After a lengthy legislative process, the new EU Batteries Regulation has finally been published in the Official Journal of the EU, entering into force later this month and commencing from 18 February 2024. The Regulation will promote the sustainability of batteries across their entire life cycle and adds to the ever-increasing legislation regarding supply chain compliance. Crucially, it impacts all batteries, from industrial batteries to ones used in electric vehicles. Requirements cover recycling, labelling and due diligence. Our team looks at what the new law means for companies below.
The new Batteries Regulation (‘the Regulation’) replaces the existing EU Batteries Directive (2006/66/EC). There are three priorities of the Regulation: strengthen the functioning of the internal market (for battery products, processes, waste batteries and recyclates) by setting standardised rules; promoting a circular economy; and reducing the environmental and societal impact of batteries across their life cycle, with a focus on supply chains.
The Regulation lays down requirements for economic operators placing batteries on the market or putting them into service in the European Union. It applies to all categories of batteries used in the EU, including batteries imported into the Union from non-EU countries. This includes batteries used in electric vehicles, light transport (e.g. mopeds, electric bikes and scooters), industrial, waste portable, and starting, lightning and ignition (SLI) batteries. ‘Economic operator’ means the manufacturer, the authorised representative, the importer, the distributor, the fulfilment service provider or any other natural or legal person who is subject to obligations in relation to the manufacture, preparation for re-use, preparation for repurposing or remanufacturing of batteries, the making available or the placing of batteries on the market, including online, or the putting of batteries into service.
Next to the obligations applying to all economic operators, including battery due diligence and risk management obligations, Chapter VI sets out specific obligations for manufacturers, importers and distributors. Noteworthy is the establishment of an extended producer responsibility. A ‘producer’ is any manufacturer, importer or distributor or other natural or legal person established in an EU Member State. Producers should finance the costs of collecting, treating, and recycling all collected batteries, carrying out compositional surveys of mixed collected municipal waste, reporting on batteries and waste batteries, and of providing information to end-users and waste operators about batteries and appropriate re-use and management of waste batteries.
Moreover, the Regulation lays down rules on green public procurement to be used by Europe’s public authorities as regards batteries.
In line with the European Green Deal, the Regulation aims to protect the environment and reduce pollution by boosting circularity in batteries throughout their lifecycle. New targets are set for producers to collect 73% waste portable batteries by the end of 2030, and 61% of waste batteries for light means of transport by the end of 2031. Interim targets are set for 2027. By the end of 2031, 80% of lithium from waste batteries should be recovered. Lithium is seen as a critical material which can be reused to make more batteries. Lithium, along with cobalt, lead and nickel, will also be subject to mandatory minimum levels of recycled content to be used in new industrial, SLI and EV batteries in the future. Finally, by 2027, portable batteries used in appliances should be removable and replaceable by the end-user.
Fairer single market
The Regulation introduces harmonised rules on safety, sustainability, and labelling requirements. For example, there are tighter restrictions placed on the use of hazardous substances like mercury and cadmium. The carbon footprint of batteries will also need to be mandatorily disclosed. The methodology for calculating footprints will be addressed through secondary legislation and shall consider the bill of material, the energy, and auxiliary materials used in a specific plant to produce a specific battery model.
Labels will also need to provide information on components, lifetime of battery and recycled content used in batteries – this will apply from 2026. This will be in the form of a digital product passport. Finally, a QR code which links to information on batteries’ composition will be required from 2027.
Supply chain due diligence
Twenty four months after entering into force (i.e. August 2025), economic operators that place batteries on the market shall comply with several due diligence requirements similar to other supply chain legislation. This includes verification of the source of raw materials used for batteries placed on the market, determining internal responsibilities, third-party verification of battery due diligence policies and annually publishing the due diligence policies that need to be based on international due diligence standards such as the UN Guiding Principles on Business and Human Rights or the OECD Due Diligence Guidance for Responsible Business Conduct (listed in Annex X). To reduce the burden on SMEs, some exemptions are in place.
In the event of non-compliance with due diligence requirements, member states must take all appropriate measures to restrict or prohibit the batteries being made available on the market by the economic operator and in serious cases ensure that the batteries concerned are withdrawn. In addition, specific sanctions can be stipulated by member states.
In terms of alignment with the EU’s proposed Corporate Sustainability Due Diligence Directive (CSDDD) (see our blog post on the topic here), the latter’s scope of application is linked to certain thresholds (i.e. number of employees and amount of net turnover), whereas the Batteries Regulation is linked to the professional activities (i.e. being an operator). As the CSDDD will become the basic supply chain legislation within the EU, the Batteries Regulation is a more specific type of law that adds specific requirements but also overlaps with the CSDDD in many parts. A holistic approach to supply chain compliance is therefore recommended, taking into account general and specific supply chain laws such as this Regulation, but also the EU Conflict Minerals Regulation or the EU Deforestation Regulation for instance.
Implementation and next steps
As batteries are used in a wide array of sectors, the Regulation will be of significance to many companies, especially those located within end-use industries such as aerospace and automotive, electronics and energy storage. It is a key legislative text in relation to the energy transition, reflecting the increasing significance of batteries in this respect.
The text was published in the Official Journal of the EU on 28 July. It will enter into force on the twentieth day following its publication, and will apply six months later on 18 February 2024, with a faded effective date of 18 August 2024 for other key obligations such as due diligence. The Regulation is directly applicable in each member state and the duties will be the same in each one, except in the case of sanctions for non-compliance, where member states have individual discretion.
A number of secondary legislative files (delegated and implementing acts) will need to be presented over the coming years to provide further clarification and rules on topics including methodology for calculation and verification of the carbon footprint of batteries, restricted substance use in batteries, electrochemical performance and recycled content requirements.