Stabilizing the Supply Chain of the Used Electric Vehicle Battery Industry

The government is establishing key systems such as a full-cycle battery history management system and a recycled material certification system to foster the post-use battery industry. With the increase in electric vehicle usage, it is expected that more than 100,000 used batteries will be discharged in the future. This measure is to respond to trade regulations from entities like the European Union (EU) that are strengthening battery recycling policies.

Government Sejong Government Complex Ministry of Land, Infrastructure and Transport.
Photo by Yonhap News

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On the morning of the 10th, the Ministry of Land, Infrastructure and Transport announced the "Plan to Establish Laws, Systems, and Infrastructure for Fostering the Post-Use Battery Industry" at the Economic Ministers' Meeting.

The post-use battery industry is gradually growing in scale. Around 2030, it is expected that more than 100,000 used batteries will be discharged domestically. According to the Ministry of Land, Infrastructure and Transport, this is due to the significant increase in the cumulative number of electric vehicles in Korea, from 5,712 units in 2015 to 591,597 units as of last May.

Recently, the EU, the United States, and others have been actively engaging in the post-use battery industry, but Korea’s related laws and systems remain insufficient. Foreign trade regulations such as the EU Battery Directive and the U.S. Inflation Reduction Act (IRA) are being strengthened. However, since the obligation for local governments to accept electric vehicle batteries was abolished in 2021, managing used batteries in Korea has become difficult. The EU Battery Directive includes mandatory recycling of used batteries, and the U.S. IRA includes provisions such as tax credits for using recycled materials.

In this context, the government is promoting legislation tentatively titled the "Act on Fostering the Post-Use Battery Industry and Supporting Supply Chain Stabilization." This bill includes standards for management systems such as a full-cycle battery history management system, recycled material certification, and pre-removal performance evaluation of electric vehicle batteries. The Ministry of Trade, Industry and Energy will lead the legislation, with the Ministry of Economy and Finance, the Ministry of Environment, and the Ministry of Land, Infrastructure and Transport jointly managing the law.

The full-cycle battery history management system is a system that allows sharing of full-cycle history information?from battery manufacturing to the transaction, distribution, remanufacturing, and recycling of used batteries?between the private sector and others. Through this, battery supply chain management, transaction activation, and safety management can be achieved. The government plans to create an integrated portal for applying and sharing such history information by 2027, proceeding with decisions on system registration information, sharing scope, and building individual systems.

Individual System Operation Plan by Battery Lifecycle Flow.
[Source: Ministry of Land, Infrastructure and Transport]

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The recycled material certification system is a system that verifies how much valuable metals such as lithium, nickel, and cobalt extracted from used batteries are used in the manufacture of new batteries. This will enable proactive response to global trade regulations like the EU’s mandatory use of recycled battery materials, which will be enforced from 2031. The Ministry of Environment will certify valuable metals produced through recycling by recycling companies as recycled materials, and the Ministry of Trade, Industry and Energy will verify the usage ratio of recycled materials in new batteries.

The government will classify battery grades through pre-removal performance evaluation of electric vehicle batteries, even if the battery is fully used but not yet removed. The purpose is to support the maximum industrial utilization of used batteries that can be remanufactured or reused. The Ministry of Land, Infrastructure and Transport plans to prepare specific grading criteria based on research and development results for performance evaluation technology and equipment dissemination.

Additionally, a policy committee will be established to deliberate and coordinate major issues requiring inter-ministerial cooperation. Detailed operational matters will be regulated through amendments to individual laws under the jurisdiction of related ministries, such as the "Eco-friendly Industry Act," the "Resource Circulation Act for Electronic Products," and the "Automobile Management Act," along with joint notifications.

Meanwhile, the government will establish a distribution system that supports the safety and fairness of the post-use battery industry. To prevent unfair practices such as price manipulation and collusion in the post-use battery market, a "Fair Trade Guideline" will be created within the second half of the year. A business registration system will be introduced to secure the expertise of related operators. Furthermore, safety management systems will be legislated, including safety inspections before and after distribution of used batteries, and detailed transportation and storage standards ensuring safety during the transaction and distribution process of used batteries will be prepared.

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