The commercial breakthrough of Li‐ion batteries (LIBs) in the 1990s irrevocably shaped today's energy storage landscape, but the disposed batteries represent a growing hazard to the environment. One may initially assume that recycling processes are commendable technologies to ensure a counterbalance to LIBs manufacturing. However, the question remains whether current state‐of‐the‐art in LIBs recycling technologies can be considered as green. This problem is due to the application of toxic chemicals or the in situ generation of harmful substances during the recycling process. Besides the potential toxicity, current solutions are accompanied with intense energy consumption, causing carbon dioxide emissions, in disagreement with the circular economy principles. This review provides a critical assessment of both published research articles and patents to derive a broad picture on the sustainability of LIBs recycling technologies. Although the efficiency of industrially applied recycling technologies can exhibit a high overall efficiency, their general process design is generally based on waste reduction and downcycling. Contrariwise, sustainable recycling of LIBs should rely on circular processes ensuring upcycling of all materials toward zero waste and minimized energy utilization. Current solutions and expected development in LIBs recycling are presented, ranging from dismantling over components separation to application of bioderived materials. Current recycling technologies of used Li‐ion batteries (LIBs) cannot be considered as green technologies due to their sole focus on waste minimalization. This review provides a critical assessment of recent progress in LIBs recycling with an emphasis on sustainable processes, which are designed toward zero waste, minimized energy consumption, and circular materials management.