China has recently taken a significant step to strengthen governance of the waste management and resource recovery process for new energy vehicle (NEV) power batteries. On January 16, 2026, the Ministry of Industry and Information Technology (MIIT), together with the National Development and Reform Commission (NDRC), Ministry of Ecology and Environment (MEE), Ministry of Transport (MOT), Ministry of Commerce (MOFCOM), and the State Administration for Market Regulation (SAMR) jointly issued the Interim Measures for the Recycling and Comprehensive Utilization of Waste Power Batteries of New Energy Vehicles (《新能源汽车废旧动力电池回收和综合利用管理暂行办法》), designed to address the increasing volume of retired power batteries from China’s rapidly growing NEV market, enhance environmental protection, and promote resource efficiency.

Strategic Importance of NEV Battery Management

China’s NEV industry has experienced explosive growth, with production and sales exceeding 16 million units in 2025, accounting for more than half of domestic vehicle sales. As these vehicles age, their power batteries, typically lithium-ion chemistries, gradually lose capacity and enter retirement. Forecasts project that used battery generation could surpass 1 million tons annually by 2030, creating both an environmental challenge and an opportunity for resource reuse.

Previously, regulatory efforts focused on encouraging recycling and establishing traceability systems in a pilot capacity. However, with the imminent scale of retired batteries and the risks associated with informal processing (environmental pollution, safety hazards), there was a need for a more robust and legally binding framework. The 2026 interim measures replace several earlier guidelines and regulations, unifying administration under a more comprehensive system.

Full-Lifecycle Framework

At the heart of the interim measures is the “full lifecycle” approach, which mandates regulatory oversight at every stage of a power battery’s existence, from production, sales, installation, operation, retirement, to recycling and reuse. This approach is designed to close gaps that previously allowed batteries to enter informal or unmonitored channels, resulting in environmental and safety risks.

The lifecycle framework also enhances data collection and transparency, enabling regulators to monitor trends, enforce standards, and intervene when necessary. By formalizing this framework, China is aligning battery recycling practices with broader ecological and industrial objectives.

Digital Traceability System

A notable innovation in the interim measures is the introduction of a digital identity system for each power battery. This system assigns a unique identifier to every battery effectively a digital “passport” which tracks key lifecycle information such as manufacturing details, installation history, maintenance, replacement, retirement, transportation, and recycling processes.

The digital identity is part of a national traceability
information platform, enabling various stakeholders, manufacturers, recyclers,
regulators, and even consumers, to access lifecycle data. This enhances
accountability, improves compliance, and supports the implementation of
responsible recycling practices throughout the battery’s lifecycle.

Battery and Vehicle Manufacturers

Under the new measures, battery producers and NEV manufacturers are required to assume clear responsibilities throughout the lifecycle of power batteries. This includes technical documentation submission, information disclosure obligations, and obligations to support recycling through authorized channels. These provisions effectively reinforce the extended producer responsibility (EPR) principle, incentivizing manufacturers to design products that are easier to recycle and reuse.

In addition, components and technical specifications must meet certain standards that support traceability and recycling efficiency, contributing to the overall industrial upgrade of battery design and management.

Recyclers and Service Providers

The interim measures establish norms for qualified recycling enterprises, setting the conditions under which recycling and reuse processes may be conducted. Entities engaged in recycling activities must meet regulatory criteria, including environmental protection standards, operational protocols, and adherence to traceability requirements.

The rules also introduce supervisory and reporting obligations, allowing authorities to monitor compliance and intervene when necessary. By formalizing these obligations, China aims to curb illegal dismantling and unsafe practices that have previously undermined sustainability goals.

Improved Resource Recovery

NEV power batteries contain valuable and strategically important materials such as lithium, cobalt, nickel, and manganese. Effective recycling can recover these materials, reduce dependence on raw material imports, and contribute to a circular economy. The interim measures’ lifecycle and traceability systems are expected to enhance recovery rates and reduce losses due to informal or inefficient processing.

As China scales its recycling infrastructure and implements standardized procedures, the industry is better positioned to support sustainable supply chains for battery materials, aligning with broader climate and economic goals.

Reduced Environmental and Safety Risks

Informal battery disposal can lead to soil and water contamination, as well as fire hazards during uncontrolled dismantling. By enforcing comprehensive management and traceability, regulators aim to mitigate these risks, ensuring that hazardous components are handled in compliance with environmental standards.

The integration of safety requirements into recycling operations also reinforces market confidence and public support for NEV adoption, which is vital for long-term industry sustainability.

Implementation Timeline and Transitional Arrangements

The interim measures are set to take effect on April 1, 2026, providing a transition period for stakeholders to adjust practices and systems. During this period, entities will need to develop mechanisms for data reporting, implement traceability systems, and align operational workflows with the new requirements.

The interim measures also supersede several earlier regulatory documents related to battery recycling and traceability management, consolidating the legal framework into a single, stronger regulation.

What This Means for Business

1. Strategic Planning and Compliance

For NEV manufacturers, battery producers, and recycling enterprises, the new measures signal a shift from voluntary compliance to mandatory oversight. Companies must adapt their operational models to incorporate digital traceability, lifecycle data management, and clearly defined recycling channels. This will require investment in information systems, staff training, and alignment with national standards.

1. Competitive Advantage Through Sustainability

Firms that proactively integrate recycling-oriented design, streamlined logistics, and digital tracking will be positioned to lead in a market where sustainability is increasingly central to reputation and regulatory compliance. Enhanced transparency and resource recovery can reduce long-term costs and foster partnerships across the value chain.

III. Risk Mitigation and Market Access

Adherence to the interim measures will be essential for maintaining market access and avoiding penalties associated with non-compliance. Robust management of end-of-life batteries also reduces risks related to environmental liabilities and supply chain disruptions.

1. Innovation and Industry Collaboration

The new regulation encourages collaboration between industry players, research institutions, and government entities to advance recycling technologies, improve material recovery, and develop best practices. Participation in standard-setting and pilot programs can help firms shape the future direction of China’s battery recycling ecosystem.

Sources

• Interim Measures for the Recycling and Comprehensive Utilization of Waste Power
  Batteries of New Energy Vehicles (《新能源汽车废旧动力电池回收和综合利用管理暂行办法》), jointly issued by the Ministry of Industry and Information Technology
  (MIIT), National Development and Reform Commission, Ministry of Ecology
  and Environment, Ministry of Transport, Ministry of Commerce, and State
  Administration for Market Regulation, January 16, 2026; effective April 1,
  2026.(wap.miit.gov.cn)
• Official interim measures release and details: Interim
  Measures for the Recycling and Comprehensive Utilization of Waste Power
  Batteries of New Energy Vehicles (MIIT page)
• National policy and context: China to Strengthen Recycling Management of Used NEV Power Batteries (Xinhua/English)
• Secondary details on lifecycle management and digital identities: China to Introduce Digital IDs for EV Batteries (China Daily)