When an electric vehicle battery reaches the end of its life, it is shredded into a dark powder called black mass. The powder holds lithium, cobalt and nickel, the metals that governments are racing to secure. As The Economist argued in a recent report on China’s recycling push, security has overtaken pollution as the main reason to recycle. That shift is now reshaping trade rules, and India has a decision to make.
What black mass recycling is, and why it matters
Black mass is an intermediate product. Spent batteries are dismantled and shredded to make it, and a second, chemical stage then extracts the metals. The first stage is simple. The second needs capital, technology and scale, and few countries have it. That second stage is where the strategic value lies.
Europe locks the door
The European Commission has classified black mass as hazardous waste, a rule that becomes mandatory across the EU from 9 November 2026. It bars exports to non-OECD countries, a group that includes China and India. The aim is to keep the material in Europe. Transport & Environment, a European clean-transport group, estimates that at least 60% of Europe’s black mass currently leaves the EU, much of it for processing in Asia, worth about €150 million a year.
China builds the machine
China is moving the other way. In July, its National Development and Reform Commission released a circular economy plan for 2026-2030, aiming for a resource recycling industry worth 8 trillion yuan, about $1.2 trillion, by 2030. The plan calls for a full life-cycle recycling system for EV batteries and stronger traceability.
Beijing has also made it easier to feed its plants. From 1 January 2026, it cut the import duty on black mass from lithium-ion batteries to 3% from 6.5%, following an earlier relaxation of some battery-scrap import limits. A senior industry ministry official has said China will draft regulations on battery recycling, with a target of more than 1 million tonnes of retired power batteries processed a year by 2030 and a digital ID system to track batteries from production to recycling. On the official projections, recycling could supply about 8% of China’s lithium, 25% of its cobalt and 21% of its nickel needs by 2030.
Estimates of China’s share of global battery-recycling capacity vary from about 75% to 94%. Much of that capacity sits idle, and analysts note that strict content requirements, such as limits on fluoride, keep a large part of the world’s black mass from meeting its standards.
India’s position
India’s recycling industry is small and mostly stuck at the first stage. An industry study by the India Cellular and Electronics Association and Accenture found the country recycles only about 1% of its end-of-life lithium-ion batteries into reusable material. Many domestic recyclers make black mass and sell it on, without extracting the metals.
In September 2025, the Union Cabinet approved a ₹1,500 crore incentive scheme for critical mineral recycling, running to 2030-31. It targets about 270 kilotonnes of annual recycling capacity, roughly 40 kilotonnes of critical minerals a year, ₹8,000 crore of investment and about 70,000 jobs. Incentives go to plants that actually extract minerals, not those that only produce black mass, through a 20% capital subsidy capped at ₹50 crore for large units and ₹25 crore for smaller ones.
The gaps India has to close
The scheme is a start, but India’s cell-manufacturing capacity was only about 1 gigawatt-hour at the end of 2025, and around 75% of the lithium-ion batteries used in its EVs come from China, so there’s little domestic demand for the metals it could recover. As of 2025, India had no battery-grade cathode producers. And black mass can still be exported at prices domestic refiners can’t match. From FY28, battery makers must use some recycled material, which should create a buyer, but only if the plants exist.
What to watch
The EU rule takes effect next month. If it works, Europe will build refining capacity and need less from Asia. If it doesn’t, black mass will keep flowing to wherever it can be processed cheapest. For India, the choice is between becoming a processor and remaining a supplier of someone else’s feedstock.
The metals in a spent battery are the same wherever they’re recovered. Who recovers them decides who controls the supply chain.
