Recycling critical materials such as lithium, cobalt and nickel are driving profits and shoring up China’s resource security as trade war with US hits supply chains
What one person discards is Ma Long’s gain.
In the age of renewable energy, his map points to depleted lithium-ion batteries—veritable reservoirs of recyclable materials boosting earnings for Ma’s firm, which produces waste recycling machinery in central China.
Expensive elements like lithium—a silver-white alkaline metal often referred to as “white gold”—alongside other resources including cobalt and nickel, retain significant worth long after they have powered China’s extensive electric vehicle (EV) sector.
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“The business of new-energy waste holds significant potential because embracing new energy is the direction for both China and the global community,” stated the sales manager from a branch of Henan Hairui Intelligent Technology located in Zhengzhou, Henan province.
At a recent trade fair focused on environmental technologies in Shanghai, Ma stated that 70 percent of his company’s operations are devoted to machinery used for recycling batteries and solar panels.
With an increasing number of batteries and solar panels reaching the end of their lifecycle in China — which leads globally in deploying renewable energy technologies — companies such as Ma’s are adopting a circular economy approach. This strategy emphasizes reuse and recycling of materials for incorporation into new goods, thereby minimizing waste and saving natural resources.
Moreover, considering that critical minerals play pivotal roles in numerous rapidly advancing clean-energy technologies, this recycling initiative holds particular significance for enhancing China’s self-sufficiency in metals. This comes at a crucial time as China seeks to bolster its position amid escalating international trade conflicts, say several experts.
“As far as resource security goes, mineral recycling plays a crucial role,” stated Professor Du Huanzheng from Shanghai’s Tongji University, who specializes in circular economics.
He stated that China is now pursuing new economic opportunities through enhanced recycling initiatives, whereas previously these efforts were largely motivated by the necessity of addressing contamination problems.
The substantial updates to large machinery along with the trade-ins of everyday items—two programs initiated a year back aimed at stimulating domestic consumption within China’s decelerating economy—have increased the need for recycling services. These efforts signify an opportunity for another phase of economic expansion, as per his statement.
To address this growing demand, a new state-owned entity was established under the State Council last year. Known as the China Resources Recycling Group, its objective is to develop an offline resource recovery network that encompasses various types of waste—from long-lasting consumer items like electronics to decommissioned wind turbines and solar panels—according to reports.
official announcement in October
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Following approximately ten years of swift expansion in electric vehicle adoption, where the battery lifespan is capped at a maximum of eight years, China began experiencing significant battery retirements. This was stated in an official summary of a State Council gathering held in February.
China is anticipated to see the discarded weight from automotive batteries surpassing 4 million tons annually by 2028, with the yearly revenue generated by the battery recycling sector projected to reach over 280 billion yuan ($38.5 billion). This information comes from reports cited by the China Electronics Energy Saving Technology Association as published in the official newspaper, The Economic Daily.
In the meantime, due to their extended operational lifespan despite being installed earlier, photovoltaic modules from China’s extensive solar infrastructure are anticipated to start reaching the end of their lifecycle this year. This trend is projected to become even more pronounced over the coming five years, as stated in a 2023 report by the China Association of Circular Economy.
In contrast to fossil fuels, which cannot be replenished after being consumed, the metals used in these emerging energy technologies have the potential for recycling. This aspect holds significant weight during the intensifying trade conflict between China and the U.S., noted an unnamed professor of environmental economics based in Beijing, declining to speak with the press without authorization.
As China steps up its search for critical minerals within its own borders, it encounters greater challenges when attempting to purchase these resources from countries allied with the United States, like Australia and Canada.
“Trade relations with other mineral suppliers like those in Congo and Chile could also face disruptions as President Donald Trump’s administration pushes for isolating China among trading partners,” he noted.
China depends significantly on imports for numerous crucial minerals, particularly those needed for new energy sources and advanced manufacturing processes, including materials like cobalt, nickel, and lithium. Conversely, both the United States and Europe have expressed concerns about being overly reliant on China due to the country’s dominance over much of the refinement stages and final product production in these supply chains.
Li Yusheng, the deputy secretary-general of the China Nonferrous Metals Industry Association, stated at a press conference in January that China’s continuous efforts to renew consumer products and upgrade machinery are anticipated to contribute approximately an additional 500,000 tons of recyclable non-ferrous metal resources.
Leading battery producers and automakers like Contemporary Amperex Technology (CATL) and BYD have refined their strategies in battery recycling over recent years. This progress has encouraged smaller companies to join this promising market, aiming to secure a share of the opportunities available.
Yu Zhongkai, a high-ranking executive at Tianli Technology—a manufacturer of recycling machines based in Zhejiang—mentioned that the firm began working on equipment for battery recycling recently. Currently, one-fourth of their operations stem from this sector.
“We are still conducting experiments as there aren’t any industry-wide standards established yet, and the market remains ambiguous,” he stated.
Although China is still in the early stages of recycling new energy waste, this challenge remains underdeveloped globally, as highlighted by a professor from Beijing.
As was pointed out, the European Union excels in setting high recycling standards and systems, while China boasts an unparalleled comprehensive industrial chain along with a massive consumer market.
The professor from Shanghai mentioned that this is a growing field that has drawn numerous investors yet remains without proper regulations and significant technological advancements.
“Companies are displaying significant excitement, however, widespread recycling initiatives have not taken off yet, and a comprehensive recycling system is still under development,” he stated.
Currently, China has implemented a whitelist system aimed at regulating the battery recycling industry to prevent safety incidents and environmental contamination. Up until now, 156 companies have made it onto this list.
At February’s State Council meeting, it passed an action plan aimed at improving the recycling system of car batteries, vowing to build a standardised, safe and efficient recycling system.
Following a directive issued by the Ministry of Industry and Information Technology in December, companies were required to implement a quality assurance system incorporating product traceability and accountability. This move also involved raising the obligatory standards for recycled goods.
A company listed on the whitelist, Guangdong Brunp Recycling Technology—a subsidiary of CATL—stated that it could recover 99.3 percent of nickel, cobalt, and manganese from used batteries. Additionally, they claimed to be able to retrieve 91 percent of phosphorus and lithium.
This helps China form a complete closed loop in new-energy development, said its CEO, Li Changdong, during the country’s annual parliamentary gathering in March.
He stated that this guarantees the batteries return to their origin and enhances the resilience of the new energy sector’s supply chain.
Lithium-ion batteries include heavy elements that might seep into the earth and groundwater if not discarded correctly. Moreover, their recycling poses risks since improper cuts could cause combustion or emission of harmful gases.
However, many discarded batteries currently wind up in illicit small-scale facilities located in less developed areas, according to Chen Liwen, an environmental advocate with over ten years of expertise in waste management.
She emphasized the critical necessity for regulations concerning the disposal of end-of-life photovoltaic systems, which have proliferated across all regions of China over the past twenty years. She pointed out that many rural families had installed these units long ago. Today, as those initial installations reach retirement, some are unfortunately being discarded indiscriminately into landfills, she noted.
Amid this situation, legal recyclers are finding it difficult to obtain sufficient waste for processing, which has led to excess capacity, according to Ma, who works as a sales manager in Zhengzhou.
He anticipated that the problem would subside as regulations evolve and reach maturity, coinciding with a surge in retired batteries within a few years. This expectation stems from numerous automotive brands, including those based in China, accelerating their transition to fully electric vehicles due to the European Union’s prohibition on selling new gasoline and diesel cars starting in 2035.
“Therefore, this represents a significant course to monitor over the coming years,” he stated.
Additional reporting by Ji Siqi
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The article initially appeared on the South China Morning Post (www.scmp.com), which is the premier source for news coverage of China and Asia.
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