Circular economy for lithium-ion batteries

New white paper shows ways to achieve a sustainable circular economy for lithium-ion batteries in electromobility and the energy transition

24.06.2025

Source: Bayern Innovativ GmbH

With the rapid ramp-up of electromobility and the expansion of renewable energies, the demand for lithium-ion batteries (LIB) is growing at an unprecedented rate. However, while new cell technologies are becoming increasingly powerful and versatile, one key challenge remains unresolved: the sustainable design of the entire battery value chain.

The new white paper "CE:Bat - Circular Economy for Lithium-Ion Batteries" sheds light on the current weak points in the life cycle of lithium-ion batteries - from cell production and use to second-life applications and final recycling. The report from the cross-cluster project of Umweltcluster Bayern, Cluster Neue Werkstoffe and Cluster Energietechnik shows why isolated processes, unclear regulatory framework conditions and a lack of economic incentives have made a closed circular economy difficult to date - and how this can be changed.

An integrated approach was pursued as part of the CE:Bat cross-cluster project: Stakeholders along the entire value chain are to be networked more closely in order to develop practical solutions for a circular battery industry. The focus is on the cell chemistries NMC and LFP, which dominate the market today.

Based on a comprehensive analysis, numerous interviews and a survey of industry players, the white paper provides concrete impetus for the transformation of the LIB cycle. It identifies technological innovation potential as well as political and economic levers.

Insights into the recommendations for action for politics and business

The white paper formulates specific recommendations for action based on in-depth analyses, industry interviews and a comprehensive survey. Some of the key proposals:

Introduction of a Europe-wide deposit system for LIBs to increase the return rate
Promotion of R&D projects for the development of innovative recycling and second-use technologies
Establishment of a competence center for the circular economy that pools and transfers knowledge
Improving the legal framework to facilitate investment in circular processes
Strengthening public procurement programs that focus on sustainability and recyclability
Targeted public relations work to raise awareness of the life cycle of batteries

The white paper thus not only provides an inventory, but also shows concrete ways in which companies and political decision-makers can contribute to the creation of a circular battery industry - especially in Bavaria, but also beyond.