The US lags on EV battery recycling. Can California lead the way?

As Canary Media reported in its recent Recycling Renewables series, the increasing adoption of EVs around the globe is a huge milestone in the effort to decarbonize transportation. But it brings with it another problem that the world needs to prepare for: mounting EV battery waste. Technical innovation is starting to drive down the costs of lithium-ion battery recycling, but government intervention is necessary to catalyze a robust system for reusing and recycling the batteries.

Currently, the U.S. has no federal recycling mandate or recycled content requirements for lithium-ion batteries. While some regulations — such as the Department of Transportation’s Hazardous Materials Regulations and the Resource Conservation and Recovery Act — govern the transportation and disposal of hazardous materials (which lithium-ion batteries are sometimes considered to be), implementation and enforcement vary widely across states. Together, these two factors — a lack of federal leadership on recycling and a patchwork approach to regulating lithium-ion batteries — have inhibited U.S. progress on sustainable and secure battery life-cycle management.

California has taken aim at these problems by launching a first-of-its-kind group to gather stakeholder feedback and recommend policies around lithium-ion battery life-cycle management for electric vehicles. Assembly Bill 2832, which was passed in 2018, created the Lithium-Ion Car Battery Recycling Advisory Group to craft recommendations ​“aimed at ensuring that as close to 100 percent as possible of lithium-ion vehicle batteries in the state are reused or recycled at end-of-life in a safe and cost-effective manner.” Over the past two and a half years, 19 members representing automakers, recyclers, government agencies, civil society groups and other entities have worked to identify barriers to this goal and researched different policies that could facilitate the reuse, repurposing and recycling of batteries. The group submitted its policy recommendations to the legislature in May 2022.

Proposals that received strong support from the advisory group include measures to facilitate the reuse of EV batteries, improve access to information about individual batteries (such as their chemistry, condition and origins), reduce costs of battery transport, and develop collection and sorting infrastructure. The recommendations could make their way into California’s 2023 legislative session, and if some of them are adopted, they may provide a useful roadmap for the rest of the country on how to manage and recycle lithium-ion batteries at the end of their useful lives.

But California — and the U.S. more broadly — still faces an uphill battle when it comes to aligning with global standards for battery recycling. Even if fully implemented, the group’s recommendations do not bring the state in line with other jurisdictions such as the European Union, where stricter legislation may penalize entities that fail to comply.

The EU is currently considering a new Batteries Regulation. Among other things, it would require that companies recycle 70% of the average weight of lithium-base batteries and recover high levels of critical metals and minerals from batteries (specifically, 95% of cobalt, 95% of copper, 90% of lithium, and 95% of nickel) by 2030. It would also mandate that many new batteries (including those in EVs) must be produced with minimum levels of recycled content (20% for cobalt; 85% for lead; 10% for lithium; and 12% for nickel) by 2035. A maximum life-cycle carbon footprint threshold (still to be determined) is expected to go into effect in 2027.

The regulation also proposes a battery passport — a ​“digital twin” of each battery that comes onto the market in the EU. It would include information about the battery, as well as key metrics like carbon footprint, recycled content and human-rights conditions across the supply chain, from raw material mining to recycling at end of life. The passport would also include third-party audits of mining sites for human-rights abuses and environmental degradation. Despite some concerns about whether there are enough old batteries to meet the requirements for recycled content in new batteries and other challenges in achieving the targets, European industry is broadly supportive of these measures, and the regulations are expected to pass into law by the end of the year.

California’s battery advisory group evaluated proposals like those in the EU Batteries Regulation — and for the most part, rejected them. The problem with this is that California may set a U.S. precedent for battery manufacturing that does not meet global standards. As a result, American automakers and battery manufacturers could face escalating penalties when exporting to the EU, which is the world’s second-largest market for EV sales. Top-ranked China, meanwhile, has already enacted measures to promote battery labeling and recyclability-by-design principles. The Chinese government has also launched a battery traceability management platform akin to the EU’s proposed battery passport. Such efforts will further bolster the market position of Chinese manufacturers, which already provide batteries for U.S. and European automakers such as Tesla, Volkswagen and BMW.

There are plenty of legitimate arguments to be made against the EU’s proposals. By mandating minimum recycled content and recoverability requirements based on existing chemistries, the EU regulations could deter research into new batteries made from materials that are more sustainable and widely available but less valuable for recycling. Likewise, if California — or the U.S. as a whole — were to implement high recycled content mandates too quickly, it might result in the need to import recycled content from somewhere else, which would defeat sustainability goals and perpetuate reliance on foreign markets for battery supplies.

But certain policy and technical innovations, like the EU’s digital battery passport, could help California address key barriers to recycling raised in the state’s Advisory Group report. A battery passport could help relevant actors from miners and battery producers to automakers and recyclers securely and cost-effectively store relevant information, facilitate coordination between suppliers and producers, and improve value-chain transparency. The Advisory Group largely rejected third-party verification mechanisms and the establishment of reporting systems for retired EV batteries and recycling and recovery rates, primarily because they would incur high administrative costs. However, a standardized passport mechanism could reduce such costs over the long term and lay the groundwork for compliance with upcoming regulations like the U.S. Securities and Exchange Commission’s proposed rules on climate-related disclosures, which will require companies to report on their Scope 1, 2 and 3 emissions (the emissions directly produced by them, by their energy or electricity use, and as part of the upstream and downstream processes in their supply chains).

There is no easy path to life-cycle sustainability for the batteries that will drive the clean energy transition. California is no doubt making strides where the federal government and other state administrations have not. The state’s Advisory Group’s recommendations exceed the ambitions of other U.S. states and could potentially avert innovation roadblocks created by over-regulation. But even if California’s lawmakers opt to act on the report’s recommendations, intervention at the federal level will still be vitally important to alleviate regulatory burdens identified in the report and standardize the patchwork of state laws.

As countries in Europe and East Asia set ambitious targets for battery life-cycle sustainability, the U.S. is still just beginning the process of collecting data. First movers in the U.S. auto industry are already partnering with companies abroad that provide technical solutions for compliance requirements in Europe and elsewhere, but more must be done for the U.S. to keep pace with other EV markets around the world. An ambitious federal recycling strategy based on both California’s leadership and an evaluation of proposals from other countries would signal the Biden administration’s seriousness about addressing end-of-life safety concerns for batteries, stimulating domestic industry and aligning with international standards.