Downstream: End-of-life and recycling performance

Lithium's downstream system is one of the least developed of the materials examined in this report, and the model suggests why. Chart 19 below shows that the collection rate starts from a low base, at only 20% in 2020. While it improves substantially across the projection period, reaching 56% by 2050, it remains below the levels achieved by more established material systems today. The absolute volume of uncollected or disposed of lithium also remains significant, somewhat plateauing from around 2040 rather than declining. This means the rapid growth of end-of-life material keeps total losses substantial in absolute terms, even as the collection rate itself improves.

A defining feature of lithium's end-of-life system is the prevalence of downcycling. For most of the projection period, downcycled lithium exceeds recycled lithium, with functional recycling only overtaking downcycling toward the end of the period. This is partially reflected in the practical challenges of recovering lithium from batteries. Historically, recycling processes have prioritised cobalt, nickel, and copper because these metals carry greater economic value, while lithium has often been lost into lower-value output streams due to its more challenging separation characteristics.⁸¹ This is particularly evident in current recycling pathways. Pyrometallurgical processes, which remain the industrial default, recover lithium poorly, while hydrometallurgical and direct-recycling approaches can achieve better lithium recovery but are less widely implemented.⁸²

Chart 20 illustrates the relatively young nature of lithium's circular system. New scrap dominates secondary supply throughout the 2020s, reflecting the rapid expansion of battery production rather than a mature recovery system. Old scrap from retired products remains limited until the 2030s, when it begins to grow quickly and eventually becomes the dominant secondary source, with around 120 thousand tonnes of old scrap by the end of the projection period, compared to 20 thousand tonnes of new scrap.

However, a significant finding is what happens after secondary material is generated. As shown in the lithium Supply-demand balance and resilience section, the model indicates that throughout much of the 2020s, secondary lithium is generated but little of it re-enters as supply, revealing a gap between material becoming available and material actually being used. This pattern begins to shift after the 2020s, as an increasingly large share of secondary material is incorporated into refined supply.

The indicators presented in Chart 21 below capture lithium’s current position clearly. Both the Recycling Input Rate and the End-of-life Recycling Rate remain negligible through 2020, both sitting below 1%, before increasing substantially across the projection period, with both exceeding 20% by the end of the period. This represents the fastest improvement in circularity among the materials examined here, but it begins from a very low base and occurs too late to fully address the supply constraint identified earlier in the system.

Lithium's circularity problem is therefore not that recovery is impossible. Rather, it reflects the combination of a young and rapidly expanding stock, historically weak economic incentives for recovery, and a timing mismatch between when recyclable material becomes available and when additional supply is most needed.⁸³