Lithium-Ion Battery Recycling India: New Safety Norms, Fire Risks and Insurance Implications

Updated: July 07, 2026 · 17 min read

Somewhere between India’s ambition to put 30% of its vehicle fleet on electric power by 2030 and the ground reality of recycling infrastructure, a dangerous gap has opened. In FY 2024-25, roughly 48,000 tonnes of spent lithium-ion battery packs entered India’s end-of-life stream — and a significant portion of that volume landed in yards that were designed, staffed, and insured for lead-acid chemistry, not the volatile electrochemistry of NMC or LFP cells. The consequences are now arriving in the form of yard fires, unresolved insurance claims, and regulatory scrutiny that producers and fleet operators cannot afford to dismiss.

India’s Lithium-Ion Battery Recycling Problem Is No Longer Theoretical

The scale of the challenge becomes clear when you overlay India’s EV sales trajectory against its authorised recycling capacity. Ministry of Heavy Industries data indicates that EV registrations crossed 1.67 million units in FY 2023-24, with two-wheelers accounting for the dominant share. Each lithium-ion pack from a scrapped electric two-wheeler weighs between 2 and 4 kg; a bus pack can exceed 300 kg. The Central Pollution Control Board (CPCB) — the primary enforcement authority under the Battery Waste Management Rules, 2022 — has repeatedly flagged that authorised collection and recycling infrastructure is not scaling commensurately with generation volumes.

This is not an abstraction. Press reports from recycling clusters in Pune, Rajkot, and the NCR belt through 2024 documented multiple thermal-event incidents in yards handling mixed battery chemistries without segregation protocols. The common thread: operators treating end-of-life EV packs like conventional lead-acid batteries — stacking them in enclosed godowns, using water-based suppression systems, and lacking state-of-charge (SoC) monitoring. In each case, the fire investigation pointed to the same root cause: a damaged or deep-discharged cell reaching thermal runaway under ambient heat stress, with the resulting fire cascade engulfing adjacent packs before any suppression system activated.

What changed in 2024 was not just the frequency of incidents — it was the regulatory and commercial response. The Ministry of Environment, Forest and Climate Change (MoEFCC) issued guidance in late 2024 directing State Pollution Control Boards (SPCBs) to conduct surprise inspections of battery storage facilities registered under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. Maharashtra Pollution Control Board (MPCB) acted on this guidance, issuing show-cause notices to at least a dozen facilities in the Pune-Nashik corridor that lacked segregated lithium-ion storage bays. For EV OEMs, fleet operators, and battery manufacturers whose EPR obligations flow downstream to these facilities, the compliance exposure is direct and material.

The Regulatory Framework Governing Lithium-Ion Battery Recycling in India

Three principal regulations now govern the lifecycle of a lithium-ion battery in India, and understanding how they interlock is essential for any compliance officer managing EV assets.

Battery Waste Management Rules, 2022

Notified by MoEFCC on 22 August 2022 and operationalised through CPCB’s EPR portal at batterywaste.cpcb.gov.in, these Rules are the centrepiece of India’s battery recycling governance. They apply to producers, importers, re-manufacturers, and recyclers of all battery chemistries, including lithium-ion. Rule 5 mandates Extended Producer Responsibility registration on the CPCB portal. Rule 9 sets collection and recycling targets by battery category and by financial year. Rule 16 establishes the penalty mechanism: producers who fall short of their EPR targets face a financial penalty calculated at a rate notified by the CPCB, which for EV batteries in the current cycle translates to up to ₹1 lakh per tonne of uncollected shortfall.

Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016

Spent lithium-ion batteries are classified as hazardous waste under Schedule II of these Rules (entry number 35.1 — “spent batteries”). Any facility that stores, transports, or processes spent lithium-ion batteries must hold a valid authorisation from the SPCB concerned. This is the hook that MoEFCC used to direct SPCBs to inspect battery yards in 2024 — a facility without a current Schedule II authorisation is operating illegally, regardless of whether it holds any other recycling licence.

E-Waste (Management) Rules, 2022

While primarily governing electrical and electronic equipment, the E-Waste (Management) Rules, 2022 have a direct bearing on lithium-ion batteries embedded in laptops, tablets, power banks, and portable electronics. Rule 5(1)(d) specifically requires producers to ensure that end-of-life batteries within EEE are channelled to authorised recyclers — not stripped out and sold informally to the grey market. For EV battery manufacturers whose cells are also used in stationary or consumer applications, this creates a compliance obligation that runs parallel to the Battery Waste Management Rules, 2022.

Thermal Runaway: Why Existing Yard Safety Protocols Are Dangerously Inadequate

Thermal runaway is not simply a fire — it is a self-sustaining exothermic chain reaction within the cell that generates its own oxygen supply. Once a lithium-ion cell enters runaway, it releases toxic gases including hydrogen fluoride (HF), a substance lethal at concentrations above 25 ppm. Cell-to-cell propagation in a pack can occur within seconds. A pack that appears extinguished may re-ignite up to 72 hours later as residual lithium compounds react with atmospheric moisture — a behaviour that catches yards entirely unprepared when the fire brigade has already left the scene.

The critical temperature threshold is well-established: separator breakdown typically initiates runaway between 130°C and 180°C for NMC chemistries; LFP cells are more thermally stable but still enter runaway above 270°C. In an Indian recycling yard exposed to summer ambient temperatures of 42-45°C in Maharashtra, Telangana, or Rajasthan, a damaged pack stored in an enclosed, poorly ventilated godown can approach the separator threshold without any external ignition source. This is not a theoretical risk scenario — it is the operating environment most yards maintain.

Standard fire-suppression systems installed in Indian industrial facilities are rated for Class A (ordinary combustibles), Class B (flammable liquids), or Class C (electrical) fires. Lithium-ion fires require Class D protocols — dry powder agents specifically rated for reactive metals — or high-volume water-immersion containment (flooding the affected pack in a containment tank for a minimum of 24 hours). Neither is commonly installed in Indian battery yards. The National Disaster Management Authority (NDMA) has issued guidelines on lithium battery fire response that align with these protocols, but their adoption among secondary handlers remains low.

BIS IS 17855, MoRTH and ARAI: What the Incoming Safety Standards Actually Require

The Bureau of Indian Standards (BIS) is finalising IS 17855, a standard specifically addressing the safety requirements for lithium-ion traction batteries used in electric vehicles, developed in coordination with the Ministry of Road Transport and Highways (MoRTH) and the Automotive Research Association of India (ARAI). While IS 17855 is primarily aimed at the design and performance of new batteries, its downstream implications for recyclers are significant: the standard mandates state-of-charge limits and pack-level diagnostic requirements that, once enforceable, will require recyclers to accept only packs that have been SoC-tested and discharged to below 20% before handover.

ARAI’s involvement is particularly important for fleet operators. Under the framework MoRTH is developing, end-of-life EV batteries may eventually require an ARAI-validated discharge certificate before they can be legally transported to a recycling facility. This would create a formal chain of custody — analogous to the certificate of destruction already required under the Vehicle Scrapping Policy — and would close the informal channel through which a significant volume of spent packs currently moves. Enforcement is expected to be phased, with Q3 FY 2025-26 identified in industry consultations as the likely start date for mandatory SoC documentation for commercial vehicle batteries.

For recyclers and collection agents, IS 17855 also implies investment in testing infrastructure. A basic SoC measurement rig for EV packs — capable of safely discharging a 48V–96V pack to a safe transport threshold — costs between ₹8 lakh and ₹22 lakh depending on capacity, based on indicative quotes from equipment suppliers serving Karnataka and Tamil Nadu yards. Facilities that lack this infrastructure will either need to invest or restrict their intake to pre-discharged packs certified by the OEM or fleet operator.

India Lithium-Ion Battery EPR Targets & Penalty Reference — Battery Waste Management Rules, 2022

Financial Year	EV Battery Collection Target	Recycling Efficiency Target	Max Penalty for Shortfall
FY 2023-24	30%	50%	₹1 lakh/tonne shortfall
FY 2024-25	50%	60%	₹1 lakh/tonne shortfall
FY 2025-26	60%	65%	₹1 lakh/tonne shortfall
FY 2026-27	70%	70%	₹1 lakh/tonne shortfall
FY 2027-28 onwards	80%	75%	₹1 lakh/tonne shortfall

The Insurance Reckoning: What Underwriters Are Asking EV and Recycling Businesses in 2025

The insurance industry’s response to lithium-ion battery fire incidents has been swift and, for many businesses, unexpected. Underwriters writing property all-risk policies and public-liability cover for EV recycling yards, battery collection centres, and fleet-operator depots have begun revising their questionnaires to include specific questions about battery chemistry, storage volumes, discharge protocols, and CPCB authorisation status. Several large general insurers operating in India — drawing on reinsurance guidance from Lloyd’s syndicates that have settled lithium-ion fire claims in Europe and the United States — have introduced battery-specific endorsements that either exclude lithium-ion fire damage from standard cover or impose a co-insurance requirement of up to 20% for facilities handling more than 5 tonnes of lithium-ion cells at any time.

The practical implication for an EV manufacturer or fleet operator using an informal or unregistered collection partner is stark: if a thermal event occurs at a non-authorised facility holding your returned packs, your product liability insurer will scrutinise whether you exercised due diligence in the selection of that partner. Under the Battery Waste Management Rules, 2022, the producer’s EPR obligation does not extinguish once a pack is handed to a collection agent — Rule 7 makes clear that producers remain responsible for ensuring the entire downstream chain is authorised. An insurer’s subrogation claim against an OEM that channelled batteries to an unregistered yard is a live risk that legal teams at at least two major Indian EV makers have flagged internally since early 2025.

NDMA’s published guidelines on lithium battery storage and fire response have become a de facto reference document in insurance underwriting conversations. Facilities that can demonstrate written SOPs aligned to NDMA guidance — covering pack segregation by chemistry, maximum stack heights, minimum aisle widths for suppression access, SoC thresholds for intake, and emergency drainage to a contained sump — are receiving more favourable terms. In practical terms, this means the compliance investment in proper storage infrastructure is increasingly offset by lower insurance premiums and fewer exclusion clauses.

EPR Targets, Penalty Slabs and the FY 2026-27 Deadline You Cannot Miss

The FY 2026-27 EPR collection-efficiency target of 70% for EV batteries is the most consequential near-term deadline in the lithium-ion battery recycling calendar. CPCB’s enforcement posture has shifted materially since FY 2023-24, when the focus was primarily on EPR portal registration. By the close of FY 2024-25, CPCB compliance cells in at least four regions — Northern, Southern, Western, and Eastern — had begun issuing demand notices to producers who had registered but filed nil or significantly below-target collection returns. The penalty mechanism under Rule 16 — up to ₹1 lakh per tonne of shortfall — is financially significant for any producer handling more than a few hundred tonnes annually.

Beyond the headline penalty, CPCB retains the power under the Environment (Protection) Act, 1986 to direct closure of a non-compliant producer’s manufacturing or import operations. For an EV OEM, that is an existential threat that no EPR filing delay justifies. Fleet operators with more than 25 electric vehicles — which brings them within the definition of “consumer” under the Battery Waste Management Rules — must ensure they have a documented handover agreement with a registered collection point. Retaining scrap batteries on depot premises beyond 90 days without a valid storage authorisation under the Hazardous and Other Wastes Rules, 2016 constitutes a separate and concurrent violation.

Our EPR compliance services page outlines how The National Recycling Corporation assists producers and importers in meeting these targets through pan-India collection networks and CPCB-portal-linked recycling certificates.

The 7-Step Safety and Compliance Checklist for Lithium-Ion Battery Handlers

Whether you are an EV manufacturer, a fleet operator returning packs to the supply chain, or a recycling facility taking in end-of-life cells, the following checklist represents the minimum viable compliance posture under current Indian regulations. Auditors from SPCBs and insurance surveyors are now checking for each of these items.

1. Verify CPCB/SPCB authorisation is current. Your recycling partner must hold an active authorisation under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 covering Schedule II entry 35.1 (spent batteries). Confirm the validity date and ensure renewal is initiated at least 60 days before expiry — CPCB’s 30-day compliance window is notoriously tight. See our related post on CPCB Authorisation Renewal for the procedural detail.
2. Register on the Battery Waste Management EPR portal. Producers and importers must register at batterywaste.cpcb.gov.in and file quarterly collection returns. Filing nil returns without explanation is treated as non-compliance from FY 2025-26 onwards.
3. Implement SoC discharge protocols before transport. All packs must be discharged to below 20% SoC before transport and labelled with SoC-test date and discharge level. This is required under NDMA guidelines and will become mandatory under IS 17855 enforcement.
4. Segregate lithium-ion from other battery chemistries at storage. Store lithium-ion packs in a dedicated bay with non-conductive flooring, minimum 1-metre aisle clearance, and a secondary containment bund capable of holding 110% of the largest single pack’s electrolyte volume. Mixed storage with lead-acid or NiMH batteries is an SPCB inspection red flag.
5. Install Class D-rated fire suppression or water-immersion containment. Standard CO₂ or dry-powder systems rated for Class B/C fires are insufficient for lithium-ion runaway. Minimum requirement: a 1,000-litre water-immersion tank capable of fully submerging the largest pack handled, or a dry-powder suppression system rated for reactive metals.
6. Obtain a Certificate of Recycling for every consignment. This document — issued by the authorised recycler — is your proof of EPR fulfilment under the Battery Waste Management Rules, 2022 and your primary defence in any CPCB enforcement audit. It is also increasingly required by insurance underwriters as evidence of due diligence. Our e-waste and battery management service issues GST-compliant invoices alongside recycling certificates for every consignment.
7. Maintain two-year records of all battery movements. Under both the Battery Waste Management Rules, 2022 and the Hazardous and Other Wastes Rules, 2016, records of generation, storage, transport, and disposal must be retained for a minimum of two years and made available to CPCB or SPCB within 48 hours of a request. Digital record-keeping with a documented audit trail is strongly preferred by enforcement officers.

Related Articles

• CPCB Authorisation Renewal: The 30-Day Compliance Window Most Recyclers Miss
• Vehicle Scrapping Policy 2026: Government Incentives, RVSF List and the Fleet Window Closing Fast
• BRSR Core: Why SEBI’s New ESG Mandate Will Force a Rethink of Your Scrap Disposal

Frequently Asked Questions

Which Indian law makes lithium-ion battery recycling mandatory for EV manufacturers?

The primary obligation falls under the Battery Waste Management Rules, 2022, notified by MoEFCC on 22 August 2022. Rule 5 requires every producer — including EV manufacturers — to register on CPCB’s EPR portal and meet annual collection-and-recycling targets. Rule 9 sets targets by battery category and financial year, escalating to 70% collection efficiency for EV batteries by FY 2026-27. Failure to meet targets triggers penalties under Rule 16 of up to ₹1 lakh per tonne of shortfall.

Are spent lithium-ion batteries classified as hazardous waste in India?

Yes. Spent lithium-ion batteries are listed as hazardous waste under Schedule II of the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 (entry 35.1). Any facility that stores, handles, or processes them must hold a valid SPCB authorisation under these Rules, separate from and in addition to any EPR registration under the Battery Waste Management Rules, 2022. Storing spent packs without this authorisation — even briefly — is a prosecutable violation under the Environment (Protection) Act, 1986.

What fire-safety infrastructure does a lithium-ion battery recycling yard legally require?

There is no single statute that prescribes fire-safety infrastructure for battery yards in exhaustive technical detail, but NDMA’s published guidelines on lithium battery fire response — combined with BIS’s forthcoming IS 17855 standard — set the practical benchmark. Facilities must demonstrate Class D-rated suppression capability or water-immersion containment, secondary containment bunding, SoC-discharge protocols, and segregated storage. Insurance underwriters are now requiring NDMA-aligned SOPs as a condition of cover for properties handling more than 5 tonnes of lithium-ion cells.

What is the EPR collection target for EV batteries in FY 2025-26?

Under the Battery Waste Management Rules, 2022, the EPR collection-efficiency target for EV batteries in FY 2025-26 is 60%, rising to 70% in FY 2026-27 and 80% from FY 2027-28 onwards. Producers must report progress quarterly on CPCB’s portal at batterywaste.cpcb.gov.in. From FY 2025-26, CPCB has signalled it will treat nil returns as non-compliant and initiate demand notices accordingly, rather than extending the grace periods that characterised the initial roll-out years.

What documents should a fleet operator retain to prove lithium-ion battery disposal compliance?

At minimum: (a) a signed consignment note from a CPCB/SPCB-authorised collection agent, referencing the Hazardous Waste authorisation number; (b) a Certificate of Recycling issued by the authorised end-processor; (c) GST-compliant invoices covering the transaction; and (d) SoC discharge records for each pack. These must be retained for a minimum of two years under both the Battery Waste Management Rules, 2022 and the Hazardous and Other Wastes Rules, 2016, and produced within 48 hours of any CPCB or SPCB request.

Work With The National Recycling Corporation

The National Recycling Corporation is a pan-India scrap trading and recycling company headquartered in Mumbai, with active operations across Maharashtra, Gujarat, Karnataka, Tamil Nadu, and the Delhi-NCR belt. We work with EV manufacturers, fleet operators, battery importers, and industrial facilities to manage end-of-life lithium-ion battery streams in a manner that satisfies CPCB EPR requirements, SPCB hazardous-waste authorisation conditions, and the documentation expectations of insurance underwriters and BRSR-reporting ESG teams.

Every consignment we handle comes with a GST-compliant tax invoice, a Certificate of Recycling traceable to a CPCB-authorised downstream processor, and a consignment note that satisfies the record-keeping requirements of the Battery Waste Management Rules, 2022 and the Hazardous and Other Wastes Rules, 2016. Our pricing for recoverable materials — lithium carbonate equivalent, cobalt, nickel, copper, and aluminium from battery black mass — is indexed to prevailing market rates, ensuring you receive fair-market value rather than a distress price from an unregistered trader. For base-metal components, we reference London Metal Exchange spot rates in our indicative pricing.

We understand that for a BRSR-reporting company, the paper trail matters as much as the physical disposal. Our documentation package is specifically designed to support BRSR Core disclosures under SEBI’s circular dated 12 July 2023, including material-flow data, recycling-rate percentages, and hazardous-waste disposal certificates. To schedule a pickup, request a compliance quote, or discuss a structured battery take-back programme for your fleet or manufacturing facility, contact us directly.

• Pan-India lithium-ion battery collection, including doorstep pickup from depots, warehouses, and manufacturing plants
• CPCB-authorised downstream recycling with full chain-of-custody documentation
• GST-compliant invoicing and Certificate of Recycling for every consignment
• BRSR-grade material-flow and waste-diversion documentation for ESG and sustainability reporting
• NDMA-aligned temporary storage SOPs for large-volume or project-based collections
• Fair-market pricing on recovered materials, indexed to LME and domestic commodity benchmarks
• Compliance support for EPR portal filing and SPCB authorisation queries — visit our about page for credentials and team details

Sources and References

• Central Pollution Control Board — Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016
• CPCB Battery Waste Management EPR Portal — Battery Waste Management Rules, 2022
• Ministry of Environment, Forest and Climate Change — MoEFCC Official Notifications
• Bureau of Indian Standards (BIS) — IS 17855 Battery Safety Standard (under finalisation)
• CPCB E-Waste Management — E-Waste (Management) Rules, 2022
• NITI Aayog — Circular Economy and EV Battery Policy Framework
• London Metal Exchange — Lithium, Cobalt and Nickel Spot Pricing Reference
• Press reports (Mint, Business Standard, Economic Times) — thermal-runaway incident reporting from Indian recycling yards, FY 2024-25