While China's lithium-ion battery recycling market is challenged by serious overcapacity, the supply shortage of battery scrap, including end-of-life batteries and production waste, has been aggravated by the non-compliant recyclers.
On the evening of March 14, Guangdong's "3·15 Gala" aired an investigative report titled Where Do Retired Power Batteries Go?, exposing improper dismantling practices at used battery recycling workshops in Huangjiang, Qingxi, and Tangxia towns in Dongguan, Guangdong Province, posing significant safety hazards.
Senior officials of the Dongguan Municipal Party Committee and Government expressed serious concern, stressing the need for stringent measures to strengthen oversight and swiftly crack down on illegal production and business activities. That same evening, the Dongguan government urgently convened a multi-departmental meeting to launch a joint enforcement campaign. The operation aims to comprehensively regulate the power battery recycling industry, trace the entire circulation chain of retired batteries, and establish a sound source governance mechanism to eradicate long-standing industry malpractices. Since the campaign began, all villages and communities have swiftly mobilized for thorough inspections. Statistics show that, so far, inspections have involved 1,040 personnel, covering 346 enterprises, with 21 non-compliant businesses shut down.
Industry Challenges & Solutions
A report by the Development Research Center of the State Council revealed that, by the end of 2023, less than 25% of retired power batteries in China were recycled through formal channels, with most ending up in "gray-market" operations. These unlicensed workshops lack technical expertise and operate recklessly, creating safety and environmental risks.
Moreover, these non-compliant players undercut formal recyclers by offering higher purchase prices, while compliant enterprises - burdened by heavy investments in facilities, equipment, and environmental safeguards - struggle to compete. This "bad money drives out good" dynamic leaves many licensed recyclers underutilized and unprofitable.
The Path to Standardization
- Strengthen Extended Producer Responsibility (EPR): Automakers and battery manufacturers should take charge of recycling, directing retired batteries exclusively to government-approved ("whitelisted") processors to prevent leakage into informal channels.
- Ensure Traceable Flows: Mandating that all retired batteries enter formal recycling systems is key to industry normalization.
With the rapid growth of electric vehicles (EVs) and energy storage system, lithium-ion battery demand has surged - but so has the challenge of managing retired batteries. Unregulated recycling wastes resources and risks pollution and safety incidents. Thus, standardizing lithium battery recycling is critical for sustainable development.
As governments intensify efforts to regulate the sector, coordinated action across departments is essential to eliminate malpractice and build a green, efficient, and sustainable battery recycling ecosystem. In the global push toward carbon neutrality, a well-regulated battery recycling industry will become a pillar of the new energy economy, supporting the transition to a low-carbon future.
