Battery Recycling Is Quietly Rewiring Clean Energy

Most people only heard about Moss Landing when it caught fire and wiped out US$400 million in value in one hit.

That single incident in California didn’t just take a 300MW battery energy storage system offline. It also exposed a problem the clean energy transition has been ignoring for years: what happens to tens of thousands of damaged lithium-ion battery modules when something goes wrong?

Here’s the thing about green technology: it isn’t truly “green” if we treat batteries as disposable. The good news is that what’s happening right now at Moss Landing, and in new facilities in Nevada and South Carolina, shows how fast battery recycling and AI-enabled resource planning are maturing into a serious industrial backbone for clean energy.

This article breaks down what the Moss Landing cleanup really means, how companies like American Battery Technology Company (ABTC) and Redwood Materials are building a closed-loop battery supply chain in the US, and why smart, AI-assisted recycling is about to become a core part of any serious energy strategy.

From Fire to Resource: What Moss Landing Really Shows

The Moss Landing Energy Storage Facility fire turned a flagship 300MW project into a safety and public trust problem. But the cleanup led by the US Environmental Protection Agency (EPA) is quietly becoming a blueprint for responsible, large-scale battery recycling.

The EPA has appointed American Battery Technology Company (ABTC) to handle and process up to 100,000 damaged lithium-ion battery modules from Moss Landing. That’s the largest Li-ion battery cleanup in the agency’s history.

ABTC went through a tough audit and review process to be approved to receive this material under CERCLA (the federal Superfund law). That approval matters for one simple reason: Moss Landing is not going to be the last large-scale battery incident. Utilities, developers, and data center operators now need proven partners and processes before regulators will sign off on major storage projects.

ABTC estimates that processing the Moss Landing material could yield around US$30 million in recovered products. Instead of being treated as hazardous waste, those damaged modules become a significant stream of lithium, cobalt, nickel, aluminum, steel, and copper.

The reality? The fire exposed a risk, but the recycling response is turning it into a critical materials opportunity.

How Large-Scale Battery Recycling Actually Works

Battery recycling for grid-scale storage is no longer a lab curiosity. It’s industrial, messy, and absolutely central to the economics of green technology.

Step 1: Safe removal and triage

At Moss Landing, crews are entering the facility and removing and discharging modules one by one. Conditions range from intact to “severely compromised,” which means some batteries need urgent handling to avoid secondary incidents.

For any business planning megawatt-scale energy storage, this is the real operational picture:

• You need a defined process for damaged battery handling
• You need EPA and local authority alignment on where the waste goes
• You need partners already audited and certified to take that material

If your battery strategy ends at “we’ll recycle later,” regulators and communities are increasingly pushing back.

Step 2: Mechanical and chemical processing

Once modules reach ABTC’s Nevada facility, they go through a series of mechanical and hydrometallurgical steps (ABTC uses its own internally developed technologies):

• Disassembly and size reduction – removing casings, cutting or shredding modules
• Separation – isolating metals like aluminum, steel, and copper from the active material
• Recovery of critical minerals – extracting lithium, nickel, cobalt, and other elements from “black mass” via chemical processing

These recovered materials can then go directly into new cathode, anode, or structural components. That’s what’s meant by a closed-loop critical mineral manufacturing supply chain.

Step 3: Back into the clean energy system

Once you can reliably turn damaged batteries into battery-grade materials, the whole equation changes:

• Developers can factor recovery value into project economics
• Lenders and insurers see a clearer path for risk mitigation
• OEMs and integrators can source more material domestically instead of from volatile global markets

I’ve found that the companies that treat recycling as part of their original design and financial model are the ones that win stakeholder support faster and negotiate better financing terms.

ABTC and Redwood: Building a Domestic Battery Ecosystem

ABTC and Redwood Materials are both US-based, but they’re tackling different parts of the same problem: how do you build domestic, scalable, and resilient green technology supply chains for batteries?

ABTC: From pilot plant to federal partner

ABTC started in 2011 and has spent more than a decade moving from concept to commercial-scale recycling:

• 2021: Secured financing for a 20,000 metric tonne-per-year Li-ion recycling pilot facility in Nevada
• 2022: Received a US$57 million US Department of Energy grant to expand that facility and its technologies
• 2025: Approved by the EPA under CERCLA to receive waste battery material from Moss Landing and other projects

By qualifying under one of the strictest environmental legal frameworks, ABTC has effectively become part of the federal toolkit for large-scale energy storage cleanup and resource recovery.

For businesses in renewables, mobility, or data centers, having an EPA-approved recycler in your project stack isn’t a “nice-to-have” anymore. It’s a trust and compliance signal.

Redwood Materials: From EV batteries to grid and AI storage

Redwood Materials, founded by former Tesla CTO JB Straubel, is attacking the problem at huge scale.

The company already operates a major Nevada campus and claims about 90% of all Li-ion batteries processed in North America run through its facilities. Now it’s expanding with a 600-acre campus in Berkeley County, South Carolina, which will add another 20,000 metric tonnes of annual materials production.

Redwood positions itself as:

• On par with the largest US source of nickel
• The only domestic source of cobalt at scale
• One of the few new domestic sources of lithium and copper to come online in decades

This isn’t just about electric vehicles anymore. Redwood explicitly calls out the expansion of AI data centers as a key driver of energy storage growth. Those GPU-heavy facilities need both reliable power and resilience, which means:

• On-site or nearby battery energy storage systems (BESS)
• Backup microgrids for critical loads
• A long-term plan for what happens when those batteries age out

In 2025, Redwood even deployed a 63MWh second-life microgrid powering two data centers, showing how used batteries can serve a productive “middle life” before being fully recycled.

Over the next decade, Redwood expects to create 1,500+ jobs in South Carolina, leaning on the state’s history in textiles, automotive, and aerospace manufacturing. That’s green technology as industrial policy, not just sustainability branding.

Safety, Public Perception, and Why Recycling Is a Trust Issue

Energy storage projects don’t just compete on cost per kWh anymore. They compete on whether communities believe they’re safe.

The Moss Landing fire has already contributed to stricter BESS regulations in California, and similar patterns are emerging in other states. During community meetings, fire safety concerns are often the main argument used to stall or kill projects.

Joe DeBellis, Global Head of Clean Energy at Firetrace International, captured the challenge clearly:

“The responsibility for (Firetrace and the BESS industry) is to educate the community, educate the public, on technologies, different safety measures that can be done.”

He’s right—and I’d add this: transparent, credible recycling and end-of-life plans are now part of that safety story.

If you’re proposing a 100–500MW storage project and you can’t answer these questions clearly, you’re going to hit resistance:

• What happens if there’s a fire or thermal runaway event?
• Who removes damaged batteries, under what standards, and how fast?
• Where do those batteries go, and how are critical materials recovered?
• How do we avoid long-term hazardous waste or landfill issues?

Developers who show they’ve lined up EPA-aligned recyclers like ABTC or large-scale materials players like Redwood have a stronger narrative: “We’ve already planned for the worst-case scenario, and it still looks responsible.”

Where AI Fits: Smarter, Cleaner Battery Lifecycles

Because this post is part of our Green Technology series, let’s zoom in on the role of AI for a moment. The storage and recycling story isn’t just metal and chemistry—it’s also data.

AI is already reshaping the battery lifecycle in a few critical ways:

1. Predictive maintenance and failure prevention

AI models built on BMS data can flag early signs of cell degradation or imbalance long before a safety incident. For large BESS installations:

• Operators can adjust charge/discharge profiles to reduce stress
• Faulty racks or strings can be isolated preemptively
• Thermal management can be tuned in real time

Every avoided failure is not only a safety win but also a recycling efficiency win. Less severely damaged batteries are easier and cheaper to process.

2. Smarter end-of-life planning

AI-driven asset models can predict when a fleet of batteries will hit certain performance thresholds. That enables:

• Coordinated batch recycling that maximizes transport and processing efficiency
• Identification of modules suitable for second-life applications (like Redwood’s data center microgrid) versus those that should go straight to materials recovery
• More accurate long-term cost and carbon accounting

For CFOs and sustainability teams, that’s gold: finally being able to forecast resource recovery value, not just depreciation.

3. Supply chain optimization for critical minerals

As domestic recyclers scale up, AI can help match regional scrap streams with processing capacity in near real time:

• Optimizing logistics between EV returns, BESS retirements, and recycling plants
• Balancing feedstock quality and quantity across multiple facilities
• Reducing transport-related emissions and bottlenecks

When you connect recycling plants, storage projects, EV fleets, and data centers with intelligent planning tools, you don’t just recycle more—you design a genuinely circular, data-driven energy system.

What This Means for Businesses Planning Storage or EV Fleets

If you’re responsible for energy strategy, data centers, EV fleets, or sustainability targets, battery recycling is no longer a “future problem.” It’s part of your 2025–2035 planning horizon.

Here’s a practical way to approach it:

1. Bake recycling into project design
   Include end-of-life assumptions in your initial financial models: recycling costs, recovery value, and potential second-life uses.

2. Vet recyclers early
   Prioritize partners with:

   • EPA or equivalent regulatory approvals
   • Demonstrated capacity (in tonnes per year, not just pilot lines)
   • Transparent material recovery rates for lithium, nickel, cobalt, and copper

3. Use AI for asset intelligence
   Work with integrators that provide robust data access and predictive analytics for your BESS or EV fleet. Push vendors to show how they’ll support smarter end-of-life decisions.

4. Own the community narrative
   When presenting projects to stakeholders, explicitly show:

   • Fire detection and suppression strategies
   • Incident response and damaged battery removal processes
   • Named recycling partners and their environmental credentials

The companies that treat recycling, safety, and AI as a single integrated system will be the ones that get projects approved faster and operate them more profitably.

Where Green Technology Goes Next

The shift happening in Nevada, California, and South Carolina is bigger than one fire or one facility. It’s a sign that green technology is maturing—from idealistic deployment at any cost to a more grounded, circular mindset.

We’re moving toward a world where:

• Large-scale BESS and EV fleets are expected to have clear, auditable end-of-life pathways
• Domestic recyclers like ABTC and Redwood supply a growing share of lithium, nickel, and cobalt
• AI ties it all together, making batteries safer, lifecycles longer, and resource recovery more predictable

For organizations serious about sustainability and energy resilience, the next step is straightforward: treat battery recycling and lifecycle intelligence as a strategic pillar, not a compliance chore.

The companies that get this right won’t just have greener tech. They’ll control more of their own critical materials future—and that’s going to matter a lot more as electrification and AI-scale energy demand keep climbing.