The International Energy Agency (IEA) highlights that batteries are among the fastest-growing energy technologies, primarily due to the expanding electric vehicle (EV) market. Battery demand is projected to increase 4.5 times by 2030 and more than sevenfold by 2035. However, this rapid growth increases concerns about emissions from battery production and mineral processing. To address these challenges, the IEA recommends strategies such as electrifying production processes, increasing energy density, and incorporating recycled materials.
The EV sector drives nearly 90% of total battery demand, with China leading global battery production. However, emerging markets and developing economies are expected to increase their share of global demand from 3% in 2023 to 10% by 2030. Investments in North America and Europe are also helping to diversify supply chains. The rise of second-hand EVs presents new opportunities for e-mobility in developing economies, but international cooperation is necessary to ensure proper battery recycling and end-of-life management.
The growing number of end-of-life EV batteries presents an opportunity to recover critical minerals, reducing reliance on new mining operations. Recycling can significantly cut demand for lithium, nickel, and cobalt, potentially reducing cobalt demand by 40% by 2050. Scaling up recycling infrastructure and improving collection rates will be essential to achieving these sustainability goals.
Governments and industry stakeholders are introducing policies to improve battery sustainability and promote circularity. The EU Batteries Regulation mandates higher recycling quotas and minimum recycled material content in new EV batteries, with requirements for at least 16% recycled cobalt and 6% recycled lithium and nickel by 2031. Additionally, initiatives like the Global Battery Passport aim to enhance supply chain transparency and facilitate responsible sourcing, reuse, and recycling, ensuring a more sustainable and resilient battery industry.
