Summary of actions
New actions
- Building Future Battery Capabilities
- Future Made in Australia – Innovation Fund
Existing actions
- National Electric Vehicle Strategy
- Lithium-ion Batteries and Consumer Product Safety Report
- Sustainable Finance Strategy
Linked initiatives
- Guarantee of Origin Scheme
- Standards Australia
- National Waste Policy Action Plan
- Atlas of Australian Mine Waste
Opportunities
Global markets and consumers are increasingly concerned about the ethics and origins of their products (PWC 2021). Australia is in prime position to develop and demonstrate high ESG standards on batteries. Across Australia, ESG reporting is a core business practice. Eighty‑seven per cent of the nation’s top 200 companies now publish substantive ESG information (PWC 2021). Australia’s battery industry can use these practices and regulatory frameworks to capture a greater share of the battery market.
ESG credentials are becoming vital to gain access to certain battery markets. For example, the EU is creating a ‘Battery Passport’ that certifies compliance with legal and societal emission standards for lithium-ion batteries. In June 2023, the EU Parliament also mandated traceability requirements for certain batteries. These laws require a carbon footprint declaration and label for batteries. This applies to EVs, electric scooters, bikes and other modes of transport using rechargeable batteries with a capacity over 2 kilowatt hours (kWh).
Programs such as these present a chance for Australia to capitalise on our existing strengths. This includes high potential for low-cost renewable energy in processing, effective engagement with First Nations communities, and safe and transparent labour practices in the supply chains. This gives international partners confidence that Australia’s batteries are made ethically.
Creating a circular economy
Batteries are vital for Australia’s renewable energy transition. However, the transition will result in waste stock of batteries and their components. Effectively recycling batteries will help Australia avoid environmental impacts and supply chain disruptions and boost the economy.
Australia is already a battery recycler and can seize the opportunity of a circular battery economy. In 2021, Australia recycled 99% of lead acid batteries, compared to just 10% of lithium-ion batteries (CSIRO 2022). Lithium-ion battery recycling in Australia faces limitations because of a lack of feedstock, safety concerns and costs. We send most lithium-ion batteries overseas for processing, where they can still end up in landfill (McKell 2022).
By 2035, Australia could be generating 137,000 tonnes of lithium battery waste annually (McKell 2022). As a result, a domestic recycling industry for lithium batteries could be worth $603 million to $3.1 billion in just over a decade (FBICRC 2021b). Recycling and reusing batteries presents an opportunity to expand Australia’s battery industry.
EV batteries need replacing when they reach 70–80% of original capacity and no longer meet performance standards. This presents an opportunity to repurpose these batteries for other applications, most notably in stationary storage. Stationary storage powered by used EV batteries could exceed 200 GWh worldwide by 2030 (McKinsey 2019). EV batteries are being repurposed for stationary storage around the world, including to power manufacturing plants and stadiums.
Once batteries have been safely sorted and discharged, there are various methods to recover the raw minerals used in them. How to best recover these materials depends on the type of battery being recycled and the materials being recovered. Using recycled minerals and materials can reduce the emissions generated from mining and extracting resources. European estimates indicate that recycling battery materials could provide 45–77% of supply by 2050 if technologies are mature and commercialised (Gregoir et al. 2022).
Victorian company Envirostream is a recycling facility in Australia with the capability to collect, sort and shred lithium-ion batteries (Envirostream 2024). The active components found in lithium-ion batteries (graphite, cobalt, nickel, and lithium) are used to produce a ‘mixed metal dust’. This product goes into manufacturing cathode materials for new lithium-ion batteries outside Australia. Envirostream also recovers other components for recycling from battery packs.
Recycling can create market access for exports. The EU have recently mandated stringent targets for battery collection, recycling and resource recovery. This includes minimum levels of recycled content in new batteries.
What we are doing
Australian ESG standards are world leading. Strong ESG credentials are vital for securing social license for new technologies, like batteries. They also support broader policy aims. For example, Australia is a foundation member of the Sustainable Critical Minerals Alliance. Through this Alliance, Australia is building sustainable and socially responsible mining practices. This includes supporting local First Nations communities, restoring ecosystems and creating a circular economy (King 2022). In the 2024–25 Budget, the Australian Government provided $5.8 million for a critical minerals trade enhancement initiative. It will accelerate efforts, building off work to date with our international counterparts, to realise the premium of sustainably producing critical minerals to high ESG standards in global markets.
Australian ESG credentials put local businesses in a strong position to maximise the value of locally made batteries. Australia’s battery industry can use this strength further by certifying their ESG practices through globally recognised schemes.
Batteries with ethical supply chains and practices will have access to premium markets where consumers may pay above market price. Australia can produce batteries that meet the highest global standards, giving Australia’s battery industry an advantage over many nations. This will also mean Australian batteries limit environmental risks, positively impact communities and have access to diverse global markets.
The National Waste Policy Action Plan outlines how Australia can adopt better waste management and circular economy practices. Under this plan, Australia has set the goal of developing a common approach to restrict the disposal of lithium-ion batteries and e-waste materials in landfill by 2024. This will ensure we minimise environmental impacts and achieve the best economic outcome from Australian batteries.
Making safer batteries
While lithium-ion batteries are generally safe, sometimes they can present hazards. These can be because of defects from poor manufacturing, overcharging from poor battery management systems and software, or environmental or external factors. In these circumstances, lithium-ion batteries can catch fire, explode or release a vapour cloud which can cause property damage, serious injury or death.
All types of batteries present safety risks. However, failure of lithium-ion batteries can be particularly catastrophic because of their flammable and volatile liquid electrolyte solution. The Australian Competition and Consumer Commission (ACCC) published the Lithium-ion Batteries and Consumer Product Safety Report in October 2023. This report recommends ways to improve the safety of lithium-ion batteries.
The state and territory electrical safety regulators are primarily responsible for regulating electrical consumer products under state and territory laws. While the existing framework has protected consumers for many years, the states and territories will need to work together to create a modern, fit-for-purpose safety framework. This will improve battery safety for consumers and businesses.
Through the Department of Finance and the ACCC, we are exploring options with the states and territories for aligning the existing regulatory framework to electrical consumer products such as lithium-ion batteries. A better safety framework will help build consumer confidence in the safety of lithium-ion batteries and improve uptake.
Existing actions
- Through the NEVS, the government has committed to carry out research to inform a recycling, reuse and stewardship initiatives for EV and other large format batteries. This will reduce waste, grow jobs and support emerging Australian industries.
- The Lithium-ion Battery and Consumer Product Safety Report by the ACCC recommends a multifaceted approach to address the risks and hazards associated with lithium-ion batteries. These recommendations include actions that the ACCC will carry out, as well as recommendations that others may take up.
- The Sustainable Finance Strategy, in development by the Department of the Treasury, will support Australia’s pathway to net zero by providing an ambitious and comprehensive framework for reducing barriers to investment into sustainable activities.
Linked initiatives
- Beginning with hydrogen, the government is creating a Guarantee of Origin scheme to certify renewable energy use and track and verify emissions from clean energy products (opt-in scheme).
- The government is continuing to engage with both Standards Australia and relevant international bodies on standards and conformance.
- The National Waste Policy Action Plan establishes a product stewardship investment fund to accelerate recycling schemes for batteries.
- Geoscience Australia’s Atlas of Australian Mine Waste is an interactive online mapping tool that provides governments, industry and the community with accurate information about Australian mine tailings, waste rock, smelter residues and related mine waste materials.
What we will do
As an evolving sector, the government supporting the creation of battery recycling facilities across Australia. Battery recycling remains an active area of basic and applied research in Australia, including through the ARC Training Centre for Battery Recycling. Through the CRC-P grants, the government has also supported the testing of innovative approaches to battery and solar recycling.
These actions will invest in existing strengths and extract greater value from Australian-made and consumed batteries. This will give consumers and markets confidence that Australian batteries will be ethical, safe and sustainable. Strong ESG measures will also help achieve other important goals, such as supporting First Nations communities and ethical labour practices. Capitalising on strengths and opportunities in sustainability, recycling and standards will make Australian-made batteries competitive on the world stage (FBICRC 2022).
New actions
- The $1.7 billion Future Made in Australia Innovation Fund will fund the deployment of innovative technologies relating to priority industries. Potential areas for innovation can include the commercialisation of technologies to extract valuable battery material from waste, or enable battery redeployment.
- The $20.3 million Building Future Battery Capabilities will include the mapping of battery value chains, support the development of nationally consistent guidelines and standards and further strengthen our ESG credentials.
The government will provide $23.0 million in 2024–25 to continue delivery of the government’s circular economy policy, program and legislative functions.