Europe’s Cobalt Recycling Ambitions Collide With Its Own Rulebook

By Karolina Chmielewska, Policy & Communications Officer, Cobalt Institute

 

Key highlights:

• Recycling is central to Europe’s cobalt security. It could meet up to 62% of EU cobalt demand by 2050, making a competitive European recycling industry increasingly important as demand grows.
• EU policies need to pull in the same direction. The EU Batteries Regulation aims to boost domestic recycling, but other regulatory and geopolitical pressures risk reducing the European capacity needed to meet its recycled content ambitions. Greater policy coherence is therefore needed to protect investment and maintain a viable European recycling base.
• The recycled content rules need further refinement. The proposed incentive for materials recycled in the EU should be monitored to ensure it drives investment and strengthens European value chains. The rules should also be technology-neutral, with adequate recycling requirements across major battery chemistries, and provide greater clarity on which waste materials can count towards recycled content targets.

 

Europe wants more recycled cobalt in its batteries. Achieving that ambition requires sufficient recycling capacity in Europe to supply it.

Recycling is increasingly important to Europe’s cobalt supply as the EU’s cobalt demand is projected to grow by 350% to 96.7 kt by 2050[1]. As opportunities for domestic mining remain limited, recycling could meet up to 62% of EU cobalt demand by 2050, making it an important source of domestic supply.

To this end, Cobalt Institute has responded to the European Commission’s consultation on the draft Delegated Act for Article 8 of the EU Batteries Regulation, which establishes the methodology for calculating and verifying recycled cobalt, nickel, lithium and lead content in batteries.

Cobalt Institute recommends establishing a formal mechanism to identify and address potential conflicts between EU policy objectives and their cumulative impact on strategic value chains.

DRC export controls, uncertainty around Chinese dual-use export controls and new US restrictions on black mass are adding further pressure to European supply chains. Policies designed to increase domestic recycling need to be considered alongside measures affecting the viability of that capacity.

Recycled-content requirements also have different implications across battery chemistries. Requirements for cobalt and nickel affect NMC (nickel-manganese-cobalt) and NCA (nickel-cobalt-aluminium) batteries, while LFP (lithium-iron-phosphate) batteries face no equivalent requirement for these materials. This matters as the battery market matures and diversifies. In 2021, LFP accounted for 25% of global light-duty EV battery demand[2], while by 2025 the combined market share of NMC and NCA chemistries is 44%[3], reflecting the significant growth of LFP.

The difference in treatment can create unintended incentives. If recycling requirements add costs to NMC and NCA batteries without commensurate requirements for LFP, the framework risks creating a cost advantage for chemistries with lower recycling value – undermining its circularity objectives and a technology-neutral approach. The EU Batteries Regulation provides mechanisms to adapt these requirements through delegated acts as the market evolves, offering a way to ensure a more consistent approach across major battery chemistries. The draft also does not define “post-consumer waste”, creating uncertainty over which streams qualify, including how battery waste, manufacturing waste and other waste streams should be treated. Without a clear definition, companies could interpret the term differently, leading to inconsistent implementation and uncertainty over their legal obligations.

Finally, the draft methodology includes a temporary 1.3 correction factor – a proposed mechanism that gives greater weight to eligible materials recycled in the EU when calculating compliance with recycled content targets. This is intended to incentivise recycling in Europe, but its impact should be monitored to ensure it strengthens EU recycling and critical raw material value chains without creating unintended market effects.

Europe has set ambitious objectives for battery circularity. Delivering them will require not only an effective recycled-content methodology, but a wider policy framework that enables the European recycling industry to remain competitive and invest for the future.

 

Read the Cobalt Institute’s full submission for our detailed recommendations.

 

[1] “Metals for Clean Energy”, KU Leven, 2022.

[2] Cobalt Market Report 2021, Cobalt Institute/CRU, p.4.

[3] Cobalt Market Report 2025, Cobalt Institute/Benchmark Mineral Intelligence, p.35.