The Leaking Pipeline: Where Europe’s Battery and Aluminium Scrap Goes
A new briefing from the clean-transport group Transport & Environment (T&E) puts hard numbers on a raw-materials exodus that has long worried European policymakers. In 2024 alone, the EU exported scrap aluminium worth an estimated $2.4 billion—material that could have fed domestic furnaces and cut imports of primary metal. More starkly, at least 60% of the bloc’s “black mass”—the shredded, lithium-rich remains of spent batteries—leaves Europe each year, equivalent to roughly €150 million worth of recoverable battery materials such as nickel and cobalt.
The leakage is poised to swell. On current trajectories, the EU could see 200,000 tonnes of black mass shipped abroad in 2030, enough to supply the recycled content of batteries from 1.7 million electric cars. Most of it disappears into Asian processing hubs where energy costs are lower and environmental regulations looser, hiding—often deliberately—behind opaque customs codes that make true volumes impossible to trace.
The policy moment to close these gaps arrives with the Circular Economy Act, the EU’s flagship legislation for resource self-sufficiency. T&E’s briefing, shared ahead of the Act’s drafting, argues that without binding rules to keep battery and metal waste within the bloc, Europe will lock in a dependence on imported critical minerals even as it trumpets a recycling revolution.
Why Regulation, Not Just Economics, Will Decide the Future of EU Recycling
The Black-Mass Drain: Why Controls Are So Weak
Unlike hazardous waste, which faces tight export restrictions under the Basel Convention, black mass currently falls through regulatory cracks. It is often classified under generic customs headings, letting exporters ship it abroad without the prior notification required for genuinely hazardous shipments. Asian processors, especially in China and South Korea, can pay more for the material because their integrated supply chains and cheaper energy give them a cost advantage over standalone European recyclers. The result is that EU recyclers are starved of feedstock while the very critical minerals the bloc wants to secure leave the continent in container ships.
A Battery Value Chain Without a Midstream
Even if black mass stayed in Europe, the industry would still face a catch-22: with almost no domestic production of precursor cathode active material (pCAM) and cathode active material (CAM), there are few large-scale buyers for recycled nickel and cobalt. The EU’s Batteries Regulation already sets recycled-content targets for new batteries, but without a “union content” requirement that specifically rewards local sourcing, those targets could be met with material refined anywhere. T&E wants the Circular Economy Act to amend Article 8 of the Batteries Regulation, introducing a local-content obligation that would compel battery makers to buy from EU recyclers and, in turn, spark investment in the missing midstream.
Five Tools on the Drafting Table
The group’s wishlist is concrete. It calls for: export bans or fees on black mass, scrap steel and scrap aluminium unless the material is treated in an EU-owned facility abroad or demonstrably benefits the European battery value chain. It wants the Waste Shipment Regulation revised to create a genuinely single EU market for waste streams containing critical raw materials, stripping out the red tape of prior written notification for intra-EU movements. End-of-waste criteria should be harmonised across member states so that valuable secondary materials are not legally stuck in “waste” status. And the EU’s Industrial Alliance for a Battery should expand incentives to pCAM, anode active material and critical raw materials from 2032, ensuring that the whole value chain—not just cell assembly—locates in Europe.
Preparing for the Circular Economy Act: Priorities for Policymakers and Industry
- For EU policymakers drafting the Circular Economy Act: Assess whether an export ban or escalating fee on black mass and aluminium scrap can pass legal muster while steering material to domestic recyclers. The Act’s effectiveness will hinge on precise definitions of black mass to close the customs-code loophole, as mere voluntary guidelines will not work.
- For battery and automotive manufacturers: Prepare for a potential union-content obligation linked to recycled-battery targets. Companies that rely heavily on imported black mass or Asian refining may need to reshape their supply chains, secure offtake agreements with European pCAM producers, or co-invest in local recycling capacity.
- For recyclers and midstream firms: The Act could open a multi-billion-euro market by requiring cells and packs to contain EU-recycled material. Early movers that lock in feedstock supply contracts and streamline cross-border logistics—using the simplified intra-EU shipment procedure being proposed—will be best placed to compete once local-content rules bite.
Risk & Opportunity Assessment
| Commercial Risk | High | European recyclers are losing €150 million worth of black mass annually and $2.4 billion in scrap aluminium; without feedstock and offtakers, their business models are unviable. |
| Competitive Risk | High | Asian processors with lower energy costs can outbid European recyclers for black mass, while the absence of a domestic midstream means no built-in demand for locally recycled materials. |
| Regulatory Risk | Medium | The Circular Economy Act is still being drafted; whether it includes binding export restrictions, union-content rules, and harmonised end-of-waste criteria is uncertain, leaving the industry exposed to political compromise. |
| Reputation Risk | Low | For specific companies, reputational damage is limited; however, a policy failure would tarnish the EU’s green-industrial credibility as it champions resource sovereignty. |
| Technology Disruption | Low | The core challenge is regulatory and economic, not technological—hydrometallurgical recycling of black mass is proven, and the gap is one of feedstock access and market incentives. |
| Commercial Opportunity | Transformational | If the Act introduces binding local-content obligations and export controls, EU recyclers and midstream producers could capture a market large enough to process battery waste from 1.7 million cars by 2030, replacing imported primary minerals. |
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