On 9 October 2025, China announced new export controls on cathodes, anodes, and lithium-ion batteries, effective 8 November 2025.
In this conversation:
Felix Wagner, CEO, Circunomics
Nils Steinbrecher, Senior Director Sales, Key Account Management and Marketing, Cylib
How can Europe build battery independence?
By strengthening European sovereignty in the battery supply chain through domestic recycling and material processing, enforcing and leveraging the Critical Raw Materials Act, implementing digital battery passports to increase transparency and reduce bureaucracy, adopting local-content strategies to keep materials and manufacturing in Europe, and fostering broad industry collaboration to build a resilient, self-reliant European battery ecosystem.
Europe faces China-driven battery material export controls that threaten European independence. The dialogue suggests boosting sovereignty through domestic recycling, tighter regulation (CRMA), digitalized processes (battery passport), and regional collaboration to build a self-sufficient European battery ecosystem despite geopolitical pressures.
- China exports tight controls on high-energy batteries and materials
- Europe needs increased sovereignty in automotive and battery supply chains
- Recycling and domestic material processing are critical for independence
HOST: Welcome, everyone, and thanks for tuning in. China recently announced new limits on key battery materials — a move already shaking up global supply chains. For Europe, there is a big question: how to stay independent and build real circular strength?
To dig into that, I'm here with Felix Wagner from Circunomics and Nils Steinbrecher from Cylib — two people working hands-on at the intersection of battery data and recycling.
Let's jump in. Felix, what exactly changed with China's latest export controls, and why does it matter so much for Europe?
FELIX: Great question. As we all know, China is leading the development of batteries, and this new regulation is about protecting that market advantage. They currently build the best-performing batteries in the world. Not just the batteries themselves — they also control the minerals needed to build them, and they build the best machinery for battery manufacturing plants.
What they want to control specifically are all batteries with an energy density above 300 Wh/kg. Everything above that threshold requires a special export license — otherwise you can't get those batteries out of China to Germany or Europe. The same applies to cathode active material, anode active material, and the machinery needed to build batteries here in Europe. They are tackling every area where they currently lead, and they want to stay in control. This is quite challenging for us if we want to become independent. I think Nils can speak more to why this is particularly challenging on the materials side.
HOST: Let's move to the recycler's point of view. Nils, how do these restrictions show up in your world?
NILS: This is a big topic, and it's just starting to materialize. At the end of the day, the core question is: who calls the shots on the automotive industry? We grew up here in Germany — in Europe — believing that Europeans are the ones who call the shots on automotive. The difficult part is that this is changing, and we may have ignored it for too long. European sovereignty over the automotive industry is at risk. If we don't change something, we will no longer have any say in that industry.
From a recycler's perspective, the worst case is that the EV market in Europe slows down further or collapses, the battery supply chain doesn't build up here, and recyclers simply don't have enough to do. If the industry isn't in Europe, there's no feedstock.
The best case is that the market still exists — the Chinese still want to sell their cars here, so they have an incentive to support market growth. In that scenario, materials may become more expensive. For recyclers, material prices are everything. If lithium, graphite, cobalt, and nickel prices are very low, the business case for recyclers is difficult. If prices are high, that's actually a positive for recyclers.
Nevertheless, as long as the battery supply chain is not successfully building up in Europe, even high prices don't matter — because we don't have anyone to sell the recovered materials to. We're still in a discovery phase, figuring out where this leads. And as Felix mentioned, we are also dependent on equipment from China as a recycler. We're at a very challenging junction right now in Europe. We grew up in a globalization where everyone does what they do best — and now we're going back to a situation where everyone has to look at what they can do on their own to survive. It's a very challenging time.
HOST: You've already touched on several aspects, but if you had to sum up the biggest weak spots keeping Europe from closing this loop — what would those be?
FELIX: The biggest weak spot is that no matter where you look in the battery industry, it's all dominated by China right now. We were simply too late to this entire game. China has a five, six, seven-year head start at this point — and they can see that Europe and the US are trying to catch up and accelerate. It's not just one area where Europe is behind; it's the entire ecosystem.
As Nils said, if there's no supply of end-of-life batteries, what's the business case for a recycler? We see this at Circunomics — we're a trading hub and we see a lot of feedstock, production scrap, and end-of-life batteries going east. That's a real problem for Europe.
That said, one reason for hope is the battery regulation — it's helping raise the bar and putting export controls in place so these materials don't flow back to China. That's becoming increasingly strict, and we'll touch on more of that later.
HOST: There has to be a positive angle here. How can Europe practically tighten the loop in the next two years?
NILS: Let me start from a different angle. We both have children, Felix. I have three. And I hope to be a grandfather someday. Europe needs to be there — it needs to be a strong region with jobs and a future.
That calls for sovereignty — not only in industry but also on the defense side. Looking at how wars are fought today, just look at Ukraine and Russia — it's mainly drones. Europe has not been well-positioned in that space. And that raises the question: what about our own drones? What about our own batteries? The defense sector is coming in very strongly here.
That's why it's not only the battery regulation — it's also the Critical Raw Materials Act by the European Union, which is there to ensure that materials in Europe are recycled and usable. Our materials from the recycling industry are not only wanted in the battery sector — they're wanted in defense and other industries too. This creates even more pressure on Europe to be sovereign and keep materials here.
The worst thing we're doing right now is exporting our waste. The majority of battery waste is leaving Europe. We then buy expensive materials controlled by others. We need to do more to be a strong European continent.
One thing that would really help — and they're starting to do this — is reducing bureaucracy. It's good to have sustainability standards in Europe, and they do protect us. But if you want to ship a single battery from Malta to Denmark, cross four borders, submit four notifications, wait half a year or longer, and sign everything in black ink and blue ink — that's not sustainable either.
That brings us to digitalization, which is a major opportunity from a recycling perspective. We need much smoother digital processes to ship batteries, handle battery waste, and manage the products coming out of the battery — first the black mass, then mixtures like MHP or sulfates. Getting those properly registered for waste and packaging compliance is just one example of where we could do much more to be competitive against China and the US, which are each just one country.
Sometimes I think we've already built the Rolls-Royce of legislation but haven't even built a small trolley for the actual industry. Let's build the industry first — and then tighten the regulation around it.
FELIX: You touched on something that is really the core of Circunomics' mission: the digitization of processes. Where it all starts is transparency across the entire value chain — and that's where the Battery Passport comes into play. I think this will already help all players along the value chain reduce process costs and make operations more efficient. That's also one of the reasons we've spent the last two and a half years building a technical solution for the Battery Passport, which we are now happy to offer as a service to anyone bringing batteries to market.
But it's also a mindset issue — not just a digital one. Europe really needs to understand that the time to act is now. Not just industry, but politicians and everyone working in this space. In automotive engineering, we were simply the best in the world — and that changed quickly. We now need to act faster, with less bureaucratic friction, so we can truly compete. They are not waiting for us.
We need to collaborate. Circular economy is about collaboration. No single player can solve all the issues along the value chain. We all need to work together. This is a wake-up call for Europe — and I think it's better to have it now than too late. We were first hit by the Russia-Ukraine war and lost major supply chains — even energy supply chains. Now we have challenges with US tariffs. On digitalization, at least, no one can stop us. It's only us holding ourselves back — complaining about data protection. There's no time to wait.
A good example is the FedEx model — a truly digitalized company operating across many areas, including digital battery passports. That should have been the standard long ago. The Battery Passport deadline is 2027 — not far from now — and we need to move. What we see instead is automotive summits in the German government trying to turn back the clock rather than moving forward. That's one of the biggest risks. The industry itself has to do its part and provide the tools.
HOST: As we wrap up — looking ahead at Battery Passport deadlines, EPR enforcement, and the broader picture — what should OEMs and policymakers focus on right now?
FELIX: I would say they don't have to do that much. They should enforce the laws we already have. That should be priority number one. From my perspective, we don't need more regulation. We also operate in markets with far less regulation, like the US. We just returned from the Battery Show, and I can tell you that 50% of the conversations we had were about the Battery Passport — even though no US government is requiring it. The industry is still interested because they understand that more transparency in the value chain helps them become more independent from other nations. You can control the battery flow and keep batteries inside the country.
We shouldn't wait for politicians to tell us how to do it or how the market should work. Industry players should work together and collaborate — because frankly, we know it better than the politicians, and we can move faster.
NILS: Two comments. On regulation — I agree in general that we have enough, and sometimes too much. That's not helping with digitalization and is actually working against reducing bureaucracy.
On the other hand, we do need a circular economy here in Europe. The Critical Raw Materials Act is important, and one discussion that will be reinforced by the China announcement is local content requirements. The idea is that new batteries, which will need recycled content from old batteries, cannot source that recycled content from China or elsewhere — at least some portion must come from Europe. In some areas, targeted regulation can still support the industry, and that argument is now stronger after China's announcement.
Some people say we can't catch up — but we have to find our own way. Whether that's a niche approach, future battery chemistries, or next-generation vehicles. This morning I was speaking with a small startup that wants to produce graphite from CO₂. We don't want CO₂ in the atmosphere, and we don't want to import graphite from China — so there's a real opportunity there. We have to be more agile in supporting these ideas and building our own industry. Otherwise, we will just be following others for a long time — and that's a big challenge for everyone.
HOST: With that, we'll wrap up today's discussion. Thank you, Felix and Nils. And thank you, everyone, for tuning in.
FELIX & NILS: Thanks, everyone. Bye!
