Lithium-Ion Battery Recycling Plant: Process, Compliance and Business Potential 2026

Battery Recycling in India: A Strategic Opportunity

Although battery recycling in India has gained attention over the years, it has primarily focused on the environmental impact. Recently, there has been a shift in attitude towards viewing battery recycling in India as strategically important. Similar to the country's dependence on importing crude oil, approximately 100% of India's supply of lithium-ion cells and battery-grade refined minerals are imported. If the country is to achieve its goal of manufacturing electric vehicles on a large scale, supply of critical minerals is of utmost importance. Minerals including lithium and other elements which are critical for battery production are present in India; however, it may take over a decade for the country to be able to commercially extract them. Therefore, it is imperative for the country to focus on battery recycling in order to strengthen its domestic supply.

Recycling battery minerals has gained particular importance as part of the country's mission to source critical minerals. It plays a pivotal role in achieving the country's goals of large-scale battery production and manufacturing of electric vehicles. The Prime Minister's E-DRIVE scheme further accelerated the target by promoting the sale of 2.2 million electric two-wheelers and three-wheelers. Recycling of these batteries is of immediate importance. By 2030, it is projected that 128 Gigawatt hour (GWh) of batteries, predominantly from electric vehicles, would be reaching their end of life.

The Key Law That Provides Opportunity In This Space

There is one set of regulations that govern the entire sector. These are the Battery Waste Management Rules, 2022 (the Rules). These Rules frame a more sustainable battery management and waste hierarchy as compared to the Batteries (Management and Handling) Rules, 2001. The 2001 Rules only addressed lead acid batteries.

The Rules notified in 2022 will be applicable from 2026. Therefore, this will give a fair understanding of the battery management ecosystem to those establishing businesses in 2026:

• From 2024, recovery of batteries from electric vehicles and other portable batteries will be mandated at the rate of 70%. This will further increase to 90% by 2027.
• From 2024, the CPCB directed that batteries of other types, i.e., automotive and industrial, should contain minimum 60% recycled content.
• From 2023, the manufacture of batteries was directed to be accompanied with digital traceability. EPR certificates were mandated to contain QR codes, and be traded digitally.
• As of May 2023, 793 producers, 102 refurbishers, and 10 recyclers, were registered on the CPCB EPR portal. Data on battery sales and battery recycling certificates need to be aligned.

There are severe consequences for battery producers for failure to adhere to the EPR mandate. Unauthorized battery collection will result in liability on the producer.

After recycling batteries, a licensed organization is required to give a government-issued Certificate of Recycling. The producer later uses the certificate to produce its Annual Compliance Report and requests EPR credits. New players in this industry stumble at managing these documents instead of carrying out the recycling process.

The Battery Recycling Process

Collection and Transport: Lithium-ion batteries are hazardous and require special transport arrangements. End-of-life batteries are packed and transported according to dangerous goods regulations.

Sorting and Classification: Once transported, batteries are sorted by varying characteristics including chemistry, size, shape, and usage.

Discharge and Physical Separation: Each unit is discharged to remove the threat of fire and explosion.

Shredding: Shredders grind batteries and separate the various constituents.

Black Mass: The shredding process results in a mix of metal particles (black mass) which contain the metals of economic interest.

Refining: Liquid-phase extraction is carried out to extract the metals in the black mass.

Business Opportunity

The battery recycling industry can be divided into three financial regions. The first, and highest demand, is financing the collection of used batteries from the field. The second, and lowest capital region, is the logistical reversal of transporting batteries to the forward integration. The last region is the highest financial requirement, and the least demand.

Hydrometallurgical processing is a huge investment, but has the potential to generate a profitable return by converting black mass to battery grade metal.

Second life assessment refers to the separation of battery cells to be further processed to extract metal for use in new battery cells. This assessment has become increasingly important as the use of solar power and other alternative energy sources has increased.

The Gujarat region of India has become a leading location for energy processing. Companies such as ACE Green, Rubamin, and Manikaran Power have leading positions in the region with plans for large scale lithium processing.

Industry experts believe the Gravita Group, along with other companies, are large participants in the industry and provided insights into the level of investment and regulatory requirements for plant compliance.

Some of the regulations include the granting of a license by the Central Pollution Control Board, and the installation of fire protection systems to address the safety of lithium-ion batteries. The building and outfitting of the plant should be completed before the above mentioned regulatory approvals, as the approvals often take longer to obtain.

How Corpseed can add value

The hurdles in acquiring required authorizations and clearances are the major barriers to entry for a new battery recycling business. Corpseed has the knowhow in navigating all the red tapism involved in obtaining regulatory approvals and compliance to set up a battery recycling plant. We assist our clients in preparing project documents and compliance related documents, and assist in setting up battery recycling plants in India.

Frequently Asked Questions

1. What do you understand by lithium ion battery recycling?
Recycling lithium ion batteries involves recovery of lithium, cobalt, nickel, manganese, copper and graphite, from used batteries.

2. What are the EPR targets for battery recycling in India?
BWMR mandates that producers of EV and other portable batteries must ensure that a minimum of 70% of the batteries placed in the market during the financial year are recovered by the producer, by the end of next financial year. This must increase to a minimum of 90% recovery by the end of the financial year 2026-27. Similar targets are set for automotive and other industrial batteries.

3. What is black mass?
Black Mass is the end product of shredding lithium ion batteries, and contains valuable metals.

4. Is it legal to sell battery scrap to any buyer?
No, it is illegal. As per the BWMR, battery producers must sell spent batteries only to authorized battery recyclers.

5. What makes battery recycling economically viable in India?
A market potential of approx. Rs. 17,000 crore ($20.35 billion) with 2026-27 target date for 90% recovery under Extended Producer Responsibility (EPR) norms, and India's dependency on other countries for battery-grade raw materials. In such a scenario, it becomes an opportunity with regulations for setting up collection/logistics and hydrometallurgical processing businesses.

6. Which permits are required for establishing a battery recycling plant?
Permits for establishing any industry and hazardous waste processing unit, along with Environmental Clearance, Consent from Pollution Control Board, and authorization from the CPCB for establishment of battery recycling unit and registration on the EPR portal.

7. How does Corpseed Indrias work?
Corpseed Indrias offers end-to-end services for establishing a battery recycling unit in India, including approval and EPR registration process, and compliance.