Report: Trade Rules for a Circular Economy

Being able to buy and sell used and recycled batteries is vital to the green transition. Batteries are needed for vehicles and for solar parks. In this report, we have examined the challenges posed by regulations on the export and import of used batteries, which are often classified as waste. We also propose how trade policy could facilitate international trade in used batteries.

Isaac Ouro-Nimini, trade policy adviser, what is this report about?

In the future, cars, trucks, and other vehicles will almost solely be powered by electricity instead of fossil fuels. Demand for lithium-ion batteries and what are termed critical metals, which the batteries contain, is expected to rise sharply. Therefore, it will be important to be able to make use of used batteries to meet this increasing demand. Today, however, trade in used batteries is restricted, and it is difficult for companies and countries to export and import used batteries.

What are the limitations involved?

Used batteries are classified as waste and the rules for trading in waste contain stringent restrictions to protect the environment. Many companies and industry organisations that we have interviewed tell us, for example, that they need to get to grips with several different complicated regulations to be able to export or import batteries at all. The process is both complicated and time consuming.

What difference would regulatory reliefs make?

For example, if a company wants to build a battery recycling facility, it will mean a big investment. If trade rules can make it easier for the company to obtain better access to used batteries, the company will be able to make a more rapid return to profitability after such an investment, increasing the likelihood that we will see more recycling facilities. Trade also enables us to spread new methods and techniques to other countries, improving the efficiency of both recycling and reuse.

What do the EU and the WTO need to do?

In this report we show how the rules for trade in waste and transport of waste can be modernised to facilitate trade in used goods. For example, a few or several countries could agree on how used batteries should be classified, which would avoid the companies having to deal with numerous different trade regulations. But the most effective approach would be general international agreements.

But the reasons behind the restrictions on used batteries are the environmental aspects – shouldn’t environmental protection take priority over trade?

Absolutely, we must protect the environmental and climate aspects. Decision-makers need different options to reduce greenhouse gas emissions, so that we can protect the climate, protect the environment, and meet the goals of the Paris Agreement. We must not lower environmental protection. On the other hand, some older rules are solely focused on environmental protection and do not include trade aspects at all. So, some rules could be modified and modernised so that trade can play its part in the transition to a more sustainable, circular economy.