Navigating the Changing Landscape of Lithium-Ion Battery Recycling Logistics

The lithium-ion battery industry is at a crossroads. As demand for electrification grows, so does the urgency to determine how end-of-life batteries should be transported, handled, and recycled. At the heart of the debate lies a fundamental question: How do we balance safety with sustainability in the logistics of recycling lithium-ion batteries?

The Safety Priority

From a pure safety perspective, there’s a strong case for bumping up packaging requirements when shipping used or damaged lithium-ion batteries to recycling or disposal facilities. Under the current regulatory system, new batteries shipped for distribution must meet strict UN performance packaging standards. These standards ensure packaging is tested to withstand drop, vibration, and thermal hazards.

But here’s the distinction: batteries being shipped for recycling or disposal are not currently required to use this same level of UN-certified packaging. That means the very batteries most likely to have been stressed, abused, or damaged—and therefore at the highest risk of thermal events—may be moving under lighter packaging protections.

The Circular Economy Priority

On the other side of the debate is the industry’s push toward a circular battery economy—where batteries are given new life before being fully recycled. Second-life applications, such as stationary energy storage, are gaining traction. Even when batteries are shredded, the recovery of critical minerals like lithium, cobalt, and nickel is vital to supporting supply chains for electric vehicles and clean energy.

This is where packaging flexibility becomes valuable in more ways than one. Looser rules make it easier and more cost-effective to move batteries between collection points, recyclers, and reuse facilities. But they also reduce a different kind of risk: when packaging requirements are too strict, some companies may choose to store used batteries on-site longer rather than ship them off immediately. Extended storage of stressed or damaged batteries can actually increase the chance of a thermal runaway event. By lowering the barrier to shipment, looser requirements can help get these risky batteries moving to safer facilities more quickly.

The Industry Debate

This tension—stricter packaging for safety vs. looser packaging to enable circularity and proactive removal of risk from facilities—has become a central topic in recent years. The industry must grapple with three competing truths:

• Used and abused batteries are inherently riskier to transport.
• Current rules allow looser packaging to encourage recycling and reuse.
• Looser rules may also improve safety by ensuring batteries are shipped out quickly instead of being stockpiled.

Striking the Balance

There is no easy answer. The path forward will require regulators, recyclers, manufacturers, and logistics providers to collaborate on solutions that acknowledge both realities. Too much rigidity could stifle recycling and reuse. Too much leniency could heighten risks during transport.

Ultimately, the future of lithium-ion recycling logistics depends on policies and packaging innovations that serve both priorities: minimizing the risk of thermal events in transit while maximizing opportunities for reuse and material recovery in a circular economy.