Europe’s waste creates value elsewhere – two thirds of the continent’s black mass is leaving the EU

Black mass exports: A Transport & Environment (T&E) briefing published on 30 July 2026 finds that at least two thirds of the black mass generated in Europe – the intermediate product that carries the recoverable value of end-of-life batteries – leaves the Union, mostly bound for South Korea and Southeast Asia. The message is twofold: Europe lacks not only material recovery capacity, but also a domestic market for recovered materials. The forthcoming Circular Economy Act (CEA) is the last realistic instrument to address both gaps at once.

Three numbers worth remembering

Black mass leakage, in numbers

Analysis commissioned by T&E traced roughly 10 kt of black mass equivalent leaving the EU by screening waste codes and product customs (HS) codes. Europe generates around 40 kt of tradeable black mass annually (down from a gross ~50 kt once storage, captive intra-group flows and transit are deducted), against a declared domestic processing capacity of just 13 kt. From that balance the analysis infers that a further ~17 kt leaves the EU hidden under other customs codes.

In total, at least 27 kt of black mass leaves the EU every year – equivalent to the recoverable battery material from roughly 225,000 electric vehicles, and worth around EUR 150 million. On a unit basis that is about EUR 5,500 per tonne, a useful benchmark for operators assessing their own material streams.

The trajectory is steep. If the export share holds, T&E projects at least 200 kt of black mass leaving the EU in 2030 – some EUR 1.1 billion of material at today’s prices, equivalent to the battery material of roughly 1.7 million cars.

Why doesn’t this show up in the statistics? Because black mass has no clear, standalone EU definition. It is classified as waste in some jurisdictions and, after minimal processing, as a product in others, and it frequently leaves the Union under broader chemical codes. T&E is explicit that 27 kt is a floor: other estimates put the share leaving the EU as high as 80%.

Where it goes – and why

The trade screening identifies South Korea (around 3.4 kt/yr of black mass) and Southeast Asia (around 3.6 kt of black mass plus 4.5 kt of whole waste batteries) as the main destinations, followed by North America. China and Japan barely register in the screened flows – telling in itself: Chinese capacity does not run on European feedstock.

The Korean pull has a prosaic explanation. South Korean recycling capacity is running at a 56% utilisation rate, leaving roughly 40 kt of capacity idle. Idle capacity produces aggressive bidding. Korean operators process mostly imported black mass rather than domestically generated material, meaning they are structurally dependent on global – including European – sourcing. This is not a price war Europe can win on cost alone; it requires a regulatory instrument.

The real fault line: shredding versus hydrometallurgy

The briefing’s most important technical distinction is that battery recycling is not one activity but two: (1) collection, discharge, dismantling and shredding – i.e. the production of black mass; and (2) hydrometallurgical refining – i.e. the recovery of lithium, nickel, cobalt and manganese.

Europe is reasonably strong in the first and effectively absent from the second. Earlier T&E work found that Asian investment in European recycling clusters in the pre-processing stage – the operating model being to make black mass in Europe and recover the metals at home. The direction of value capture is already settled.

The capacity data confirm it. Of roughly 4,050 kt/yr of global material recovery capacity, China holds 94%, South Korea 146 kt, India 50 kt – and Europe 30 kt. Even that European figure is misleading: the larger part (~17 kt) is Glencore Nikkelverk in Norway, which recovers metals from matte pre-processed outside the EU. Actual EU black mass intake is around 13 kt.

Capacity at risk: 93 projects, 39 operational

T&E’s project tracker follows 93 recycling projects across Europe, of which 39 are already operational. If every project came online, Europe would have capacity to process around 1,320 kt of battery materials by 2030 – but over half of that capacity is classified as at risk (medium or high). Given the wave of cancellations across the European battery value chain over the past two years, this is not surprising, but it is sobering: the gap between announced and delivered capacity is the weak point of the entire policy debate.

The demand-side gap – the briefing’s strongest argument

The standard reflex, in Brussels as in national capitals, is to frame the problem as a feedstock shortage. T&E goes further: there is no buyer in Europe for the recovered material.

• There is essentially no European demand for battery-grade lithium carbonate, and only marginal demand for lithium hydroxide (roughly 15–20 kt LCE/yr), against China’s ~760 kt LCE/yr and South Korea’s ~140 kt.
• There is no domestic European buyer for recovered nickel and cobalt sulphates, because sulphate demand is driven by precursor cathode active material (pCAM) production. European pCAM capacity is close to zero, against China’s ~3,000 kt/yr and South Korea’s ~380 kt/yr. (Note that LFP chemistries require no sulphate at all, which is why the chemistry mix matters as much as the volume.)

This is the briefing’s key message for the industry: building a recycling plant is pointless without an offtaker. Without a midstream pCAM/CAM sector, a European recycler must export its own output – at which point exporting the black mass directly is simply the cheaper option.

The cost gap: 25% or 56%?

T&E reports that European recyclers face 60% higher electricity costs, 35% higher labour costs and up to five times higher utility costs than Chinese competitors. For NMC battery recycling – disassembly plus hydrometallurgy – this translates into a 25% OPEX gap.

It is worth reading the figures carefully, though. The briefing’s chart covers prismatic LFP cell packs at facilities with automated disassembly and hydrometallurgy, and shows a 56% cost gap (roughly USD 7 vs 4.5 per kWh). These are not contradictory numbers but two different chemistries and plant configurations – a distinction easily lost in public communication. The LFP gap is wider because the recoverable metal value is lower, so energy and labour costs weigh proportionally more heavily.

What T&E asks of the Circular Economy Act – eight recommendations

1. Black mass should only be exported outside the EU if treated by EU-owned facilities abroad or demonstrably benefiting the EU battery value chain – backed by enforcement, a clear definition, and export restrictions (a ban or fees).
2. Prevent aluminium (and steel) scrap leakage through export bans or levied export fees.
3. Keep end-of-life vehicles in Europe: a Euro 4 limit on vehicles exported to third countries from 2028, moving to a 5-year age limit from 2035.
4. Create a genuine single EU market for waste: amend the WSR so that CRM-containing waste streams (as listed in Commission Implementing Regulation (EU) 2026/1116 under the CRMA) are exempt from prior written notification and consent, and subject to the simplified information procedure when destined for a pre-consented EU facility.
5. Harmonised, strict end-of-waste (EoW) criteria for CRM-containing waste, with implementing guidance for Member States.
6. A union content requirement for recycled content: a targeted amendment to the delegated act on recycled content under Article 8 of the EU Batteries Regulation (2023/1542).
7. Extend local content rules under the Industrial Accelerator Act to pCAM, with incentives for AAM and CRMs added as a third step from 2032.
8. Capex and opex support for recycling projects (Innovation Fund, EIB, the future European Competitiveness Fund, national state aid), prioritising hydrometallurgical recovery of CRMs.

The Hungarian reading: what follows locally?

The briefing does not name Hungary, but given the country’s industrial structure almost every finding applies directly.

Hungary is today one of Europe’s most significant sources of black mass. The volume of genuinely end-of-life EV batteries in Europe remains small – the bulk of black mass comes from production scrap. With cell manufacturing concentrated in Debrecen, Iváncsa, Göd and Komárom, the scrap and reject material arising at Hungarian plants represents a feedstock base that is meaningful on a European scale. Put differently: of the 27 kt leaving the EU, a non-trivial share originates here.

But the Hungarian value chain sits on the wrong side of the divide T&E describes. Pre-treatment, dismantling and shredding capacity has been built; hydrometallurgical refining has not. This is precisely the pattern the briefing criticises – low value-added pre-processing at home, metal recovery elsewhere. If the CEA does introduce black mass export restrictions, the effect on Hungarian operators will be double-edged: a narrowing sales market and falling prices for pre-processors in the short term, but in the medium term exactly the commercial basis a domestic refining investment currently lacks – provided the funding architecture (recommendation 8) lines up behind it.

Union content: the risk and the opportunity. Recycled content obligations under Article 8 of Regulation (EU) 2023/1542 can today be met with secondary material recycled anywhere in the world. A union content requirement would immediately rewrite the sourcing strategy of Hungary’s cell plants and create demand for domestic recovery. It is the only recommendation on the list that addresses the demand side – which makes it the most consequential one for Hungarian industrial policy.

Waste shipment and EoW. Simplifying intra-EU shipments (recommendation 4) is a direct administrative saving for Hungarian pre-processors, since much of the black mass and aluminium scrap generated here is destined for EU facilities anyway. Harmonised EoW criteria (recommendation 5) cut both ways: divergent national EoW practice for aluminium can currently function as a competitive advantage, and harmonisation removes that regulatory arbitrage – along with the abusive exports it enables.

End-of-life vehicles. The roughly 3.5 million European vehicles that go missing each year is a familiar problem in Hungary too: vehicles that never reach authorised treatment facilities represent a material loss as much as an environmental one. The proposed Euro 4 export threshold from 2028, followed by a 5-year age limit from 2035, would substantially reshape the relationship between Hungary’s used-car export trade and its dismantling sector.

Methodological caveats worth reading alongside

The argument is strong, but a few points warrant caution:

• The 27 kt is derived, not measured. The 10 kt of traced exports is supplemented by a capacity-based residual calculation. The “13 kt processed in Europe” is declared intake capacity, not verified throughput – if real utilisation is lower, leakage is larger; if generation falls short of 40 kt, it is smaller.
• “60%” and “two thirds” describe the same conclusion at different levels of rounding; the summary and Section 1.1 of the briefing use different figures for the same finding.
• T&E is an interested party with an openly stated policy objective: export restrictions and union content rules. The counter-argument the briefing does not engage with is that an export ban would depress European black mass prices, undermining the economics of the collection and pre-processing chain in the very period before domestic refining demand materialises. That transition window is the principal risk for Hungarian operators, and the briefing offers no compensating mechanism for it.

Conclusion

T&E diagnoses accurately why capacity-building alone will not fix European recycling. Europe today exports raw material and imports processed material – not only in primary mining, but in secondary raw materials as well. Restricting black mass exports helps on the supply side, but is worthless in isolation if no European pCAM and cathode industry exists to buy the recovered nickel and cobalt sulphates and lithium salts. The Circular Economy Act must therefore close the export tap and open domestic demand simultaneously – and Hungary is exposed on both sides of that equation: as a source of the material, and as a potential site for the investment.

Source:

Transport & Environment: Europe’s waste creates value elsewhere – How the Circular Economy Act can provide the tools to help scale Europe’s recycling industry, in order to secure access to critical minerals. Briefing, 30 July 2026. Lead author: Emily Ritchey; lead analyst: Loïs Miraux. Data sources: Circular Energy Storage, UN Comtrade, BloombergNEF LiRyc model, T&E analysis.