Battery recycling industry faces risks from low EPR floor price, say experts

The battery recycling industry is facing significant risks due to an underpriced recycling framework, which may lead to the emergence of fraudulent operators and environmental crises, experts caution, advocating for a higher threshold to achieve a sustainable circular economy.

Some industry experts warn that the existing pricing structure could result in India losing approximately USD 1 billion in foreign exchange for importing essential minerals like lithium, cobalt, and nickel.

This issue is becoming increasingly critical as the nation's dependence on cleaner energy sources grows, making sustainable battery recycling essential for clean energy initiatives.

The Material Recycling Association of India (MRAI) and industry experts suggested raising the Extended Producer Responsibility (EPR) floor price for lithium recycling to foster sustainable, competitive, and standardised recycling practices.

"Extended Producer Responsibility (EPR) mandates that battery producers ensure safe recycling, yet low EPR floor prices hinder the collection and management of low-value or hard-to-recycle batteries. A higher EPR price is crucial for achieving sustainability and scale of battery recycling," MRAI said in a statement.

Additionally, the association emphasised that safe transport and pollution control measures are critical for minimising risks and costs in battery recycling.

Incorporating an adequate EPR price into producers' costs would only marginally increase the selling price of commodities, approximately by 0.6 per cent for a Rs 4,000 power bank, it said.

Recently, the MRAI presented to the Central Pollution Control Board (CPCB) advocating for an upward revision of the EPR floor price. The government has been urged to establish a fair EPR floor price while ensuring implementation, transparency, and regular audits to foster a sustainable battery recycling sector.

The CPCB could conduct a study on the economics of battery recycling, considering various technologies and business models, which should guide the determination of the EPR floor price, according to CEEW Programme Lead Akanksha Tyagi.

While a higher floor price may be beneficial to attract new entrants and support industry growth, she noted that prices should be adjusted periodically in line with technological advancements and improvements in collection efficiency.

R B Srivastava, founder of Prima Focus Technologies & Consulting Services Pvt Ltd, highlighted that a low EPR floor price might lead to batteries being left uncollected, ultimately falling into the informal sector for resource recovery.

With PTI Inputs