Why battery recycling is key to the future of EVs
A new IEA report sheds light on how the rising demand for EVs impacts battery supply chain emissions and explores ways to enhance sustainability throughout the process.
A recent study by the International Energy Agency (IEA) highlights that batteries are among the fastest-growing energy technologies worldwide, driven by the expanding role of electric vehicles (EVs). With demand projected to increase 4.5 times by 2030 and more than sevenfold by 2035, the agency has raised concerns about battery-related emissions.
In its recent EV Battery Supply Chain Sustainability report, the IEA emphasizes the need to reduce emissions from battery production and mineral processing as manufacturing scales up. The agency points out key strategies to address this challenge, such as the electrification of production processes, increased energy density, and use of recycled materials.
Battery demand growth is driven primarily by the expansion of the EV market, which currently accounts for nearly 90% of total demand. While China remains the dominant player in battery production, emerging markets and developing economies are expected to play a more significant role, reaching 10% of global demand by 2030, up from 3% in 2023. Meanwhile, investments in North America and Europe are helping to diversify supply chains.
In addition, the rise of second-hand EVs presents an opportunity for expanding e-mobility in developing economies. However, international cooperation is crucial to ensure proper end-of-life management for these vehicles and their batteries. Policies that incentivize responsible trade, enhance collection rates, and support recycling infrastructure in developing markets will be essential in building a more sustainable and resilient supply chain.
Over the next decade, the growing number of end-of-life EV batteries presents an opportunity to recover critical minerals, reducing reliance on new mining operations. Recycling is emerging as a key sustainability strategy, with the potential to cut lithium and nickel demand by 25% and cobalt by 40% by 2050. To achieve this, recycling capacity must be effectively scaled up through new facilities and higher collection rates of end-of-life batteries.
Governments and industry stakeholders have been implementing policies to improve battery sustainability and promoting circularity. The EU Batteries Regulation, introduced in 2023, mandates higher recycling quotas and minimum levels of recycled materials in new batteries. For instance, by 2031, EV batteries sold in the European Union must contain at least 16% recycled cobalt and 6% recycled lithium and nickel.
Additionally, initiatives like the Global Battery Passport aim to improve transparency and traceability across the supply chain. By providing comprehensive data on battery origin, ESG (environmental, social, and governance) performance, and lifecycle emissions, such efforts support responsible sourcing and facilitate battery reuse and recycling.
