Context

India’s ambitious Net Zero target by 2070 and its push towards decarbonisation have significantly accelerated the adoption of electric vehicles (EVs) and renewable energy technologies. Consequently, the demand for lithium-ion batteries is expected to surge—from 4 gigawatt-hours (GWh) in 2023 to nearly 139 GWh by 2035.

While this transition marks a positive shift towards clean energy, it also introduces a pressing environmental and economic challenge: managing the disposal and recycling of lithium batteries sustainably. Without an effective recycling infrastructure, India’s green ambitions risk being compromised.

The Urgency of Battery Waste Management

Lithium batteries are crucial not only for EVs but also for battery energy storage systems (BESS) that stabilize renewable power supplies. However, their improper disposal can cause severe environmental harm. Toxic chemicals leaking into soil and water, coupled with the growing volume of battery waste—700,000 metric tonnes of lithium batteries out of 1.6 million metric tonnes of e-waste in 2022—call for immediate action.

To address this, the Indian government introduced the Battery Waste Management Rules (BWMR) in 2022, centered on Extended Producer Responsibility (EPR). Under EPR, manufacturers are responsible for ensuring the collection and recycling of end-of-life batteries.

The Challenge of EPR Floor Pricing

A core component of this recycling system is the EPR certificate, which producers must obtain as proof of compliance. These certificates are issued by recyclers who require a minimum floor price to sustain their operations.

Currently, India’s EPR floor price is too low to cover the high costs associated with safe battery recycling, including advanced technology, skilled labor, and secure logistics. Lithium-ion batteries also contain valuable minerals such as cobalt, lithium, and nickel, whose efficient recovery could reduce India’s dependence on imports. However, without fair compensation, legitimate recyclers struggle to remain viable.

Corporate Non-Compliance and Global Double Standards

The situation is further complicated by the reluctance of large producers—especially multinational corporations—to fully comply with recycling norms in developing countries like India. These companies often apply stringent environmental standards in developed markets while neglecting similar obligations in emerging economies.

This dual approach weakens local regulations and hampers the growth of a robust battery recycling ecosystem in the Global South.

Interestingly, fears that raising the EPR floor price will increase consumer costs lack evidence. Despite recent drops in global metal prices, producers have not passed savings to consumers, indicating that Original Equipment Manufacturers (OEMs) can absorb higher recycling costs without raising prices.

Global Benchmarks

For comparison, the UK requires producers to pay up to ₹600 per kilogram for EV battery recycling—roughly four times the proposed floor price in India, even after adjusting for purchasing power parity. This highlights the need for India to establish a globally competitive and realistic EPR pricing model.

A fair EPR floor price should account for all recycling costs—from collection and transport to safe material recovery—and evolve into a market-driven system as the industry matures. Additionally, producers should be encouraged to audit recyclers regularly, promoting accountability, preventing fraud, and driving innovation in recycling technologies and logistics.

Policy Recommendations

1.              Integrating the Informal Sector

India’s battery recycling has long relied on informal workers who often operate outside regulatory oversight using unsafe methods. However, their involvement is critical to scaling up recycling capacity. Formalising this sector through training, regulation, and incentives can enhance safety, efficiency, and sustainability.

Formalisation not only mitigates environmental risks but also creates green jobs, making it a vital social and environmental priority.

2.              Strengthening Enforcement and Governance

Policy effectiveness hinges on strong enforcement. India must deploy robust digital tracking for EPR certificates, implement rigorous audit protocols, and impose stringent penalties for non-compliance and fraud. Such measures will increase transparency and reduce malpractices.

Constructive and immediate dialogue among policymakers, producers, and recyclers is essential to establish a balanced and effective EPR framework.

Conclusion

India’s rapid growth in EVs and renewable energy demands a comprehensive battery recycling system. Revisiting the EPR floor price, enforcing regulations, and integrating the informal sector are crucial to turning battery waste management from a looming crisis into an opportunity.

If implemented well, this can drive sustainable growth, promote environmental goals, and bolster economic self-reliance through the recovery of critical resources.