Between ambition and reality: Europe faces up to the challenges of battery recycling
The recent bankruptcy of Swiss electric vehicle (EV) battery champion Northvolt, which comes not long after that of Britishvolt in 2023, highlights the challenges Europe faces in developing a sector that is essential to its ambitions when it comes to electrification and sovereignty. The development of a recycling industry requires massive investment, and the financing of technological innovation is crucial if the bloc is to meet the challenges of international competitiveness.
An ambitious circular economy framework
The framework is ambitious – but the facts of the matter are simple. With the energy transition gathering pace, battery recycling poses a major challenge in Europe. At the same time, however, the rise of electric vehicles and energy storage devices is sending demand for lithium, cobalt and nickel skyrocketing[1]. Europe is entirely dependent on imports of these rare metals, with their extraction and, more importantly, refinement dominated by China. Recycling may be the answer to ensuring European sovereignty; securing supplies for its industry while limiting the opening of mines[2] that could have a significant local environmental impact.
To reduce this dependency, the European Union has implemented strict regulations – such as the one on batteries and battery waste, which has been setting targets for the collection and recovery of battery waste since 2023 and mandates that 50% of lithium and 90% of cobalt and nickel from batteries will have to be recycled from 2028 onwards. Plans to introduce mandatory minimum levels of recycled content for new industrial batteries are also in the works. The aim of this regulatory framework is twofold: a) open up an attractive recycling market for manufacturers, while b) creating a virtuous circle of production and consumption.
Technological and Economic Challenges
Battery recycling is a complex and costly process that poses several challenges.The first is the availability of raw materials to supply the recycling plants. However, there is a gap of around ten years between a battery’s production and the end of its life, meaning the first plants are operating on production waste. Added to this is an electric car industry that is struggling to take off in Europe in the face of challenges concerning competitiveness. Finally, there is uncertainty surrounding the choice of battery chemistry – either nickel cobalt manganese (NMC) or lithium iron phosphate (LFP). This is important, as the residual value between the two differs by a factor of two or even three.
Structuring the ecosystem
While the challenges are considerable, as evidenced by the abandonment or postponement of major projects by Suez, Eramet, Stellantis and Orano, there are also stakeholders who have seized on these issues to advance the sector and commit to a virtuous circular economy. In June 2025, French start-up Battri opened its first recycling facility. Its objective is to extract so-called “black mass” from batteries. This black powder – a mixture of metals and minerals – represents the first link in the recycling chain. It is then sold to manufacturers to be refined and used in the creation of new batteries.
While the optimised cost structures and operational responsiveness of start-ups enable them to adapt easily to fluctuations in emerging markets, there are also listed companies that are working to develop this expertise. Take Veolia for example: a specialist in waste treatment that now has four sites capable of processing, from collection to refinement, up to 30,000 tonnes of batteries – equivalent to nearly 100,000 EV batteries. Another example is Derichebourg, which announced a partnership with Korean battery manufacturer LG in May.
Battery recycling may still be in its infancy, but it is already a key part of the energy transition. Supporting businesses in meeting this challenge will be essential.