New EU Framework Batteries Regulation

New EU battery rules to deliver on Strategic Action Plan on Batteries, to support developing a sustainable and competitive battery value chain, and to strengthen a strategic, 4-million-new-jobs industry.

New EU Framework Batteries Regulation

New EU battery rules to deliver on Strategic Action Plan on Batteries, to support developing a sustainable and competitive battery value chain, and to strengthen a strategic, 4-million-new-jobs industry.

Sustainable batteries for a circular and climate neutral economy

In the context of the European Green Deal, the European Commission published a proposal for a new EU batteries legislation on December 10. With the aim of paving the way for sustainable batteries for a circular and climate neutral economy, the new batteries framework is the next step in delivering on the European Strategic Action Plan on Batteries. Key changes are the shift from a Directive to a Europe-wide Regulation as well as new requirements for social responsibility and environmental sustainability. At RECHARGE, we especially welcome that the Commission proposal has the clear objective of creating coherence with other EU policy areas and regulatory frameworks.

"European policymakers are now in the unique position to translate the EU’s battery vision into a meaningful legislative framework."

An opportunity for better regulation

However, despite relevant updates and innovations, the draft Batteries Regulation does not fully meet its objective of creating a future-proof, strengthening legislative framework. A high level of complexity and critical overlaps risk jeopardizing the effectiveness of the Commission proposal. As the industry voice for the advanced rechargeable and lithium batteries value chain in Europe, RECHARGE proposes to: 

Given the strategic importance of the battery industry, a timely yet robust implementation of the new EU rules is crucial for this cornerstone legislation.

    • As a general rule, the Batteries Regulation must include a grandfather clause to distinguish between new models of batteries that fall within the scope of the new requirements as created by the Batteries Regulation and products such as legacy spare parts or battery models introduced to the market before the entry into force of this Regulation.
    • Certain deadlines between the proposed Batteries Regulation and the respective implementing acts pose a real challenge to compliance. This is especially the case for establishing the technically challenging calculation methodologies for the carbon footprint, the recycled content or for the new recycling efficiencies – all subject to an early declaration obligation.
    • All provisions directly or indirectly impacting the production process require a minimum 24-month transition phase for proper implementation at manufacturing line level.

To ensure the effectiveness of the European battery rules, RECHARGE recommends incorporating a dedicated paragraph on enforcement and the necessary resources required at Member State level to sufficiently execute enforcement measures for EU and imported products alike. Several articles are prone to become paper tigers without relevant enforcement.

In addition, for the Batteries Regulation to successfully set the standard for environmentally and socially responsible batteries, all actors – inside or outside the European Union – must be subject to the same requirements. Therefore, third-party auditing bodies, as applicable under article 39 (3b) for example, that are based outside the European Union, shall ensure to apply the same standards – and potentially require an accreditation at EU level.

Batteries are electro-chemical devices that have been carefully designed to meet the specific requirements of an application or equipment. To ensure their safety at all times, the European battery industry has established an extensive safety approach based on functional safety analysis and typically these main safety levels:

    • Cell and battery design
    • Battery-device optimization
    • Electric and electronics architecture
    • Battery Management System

The draft Batteries Regulation introduces wording pertaining to removability, repair, remanufacturing and repurposing that is of high concern to both the industry and consumer protection organizations. With the goal of upholding the industry’s comprehensive safety proposition, we, therefore, call upon European policymakers to refrain from any wording in the final Batteries Regulation that would encourage unqualified persons to alter a battery, and that contradicts existing safety standards. Ultimately, any battery – first or second use – should be subject to product certification and safety testing alike.

The Batteries Regulation has the clear objective of creating coherence with other regulatory frameworks. RECHARGE encourages EU policymakers to give priority to overarching, horizontal legislation, such as:

    • Chemicals Management: With horizontal – and already overlapping – chemical management frameworks in place, the Batteries Regulation should not create another layer of complexity by introducing a REACH-like restriction mechanism for battery substances only. The assessment of substances used in batteries should remain subject to the horizontal chemicals management framework. In view of the opportunities created by the Chemicals Strategy for Sustainability, we call upon the European Commission to work towards a holistic chemicals management regime based on a robust risk management approach, including regulatory management option analysis (RMOA) and a socio-economic impact assessment.
    • Safety: Safety is a key priority for the European batteries value chain and we, thus, welcome the underlying principle of article 12 to support the safety of all batteries (not just stationary battery energy storage systems) at all times. To that end, article 12 should be amended to refer to the wide spectrum of applicable safety obligations and we call in Annex V for a technically strong CEN/CENELEC standardization mandate that can complement the existing standards, as needed. With regard to best practice, Annex V should not substitute – or anticipate – the work established by European standardization bodies and should avoid any overlaps with horizontal requirements, such as described by the UN battery safety testing legislation.

We welcome that the Batteries Regulation is an ambitious piece of legislation, with the potential to support equally ambitious value chain actors in the transition to a sustainability-focused market structure. Certain provisions risk creating over-regulation and unnecessary overlaps, though.

    • End-of-life management: The draft Batteries Regulation features extensive waste management actions, such as second life, recycling efficiency targets, material recovery targets and a recycled content obligation. While all battery chemistries are suitable for recycling, circular economy measures should not overburden the industry, should take into consideration best available techniques not entailing excessive cost (BATNEEC) and must not create contradicting conditions or negative environmental impacts. A successful battery waste management scheme reflects the fast-paced, innovative profile of batteries and battery-containing equipment. Flexible solutions are expected to create greater effectiveness than too stringent – or overlapping – measures that risk blocking the market.
    • Information provisions: The extensive information, labelling, declaration and auditing provisions under articles 13, 18, 60, 61, 64, 65 as well as article 7, 8 and 39 should be streamlined to reduce administrative and procedural challenges – for both industry and authorities. An electronic battery passport capable of respecting IP rights as well as the manufacturer’s safety chains, and with dedicated access levels for each stakeholder group, including end-users, recyclers, Member State authorities and the European Commission, represents a unique opportunity to simplify such obligations and to establish a central point of information, where possible.

Batteries have been subject to a comprehensive regulatory framework since 2006. It is in this context, that RECHARGE promotes new legislative measures that bring a true benefit to the existing framework. Against this background, RECHARGE wants to point out several provisions that do not withstand the effectiveness test under real-world conditions.

    • Performance and durability criteria for industrial and electric vehicle batteries: In a fast-paced, innovative industry, performance and durability criteria are likely to stall product development and hamper the necessary flexibility to meet the specific needs of different products and applications. A number of design criteria would clearly contradict design requirements, such as durability obligations in areas where fast charge is needed. In addition, the parameters related to the electrochemical performance and durability, as defined in Annex IV Part A, are already incorporated in the calculation of the carbon footprint (Annex II (3)). In connection with the internationally applicable durability requirements developed by the UNECE Working Group on Electric Vehicles and Environment, especially electric vehicle batteries should not be subjected to article 10 and its Annex IV, Part A and B. Overall, it can be said that article 10 is redundant and should be deleted accordingly.
    • Recycled content: Because of the limited environmental benefits and the disproportionate burden for European battery manufacturers, recycled content should start on a voluntary basis. According to the inception impact assessment, the amount of available secondary materials will not reach significant levels before 2035. Beyond that, continuous developments in battery chemistry are expected to make (at least some) material targets obsolete. To that end, a regular review of targets is needed, taking into account evolutions in battery chemistry and waste volumes. To drive the objective of high-quality recycling more effectively, an ambitious recycling quality definition should be introduced instead of the burdensome recycling content provision.
    • Repair and second life: While it is important for the Batteries Regulation to define the legal basis for repair and second life, the general language in articles 11, 14, 59 (1 and 2) and 60 (1a) needs to be amended to prevent unqualified persons from altering a battery, and to avert potential safety risks.
    • Collection of waste portable batteries: The significantly higher targets for collecting waste portable batteries are practically not achievable based on the existing calculation methodology. An “available for collection” approach must be implemented to account for the long lifetime of batteries and losses caused by export or incorrect disposal. In general, article 48 must better recognize the role that end users have in disposing of waste batteries.

Certain measures create a disproportionate administrative and cost burden on niche or small-series batteries that are produced in only a few thousand units per year, designed to meet very specific application needs and often must be brought onto the market within weeks. Especially the scope of articles 7, 8, 59 and 65 – that were clearly established around the profile of mass-volume (EV) batteries – must be limited in view of the unique profile of these batteries. Similarly challenging is article 57 for several (niche) battery technologies. The recycling efficiency for lithium-based batteries and, respectively, certain material recovery targets are too technology-specific to be operationally achievable for all battery chemistries. The economic burden of complying with article 57 would basically drive such chemistries off the market.

Support for a strategic industry in the making

Batteries were one of the first products to have been regulated on a lifecycle basis, from design and product safety to transport and recycling. At RECHARGE, we firmly believe that a modernized EU batteries framework should, therefore, really put the focus on regulating relevant areas of our product and value chain, closing gaps in the existing framework, removing overlaps with other policy areas, and enhancing existing provisions or definitions. The objective of a future-proof Batteries Regulation must be to establish net environmental or social benefits, be effective and meaningful, and applicable to domestic as well as imported batteries.

For an industry in the making, long-term investments and cutting-edge innovations will depend on a legislative framework that is capable of providing predictability and flexibility likewise. The transformation of the current batteries framework into a European-wide regulation is a key step to ensure a high degree of predictability and clarity for economic operators. In turn, measures that hamper the innovative and fast-paced profile of our industry risk jeopardizing the further decarbonization of our societies as well as the establishment of a prosperous battery value chain in Europe. 

To allow end-users to take informed purchase decisions, RECHARGE welcomes a consistent information giving approach. Also other stakeholders along a battery’s lifecycle depend on meaningful information. 

A streamlined, digitized approach is, therefore, crucial to harmonize the various needs for data. Redundancies, as is the case between articles 61, 65 and Annex XIII, must be avoided. To that end, we also want to point to the duplications between the information required in form of a label and as part of the QR code in article 13.

An electronic battery passport with relevant access levels for each stakeholder offers a unique opportunity to simplify labelling, information exchange and declaration obligations. Practically speaking, the QR code should serve as an identifier to link to the battery passport (electronic database) but should not be used to “store” information. According to their authorization, users may then obtain complete or partial information from the database.

Any remaining needs for labels should be assessed based on effectiveness and legibility. The crossed-out wheelie bin for example is an important and meaningful piece of information that must be visible from the product/battery.

RECHARGE welcomes the inclusion of carbon intensity – calculated based on an enhanced EU Product Environmental Footprint methodology – in the draft Batteries Regulation.

Carbon footprint performance classes will allow consumers to identify batteries with a superior product profile more easily and give necessary signals to poorly performing industry actors to improve their carbon emissions. Additionally, it is an effective criterion for the quality and performance of a battery (see Annex II).

We believe that the proposed step of implementing CO2 thresholds is an important instrument to pave the way to low-carbon products. To further accelerate this transition, CO2 thresholds should be accompanied by positive measures for frontrunners.

To ensure a meaningful differentiation between products and value chain steps, the secondary legislation process will have to ensure a robust implementation of the carbon footprint provision now:

  • Prerequisite is that the carbon footprint reflects real-world manufacturing operations and is calculated based on actual emissions for the whole supply chain, and not on averaged data of upstream suppliers and operations. Data agglomeration shall only be permitted at selected calculation and declaration steps.
  • At the same time, confidentiality of the data must be ensured at all times.

To that end, the industry has started to update the Product Environmental Footprint Category Rules (PEFCR). The current calculation methodology was established in 2013 and needs to be transposed into a method that is fit for a European-wide regulation now. The goal is a robust, comparative and consistent approach.

Generally, the carbon footprint requirement must be proportionate and feasible before it can come into force. To date, PEFCR have only been established for rechargeable EV batteries. Considering the much broader scope of article 7, all other battery chemistries and categories shall only become subject to the carbon intensity requirement after the establishment of their PEFCR.

In terms of feasibility and proportion, article 7 should be limited to the initial scope of batteries for electric vehicles and large energy storage systems. Small-volume batteries should be excluded, hence. 

Paramount to the further development of our industry, and as a matter of fact of all sectors, is social responsibility.

RECHARGE and our members especially welcome that the Commission has incorporated our call for human as well as social and labor rights. Unfortunate is the limitation to the raw materials sector, however. A responsible and sustainable battery market, covering all relevant actors and value chain steps, is a key objective of the European advanced rechargeable batteries industry – and an important competitive differentiator.

In view of better regulation, we appreciate that the due diligence provision makes a clear reference to the existing OECD Due Diligence Guidance and recognizes the value that existing industry schemes have created to date (article 72). To avoid overlaps, article 39 should be extended to capture horizontal EU due diligence legislation such as the Conflict Minerals Regulation, too. 

According to the European Commission, the recycled content provision shall boost quality recycling by triggering market demand for secondary raw material. 

What does the industry say?

At RECHARGE, we welcome that the Commission has partially considered the industry’s concerns regarding the alleged benefits and burdens stemming from article 8, and introduced a stepwise implementation of recycled content as well as an amendment mechanism:

  • At a time when volumes of available secondary raw materials in Europe are low, the burdens on the European industry to implement a recycled content obligation would have jeopardized the competitiveness of European batteries. The inception impact assessment clearly concluded that the European battery market is not yet mature enough for a meaningful recycled content obligation.
  • The amendment mechanism is important to better reflect real-world waste streams and developments in battery chemistry. Especially the latter is expected to make certain recycled content targets marginal or obsolete even before the implementation date of article 8. Finally, the economic impact of a new mandatory requirement must be assessed, too. Referring to the inception impact, this was not the case for the recycled content provision. The amendment mechanism should be altered to a review clause, therefore. Especially the later 2035 targets should only be set following an extensive assessment.

With regards to the inception impact assessment’s concluding remarks on the limited environmental benefits of recycled content for batteries, it must be stated that the recycled content obligation currently remains an unjustified burden on the industry. Even more so because non-European battery manufacturers benefit disproportionately from article 8. Battery waste, including production scrap, has reached significant volumes in Asia, making it easier for Asian companies to access recycled battery materials.

What does the industry propose?

  1. RECHARGE recommends establishing article 8 as a voluntary provision first. Especially a clear and robust definition of recycled content would be required before defining potential targets.
  2. In a similar vein, criteria for end-of-waste and end-of-recycling must be further developed to ensure high-quality recycling and to allow for a clear definition of what can be considered as recycled content. In fact, an ambitious definition of end-of-recycling could effectively replace the burdensome recycled content provision. Together, the material recovery targets and a new end-of-recycling definition would boost recycling quality in those areas where market mechanisms have not taken effect yet. 
  3. All in all, the scope of article 8 should be limited to batteries for electric vehicles and large energy storage systems. The administrative cost would overburden niche and small-series batteries disproportionally. 

The batteries industry is an innovation-driven, fast-paced sector. Both battery chemistries and material compositions as well as battery-powered equipment undergo enormous design developments. 

Design obligations present a real threat to the European industry’s efforts to compete in this strategic technology. They are expected to hamper the capability of battery manufacturers to meet the specific needs of the products or applications they serve and might even contradict OEMs’ design requirements. Therefore, RECHARGE recommends the following for performance, durability and removability provisions:  

Performance and durability requirements for rechargeable industrial and electric vehicle batteries

In view of coherence and to reduce complexity as well as overlaps, article 10 should be removed from the Batteries Regulation:

  • At UN level, performance and durability criteria are currently being developed for electric vehicle batteries. The Batteries Regulation should not overlap or contradict horizontal and internationally applicable legislation. 
  • Article 7 already requires a test of life duration, and Annex II (3) explicitly incorporates the electrochemical performance and durability parameters as set out in Annex IV Part A. Additional performance and durability requirements would result in clear overregulation.
  • Industrial batteries and batteries for electric vehicles are sold to OEMs and not to end users. These OEMs have strict quality and technical protocols in place for the components (including batteries) they purchase.

Removability and replaceability of portable batteries

At RECHARGE, we are particularly concerned about the general language in the draft Batteries Regulation, widely encouraging the unconditional altering of batteries. The draft Regulation does not provide for any technical framework for remanufacturing or repurposing that is aligned with well-defined intermediate product quality, product responsibility and certification, production process control, transport safety aspects as well as safety testing of batteries. It is for that reason that the Batteries Regulation should refrain from any wording that will encourage the altering of a battery by an unqualified person. Concretely: 

  • To ensure a high level of safety, replaceability options must be restricted to batteries and shall never include individual cells within a battery pack.
  • Under no circumstances should non-original battery packs or uncertified sub-units thereof be allowed in any application after the exchange of certain parts such as the battery cells.

In general, the draft Batteries Regulation should recognize the role of integrated batteries as an important design decision to protect against water, dust or direct light exposure and to consequently ensure better performance, durability and safety.

In several parts, the Batteries Regulation does not provide sufficient protection of the property rights of the (initial) manufacturer. 

This is especially the case in article 59 on requirements related to the repurposing of industrial and electric vehicle batteries. 

To protect the intellectual property and related investments of first manufacturers, additional provisions need to be made as regards the transfer of data from the battery management system. Currently, article 59 does not sufficiently protect the initial manufacturer’s intellectual value. In fact, the industry fears that article 59 (1) even permits second life at the expense of the first manufacturer.

Additionally, the Batteries Regulation should refrain from any wording that encourages unqualified persons to alter a battery by accessing battery data. Operating an electro-chemical device, such as batteries, requires adequate technical expertise. It is in this context, that article 59 (1 and 2) as well as articles 14 and 60 (1a) need to be amended to avert potential safety risks, clearly mentioning that the safety information provided for handling and testing does not guarantee the safety of the battery in case of repurposing.

Instead of enabling access to the battery management system (BMS), a possible solution could be to make BMS data available via the battery passport (article 65).

The European battery industry is estimated to be worth up to EUR 250 billion per year, from 2025 onward.

In 2019, more than EUR 60 billion were invested in the European battery ecosystem. European cell manufacturing capacity is expected to exceed 400 GWh p.a. in the next three to five years. Nearly a dozen new gigafactories will become operational by the mid of the decade to support the electrification of our society.

An important employer already today, the advanced rechargeable batteries sector has the potential to create some 800,000 direct jobs and up to 3 million indirect jobs by the mid of the decade – in both base and high-skilled jobs.

To maintain the beat of this innovation and investment dynamic, RECHARGE advocates an enabling legislative framework.

Our policy recommendations include: 

  • Carbon footprint content as a pivotal environmental and quality performance indicator
  • Mandatory requirements for human, social, and labor rights along the value chain
  • A digital battery passport for comprehensive tracing of materials
  • Effective, net-value circular economy strategy thanks to high-impact materials recycling and a recycling concept that can meet the innovative, fast-paced profile of batteries
  • Safety measures and legal certainty to facilitate repair and refurbishment for second life batteries
  • Improved collection reality with increased user sensibilization, available for collection methodology and end-of-life declaration for industrial/automotive batteries