Influx of old electric vehicle batteries will pose a significant challenge for Australia

Australia's battery recycling industry is in 'crisis' and unprepared for an influx of electric vehicles once they reach the end of their lives, a federal inquiry has been told.

Automotive and recycling industry representatives issued the warning on Thursday at the Transition to Electric Vehicles inquiry in Sydney, which also heard calls for a 'battery passport' for electric cars, similar to efforts in Europe.

The federal government may have limited time to act on the recommendations, however, with one recycling organisation saying the issue could become a significant challenge within six years.

The parliamentary inquiry is probing many parts of the transport transition, including electric cars' impact on the electricity grid, opportunities to save fuel, demand for chargers, and battery manufacturing and recycling.

Recycling facilities were already struggling with too few collection points and a lack of guidance and standards about battery recycling, Australian Council of Recycling chief executive Suzanne Toumbourou told the inquiry.

'The recycling and the waste sectors ... are in a crisis relating to incorrectly disposed-of batteries that cause fires in all types of facilities,' she said.

'We don't have a sufficient collection system, we don't have a sufficient extended producer responsibility system for batteries.'

The nation needs clear rules on battery labelling, transport and disposal, including a ban on dumping them in landfill, before local facilities could break down and process electric vehicle batteries, Ms Toumbourou said.

'All batteries, including EV batteries, must be regulated,' she said.

'These standards must extend to handling, storage, transport and processing for batteries at end-of-use.'

Many electric vehicle brands had already partnered with companies to process old batteries, Polestar Australia communications head Laurissa Mirabelli said.

While Australian facilities were able to extract valuable 'black mass' from batteries that contains metals such as lithium, cobalt and graphite, they were unable to process the material onshore.

In addition to ramping up recycling efforts Australia should consider introducing regulations like those in Europe that label batteries and set a target for the recovery of critical minerals from them, Ms Mirabelli said.

'It's about transparency for customers,' she said.

'There's no standard way of establishing the climate impact of a battery or how you're sourcing any of the materials in that battery (in Australia), which is why the EU battery passport would be a really good standard for us to adopt here.'

A facility in Victoria has begun recycling electric vehicle batteries, although only into black mass for export, Association for the Battery Recycling Industry chief executive Katharine Hole told the inquiry.

Australia had a significant opportunity to recover critical minerals from electric cars but the industry would need standards and support quickly to meet the challenge, Ms Hole said.

'We've got six years to really stand this industry up,' she said.

'As the volume of EVs on the road grows in the next few years they'll come through (for recycling).'

The inquiry is expected to hold public hearings in Melbourne, Brisbane and Canberra over August and September.