Waste to Wealth: India’s Battery Recycling Boom

New Delhi, the world's third-largest automobile market, is shifting gears towards adopting electric vehicles (EVs). India has set two ambitious targets for 2030: achieving 30% EV sales whilst deriving 50% of its primary energy requirement from renewable energy sources.

India's EV Ecosystem

India’s push towards manufacturing and selling EVs has been apparent through its implementation of incentives. In September 2021, the government earmarked $3.1 billion to enhance manufacturing capabilities for advanced automotive products, including EVs via its Production Linked Incentive (PLI) Scheme. The scheme offers financial incentives to industries that meet specific performance targets, such as higher production and sales. In this case, the scheme incentivises the sector to invest in the local supply chain of Advanced Automotive Technology products. 

Similarly, to enhance sales, the government launched versions of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles scheme in 2014 and 2019, the Electric Mobility Promotion Scheme in 2024, and the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme in 2024. 

Collectively, these schemes aim to push for a green transition in the automobile industry by providing buyers with an upfront reduction in the purchase price of vehicles and establishing a network of charging stations to support the use of EVs. 

However, India heavily relies on imports to procure lithium-ion batteries that power electric vehicles, particularly from China. The government introduced a PLI scheme for Advanced Chemistry Cell (ACC) Battery Storage to localise battery production with a USD 2.14 billion outlay. Like other PLI schemes, it provides target-linked financial incentives to boost the manufacturing capabilities in the energy storage sector. To benefit, companies must scale up domestic activity by at least 25 per cent within two years and increase it to 60 per cent within five years, in addition to making the mandatory investment of about $27 million per 1 GWh. Though schemes encouraging local scale-up of production are plentiful, experts say the country's battery manufacturing industry is still nascent. 

Battery Recycling in India

As the demand for EVs soars, the number of discarded batteries is also set to increase. Shubhra Pathak, Founder of Vimarsh Earthwise, a battery waste management firm, highlighted the environmental cost of Lithium mineral extraction from mines. She told FairPlanet, "In terms of extracting lithium out of batteries, we can minimise [the environmental cost] by 10 times." Pathak added that batteries must be disposed of carefully as they can easily catch fire.

To curb this menace, India introduced the Battery Waste Management Rules in 2022, mandating that battery producers (including importers) be responsible for collecting, recycling, and refurbishing waste batteries to promote a circular economy. 

A lithium battery has a life cycle of five to seven years. "If a producer has sold 1,000 batteries in 2020, they need to collect 60 per cent of 1,000 batteries in 2025, after the life cycle of those batteries is over. After collecting 60 per cent of batteries, they need to get them recycled by an authorised recycler. Once batteries are recycled, the recycler shares the credit of these 60 per cent batteries with the producer on [an online] portal," explained Pathak. 

Speaking to FairPlanet, Gaurav Dowlani, CEO of LICO Materials, a battery recycling company, commended the new rules. "When we talk to recyclers from other parts of the world, there is a great deal of appreciation for the battery waste management rules India has drafted," he said. LICO Materials collects batteries from significant OEMs (Original Equipment Manufacturers) like MG Motor, Ola Electric, and Tata Motors.

Private companies and even research institutions are working in the battery recycling domain. The Center for Excellence in Energy and Telecommunications (CEET), one of the centres of the Indian Institute of Technology, Madras, has been working on recycling technology for the past four years. "The centre has developed a methodology to extract materials from different battery chemistries at 90-95 per cent recovery level," Kaushal Jha, CEO of CEET, told FairPlanet. He elaborated that the method includes mechanical separation, pyrometallurgy and hydrometallurgy. It is established to release only small amounts of gaseous emission, significantly less than vehicular emission.

Turning Waste into Opportunity: Challenges Ahead

India's battery recycling market remains unorganised. Dowlani attributed this to the drawn-out recycling process – including battery collection, mechanical separation, and material recovery – necessitating more clarity on who is responsible for each aspect.

"We need to validate and verify how well each player is working. There is a need to set guidelines and standard operating procedures. Otherwise, you can't measure yourself against anything, right?" Dowlani questioned. Pathak, too, added that once the scrap dealer market is organised, it would be much easier for recyclers to collect and recycle the batteries.

Dowlani said that even if his company stands by the rules, the ground implementation hasn't been effective regarding battery waste regulations. "Implementation has been challenging because it requires producers to adhere to the rules. We propose a higher environmental compensation as the current calculations equate to a very small percentage of a new battery price. They have a minimal impact; thus, producers may not feel compelled to recycle and get away from the responsibility by paying a nominal compensation. We expect the numbers to be at least 10 times higher. The recycling industry gets impacted, and material goes into the informal sector,” he said. 

Overall, the environmental factors and the rarity of such minerals make battery recycling an urgent need. However, while there are schemes for manufacturing (EVs and batteries) and sales, there is a policy gap for battery recycling incentives.

Outlining the need for incentives in the form of PLI schemes for battery recycling, Dowlani said, “At the moment, there are no schemes from the central government. Most state EV policies are only geared toward selling EVs. So far, there has been no announcement of even a park for recycling, a centralised zone, or a collection mechanism."

Battery Recycling: Can India Become A Global Hub?

Even though India is catching up with battery production, it still relies on imports. According to CareEdge Ratings, a credit ranking firm, the country's lithium-ion battery demand is set to grow exponentially to 127 GWh by FY30. Nearly all of India's 15 GWh demand for lithium-ion batteries is met through imports.

In its 2022 report, government think tank NITI Aayog estimated that the potential of lithium-ion batteries in India between 2022 and 2030 will amount to 600 GWh across all segments, enough to power 15 million electric vehicles. Out of this, the recycling volume will be 128 GWh by 2030, with 46 per cent coming from electric cars alone.

The data shows that India has an opportunity to tap into the battery recycling ecosystem. Along with Pathak, Dowlani believes batteries shouldn't be treated like waste as they are made of critical and rare minerals and can be salvaged.

When asked about India’s potential to become a global hub for battery recycling, Dowlani emphasised that the country should strive to push the boundaries, as it can position itself as a leading processor for the rest of the world.

"India as a country does not need to look only inward and solve our own country's recycling problem. We can also look outward. We have the necessary talent for understanding metallurgy and chemical engineering," he added.

Responding to the same question, Pathak was confident about India's prospects of becoming the world's recycling hub. "Many foreign companies based in Singapore or Germany are interested in coming to India and starting their plants. These companies enquire about the battery market, challenges, and overall landscape," she said.

Jha envisions the country as a place that imports and recycles spent batteries and simultaneously makes its batteries while exporting and using them.

Udisha Srivastav developed the idea for this story during the Communicators’ Workshop on Renewable Energy, organised by Internews’ Earth Journalism Network in October 2024, in Chennai, Tamil Nadu, India.

Image by Markus Spiske.