Trump's second term is creating ‘a limbo moment' for US battery recyclers

Yahoo

2 days ago

In a recycling facility in Covington, Georgia, workers grind up dead batteries into a fine, dark powder. In the past, the factory shipped that powder, known in the battery recycling industry as black mass, overseas to refineries that extracted valuable metals like cobalt and nickel. But now it keeps the black mass on site and processes it to produce lithium carbonate, a critical ingredient for making new batteries to power electric vehicles and store energy on the grid.
From Nevada to Arkansas, companies are racing to dig more lithium out of the ground to meet the clean energy sector's surging appetite. But this battery recycling facility, owned by Massachusetts-based Ascend Elements, is the first new lithium carbonate producer in the nation in years — and the only source of recycled lithium carbonate in North America. The company is finalizing upgrades to its Covington facility that will allow it to produce up to 3,000 metric tons of lithium carbonate per year beginning later this month. Right now, the only other domestic source of lithium carbonate is a small mine in Silver Peak, Nevada.
Since January, President Donald Trump has taken a sledgehammer to the Biden administration's efforts to grow America's clean energy industry. The Trump administration has frozen grants and loans, hollowed out key agencies, and used executive action to stall renewable energy projects and reverse climate policies — often in legally dubious ways. At the same time, citing economic and national security reasons, Trump has sought to advance efforts to produce more critical minerals like lithium in the United States. That is exactly what the emerging lithium-ion battery recycling industry seeks to do, which is why some industry insiders are optimistic about their future under Trump.
Nevertheless, U.S. battery recyclers face uncertainty due to fast-changing tariff policies, the prospect that Biden-era tax credits could be repealed by Congress as it seeks to slash federal spending, and signs that the clean energy manufacturing boom is fading.
Battery recyclers are in 'a limbo moment,' said Beatrice Browning, a recycling expert at Benchmark Mineral Intelligence, which conducts market research for companies in the lithium-ion battery supply chain. They're 'waiting to see what the next steps are.'
To transition off fossil fuels, the world needs a lot more big batteries that can power EVs and store renewable energy for use when the wind isn't blowing or the sun isn't shining. That need is already causing demand for the metals inside batteries to surge. Recycling end-of-life batteries — from electric cars, e-bikes, cell phones, and more — can provide metals to help meet this demand while reducing the need for destructive mining. It's already happening on a large scale in China, where most of the world's lithium-ion battery manufacturing takes place and where recyclers benefit from supportive government policies and a steady stream of manufacturing scrap.
When the Biden administration attempted to onshore clean energy manufacturing, U.S. battery recyclers announced major expansion plans, propelled by government financing and other incentives. Under former president Joe Biden, the U.S. Department of Energy, or DOE, launched research and development initiatives to support battery recycling and awarded hundreds of millions of dollars in funding to firms seeking to expand operations. The DOE's Loan Program's Office also offered to lend nearly $2.5 billion to two battery recycling companies.
The industry also benefited from tax credits established or enhanced by the 2022 Inflation Reduction Act, the centerpiece of Biden's climate agenda. In particular, the 45X advanced manufacturing production credit subsidizes domestic production of critical minerals, including those produced from recycled materials. For battery recyclers, the incentive 'has a direct bottom-line impact,' according to Roger Lin, VP of government affairs at Ascend Elements.
The DOE didn't respond to Grist's request for comment on the status of Biden-era grants and loans for battery recycling. But recyclers report that at least some federal support is continuing under Trump.
In 2022, Ascend Elements was awarded a $316 million DOE grant to help it construct a second battery recycling plant in Hopkinsville, Kentucky. That grant, which will go toward building capacity to make battery cathode precursor materials from recycled metals, 'is still active and still being executed on,' Lin told Grist, with minimal impact from the change in administration. Ascend Elements expects the plant to come online in late 2026.
American Battery Technology Company, a Reno, Nevada-based battery materials firm, told a similar story. In December, the company finalized a $144 million DOE contract to support the construction of its second battery recycling facility, which will extract and refine battery-grade metals from manufacturing scrap and end-of-life batteries. That grant remains active with 'no changes' since Trump's inauguration, CEO Ryan Melsert told Grist.
Yet another battery recycler, Cirba Solutions, recently learned that a $200 million DOE grant to help it construct a new battery recycling plant in Columbia, South Carolina, is moving forward. At full capacity, this facility is expected to produce enough battery-grade metals to supply half a million EVs a year. Cirba Solutions is also still spending funds from two earlier DOE grants, including a $75 million grant to expand a battery processing plant in Lancaster, Ohio.
'I think that we aligned very much to the priorities of the administration,' Danielle Spalding, VP of communications and public affairs at Cirba Solutions, told Grist.
Those priorities include establishing the U.S. as 'the leading producer and processor of non-fuel minerals,' and taking steps to 'facilitate domestic mineral production to the maximum possible extent,' according to executive orders signed by Trump in January and March. Because critical minerals are used in many high-tech devices, including military weapons, the Trump administration appears to believe America's national security depends on controlling their supply chains. As battery recyclers were quick to note following Trump's inauguration, their industry can help.
'Critical minerals are central to creating a resilient energy economy in the U.S., and resource recovery and recycling companies will continue to play an important role in providing another domestic source of these materials,' Ajay Kochhar, CEO of the battery recycling firm Li-Cycle, wrote in a blog post reacting to one of Trump's executive orders on energy.
Li-Cycle, which closed a $475 million loan with the DOE's Loan Programs Office in November but is now facing possible bankruptcy, didn't respond to Grist's request for comment.
While Biden's approach to onshoring critical mineral production was rooted in various financial incentives, Trump has pursued the same goal using tariffs — and by attempting to fast-track new mines. Although economists have criticized Trump's indiscriminate and unpredictable application of tariffs, some battery recyclers are cautiously optimistic they will benefit from increased trade restrictions. In particular, recyclers see the escalating trade war with China — including recent limits on exports of various critical minerals to the U.S. — as further evidence that new domestic sources of these resources are needed. (China is the world's leading producer of most key battery metals.)
'There is a chance that limiting the amount that is being imported from China … could really strengthen' mineral production in other regions, including the U.S., Browning said.
Trade restrictions between the U.S. and key partners outside of China could be more harmful. Today, Browning says, U.S. recyclers often sell the black mass they produce to refiners in South Korea, which don't produce enough domestically to meet their processing capacity and are paying a premium to secure material from abroad. Trump imposed 25 percent tariffs on Korean imports in April, before placing them on a 90-day pause. If South Korea were to implement retaliatory tariffs in response, it could cut off a key revenue stream for the U.S. industry. However, recycling companies Grist spoke noted that there are currently no export bans or tariffs affecting their black mass, and emphasized their plans to build up local refining capacity.
'The short answer is that we see the tariffs as an opportunity to focus on domestic manufacturing,' Spalding of Cirba Solutions said.
While battery recyclers seem to align with Trump on critical minerals policy, and to some extent on trade, their interests diverge when it comes to energy policy. Without a clean energy manufacturing boom in the U.S., there would be far less need for battery recycling.
Today, nearly 40 percent of the material available to battery recyclers in the U.S. is production scrap from battery gigafactories, according to data from Benchmark. Another 15 percent consists of used EV batteries that have reached the end of their lives or been recalled, while grid storage and micromobility batteries (such as e-bike batteries) account for 14 percent. The remaining third of the material available for processing is portable batteries, like those in consumer electronics.
In the future, as more EVs reach the end of their lives, an even greater fraction of battery scrap will come from the clean energy sector. If a large number of planned battery and EV manufacturing facilities are canceled in the coming years — due to a repeal of Inflation Reduction Act tax incentives, a loss of federal funding, rising project costs, or perhaps all three — the recycling industry may have to scale back its ambitions, too.
The budget bill that passed the House in May would undo a number of key Inflation Reduction Act provisions. Some clean energy tax credits, like the consumer EV tax credit, would be eliminated at the end of this year. The legislation was kinder to the 45X manufacturing credit, scheduling it to end in 2031 rather than the current phase-out date of 2032. But the bill could face significant changes in the Senate before heading to Trump's desk, possibly by July 4.
Despite uncertainty over the fate of IRA tax credits, Trump's actions have already put a damper on U.S. manufacturing: Since January, firms have abandoned or delayed plans for $14 billion worth of U.S. clean energy projects, according to the clean tech advocacy group E2.
While the battery recyclers Grist spoke with are putting on a brave face under Trump's second term, some are also looking to hedge their bets. As Ascend Elements ramps up lithium production in Georgia, it has lined up at least one buyer outside the battery supply chain. The battery industry accounts for nearly 90 percent of lithium demand globally, but the metal is also used in various industrial applications, including ceramics and glass making.
Integrating into the EV battery supply chain remains 'the ultimate goal,' Lin told Grist. 'But we are looking at other plans to ensure … the economic viability of the operation continues.'
This story was originally published by Grist with the headline Trump's second term is creating 'a limbo moment' for US battery recyclers on Jun 10, 2025.