Europe’s waste creates value elsewhere

Recovering materials from end-of-life products like cars and batteries is a key means to secure much needed critical minerals resiliently and sustainably. However, Europe’s recycling industry is struggling to scale and compete globally. The Circular Economy Act can and must provide the tools to support the effective scaling of Europe’s material recovery and recycling capacity.

The rationale for recovering all important critical minerals from end of life vehicles and waste batteries is clear. With increased recycling, Europe can reduce imports of critical minerals (CRMs) such as nickel and cobalt, in turn reducing external dependencies. Increased recycling can also limit the need for primary extraction, providing a more sustainable source of CRMs.

However, Europe’s recycling industry is struggling to scale. European battery and aluminum recyclers lack the needed feedstock, with huge amounts of end of life vehicles, waste batteries, black mass and scrap being exported outside of the EU, to be processed elsewhere. At least 60% of Europe's black mass is leaving the EU, equal to around €150 million worth of material a year. This is only the tip of the iceberg, with lots more black mass leaving the EU, hidden in different customs codes, and unable to be traced.

If nothing is done to limit black mass leakage, and we continue to export at least 60% of our black mass, this number will only grow. Based on current estimates of future black mass production in Europe, we could expect at least 200kt of black mass to leave the EU in 2030, the recoverable battery material from roughly 1.7 mn cars. Using today's black mass prices, this could be the equivalent of 1.1 bn EUR of material.

On top of this, without a battery value chain in Europe, there will be little demand for recycled materials in Europe. To effectively scale its recycling industry, Europe will need to onshore the entire battery value chain. This includes in particular the midstream industry, including cathode active materials and their precursors (pCAM). This part of the value chain is key as they will be the offtakers for EU recyclers.

Finally, European recyclers struggle to compete globally, facing higher energy costs and extended project timelines. Companies recycling in Europe need targeted financial, de-risking and industrial support to compete on the global scene.

Fundamentally, we need to see the economic opportunity in our waste, instead of the environmental burden. This briefing explores how the upcoming Circular Economy Act can achieve a shift in mindset, and deliver much needed tools to support Europe’s recycling industry, securing effective material recovery capacity in Europe.