The Broken Cycle of Independence

Western governments are heavily investing and encouraging investments in batteries, their recycling capacity, and circular-economy policies to retain critical materials, reduce waste, and strengthen supply security. Progress is often measured through collection rates, recycling efficiencies, and material recovery targets. These achievements are important, but they reveal only one part of the story. Collecting, dismantling, and mechanically processing end-of-life batteries may produce “black mass”– a concentrated intermediate containing valuable battery materials such as lithium, nickel, cobalt, manganese, and graphite, depending on the battery chemistry. Black mass is an important feedstock, if it can be returned directly to battery active materials. Before it can do so, it generally requires further recovery, refining, purification, and downstream processing into usable materials.

A country may collect all spent batteries within its borders and process them into black mass. Yet if that black mass must leave the country before becoming battery-grade lithium, nickel, cobalt, graphite, or other specification-grade industrial materials, the most strategically important stage of the recycling chain still occurs outside the country of origin, usually in China. This separates the geography of battery collection from the geography of material production, defeating the self-sufficiency of supply.

This is not merely a theoretical distinction between the country that collects spent batteries and the country that refines their recovered materials. In today’s battery supply, China is the clearest example of how the refining side of this relationship works. China can therefore benefit from those materials once during their original production and again when they return for recovery and refining. But the advantage extends beyond recapturing materials from batteries previously produced in China. Black mass from batteries manufactured in any other industrial system can also enter Chinese processing capacity. In that case, China benefits from production that did not originally take place there. Whether a battery was made in China or elsewhere, the country controlling its recovery, refining and return to manufacturing captures the new industrial activity created at the end of its useful life.

When black mass is exported to China, the recovered materials are not automatically required to return to the country from which they came. Unless the shipment is governed by a specific toll-processing or closed-loop agreement, the black mass may be sold to a Chinese processor, allowing the recovered lithium, nickel, cobalt and other materials to enter China’s own industrial supply system. The exporting country is then left with two broad routes: it can purchase refined materials and attempt to manufacture new battery components domestically, or it can continue buying ready-to-use products from China. Current trade patterns suggest that the second route remains far more established. Europe continues to depend heavily on Chinese battery cells, components and finished products while a substantial share of its black mass has been sent to China for final recovery. The result is an unequal interpretation of this material flow. For the exporting country, the transaction can function primarily to remove an end-of-life material without assuming the cost, permitting requirements, environmental controls, technical risk and political difficulty of building a complete domestic refining and manufacturing system. China, by contrast, formally treats qualifying imported black mass not as solid waste but as a freely importable recycled raw material that can support supplies of lithium, nickel and cobalt. When one country approaches black mass treatment as a waste-management burden, it gives another country the opportunity to another country to consider it as its secondary source of supply, refinery feedstock and foundation for further industrial expansion.

The benefit is not limited to the value of the recovered metals. Each additional stream of black mass increases plant utilisation, spreads fixed costs across greater output, deepens operating experience, generates more process data and strengthens reliability with downstream manufacturers. These advantages make the established refining system more competitive and more attractive to the next supplier searching for somewhere to process its material. Therefore, a self-reinforcing loop begins to form: more feedstock strengthens the refining systems, and the stronger refining systems attract still more feedstock. Countries attempting to establish competing capacity must therefore do more than build new facilities. They must also secure sufficient material, develop comparable operating experience and convince manufacturers that their products can meet the required specifications consistently.

Battery and electronics recycling offers governments a highly visible way to appear responsible, modern and forward-looking. Collection targets, public campaigns and recycling commitments create the impression that materials are being brought back into productive use. But when the wider industrial, regulatory and trade environment does not support their domestic recovery, refining and reuse, the policy may stop at collection while the real capability develops elsewhere. Governments encourage communities to participate in a circular future without building the industrial system required to deliver it. At that point, recycling begins to function less as a material strategy and more as a more policy slogan.

A circular strategy should not be measured only by collection rates or the volume of black mass produced. Its real test is whether recovered materials can be refined to the required specifications and returned to manufacturing through a domestic industrial system the country can rely on. The decisive question is not simply whether the batteries can be recycled or not, but where in the supply chain, the materials become usable again.