Battery Recycling Industry Faces Risks Due To Underpriced Recycling System, Say Experts

Battery recycling industry is facing risks due to underpriced recycling system, which may lead to entry of fraudulent players and environmental disasters, experts said making a case of raising the threshold for achieving sustainable level of circular economy.

Some industry experts warn that the current pricing structure could cost India an estimated $1 billion in foreign exchange losses for import of critical minerals like lithium, cobalt, and nickel.

The issue gains importance as the country's reliance on cleaner alternative sources of energy is increasing day by day which makes the sustainable recycling of batteries a major prerequisite for clean energy.

The Material Recycling Association of India and experts thus suggest setting the EPR floor price for Lithium recycling at a higher rate to ensure sustainable, competitive, and standardized recycling.

"Extended producer responsibility mandates that battery producers ensure safe recycling, yet low EPR floor prices hinder the collection and management of low-value or hard-to-recycle batteries. A higher EPR price is crucial for achieving sustainability and scale of battery recycling," MRAI said in a statement.

Additionally, it said, safe transport and pollution control measures are essential to mitigate risks and costs in battery recycling.

Incorporating a sufficient EPR price into the costs incurred by the producer will only increase the commodity's selling price by a small fraction, by around 0.6% in the case of a Rs 4,000 power bank, it said.

Recently, the MRAI made a presentation to the Central Pollution Control Board requesting to revise the EPR floor price upwards. The government has been urged to set a fair EPR floor price and ensure implementation, transparency, and regular auditing to build a sustainable battery recycling industry.

CPCB could initiate a study on the economics of battery recycling based on various technologies and business models, and this study should inform the determination of the EPR floor price, Council on Energy, Environment and Water Programme Lead Akanksha Tyagi said.

While a higher floor price may be desirable for now to encourage new entrants and industry development, the prices should be revised periodically depending on improvements in technologies and increases in collection efficiencies, she said.

According to Prima Focus Technologies & Consulting Services Pvt Ltd founder R B Srivastava, low EPR floor price could encourage batteries not being collected and thus landing into the hands of the informal sector for resource recovery.