How can Europe reduce its strategic dependencies by boosting recycling?

Our valuable battery waste is currently leaving Europe on ships headed halfway across the world. And we’re doing little to stop them.

Whilst Europe manages to collect old batteries and shred them into so-called black mass, we then let this valuable dust leave to South East Asia to be refined, and for all the valuable raw materials to be extracted. And we’re seeing a similar story with scrap aluminium.

Europe’s inability to close this loophole, and keep these critical raw materials in the continent, means we are missing out on a golden opportunity to reduce our dependencies on other countries. The ongoing oil crisis has shown just how sensitive we are to external dependencies.

It’s clear that clean power and electrification are the way to wean Europe off its dependency on fossil fuel imports. Luckily, the minerals we need for the batteries and clean technologies at the heart of this transition are not like oil. In large part because they can be recycled and reused endlessly.

In the long term, recycling is therefore one of Europe’s tools to reduce dependencies, and secure its energy security.

Currently, however the EU is heavily dependent on imports for many of these critical minerals. At the same time, end-of-life batteries and scrap in Europe contain lots of the materials we need.

There is therefore huge potential in Europe to recover these raw materials. By scaling recycling capacity in Europe, we can avoid importing over 80kt of lithium by 2035, enough to power around 2.5 million EVs.

The same can be said for aluminium, where we can avoid importing 3mt of aluminium by 2040, with increased recycling.

It should therefore be a no brainer to scale our recycling capacity in Europe. However, it’s not quite that simple. Over half of Europe’s battery recycling capacity is currently at risk. Despite the huge potential, Europe is not yet ready to capture this opportunity. And if we don’t act now, we could be out of the game for good.

Recyclers in Europe are facing a number of challenges. Firstly, as explained, there is a lack of feedstock as almost all our valuable scrap is leaving Europe to be processed and create value elsewhere. With the price of black mass sky rocketing, we must ask why are we letting this valuable material go?

Secondly, to efficiently 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, faced with financial pressures and higher energy costs, European recyclers need strong political and demand signals in Europe.

Fundamentally, we need a mindset shift. We need to see the economic opportunity in our waste, instead of the environmental burden. Whilst there is no single magic solution, the upcoming Circular Economy Act must set out the right policy measures to help scale recycling facilities in Europe and secure access to the raw materials we need, before we’ve lost any hope of mastering this industry.

Firstly, we need to ensure our valuable waste, including end-of-life batteries and black mass, as well as scrap steel and aluminium, stays in Europe. Despite the European Commission having taken some steps, notably by classifying black mass as hazardous, limiting its exports to OECD countries, circumvention persists. Black mass should only be exported outside of the EU if it is to be treated by EU facilities abroad or shown to benefit the EU battery value chain.

Secondly, we need a truly European single market for waste. Currently, the process for shipping waste between EU member states is complex and burdensome. Different countries apply different requirements, even coming down to the colour of the pen needed for filling out forms. This makes the process of moving waste costly and time consuming. As a result, the European Commission should commit to amend the Waste Shipment Regulation (WSR) and apply the simplified green-listing procedure to waste streams containing critical raw materials destined for approved EU-based facilities. This should - and actually can - be done without increasing safety risks.

Finally, to send a strong demand signal, the Circular Economy Act should amend the EU Batteries Regulation recycled content targets to ensure that only materials recycled in Europe count. This will be key to incentivising recycling and refining capacity within Europe.

The rationale for recycling has never been clearer. Now is the time to seize the opportunity and scale European recycling champions.