Context

• India's push for electric mobility and renewable energy has led to a surge in lithium battery usage, creating an urgent need for sustainable battery waste management. A critical gap has emerged in the implementation of fair EPR (Extended Producer Responsibility) floor pricing, risking environmental and economic consequences.

Background

• India's EV battery demand is expected to grow from 4 GWh in 2023 to 139 GWh by 2035. 
• Lithium batteries are also crucial for Battery Energy Storage Systems (BESS) to meet Net Zero by 2070.
• In 2022, lithium batteries formed 700,000 MT out of 1.6 million MT of total e-waste.
• To address battery pollution, the Battery Waste Management Rules (BWMR), 2022 were notified.
• A key feature is Extended Producer Responsibility (EPR) - producers must ensure collection and recycling through certified channels. 

Battery Waste Management Rules 

• Governed by Battery Waste Management Rules, 2022 under the Environment (Protection) Act, 1986. Replaces the 2001 Rules; amended in 2023 and 2024.

Key Provisions (2022 Rules)

• EPR Mandate: Producers must collect, recycle/refurbish waste batteries, and reuse recovered materials. 
• Online Portal: Centralized platform for EPR certificate transactions between recyclers/refurbishers. producers and recyclers/refurbishers.
• Material Recovery: Sets minimum recovery percentages from waste batteries.
• Polluter Pays Principle: Environmental Compensation (EC) imposed for EPR non-compliance; funds used for battery waste management. 

Key Amendments (2024 Rules)

• EPR Certificate Pricing: Central Pollution Control Board (CPCB) sets price range:
• Max: 100% of applicable EC and Min: 30% of applicable EC 
• Certificate trading must occur within this range. - 
• Environmental Compensation Guidelines: - 
• Earlier: Committee for Implementation prepared EC guidelines. 
• Now: CPCB prepares guidelines; may consult Committee. 
• Guidelines submitted to MoEFCC.

Challenges Highlighted

• Inadequate EPR Floor Pricing: Current EPR floor price is too low to cover legitimate recycling costs. Leads to financial unsustainability for formal recyclers and growth of informal, hazardous recyclers. 
• Environmental Hazards: Improper disposal causes leakage of toxic substances into soil and water. Absence of robust recycling infrastructure threatens India's environmental health.
• Loss of Strategic Resources: Inefficient recovery of rare metals like lithium, cobalt, and nickel increases import dependency. Estimated loss: $1 billion in foreign exchange by 2030 due to poor recycling.
• Weak Enforcement: Lack of effective auditing, digitisation, and penalties encourages fraud and noncompliance. Large manufacturers show reluctance to comply in developing countries, including India. 
• Informal Sector Exclusion: Informal recyclers dominate the ecosystem but lack regulation and training. Their exclusion leads to unsafe and environmentally harmful practices.

Way Forward

• Establish Fair EPR Floor Price: Should reflect actual recycling costs (infrastructure, R&D, skilled labour). Ensure economic viability for formal recyclers.
• Learn from Global Best Practices: UK charges 600/kg for EV battery recycling; India's proposed rate is less than one-fourth. Adjust pricing based on purchasing power parity, but ensure fair compensation.
• Strengthen Enforcement Mechanisms: Implement digital tracking of EPR certificates, introduce stringent penalties for fraud and mandate audits by producers.
• Integrate Informal Sector: Provide training, certification, and regulatory support to informal recyclers. Promote safe recycling practices to expand capacity and compliance.
• Multi-stakeholder Collaboration: Engage policymakers, industry, and recyclers to co-create a viable, sustainable recycling ecosystem.