In principle, spent batteries represent a valuable secondary material source that provides access to strategic and critical raw materials. However, there is still a need to develop efficient, sustainable, and low-energy recycling processes that allow easy access to this material source. To date, the main recycling processes for batteries are pyro- and hydrometallurgy as well as the so-called direct recycling. The latter approach has the decisive advantage that the materials are not “downcycling” into precursors, but will be conserved in their original structure which in principle allows the direct re-use in the fabrication of new batteries. While pyro- and hydrometallurgy processes have already been industrialized by various companies, the technology readiness level of direct recycling is rather low and remains a challenge to be overcome. We address this topic in the idea of design for recycling as part of the concept design for circularity. This research on direct recycling therefor focuses on key points within the circular economy of lithium-ion batteries, namely an environmentally friendly water-based electrode production, a cell design suitable for recycling and the separation and classification of the materials by use of a water-based semi-continuous process. Furthermore, in the purpose of sorting & tracing, fractionation and control, an innovative marker technology based on supra-particles is introduced. This highly interdisciplinary approach on the complete process chain of direct recycling in the principle of cradle-to-cradle is bundled and addressed in the publicly funded project IDcycLIB, presented herein, and is expected to have a direct impact on the growing EU battery production ecosystem.