【SMM Analysis】In-Depth Review of H1 2025 Lithium Battery Recycling Market and H2 Outlook (2)

III. Major Policy Review

On January 20, the State Administration for Market Regulation (SAMR) and the Standardization Administration of China (SAC) released GB/T 45203-2024 "Recycled Black Mass for Lithium-Ion Batteries". This specification details multiple requirements and regulations for recycled black mass used in lithium-ion batteries, including specific chemical composition, inspection and acceptance standards, sampling and sample preparation, packaging, and transportation. The key highlights compared to the pre-draft released in June 2024 are as follows: This version classifies the recycled black mass into two types and two grades based on the content of nickel, cobalt, lithium, and impurities. It adds requirements for water-soluble fluoride and specifies the content limits for chemical components like iron, phosphorus, and manganese. Overall, the new specification provides more detailed and specific guidance and standards for the comprehensive utilization industry of spent power batteries from new energy vehicles, contributing to the healthy development of the industry.

On February 13, to facilitate the 2025 automobile trade-in program and make it easier for consumers to apply for subsidies, and in accordance with the "Notice from the General Office of the Ministry of Commerce and Seven Other Departments on Doing a Good Job in the 2025 Automobile Trade-in Program" (Shang Ban Xiao Fei Han [2025] No. 8, hereinafter referred to as the "Notice"), the purpose of this revision is to intensify efforts to promote equipment updates, expand support for consumer goods trade-ins, and accelerate the improvement of recycling and circular utilization levels. The main key points are as follows: 1. Expand the scope of end-of-life vehicles: The range of eligible old vehicles for scrap-and-renewal subsidies is expanded from fuel-powered passenger cars meeting China National III and below emission standards to include eligible China National IV emission standard fuel-powered passenger cars. The registration deadline for new energy passenger cars eligible for trade-in is extended from before April 30, 2018, to before December 31, 2018. 2. Adjust the old vehicle ownership duration requirement: For consumers applying for the automobile scrap-and-renewal subsidy, the corresponding vehicle to be scrapped must have been registered under their name before January 8, 2025. 3. Improve the automobile replacement subsidy standards: Individual consumers who transfer a passenger car registered under their name and purchase a new energy passenger car are eligible for a subsidy of up to 15,000 RMB per vehicle; those purchasing a fuel-powered passenger car are eligible for a subsidy of up to 13,000 RMB per vehicle.

On June 10, the Ministry of Ecology and Environment of the People's Republic of China publicly released the "Public Announcement on Regulating Matters Related to the Import of Recycled Black Mass Raw Materials and Recycled Steel for Lithium-Ion Batteries" (Document Index Number: 000014672/2025-00219). This document assigns the customs commodity code 3824999996 to raw materials of recycled black mass for lithium-ion batteries, and the announcement will take effect from August 1, 2025. It declares that recycled black mass raw materials for lithium-ion batteries conforming to the specified standards are not considered solid waste and can be imported freely. Furthermore, recycled black mass raw materials must not be mixed with other categories of recycled raw materials, and different types of recycled raw materials are not allowed to be declared under the same customs declaration form.

IV. H2 Supply and Demand Outlook Forecast:

The theoretically expected scale of end-of-life batteries for the global black mass recycling market in 2025 is projected to reach 330 GWh, and this theoretical value is forecast to exceed 1,000 GWh by 2030 (representing a Compound Annual Growth Rate of 24.8%). The future growth will primarily come from the large-scale increase of retired batteries from electric vehicles and regulatory constraints such as the EU's New Battery Regulation. Taking 2025 as an example, China's lithium battery recycling currently accounts for over 70% of the global market. After more than a decade of development, there are over 200 domestic lithium battery recycling enterprises, covering multiple segments and processes in the industrial chain, including vehicle dismantling, crushing/powdering, hydrometallurgical processing, and physical repair. With the relaxation of relevant national policies starting in August, allowing qualified overseas black mass to be freely imported and exported, more and more attention is being paid to the scale and price of overseas black mass. In 2025, the total volume of end-of-life batteries in Europe and North America is expected to reach 70 GWh, accounting for about 20% of the global total. However, due to strict local environmental standards, these regions only host some crushing enterprises and a small number of hydrometallurgical lines in the pilot stage. Most spent batteries flow to Southeast Asia, South Korea, and other regions that serve as black mass trading hubs for dismantling and crushing/powdering processing.

Overall, lithium battery recycling supply, both domestically and overseas, is gradually increasing, and it is expected that the supply of lithium battery recycling will continue to grow in the second half of the year.