweden notes, the ADR and COTIF “have been implemented differently in the signatory states and in some cases complemented with additional requirements, resulting in businesses having to adjust to several different sets of rules and requirements.”121 While ADR and COTIF provide more certainty than the Basel Convention when it comes to LIBs, adhering to their rules is similarly burdensome and expensive. Much deeper public- private dialogue is required to pinpoint the barriers and commit to policy reform, which in turn will need a strong investment signal from companies; otherwise, policy appetite will be limited. Regulatory cooperation between countries within regions and dialogue with the private sector will be vital for ensuring that policy signals complement the private sector strategies suggested above. Revise and harmonize import/export regulations of used EVs to prevent overburdening importers with EOL management. There are several regulatory tools that can be implemented to prevent importing countries from receiving used EVs (and therefore EVBs) with limited remaining useful life, which could overburden their recycling infrastructure while providing limited benefits: –Requirements for data-sharing on battery SOH: Before used EVs are exported, data on the battery’s SOH and associated information should be reported. (This again emphasizes the need for globally coordinated T&T platforms and DPPs to provide visibility into critical data about battery health.) –Import restrictions and financial incentives: Importing countries should enact performance- based restrictions or fiscal disincentives to avoid receiving older vehicles, obsolete technologies or inferior products that have limited utility. Performance-based import restrictions are already seen to some extent with internal combustion engine (ICE) vehicles, with approximately 19% of countries adopting advanced emissions standards for used vehicles.122 Performance-based standards for EV imports based on battery health are emerging, as seen in Kenya in 2024 when the country banned imports of used EVs with a battery SOH of less than 80%.123 Beyond import restrictions, some of the fiscal instruments in place for used ICE vehicle imports may be adapted for EVs, including age-based taxation or progressive excise tax based on battery health.124 –Demonstration of EOL management capacity: Countries that import EVs should be able to demonstrate they have the capacity to treat EOL batteries. Capacity building and awareness campaigns should help developing countries to acquire knowledge and expertise in EOL EVBs. Powering the Future: Overcoming Battery Supply Chain Challenges with Circularity 30