Recycling helps recover valuable materials, cut waste, and support clean energy. With stricter sustainability rules, governments are pushing for greener solutions. EV companies are also focusing on battery recycling. This helps lower supply chain emissions and cut their carbon footprint.
Thus, battery recycling has become essential for a greener future. We have studied the Lithium-ion battery recycling report by the Chemical Abstracts Service aka CAS (a division of the American Chemical Society) and Deloitte. It provides insights into key growth drivers, emissions impact, and the current and future outlook of the market. Let’s dive in!
What’s Driving the EV Battery Recycling Market?
EV batteries have valuable metals, such as lithium, cobalt, and nickel. However, getting rid of them is difficult and this is where recycling comes in use. Thus, the rising need for these energy metals is the key driver for the EV battery recycling market.
This approach reduces waste, conserves resources, and supports a more sustainable supply chain. As demand for EVs grows, so does the need for efficient battery recycling to lessen reliance on mining.
Notably, strict environmental rules are also driving manufacturers to adopt greener practices. Advancements in recycling technology are helping recover more metal. This makes the process cheaper and better for businesses. On a global scale, many countries are promoting a circular economy.
Supply and demand gap for critical minerals

Asia-Pacific Leads in Battery Recycling
In 2023, Asia-Pacific led the battery recycling market. High EV adoption in China, Japan, and South Korea increased demand for recycling. The region produces many end-of-life batteries as a major EV and battery manufacturer.
Strong government support, incentives, and environmental awareness are driving growth. Investments in recycling technology and infrastructure further strengthen the region’s lead. This is evident from more patents than research papers.
Geographical distribution of publications in the field of lithium-ion battery (LIB) recycling

The Top Player: Brunp Recycling Technology
China’s Brunp Recycling Technology, a subsidiary of CATL, is a top player in battery recycling. The company focuses on four major areas of battery material development:
-
Ultra-High Nickel: Increases nickel content while reducing cobalt to boost battery capacity.
-
High Voltage: Raises the charging voltage limit while maintaining safety and performance.
-
Intelligent Management: Uses digital tools and smart systems for efficient operations.
-
Emerging Materials: Develop new materials for various applications, continuously improving energy density.
These advancements help improve battery performance, efficiency, and sustainability. Notably, Japan’s Sumitomo Metal Mining follows as another key company in this field.
Global Regulations Powering Battery Recycling
Governments are tightening laws to improve battery recycling. Policies like Extended Producer Responsibility (EPR) require manufacturers to handle waste management. EPR makes producers responsible for collecting and recycling their lithium-ion batteries. This encourages sustainable manufacturing and proper disposal.
New rules in the EU, U.S., and Asia are shaping the industry:
China’s Leadership
China introduced key recycling laws as early as 2016. In 2018, the Ministry of Industry and Information Technology (MIIT) set strict rules for battery handling, recycling traceability, and technical standards. The 2020 Solid Waste Pollution Law stopped waste imports and boosted recycling. Also, the Circular Economy Development Plan (2021-2025) prioritizes battery reuse. In 2024, MIIT suggested new standards for recycling waste batteries. They are now being reviewed.
EU Regulations
In 2023, the EU launched New Battery Regulations. These rules address the whole lifecycle of batteries, from design to end-of-life. By 2027, manufacturers must recover 50% of lithium from old batteries and 80% by 2031. Companies need to track their batteries’ carbon footprint and meet recycling content targets by 2025. Additionally, by 2027, a digital battery passport will improve transparency and traceability.
U.S. Policies
The Environmental Protection Agency (EPA) regulates lithium-ion battery (LIB) recycling under the Resource Conservation and Recovery Act (RCRA). In 2023, the U.S. issued federal guidelines clarifying how hazardous waste laws apply to LIBs. The EPA plans to introduce a dedicated LIB recycling policy by mid-2025.
India and South Korea are working on policies to support LIB recycling.
Making EVs Greener: Decarbonizing the Battery Supply Chains
The report has highlighted the most critical information on EVs. EVs have no tailpipe emissions. However, making their batteries does create a lot of carbon emissions.
- Lithium-ion battery production accounts for 40-60% of an EV’s total emissions.
Top automakers are now focusing on sustainable sourcing and recycling. As EV demand rises, battery recycling will be crucial for cutting carbon footprints and securing raw materials. And this is why regulators and investors are also pushing for cleaner supply chains.
Slashing Emissions and Saving Resources
Recycling lithium-ion batteries is much better for the environment than mining new metals. A study from Stanford University, published in Nature Communications, found that recycling creates less than half the emissions of traditional mining. It also uses only one-fourth of the water and energy.
The benefits are even bigger when recycling scrap from manufacturing. Scrap-based recycling created just 19% of the emissions, used 12% of the water, and needed only 11% of the energy compared to mining. Using less energy also means fewer air pollutants. So, battery recycling is a cleaner and smarter choice.
- The study concluded that recycling reduces greenhouse gas emissions by 58–81% and cuts water use by 72–88%.
The CAS report also published a 2023 study by Fraunhofer IWKS that evaluated the life-cycle environmental impact of three major battery recycling methods- Pyrometallurgy, Hydrometallurgy, and Direct recycling. The two significant deductions are:
- Recycling 1 kg of lithium batteries can reduce carbon emissions by 2.7 to 4.6 kg CO₂ equivalent.
- Direct recycling is the most effective method for the environment.
Life-cycle environmental impacts of different recycling routes of LIBs

Making Battery Recycling Profitable
Battery recycling has three phases: high-cost investment, break-even, and strong profits. Initially, recyclers invest heavily to set up facilities and meet regulations.
They can start making money by cutting costs, recovering valuable metals, and reducing waste. Costs depend on transport, labor, battery design, and recycling methods. Recyclers can stay profitable by automating tasks, lowering transport costs, and using advanced technology.
Batteries with valuable metals like cobalt and copper, such as NMC and NCA, offer quick returns. In contrast, LFP batteries provide better long-term benefits when reused before recycling.
Choosing the right recycling method—pyrometallurgy, hydrometallurgy, or direct recycling—can boost efficiency. Studies show recycling offers environmental benefits worth $3 to $11 per kWh. However, this also depends on carbon pricing and market trends.
Net recycling profit comparison

Subsequently, recyclers should focus on improving their processes. They also need to form partnerships to strengthen their business.
The Future of Battery Recycling: Turning Challenges into Opportunities
Battery recycling faces hurdles like high costs, complex processes, and inefficient collection. Various battery designs and hazardous materials add further challenges. New technology, digital tools, and teamwork in the industry are making recycling cheaper and easier.
Polaris Market Research reports the EV battery recycling market was $8.89 billion in 2023. It is set to grow from $11.09 billion in 2024 to $65.71 billion by 2032, with a 24.9% annual growth rate.

Digital Tools Improve Efficiency
Traditional recycling relies on slow, expensive, and unsafe manual processes. Digital tools are transforming this by tracking materials, automating sorting, and improving disassembly. These innovations enhance efficiency and help companies comply with strict regulations, reducing legal risks.
For example, digital twins optimize processes, blockchain ensures traceability and cloud platforms enable real-time tracking. Umicore uses AI and cloud solutions. CATL, on the other hand, uses blockchain to track materials.
Similarly, companies like Redwood Materials, BYD, and Toyota use AI to predict optimal recycling timelines.
The Power of Industry Collaboration
The disrupted supply chain remains a major challenge. In China, only 25% of retired EV batteries go through formal recycling channels. Companies are making batteries easier to recycle. They are also working together in the supply chain to solve this issue.
In October 2023, Stellantis and Orano teamed up to recycle EV batteries and factory scrap in Europe and North America. Such collaborations are driving a more sustainable and scalable battery recycling industry.
Similarly, last December Li-Cycle Holdings Corp. resumed its collaboration with Glencore International AG, (a subsidiary of Glencore plc). Both companies will evaluate the feasibility of building a new Hub facility in Portovesme, Italy that could potentially produce critical battery materials such as lithium, nickel, and cobalt from recycled battery content.
The post Are EVs Truly Green? How Battery Recycling is Powering a Cleaner Future appeared first on Carbon Credits.
Carbon Footprint
Designing an Insetting Program: A Step-by-Step Playbook for Procurement
Insetting program design starts with your supplier map. The carbon claim comes much later.
Consider a coffee procurement team that funds a farm intervention before checking its sourcing data. The supplier aggregates coffee lots from several regions. The buyer lacks farm-level traceability. Another purchaser expects to report the same outcome. A more attractive project brochure solves none of these problems.
If the distinction between a value-chain intervention and a purchased credit is still open, read CCC’s Insetting vs Offsetting guide before you set the brief.
Insetting program design begins with the purchasing relationship and works outward. You need to decide 1) where an intervention belongs, 2) what business problem it addresses, 3) who pays for it, 4) how results will be measured, and 5) what the evidence will let you say about them. This five-step playbook turns that sequence into a procurement plan.
Step 1: Insetting program design starts with supplier mapping
Start with the commodities that matter most to your Scope 3 inventory and sourcing continuity. Ask finance for spend by supplier, sustainability for the emissions baseline, and category managers for origin and volume records. Then identify which suppliers can trace material to a jurisdiction, sourcing region, producer group, or individual land-management unit.
The level of traceability affects what you can account for. Under the GHG Protocol Land Sector and Removals Standard, the spatial boundary for purchased land-based products depends on the traceability associated with each volume. Farm-specific factors or removals require physical traceability through an acceptable chain-of-custody model. A contract with a tier-one trader, by itself, does not establish a link to the farms behind its deliveries.[1]
Build a first-pass table with five columns: commodity and annual volume; supplier and origin; current traceability level; land-use and production risks; and the business owner who can change the purchasing terms. Mark missing data plainly. A blank cell is cheaper to fix before a program starts than after a claim is drafted.
If your company sets an SBTi Forest, Land and Agriculture target (FLAG), keep its land-related target boundary separate from energy and industry emissions. The current FLAG guidance also requires relevant companies to assess primary deforestation-linked commodities in their value chains.[2]
Step 2: Choose a commodity and jurisdiction for a pilot
Select one supply corridor where the sourcing connection can be established and procurement has a reason to stay. A useful pilot has repeat purchases, suppliers willing to share records, an intervention matched to a diagnosed problem, and a defined plan to measure the result. Carbon potential alone is a poor selection rule if the supplier cannot deliver the crop your business needs.
Compare candidate regions on land-use risk, supplier concentration, local rights and tenure, the availability of baseline data, and exposure to drought, erosion, or forest conversion. Check the relevant legal requirements separately. A nature project does not satisfy a due-diligence obligation merely because it has a carbon method attached.
Consider a coffee buyer sourcing from two districts. In the first, producer-group records identify the farms, while recent dry seasons have increased rejected green coffee lots. In the second, deliveries pass through several intermediaries and farm origins are unknown. Pilot shade management in the first district, with local agronomic advice and quality checks built into the plan. The buyer can trace purchases there and test the intervention against a defined sourcing problem.
Use a short decision memo to record why the selected corridor beats the alternatives, what remains uncertain, and what would stop the pilot. That memo is the first control against a project drifting toward whatever happens to photograph well.
Step 3: Design the supplier engagement and commercial model
The intervention needs an owner on each side of the contract. Decide who supplies planting material or training, who maintains the practice, who bears the cost if a harvest disappoints, and how long the buyer expects to purchase from participating suppliers. Where smallholders participate, budget cash flow and technical support for practices that offer a later return.
Put these terms in a supplier agreement or pilot addendum. It should cover eligible farms and volumes, consent to data collection, access for monitoring, any land or carbon rights that matter, benefit sharing, and what happens if the purchasing relationship ends. Ask local counsel and producer representatives to review the arrangement. The Accountability Framework is a useful reference for supply-chain work involving forests, ecosystems, and human rights.[3]
Avoid assigning an automatic carbon benefit to the buyer. The contract should say which party has the right to report each outcome, how overlapping claims will be checked, and how any issued credits will be handled. A reduction reported in a buyer’s inventory cannot simply be sold for someone else’s offset claim without an accounting review. SBTi FLAG guidance excludes purchased credits used as offsets from near-term FLAG target achievement.[2]
Set commercial measures beside environmental ones: delivered volume, rejection rate, supplier retention, and procurement cost. They tell you whether the program works as a supply-chain investment, even if carbon accounting takes longer to resolve.
Step 4: Build monitoring, reporting, and verification before rollout
Agree on the baseline and data flow before paying for a full rollout. Identify the land units or sourcing regions in scope, the practices that change, the records suppliers already keep, and the additional measurements the program requires. Decide which data can come from field visits, transaction records, or remote sensing, and who checks each source.
For carbon, separate three questions. Did the practice happen? Did emissions or removals change under an applicable method? Can the buyer attribute a defensible share to its purchased goods without double counting? The GHG Protocol’s 2026 guidance includes dedicated chapters on spatial boundaries, data and methods, evaluating actions, credited outcomes, and assurance.[1] These are distinct jobs. A photograph of a planted tree answers only part of the first.
CCC’s MRV and Additionality article explains the separate evidence questions a project reviewer will ask.
Create an evidence file for every reporting period: dated supplier and farm records, purchase volumes, methods and emission factors, uncertainty, quality checks, and changes from the baseline. Specify who can challenge the data and how corrections are recorded. If a project also seeks credit certification, keep project accounting and corporate inventory accounting separate. The GHG Protocol says its land standard focuses on entity-level inventories and does not set the rules for credit certification.[4]
Start with the minimum viable measurement design that can survive review. Add complexity when the pilot tells you which data actually changes a decision.
Step 5: Decide what can be reported and claimed
Insetting program design needs reporting rules before the marketing copy. Procurement, sustainability, finance, and legal should agree on four distinct outputs: operational performance; observed land or nature outcomes; inventory effects, if the accounting criteria are met; and any separately issued credits. One dashboard can display them, but they should not share a single unqualified headline.
SBTi FLAG guidance allows certain land-based removals within a company’s operations or supply chain to contribute to FLAG pathways, subject to criteria including permanence, traceability, data quality, and allocation. It does not allow purchased offsets to meet near-term FLAG targets.[2] Eligibility therefore depends on evidence and the applicable target rules, not on calling an activity “insetting.”
Draft a claims register. For each proposed sentence, record the period, boundary, data owner, calculation method, reviewer, and whether the result is measured, estimated, or still a goal. If the evidence supports only “we funded a pilot with 200 farms,” say that. Do not turn a funding fact into a verified emissions reduction.
What good looks like by year three
Treat year three as a review point, not a promised payback date. A mature pilot should have mapped participating supply volumes, a stable supplier agreement, a repeatable data collection process, and a comparison of commercial and environmental results against the baseline. It should also have a documented answer for outcomes that cannot be included in the buyer’s inventory.
Scale only where the pilot improves a sourcing decision and the evidence can follow the product. If neither condition holds, redesign the intervention or change the corridor. A disciplined program can conclude that a site is unsuitable. That is useful procurement intelligence.
Discuss your insetting program with CCC
Carbon Credit Capital designs nature-based supply chain investments around sourcing needs and measurable sustainability outcomes. Schedule a consultation with our carbon and sustainability experts to map your tier-one supplier network, FLAG exposure, and first pilot decision.
Sources
[1] GHG Protocol, Land Sector and Removals Standard, version 1.1, and companion Guidance, June 2026: https://ghgprotocol.org/land-sector-and-removals-standard ; https://ghgprotocol.org/land-sector-and-removals-guidance
[2] Science Based Targets initiative, Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, especially pp. 16–17, 37, and 41: https://sciencebasedtargets.org/resources/files/SBTiFLAGGuidance.pdf
[3] Accountability Framework initiative, Accountability Framework and guidance for companies: https://accountability-framework.org/
[4] GHG Protocol, Frequently Asked Questions: Land Sector and Removals Standard, questions 10 and 18: https://ghgprotocol.org/blog/frequently-asked-questions-land-sector-and-removals-lsr-standard
Carbon Footprint
The Strategic Case for Nature-Based Carbon Investments
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.

