[SMM Analysis] Power Battery Recycling Continues to Heat Up, July Construction and Approval Projects Announced

SMM, July 31:

With the vigorous development of the NEV industry, China’s first batch of power batteries has entered a large-scale "retirement period." According to industry forecasts, the volume of retired power batteries nationwide is expected to exceed 1.5 million mt in 2026, giving rise to a hundred-billion-yuan recycling market. Recently, lithium battery recycling projects have been launched intensively across multiple regions in China, accelerating the layout across all segments of the industry chain, from disassembly and crushing to hydrometallurgy and from second-life application to material regeneration.

Jiangxi: Two Major Projects Advance Simultaneously, Building a Recycling Hub in the Ganpo Region

Jiangxi province has seen frequent activity recently. The expansion project for an annual processing capacity of 15,000 mt of retired LFP batteries in Xiajiang County, with a total investment of 30 million yuan, has received EIA approval. Using retired LFP battery cells as raw material, it produces battery black mass, copper materials, and aluminum materials through processes such as cutting, primary crushing, and drying pyrolysis. Upon completion, it is expected to produce 8,878 mt of LFP battery black mass, 1,500 mt of copper foil, and 1,143 mt of aluminum foil annually. Meanwhile, the project for the annual recycling and comprehensive utilization of 18,000 mt of scrap NEV batteries in Pingxiang Economic and Technological Development Zone, with a total investment of 34 million yuan, has also entered the first round of EIA public notice. The project involves building a new scrap battery comprehensive utilization production line, equipped with 136 devices including capacity grading, battery disassembly, and dust removal equipment, forming a comprehensive utilization capacity for processing 18,000 mt of scrap NEV batteries annually upon completion.

In addition, the 10,000 mt scrap power battery comprehensive utilization project in Longnan Economic and Technological Development Zone, Ganzhou, has also entered its first EIA public notice. A new scrap power battery pack resource utilization production line will be built, which, upon completion, is expected to produce 8,000 mt of modules meeting reuse standards and 2,000 mt of metal materials annually, further consolidating Jiangxi's core position in China's lithium battery recycling landscape.

Guangdong: Dual Engines in Jieyang and Guangzhou Accelerate the Formation of a Greater Bay Area Recycling Network

Leveraging its share of approximately 20% of national NEV production and sales, Guangdong province consistently ranks first in the volume of retired batteries. The new construction project for a comprehensive recycling and utilization production line for 35,000 mt of scrap lithium batteries in Jieyang recently obtained a verification opinion for construction project planning conditions. Facilities such as a disassembly and extraction workshop, a comprehensive warehouse, and a comprehensive building will be built, forming an annual production capacity for processing 35,000 mt of scrap lithium batteries.

More notably, the retired power battery and scrap lithium battery comprehensive utilization project in Huadu District, Guangzhou, with a total investment of 1.22 billion yuan, has been accepted and publicized. Located in Chini Industrial Park, Chini Town, Huadu District, the project involves building a new-type energy storage intelligent manufacturing center, a comprehensive utilization and disassembly center for an annual processing capacity of 60,000 mt of retired NEV power batteries, and a disassembly center for recycling 50,000 units of retired NEVs annually. Upon completion, its annual output value is expected to exceed 1.3 billion yuan, and annual carbon emission reductions could reach 1.03 million mt, making it a benchmark project in the Greater Bay Area’s recycling industry chain.

Hebei, Handan: 20,000 mt Second-life Application and Disassembly Recycling Project Advances Steadily

The scrap lithium battery second-life application and disassembly recycling project (Phase I) in HandanJinan New District, Hebei province, with a total investment of 20 million yuan, recently received EIA approval for public notice. Located in the Herun Small and Micro Enterprise Industrial Park, the project involves procuring equipment such as feeding mechanical systems, conveyor belt systems, condensers, battery cell testing machines, and vacuum pumps, and constructing two lithium battery second-life application and pretreatment production lines. Upon completion, it will form an annual production capacity for processing 20,000 mt of scrap lithium batteries, adding an important link for retired battery recycling in North China.

Hubei, Huanggang: LFP Battery Circular Base Signed and Launched

The Huanggang High-tech Industrial Development Zone in Hubei province has officially signed an agreement with relevant enterprises for the LFP battery circular base project. Adopting a "physical disassembly + hydrometallurgy" comprehensive recycling process, the production line construction covers a scrap lithium-ion battery disassembly line, a reduction roasting furnace, a carbonisation production line, a leaching and purification production line, an extraction production line, and evaporation and crystallisation equipment. The final products include battery-grade lithium carbonate, battery-grade nickel sulphate, battery-grade cobalt sulphate, and battery-grade manganese sulphate, realizing a closed loop from scrap batteries to high-end battery materials and connecting the complete green chain of "recycling—regeneration—reproduction."

Conclusion

From Xiajiang, Jiangxi, to Jieyang, Guangdong, and from Handan, Hebei, to Huanggang, Hubei, this wave of intensively launched lithium battery recycling projects reflects that China's power battery recycling industry is moving from a phase of "disorderly growth" toward a new stage of standardisation, scale, and high value-addition. The official implementation of the "Interim Measures for the Management of NEV Power Battery Recycling and Comprehensive Utilization" in 2026 has further reinforced producer responsibility, driving the industry's transformation from being "policy-driven" to being driven by "policy and market forces." When scrap batteries are no longer "waste" but "urban ore," and the closed loop of "production—usage—recycling—regeneration—reproduction" truly operates, the golden era of the lithium battery recycling industry has only just begun.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Zhou Zhicheng 021-51666711