The escalation of the global climate crisis and implementation of carbon neutral policies have accelerated the transition to new and renewable energy sources, thereby increasing the supply of electric vehicles (EVs) [1, 2]. Recently, owing to the rapid transition to EVs, EV waste battery treatment has emerged as a critical public policy issue [3, 4]. Providing waste batteries, a second life could be beneficial for the environment and economy [5]. However, to date, environmental and transport policies have not prioritized value creation from EV lithium-ion battery (LIB) waste; therefore, the circular economy remains unachieved. This failure is primarily attributable to uncertain governance. Therefore, concrete governance is warranted in EV waste battery policies.

First, owing to the absence of proper management, an increase in the number of EV waste batteries [6] has raised concerns [7–9]. Despite the rapid growth of the EV battery market, policies directed toward their treatment are lacking. Second, waste battery policies can be a new driver for the economic growth of the nation. A sudden increase in the cost of raw materials for secondary batteries used in EVs has been stimulating the waste battery market [10, 11]. For example, in the global market, the average price of lithium, a major raw material for secondary batteries, has increased by 410% in 2022 compared with 2020 [12]. Furthermore, there has been an increase in the supply prices of cobalt and nickel [12]. Third, fierce competition to secure supply chains has triggered the waste battery market. Competition has been intensifying owing to the entry of new European companies, including Northvolt. Notably, the growing demand for producers to internalize battery production has facilitated the growth of the waste battery market.

The key drivers in the battery industry include structured cooperation among the government, companies, and stakeholders and a strong policy [13, 14]. This has been proven by the industrial models of China and Japan. However, the experience of South Korea in the EV battery industry has been like a double-edged sword: an excellent output in battery production but poor output in waste battery reuse and recycling. Therefore, infrastructural and societal needs for waste batteries have been established in South Korea; however, institutions and governance systems fail to meet these demands.

As South Korea is a leading country in EV technology, case studies concerning EV waste batteries from South Korea are emerging in international journals. Choi and Rhee [15] explained the recycling management and technology of end-of-life EV batteries in Korea. In addition, Chen et al. [16] compared next-generation vehicles in China, Japan, and South Korea and suggested developmental strategies and policy trends for vehicle batteries. Furthermore, Herrador et al. [17] compared circular economy policies on battery issues in Korea and Japan. However, these recent studies have failed to apply proper methodologies and have relied on reviews. In addition, previous studies have only explained Korean policies in general and not focused on governance systems. Therefore, we aimed to overcome the methodological limitations of previous studies by including an actual survey, i.e., the analytic hierarchy process (AHP), for policy experts in South Korea. Our primary objective was to determine which actor’s role should be prioritized in waste battery governance, ultimately facilitating the circular economy. Because many countries interested in the waste battery market are not yet in the implementation stage, analyzing South Korea’s situation can offer practical insights for countries aiming to expand their waste battery market with a clear policy orientation towards carbon neutrality or net-zero emissions and strong leadership of policy actors.

After the adoption of the Paris Climate Agreement in 2015, the supply of EVs has expanded and is expected to continue increasing. Although Asian countries such as China, Japan, and South Korea dominate the market and revenue share (Fig. 1), the European Union (EU) has implemented the leading institutions and legal frameworks [18, 19].

In the EU, it is expected that by the year 2040, 70% of the vehicles sold will be EVs because economic feasibility will improve with the development of EV manufacturing technology, resulting in regulations on fossil fuel vehicles. Furthermore, the recent EU battery and waste battery regulation (draft) law, which will revise the battery directive, has stated that an increase in battery usage will be a major factor influencing the transition to a climate neutral economy. Notably, the manufacture of new batteries may decrease owing to the increased use of recycled batteries, thereby decreasing the use of natural raw materials.

The Japanese government has predicted that by the year 2050, >500,000 EVs will be supplied as next-generation vehicles, with the generation of batteries after their use. Notably, Nissan Motor and Sumitomo Shoji established “Fore Energy Company” in September 2010 to review the reuse business of lithium-ion battery separators in EVs supplying electricity. In addition, “Vehicle to Home,” a conceptual diagram of the solution, aims to use the large-capacity batteries of EVs as a power supply device. China has the world’s largest EV market share [20], and the

Chinese government has presented a roadmap to supply 5 million new EVs by 2020. Furthermore, it has been promoting support policies, including vehicle purchase subsidies and exemption from acquisition tax [21]. The Chinese government has also implemented regulations to strengthen the management of the recycling of new energy vehicle batteries, standardize industrial development, protect the environment and human health, ensure safety, and promote comprehensive resource utilization and the development of the new EV industry. However, studies on the recycling of EV batteries are lacking [22].

In South Korea, 25,593 EVs were distributed (cumulative) in 2017, representing an average annual growth rate of approximately 85% (2011–2017). In addition, based on the fine dust management plan in Korea, the South Korean government planned to supply 350,000 EVs by 2022. Furthermore, the South Korean EV battery market is expected to grow to 1,243 GWh by 2025, with an annual average growth rate of 46.7%. Notably, EV batteries are generally discarded after 5–10 years of use, and the initial EV market was established in 2011; therefore, the number of waste batteries may increase after 2020 [23].

The EV waste battery business is divided into recycling and reuse methods (Table 1). Notably, EV batteries can no longer be used if their charging decreases to <70% of the initial capacity owing to decreased mileage and charging/discharging speed due to the operational reasons. Therefore, batteries with a charging capacity of 70% are warranted for replacement, necessitating recycling and reuse.

The recycling method involves disassembling the batteries and extracting and recycling their core materials, including cobalt and lithium. Therefore, facilities such as a waste battery discharge system are required for the recycling industry. Furthermore, it is important to secure process technologies that can minimize constituent materials. Recycling waste batteries can replace the import of raw materials and decrease costs associated with battery raw materials. Companies such as Belgium’s Umicore, which specializes in battery recycling, are successful business models [12].

In the reuse method, the condition of waste batteries is first evaluated, followed by changing them to energy storage systems (ESS) and uninterruptible power systems. Notably, domestic and foreign automakers are actively researching and developing new reuse methods. The reuse industry requires facilities to diagnose and analyze the remaining performance of waste batteries. Furthermore, technical expertise in ESS manufacturing and operation is warranted. Reusing waste batteries as ESS may establish new economic value. Although a successful model for the commercialization of ESS remains undeveloped, vehicle manufacturers are reviewing it as a new business model owing to its potential [12].

Governance in public policy can be defined as the process of decision-making by core policy actors [24–26]. Notably, policies are an outcome of interactions among policy actors; therefore, identifying the core actors and their roles has been the primary concerns of studies on energy and environmental policies [27–31].

Fig. 2 demonstrates that the primary policy actors in the domestic waste battery circulation system are the central government, parliament, corporations, and local governments. In addition, vehicle owners and automobile environmental associations play vital roles. First, the central government or parliament supports legal systems related to battery reuse and recycling. Next, the waste batteries are segregated at the company level, and the local government collects and stores returned waste batteries. Thereafter, the central government evaluates and classifies the performance of the stored waste batteries. Subsequently, the Automobile Environmental Association sells the waste batteries to companies for recycling or reusing as ESS. Furthermore, the companies develop business models and strengthen research and development (R&D) in the reuse and recycling processes. Lastly, the central government strengthens macroenvironmental regulations related to the circular economy and influences the entire cycle of waste batteries.

The EV market is rapidly growing toward green transportation and the global target of carbon neutrality. However, the after-effects of EV components, particularly waste battery treatment, remain unclear. To elucidate the correct use of waste batteries, the appropriate roles of primary governance actors should be identified and they should lead to the early stage of the industrial ecosystem. In the present study, we determined the appropriate role of each circular governance actors in EV waste batteries using the case of South Korea. To achieve this, we performed AHP analysis, a semiquantitative method, of 37 experts in the circular economy. This study derived several insights and policy implications as follows.

Point 1. More authority and resources to firms and the central government.

First, more authority and resources should be designated to firms and the central government. In South Korea, the local government is primarily responsible for waste battery management. However, in the early stage of the circular ecosystem of waste batteries, the responsibility should be given to firms (by developing a business model) and the central government (by reinforcing the detailed regulations), and not to local governments.

Point 2. Reuse industry requires more attention.

Second, the reuse industry requires more attention than the recycling industry, which has already been established and does not require advanced technology. However, because the reuse industry is in the beginner stage, it is vital to invest more in technology and put additional efforts into developing the reuse industrial value chain.

Point 3. Confirming consistent prioritization for significant issues.

Third, South Korean experts in different sectors mostly had similar opinions on circular governance. Excluding several detailed factors, the public, academic, and private sector experts exhibited comparatively consistent prioritization for significant issues, including the urgency of developing a business model for reuse and recycling and implementing regulations for waste batteries.

Point 4. Korean case as guideline for EV waste battery governance.

Lastly, additional case studies should be conducted in other countries to confirm the results of the present study, enabling their generalizability. Nevertheless, the case discussed in this study is meaningful because South Korea occupies a large portion of the global EV and battery market in terms of production and consumption. Our study results can offer some guidelines for conforming the governance of EV waste batteries in latecomer countries in EV technology. This can ultimately facilitate the growth of the EV market toward sustainable and more ecological transportation in global society.