The policy will have a focus on cluster-based recycling units, located to close by battery manufacturing factories and set up with government incentives, said two officials aware of the development.
This could see the Centre propose an allocation of around ₹3,500 crore for the scheme for a period of around three years, the people cited above said.
“Battery recycling industries are very capital-intensive and we cannot expect large-scale recycling without incentives. Companies would require initial fiscal support from the Centre. The emphasis would be to set up these industries in established industrial areas keeping in view the logistical support," said one of the two officials. The move follows visits to major battery recyclers around the world by Indian delegations, who have also sought investments by these businesses in Indian recycling units, said the official, adding that the government will now identify the clusters where recycling units can be set up.
“The Centre will also talk to states for selection of clusters and incentives that state governments need to provide to these investors," said the second official.
This official said lithium-ion batteries are expected to be available in large numbers in the next few years as EV mobility picks up in India along with domestic manufacturing of batteries.
The government is also expected to propose a deposit-refund system, under which all market players would contribute into a corpus and provide incentives to customers to return batteries.
Queries sent to the ministries of new and renewable energy and finance remained unanswered.
Nitin Gupta, co-founder and CEO of Attero Recycling, said, “Given the fact that the entire world—and India in particular—is very concerned about carbon emission and we have taken a very aggressive target for carbon neutrality by 2070, the government will give a lot of emphasis on climate and carbon neutrality. Recycling itself is a very important subject and within that recycling of lithium-ion batteries is more prominent because it would help India have a whole battery supply chain within the country, from cell manufacturing to recycling."
Battery recycling could also address challenges of the lack of availability of lithium in India.
Gupta said lithium and cobalt make up more than 40% of the value of lithium-ion cells, and India does not have any reserves of either lithium or cobalt. “So, recycling of lithium-ion batteries would take care of self-dependence or self- reliance in critical battery materials," he added.
According to a report by federal policy think tank NITI Aayog, it is estimated that the cumulative potential of lithium-ion batteries in India from 2022 to 2030 across segments will be around 600 GWh. The recycling volume coming from the deployment of these batteries will be 128 GWh by 2030. Out of this, almost 59 GWh will be from electric vehicles alone.
EV batteries usually first go for repurposing or reuse in UPS or other such smaller applications once they reach 80% of their capacity. They are then sent for recycling when 20% of capacity remains.
India has already allocated 50 GWh of manufacturing capacity for advance chemistry cells under its production linked incentive scheme and the government expects to become self-reliant in terms of EV batteries by FY25.
The NITI Aayog report also suggested a separate licence for handling lithium-ion batteries from electronic waste to reduce the minimum requirement for entry in recycling. In a bid to boost demand for recycling, it also recommended that disposal of batteries in landfills should be made illegal.
The focus on recycling comes at a time when India holds the G20 presidency. New Delhi’s plans to pitch itself as a hub for the global EV ecosystem and recycling would be a major part of its presidency.
