Assessing Trade-Offs in Climate Impacts across Various Circular Economy Strategies for Japan’s Battery Industry

Circular strategies, such as extending in-use lifetimes, reuse, and recycling, are recognized as efficient ways to mitigate the climate impacts associated with lithium-ion battery demand. However, these strategies come with trade-offs, as extending lifetime through continued use in vehicles or through reuse in battery energy storage systems (BESS) delays recycling and secondary material supply. While recycling regulations with mandatory warranty periods accelerate material recovery, they may sacrifice carbon benefits from prolonged use. Focusing on Japan, we develop a dynamic assessment framework that combines stock-driven material flow analysis with life-cycle-based greenhouse gas (GHG) accounting to evaluate these trade-offs under time-evolving vehicle battery and solar/wind BESS demand and time-varying GHG emission factors. Our analysis indicates that, under the current warranty (8-year) lifetime scenario, the generation of reusable electric vehicle batteries is projected to reach 225 GWh by 2050, sufficient to meet most energy storage demand. Despite the trade-offs, implementing both reuse and recycling reduces cumulative battery emissions by 20-30% compared with scenarios that use only one strategy. In the early stage (2022-2035), compared with reuse in BESS and recycling, extending battery lifetime in electric vehicles can yield greater emissions-reduction benefits. These findings highlight the need for adaptive policies to optimize circularity in battery systems.