1 June 2026
- Regulating and trading ‘black mass’: Will divergent waste classifications lead to significant implications for battery recycling supply chains?
- Indonesia moves towards State-controlled exports, starting with coal, palm oil, and ferroalloys from June 2026
- The EU discusses updates to its organic production rules and to its labelling rules for products imported from third countries recognised as equivalent
- Recently adopted EU legislation
Regulating and trading ‘black mass’: Will divergent waste classifications lead to significant implications for battery recycling supply chains?
By Amanda Carlota, Stella Nalwoga, and Paolo R. Vergano
On 9 November 2026, Commission Delegated Decision (EU) 2025/934 of 5 March 2025 amending Decision 2000/532/EC as regards an update of the list of waste in relation to battery-related waste will start to apply. Commission Delegated Decision (EU) 2025/934 updates the List of European Waste by classifying the shredded-waste from lithium-ion batteries, which is known as ‘black mass’, as hazardous waste, thereby effectively restricting its export outside of the EU.
This article provides an overview of the concept of ‘black mass’ and its growing strategic importance, examines its evolving classification under EU law and in other key jurisdictions, and the implications for trade.
EU regulation on waste shipments
The tightening of environmental laws in developed countries during the 1970s increased domestic disposal costs, resulting in hazardous waste being exported to developing countries with less stringent regulations and causing significant environmental and health impacts. In response, countries negotiated the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, which was adopted in 1989 and aims, inter alia, at regulating the export of hazardous waste, particularly to developing countries, and at promoting environmentally sound waste management practices. In 1992, the Organisation for Economic Co-operation and Development (hereinafter, OECD) adopted a Decision on the OECD Legal Instruments Control of Transboundary Movements of Wastes Destined for Recovery Operations (hereinafter, OECD Decision), setting the framework for the environmentally sound movement of recyclable waste among OECD Member countries.
These international instruments formed the foundation for the revision of the EU’s waste shipment regulation in 1993. Currently, waste shipment is regulated by Regulation (EU) 2024/1157 of the European Parliament and of the Council of 11 April 2024 on shipments of waste (hereinafter, Waste Shipments Regulation). Under the EU’s Waste Shipments Regulation, the export of all hazardous waste from the EU to non-OECD countries is banned.
‘Black mass’ and its classification as hazardous waste
‘Black mass’ refers to shredded battery waste obtained through the recycling of used lithium-ion batteries. ‘Black mass’ contains valuable raw materials, such as nickel, cobalt, and lithium. As an intermediate output material, ‘black mass’ must undergo additional refining and extraction before those raw materials can be reused, such as for new batteries. The commercial significance of ‘black mass’ has grown sharply alongside the expansion of electric vehicle markets. The Commission explains that ‘black mass’ is essential to ensure electric vehicle battery recycling, as batteries are a “key technology to drive the green transition, support sustainable mobility, and contribute to climate neutrality by 2050 as well as ensuring the EU’s autonomy and resilience in critical raw materials”.
‘Black mass’ has rapidly emerged as a strategically valuable secondary resource within the global battery supply chain. Studies indicate that recycling is expected to supply around 15% of global critical minerals by 2035, which would correspond to more than twice the current level. At the same time, the global battery recycling market is projected to reach a value of USD 52 billion by 2045. The processing is currently concentrated in China and East Asia, while the US, EU, and Japan remain key exporters.
The principal legal issue surrounding ‘black mass’ concerns its waste classification, which, until recently, was not harmonised across the EU, with Member States adopting divergent approaches. Commission Delegated Decision (EU) 2025/934 updates the list of waste in Commission Decision of 3 May 2000 replacing Decision 94/3/EC establishing a list of wastes by introducing new hazardous waste code 19 14 02, covering the “intermediate fraction from the thermal and/or mechanical treatment of waste lithium-based batteries and lithium-based battery manufacturing waste containing a mixture of electrode materials”, commonly referred to as ‘black mass’. This decision clarifies the classification of ‘black mass’ in the EU and harmonises it across EU Member States.
Export of ‘black mass’ to be subject to more stringent compliance requirements?
The European Commissioner for Environment, Water Resilience and a Competitive Circular Economy, Jessika Roswall, stated that the classification of ‘black mass’ from batteries as hazardous waste would “lead to better control of black mass shipments and especially a ban on its export to non-OECD countries”, adding that “by keeping black mass longer in the economy, we can boost battery recycling and our circular economy”. From 9 November 2026, EU operators will be prohibited from exporting ‘black mass’ to non-OECD countries on the basis of the EU’s Waste Shipments Regulation. Exports of ‘black mass’ would only be permitted to OECD countries with facilities that meet the regulatory standards for hazardous waste processing set out in the EU Waste Shipments Regulation.
An incentive for recycling and retention of ‘black mass’ within the EU is provided under Article 72(3) of Regulation (EU) 2023/1542 of the European Parliament and of the Council of 12 July 2023 concerning batteries and waste batteries (the EU Batteries Regulation), which provides that waste batteries or fractions thereof exported outside the EU would only count towards the fulfilment of recycling obligations and recovery targets if the exporter demonstrates, through documentary evidence approved by the competent authority of destination, that the treatment occurred under conditions equivalent to those required under EU law, including standards relating to environmental protection and human health.
WTO consistency: Environmental protection or resource retention?
The EU’s classification of ‘black mass’ as hazardous waste appears to pursue a combination of environmental and industrial policy objectives. On the one hand, the measure appears to be consistent with the EU’s broader efforts to ensure environmentally sound management of hazardous waste in alignment with the Basel Convention. On the other hand, statements by EU officials suggest that the measure is also intended to promote domestic recycling capacity and retain valuable critical raw materials within the EU.
From an international trade perspective, restrictions on exports of ‘black mass’ could raise questions regarding their compatibility with the rules of the World Trade Organization (hereinafter, WTO) for imposing a ‘quantitative restriction’ on exports contrary to Article XI:1 of the General Agreement on Tariffs and Trade (GATT), thereby limiting access to valuable secondary raw materials. The EU might justify such measures under Article XX(b) of the GATT as measures necessary for the protection of human, animal or plant life or health, provided that the measures are applied in a non-discriminatory manner and are not a disguised restriction on international trade. The WTO consistency of the EU’s classification of ‘black mass’ as hazardous waste would depend on whether the measure’s primary objective would be environmental and health protection, rather than the retention of valuable raw materials within the EU market, as had been underlined.
Regulation of ‘black mass’ in other jurisdictions
The regulation of ‘black mass’ outside the EU is particularly relevant because differences in classification and treatment across jurisdictions could significantly affect trade flows, investment decisions, and the location of recycling and refining activities.
In the US, the US Environmental Protection Agency (EPA) notes that ‘black mass’ is generally considered to be non-hazardous waste, if it does not exhibit characteristics of hazardous waste. In addition, because the US is not a party to the Basel Convention, international trade in ‘black mass’ is shaped by a fragmented framework, with restrictions or controls depending on how trading partners classify the material and whether the OECD Decision applies.
China, which is the largest market for ‘black mass’ recycling, has recently lifted its ban on the importation of ‘black mass’ by introducing a pathway for its import under certain conditions. Since 1 August 2025, qualifying ‘black mass’ that meets specified technical standards is classified as non-waste and may be imported into China without waste-shipment related restrictions. Additionally, in its 2026 tariff adjustment plan, China reduced its import tariffs on recycled raw materials, such as ‘black mass’.
Across the broader Asia region, studies indicate that regulatory approaches to ‘black mass’ remain fragmented and evolving, which could create compliance challenges and also influence the location of recycling, refining and trading activities. Countries such as Japan and South Korea allow controlled imports of ‘black mass‘ for processing, whereas other countries, such as India, have tightened import restrictions due to environmental compliance concerns. Most notably, Southeast Asia is emerging both as a source and transit hub, with countries such as Singapore and Malaysia acting as logistical intermediaries in global supply chains. In Viet Nam, the legal framework for the recycling of waste is set out in the Environmental Protection Law of 2020 and its implementing Decree No. 08/2022/ND-CP. Since January 2024, Viet Nam enforces mandatory recycling requirements for certain products including batteries.
Commercial implications and outlook
The classification of ‘black mass’ in the context of waste regulation could have significant implications for trade. Where ‘black mass’ is classified as hazardous waste, exports require regulatory approvals and compliance with international waste shipment controls under the Basel Convention. Conversely, where ‘black mass’ is treated as a secondary raw material or commodity, trade may proceed under ordinary Customs and trade rules.
As the cross-border movement of ‘black mass’ increasingly becomes a source of regulatory scrutiny, businesses involved in battery recycling, logistics, refining, and trading should closely monitor the evolving regulatory requirements, particularly in relation to the classification of ‘black mass’, shipment authorisations, traceability obligations, and Customs treatment.
For any additional information or legal advice on this matter, please contact Paolo R. Vergano
Indonesia moves towards State-controlled exports, starting with coal, palm oil, and ferroalloys from June 2026
By Joanna Christy, Paolo R. Vergano, and Tobias Dolle
On 20 May 2026, during a plenary session at Indonesia’s House of Representatives, Indonesia’s President Prabowo Subianto announced the reform of Indonesia’s export regime on the basis of a forthcoming Government Regulation on Natural Resource Commodity Export Governance, which would require exports of certain natural resources, namely palm oil, coal, and ferroalloys, to be conducted only through the State-owned company, PT Danantara Sumber Daya Indonesia (hereinafter, DSI).
This article examines the rationale behind the State-controlled export regime, discusses the details of the proposed requirements, the implications for stakeholders across the relevant supply chains, and assesses the consistency with Indonesia’s international trade obligations.
The rationale behind the new State-controlled export regime
The new State-controlled export regime for certain commodities was proposed by Indonesia’s President Prabowo in order to strengthen the Government’s supervision and control over the exports of Indonesia’s key natural resources. The idea is to centralise export activities through a State-owned enterprise instead of individual private traders, partly in response to alleged invoice manipulation and under-invoicing that reportedly caused losses in State tax revenues.
While the official text of the forthcoming Government Regulation has yet to be issued, a number of general elements were elaborated by President Prabowo in his speech at the House of Representatives. Initially, the scope would extend to palm oil, coal, and ferroalloy exports. Indonesia is the world’s largest exporter of palm oil, coal, and ferroalloys and the three commodities accounted for around a quarter of Indonesia’s total exports in 2025. President Prabowo noted that his plan would impact the three export stages: 1) Pre-Export Clearance: A process that covers, inter alia, the obtaining of necessary licences. According to the Government, this stage also encompasses the negotiation and conclusion of sales contracts and payment arrangements; 2) Export Clearance: A process that covers, inter alia, the preparation and submission of export documents to the Customs Authority; and 3) Post-Export Clearance: A process that covers, inter alia, the completion of the payment by foreign buyers for the exported goods.
President Prabowo’s plan foresees the gradual transfer of responsibilities across the three export stages from traders (i.e., private trading companies that purchase commodities from local producers and that export to foreign buyers) to DSI. The new export regime is to be implemented in the following phases:
| Phase I Transition Period | Phase II Full Implementation | |
| 1 June to 31 August 2026 | 31 August 2026 to 1 January 2027 | From 1 January 2027 onwards |
| Traders and foreign buyers will continue to conduct transactions under existing arrangements, while DSI will supervise the export clearance stage, including the submission of export documents.Traders must report their exports to the DSI.Indonesia’s Ministry of Trade will continue to issue export permits during the transition period, in order to accommodate existing export contracts. | Traders that are “ready”, namely those that have transferred their contracts to DSI, could start diverting their exports through DSI. | Domestic traders continue sourcing and managing commodities from producers, but must sell them to DSI. DSI will enter into contracts with foreign buyers, and exporting the commodities at internationally benchmarked market prices.Foreign buyers pay DSI for the exported goods, and DSI would transfer the proceeds to the supplying trader. |
Implications for the affected industries
In order to transition to the new export regime, domestic traders would have to inform foreign buyers of the new export arrangement and transfer export-related rights and obligations under existing contracts to DSI. Consequently, traders would act as suppliers to DSI, which may significantly alter existing business operations and supply chains, including reducing traders’ direct control over customer relationships and their ability to determine export pricing.
As Indonesia is a major global exporter of palm oil, coal, and ferroalloys, the proposed export regime carries significant implementation and market risks. Any disruptions, such as delays in shipments due to contract transfers to DSI during the transition period, may create supply chain disturbances that could drive up global commodity prices and affect international value chains, particularly as contracting arrangements, shipping schedules, and trade financing are planned several months in advance. In response, foreign buyers may adjust their sourcing strategies to seek alternative suppliers with greater regulatory predictability and supply certainty, such as Malaysia for palm oil, thereby potentially affecting Indonesia’s export competitiveness. The Indonesian Palm Oil Farmers Association warned that including DSI as an additional intermediary into the export chain would likely lead to increased costs being passed down to producers, reducing farmers’ income, and weakening their position within the value chain.
There were also concerns that centralising export activities within a State-owned company would give the Government of Indonesia greater ability to influence the allocation of supply between domestic needs and export markets through administrative and commercial decisions, without imposing formal export restrictions (i.e., through regulations). Such arrangements may reduce transparency and predictability for market participants, particularly where export decisions become subject to discretionary administrative control. In practice, this could allow the Government to indirectly prioritise domestic policy objectives, such as securing coal supplies for domestic power generation.
If Indonesia’s primary concern was addressing issues of under-invoicing, these concerns could be addressed through alternative regulatory and enforcement measures, including through measures that are less disruptive to existing commercial arrangements. Rather than introducing State-controlled export centralisation, the Government could adopt more targeted enforcement measures focusing on palm oil, coal, and ferroalloys, namely by focusing on strengthening the monitoring and Customs valuation controls to verify whether the declared export value accurately matches the commercial value of the exported commodities, particularly where commodities are sold to affiliated companies or trading intermediaries located in third countries before being exported or resold to the final customer. The Government of Indonesia could also consider stricter penalties on exporters found to have deliberately undervalued export transactions or misreported export prices, including through administrative fines, the suspension or revocation of export licences or business permits, or through temporary restrictions on export activities.
Conflicting with Indonesia’s international trade obligations?
The mere establishment of a State Trading Enterprises (STEs), such as DSI, is not prohibited under WTO rules. Article XVII of the General Agreement on Tariffs and Trade (GATT 1994) allows their establishment, provided that they operate on commercial considerations (i.e., market-based factors, such as price) and do not discriminate between foreign buyers or export destinations through pricing, allocation, or other conditions for sale. Based on the policy announcement, there is currently no indication of differentiated pricing or export terms, while uncertainty remains regarding the operationalisation of contract management between the foreign buyers and the delivery prioritisation. If export allocation decisions were to be made in a non-transparent manner and without objective commercial considerations, issues of compliance with Article XVII could arise.
Centralising exports through DSI would not, in itself, constitute an export restriction under Article XI of the GATT 1994, which prohibits quantitative restrictions and other measures that limit exports other than duties, taxes, or other charges. However, in the absence of detailed implementing rules, it is unclear whether the new export regime would result in delays in contract execution, additional approval requirements, or impose other additional administrative processes that could de facto or de iure restrict or impede exports, which may raise concerns under Article XI of the GATT 1994.
Concerns over Indonesia’s commitments under preferential trade agreements, such as the EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA), may also arise if the implementation of the new export regime were to result in measures that amount to non-tariff barriers restricting trade (e.g., delays in export approvals or impose additional administrative requirements that increase export time and costs), which could be contrary to Indonesia’s commitments under the CEPA to ensure transparent, predictable, and trade-facilitating practices. The new rules would also raise questions of Indonesia’s compliance with Article 2.9 of the EU-Indonesia CEPA, which prohibits the designation or maintenance of an export monopoly, defined as the granting of exclusive rights or authority to a single entity to export goods.
What’s next? Time-critical implementation ahead
For now, the absence of detailed transitional rules is creating uncertainty and may already disrupt trade flows, particularly due to limited clarity on the treatment of existing contracts and scheduled shipments, affecting the ability of Indonesian traders and foreign buyers to confirm delivery arrangements and contractual performance. Indonesian traders have reportedly already received requests from foreign buyers seeking assurances that existing contractual obligations could still be fulfilled. Therefore, the timely issuance of clear implementing rules and transitional arrangements is important to provide legal certainty and commercial predictability for businesses, support a smooth transition, and maintain market stability, particularly in light of the transition period scheduled to commence on 1 June 2026. Relevant stakeholders should continue to monitor the updates and the issuance of the Government Regulation to ensure compliance and minimise trade disruption.
For any additional information or legal advice on this matter, please contact Tobias Dolle
The EU discusses updates to its organic production rules and to its labelling rules for products imported from third countries recognised as equivalent
By Ignacio Carreño García, Paolo R. Vergano, and Tobias Dolle
On 11 May 2026, the Council of the EU agreed on a negotiating position regarding the European Commission’s (hereinafter, Commission) Proposal to update the EU rules on organic production and labelling, which were laid down in Regulation (EU) 2018/848 of the European Parliament and of the Council on organic production and labelling of organic products and repealing Council Regulation (EC) No 834/2007.
This article analyses the Commission’s proposal, which intends to amend certain EU rules on organic production, as well as Article 33 of Regulation (EU) 2018/848 on the use of the EU organic logo. The article focuses on the proposed amendments to the labelling provisions, as well as on the upcoming expiry of equivalency agreements with third countries.
Imported organic products to comply with equivalent standards or all EU organic rules
A product is considered ‘organic’ when it has been grown, produced, processed, and/or handled in compliance with the relevant organic standards. Organic labels play a crucial role in consumer protection, communication and product distinction, by conveying the message to consumers that a given product is compliant with the organic standards.
In order to import organic products into the EU from third countries, and to commercialise them as “organic”, Article 45 of Regulation (EU) 2018/848 on ‘Import of organic and in-conversion products’ provides that such products must either: 1) Comply with organic standards recognised as equivalent by the EU; or 2) Fully adhere to all EU organic production rules. The former requires compliance with the production and control rules of the third country, as controlled by an EU-recognised entity in the third country, while the latter involves rigorous inspection and certification processes to ensure adherence to EU standards determined by an EU-recognised control body.
The CJEU’s judgement in case Herbaria and the Commission’s proposal
In the judgement of 4 October 2024 in Case C-240/23 Herbaria Kräuterparadies (see Trade Perspectives, Issue No. 22 of 2 December 2024), the CJEU held that the EU organic label provided under Article 33 of Regulation (EU) 2018/848may only be used on products produced according to EU rules, which means that products imported from third countries whose organic rules are recognised as equivalent under equivalence arrangements may not display the EU organic logo, or, in principle, any term suggesting products are ‘organic’. Such products may use the organic logo of their country of origin.
Following the CJEU’s judgement, the Commission put forward a proposal on 16 December 2025 to improve clarity for consumers and prevent trade disruptions. The proposal provides for amendments to a limited number of provisions, including a substantial amendment to Article 33 of Regulation (EU) 2018/848 on the use of the EU organic logo. With respect to labelling requirements for products imported from third countries recognised as equivalent, the proposal provides that the use of the EU organic logo should be allowed on imported products from third countries recognised as equivalent, provided that, in addition to compliance with equivalent rules, those products also meet the additional EU production and control requirements set out in the Annexes to Regulation (EU) 2018/848. Additionally, processed products made in the EU should, in any case, be allowed to bear the EU organic logo if they contain organic ingredients from third countries recognised as equivalent, where those imported ingredients account for 5% or less of the agricultural ingredients of the final product.
Postponing the expiry of equivalence agreements with third countries
The Commission has recognised 11 third countries, namely Argentina, Australia, Canada, Costa Rica, India, Israel, Japan, New Zealand, South Korea, Tunisia, and the US, pursuant to Article 33(2) of Regulation (EC) No 834/2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91 for the purpose of equivalence. Article 48(1) of Regulation (EU) 2018/848 sets an expiry date of 31 December 2026 for the recognition of the organic production and control systems of those 11 third countries. After that date, the existing equivalence arrangements would come to an end and would have to be replaced by international agreements on trade in organic products in accordance with Article 47 of Regulation (EU) 2018/848, such as those already in place with Chile, Switzerland, and the UK, where the EU concluded specific agreements on trade in organic products, detailing products covered and relevant control authorities and control bodies.
In 2021, the Council had authorised the Commission to open negotiations with the third countries recognised for the purpose of equivalence under Regulation (EC) No 834/2007 with a view to concluding agreements on trade in organic products. On that basis, the Commission is conducting technical exchanges with those third countries. According to the Commission “those exchanges show different levels of progress due to the diversity of legal and regulatory frameworks and complexities linked to varying consumer perceptions of organic production from one organic production system to the other”.
The Commission, therefore, proposed it as necessary and urgent to postpone the date of expiry of the recognition of the 11 third countries laid down in Article 48(1) of Regulation (EU) 2018/848 to 31 December 2036, in order to avoid disruptions in the trade of organic products. According to a Commission Staff Working Document accompanying the Proposal amending Regulation (EU) 2018/848, “if the equivalence arrangements were to expire on 31 December 2026, it would be more difficult to continue current trade with the equivalent third countries concerned. This would be particularly detrimental to EU operators, as the EU enjoys a positive trade balance with those third countries”.
In such a scenario, since equivalency recognition goes both ways, EU operators would need to be certified as complying with third countries’ national schemes (e.g., in the US USDA organic, in Canada COR organic, in Japan JAS organic etc.) in order to export their goods to third countries. This would increase administrative costs for EU operators, for example for inspections, controls, audits and certification by the accredited control bodies and competent authorities of third countries. This would make EU organic operators less competitive on third country markets and make it more difficult for them to access those markets. It would also harm EU imports if the equivalences expired at the end of 2026, especially for purposes of processing organic raw materials into EU organic products, as it would force third country operators to be certified against EU standards in accordance with point (b)(i) of Article 45(1) of Regulation (EU) 2018/848. This would reduce access to organic raw materials and increase administrative costs, which would likely be reflected in increased costs of organic goods imported from third countries and higher prices for consumers.
Next steps
The Council of the EU’s position of 11 May 2026 supports most of the Commission’s proposal, but notably rejects the Commission’s proposal to allow the EU organic label on products containing up to 5% ingredients from third countries that do not meet additional criteria. It has been reported that, “While the carve-out was meant to give breathing room to businesses, several countries echoed industry concerns that it could be too burdensome to comply with”. The European Parliament is reportedly also proposing to eliminate the 5% margin of tolerance, but otherwise largely agrees with the Commission.
A vote by the relevant committee in the European Parliament is expected in July 2026. Negotiations between the Council and the European Parliament are then expected to start “as soon as possible” to extend the equivalency recognition until 2036, as it is currently set to expire on 31 December 2026.
For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia
Recently adopted EU legislation
Trade Law
Trade Remedies
Food Law
Other
- Commission Regulation (EU) 2026/1123 of 26 May 2026 laying down labelling requirements for plant protection products and repealing Regulation (EU) No 547/2011
Imelda Jo Anastasya, Amanda Carlota, Ignacio Carreño García, Pattranit Chantaplaboon, Joanna Christy, Tobias Dolle, Alya Mahira, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.
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