The Italian bus and truck manufacturer Iveco Group announced January 23 that it had joined forces with the German chemical company BASF to recycle lithium-ion batteries in the organization’s electric vehicles. The financial details of the deal have not been announced at this time.

This announcement comes shortly after BASF launched a hub for battery material production and recycling in Schwarzheide, Germany.

According to Reuters, the plan is part of Iveco’s circular economy strategy, which aims to expand the lifetime of batteries and reduce their overall environmental impact. The agreement will also comply with Extended Producer Responsibility policies that expand manufacturers’ responsibilities to cover the entire life cycle of products they introduce to the market.

Under the deal, BASF will arrange the whole recycling process for lithium-ion batteries produced by the Italian group on its vans, buses and trucks, including the collection, packaging, transporting and recycling processes in several European countries.

BASF will mechanically process the batteries into a “black mass," from which materials like nickel, cobalt and lithium can be extracted and reused. From there, the materials will be recycled back into Europe's local battery industry.

Iveco’s chief supply chain officer, Angela Qu, said that BASF’s battery collection and recycling capabilities “will help us close the loop from end-of-life batteries to new ones.”