How the Circular Economy Act can provide the tools to help scale Europe’s recycling industry, in order to secure access to critical minerals. Recovering materials from end-of-life products like cars and batteries is a key means to secure much needed critical minerals resiliently and sustainably. However, Europe’s recycling industry is struggling to scale and compete globally. The Circular Economy Act can and must provide the tools to support the effective scaling of Europe’s material recovery and recycling capacity. At least 60% of Europe’s black mass is leaving the EU to be processed elsewhere. Scrap aluminium worth $2.4 billion was exported from the EU in 2024. China holds 94% of global battery material recovery capacity. The rationale for recovering all important critical minerals from end of life vehicles and waste batteries is clear. With increased recycling, Europe can reduce imports of critical minerals (CRMs) such as nickel and cobalt, in turn reducing external dependencies. Increased recycling can also limit the need for primary extraction, providing a more sustainable source of CRMs. However, Europe’s recycling industry is struggling to scale. European battery and aluminum recyclers lack the needed feedstock, with huge amounts of end of life vehicles, waste batteries, black mass and scrap being exported outside of the EU, to be processed elsewhere. At least 60% of Europe’s black mass is leaving the EU, equal to around €150 million worth of material a year. This is only the tip of the iceberg, with lots more black mass leaving the EU, hidden in different customs codes, and unable to be traced. If nothing is done to limit black mass leakage, and we continue to export at least 60% of our black mass, this number will only grow. Based on current estimates of future black mass production in Europe, we could expect at least 200kt of black mass to leave the EU in 2030, the recoverable battery material from roughly 1.7 mn cars. Using today’s black mass prices, this could be the equivalent of 1.1 bn EUR of material. On top of this, without a battery value chain in Europe, there will be little demand for recycled materials in Europe. To effectively scale its recycling industry, Europe will need to onshore the entire battery value chain. This includes in particular the midstream industry, including cathode active materials and their precursors (pCAM). This part of the value chain is key as they will be the offtakers for EU recyclers. Finally, European recyclers struggle to compete globally, facing higher energy costs and extended project timelines. Companies recycling in Europe need targeted financial, de-risking and industrial support to compete on the global scene. Fundamentally, we need to see the economic opportunity in our waste, instead of the environmental burden. This briefing explores how the upcoming Circular Economy Act can achieve a shift in mindset, and deliver much needed tools to support Europe’s recycling industry, securing effective material recovery capacity in Europe. Key Recommendations To limit material leakage and support Europe’s recycling industry, T&E calls for: Limit material leakage outside the EU. Black mass and scrap steel and aluminium should not be exported outside the EU unless it to be treated by EU facilities abroad or shown to benefit the EU battery value chain. Proper enforcement, clear definitions and export restrictions e.g. ban or fees are needed. Drive demand for locally recycled materials. The CEA should set out a targeted amendment to article 8 of the EU Batteries Regulation (2023/1542) in order to introduce a union content requirement to recycled content targets for batteries. This would incentivise the scaling of recycling and refining capacity within Europe. Create a truly single EU market for waste. The CEA should amend the Waste Shipment Regulation (WSR), to simplify intra-EU shipments of waste streams containing CRMs. These waste streams should be exempt from the procedure of prior written notification and consent, and subject to the simplified information procedure. Harmonised end-of-waste criteria. The CEA should harmonise and ensure strict end-of-waste (EoW) criteria for CRM-containing waste, accompanied by implementing guidance for Member States. Local content rules under the IAA should be expanded, to include precursor cathode active material (pCAM) in order to ensure robust European battery component manufacturing and a competitive recycling industry. Incentives for pCAM, as well as anode active material (AAM), critical raw materials (CRMs) should be added as third step from 2032. Article from T&E. Read the full report.
