On June 14, 2023, the European Parliament adopted the new European Batteries Regulation, by a vote of 587 in favor, 9 against and 20 abstentions. According to the legislative process, the regulation needs to be approved by the Council of the European Union, published in the Official Journal of the European Union and enter into force after 20 days.
The new European Batteries Regulation((EU) 2023/1542), originally proposed by the European Commission in 2020, aims to regulate the full life cycle of all types of batteries sold in the EU, including design, production and recycling. Under the legislation, future electric vehicle batteries and rechargeable industrial batteries will be required to have a carbon footprint declaration and labeling, as well as a digital battery passport in order to enter the EU market.
The main content of the new European Batteries Regulation
The core idea of the the new Batteries Regulation is the full life cycle management of batteries. The EU has set out a series of regulations on manufacturer responsibility, recycling, due diligence and green public procurement in the battery sector from the perspectives of sustainability, safety, labeling and information.
The Scope of the new European Batteries Regulation
- Portable Batteries;
- SLI batteries that provide power for vehicle starting, lighting or ignition;
- Light transportation batteries (LMT batteries) that provide traction power for wheeled vehicles such as electric scooters and bicycles;
- Electric vehicle batteries (EV batteries);
- Industrial batteries.
Carbon Footprint Declaration and Labeling Requirements
For EVs, LMTs and rechargeable industrial batteries (above 2KWh), the EU requires mandatory disclosure of carbon footprints with declarations and labeling.
Recycled Material
For EV, LMT and rechargeable industrial batteries (above 2KWh), the EU has proposed a minimum percentage of recycled material to be used in the manufacture of new batteries.
| Cobalt (Co) | Lead (Pb) | Lithium (Li) | Nickel (Ni) | |
| Short-term goal (8 years after the regulation came into force) | 16% | 85% | 6% | 6% |
| Long-term goal (13 years after the regulation came into force) | 26% | 85& | 12% | 15% |
Removable and Replaceable Requirements
For portable batteries, the end user is guaranteed to be able to remove and replace the portable battery from the product at any time;
For LMT batteries, the assurance that professionals can remove and replace the LMT battery and the individual cells in the battery from the product at any time.
Labeling Information Requirements
The EU has detailed regulations for battery surface information, trash can signs, QR codes and digital passports, and CE marking.
For EV, LMT and rechargeable industrial batteries (above 2KWh), the “Digital Battery Passport” will be implemented from January 1, 2026 onwards. This is equivalent to a battery’s “ID card”, which is essentially a data management system that can be accessed by scanning the QR code on the surface of the battery, including battery information, material composition, carbon footprint information, supply chain data, and many other things.
Battery Operator Due Diligence
The EU requires all operators to conduct due diligence, but SMEs （small and medium-size enterprise）with a net turnover of less than 40 million euros for the fiscal year are exempted.
The raw materials used in batteries involve a number of social and environmental risks during mining, processing and trading in the supply chain, and in order to identify, prevent and address these actual or potential risks, operators are required to carry out relevant management systems, risk management, third-party validation and supervision by notified bodies, and disclosure of information, among other behaviors.
Waste Battery Management
The EU has also set minimum recycling rate targets for waste batteries and key metals.
The new European Batteries Regulation introducing a dedicated collection objective for waste batteries in light means of transport, wherein 51% must be collected by the end of 2028, and this target increases to 61% by the end of 2031. Moreover, it will be mandatory for the batteries used in light electric vehicle to be replaceable by an independent professional.
In addition to the key points listed above, the new European Batteries Regulation also proposes provisions on hazardous substance limitations, performance and durability requirements, safety requirements for stationary energy storage and conformity assessment.
China’s battery enterprises in the green trade barriers under the industry chain of the difficulties
China has the most complete battery industry chain in the world, and has captured more than 60% of the global electric vehicle battery market, and the advantage is expanding. However, China’s power battery industry does have a lot of problems in carbon emission management.
China Automotive Engineering Research Institute director Peipei Chao told reporters, “in the carbon neutral vision, China’s power battery products export cost will continue to rise, the future of power battery products export carbon cost will reach 27 yuan – 100 yuan / kWh, the whole industry export carbon cost will be close to ten billion yuan.”
According to the EU’s previous draft, it is expected that the “mandatory carbon footprint declaration and labeling” will be implemented on July 1 next year, and there will be carbon footprint classification and threshold limitations. It can be predicted that the carbon footprint and digital battery passport in the new EU Batteries Regulation will be a small threshold for Chinese battery companies.
On the technical side, carbon management of the supply chain requires that every link in the entire industry be clear, precise, and traceable. From mining to raw materials, to battery materials, cells, and systems, companies in all segments of the battery’s full life cycle must be brought under the carbon management system.
In practice, this is not easy to implement due to the complexity of the battery carbon footprint and digital battery passport, the lack of digital tools in the supply chain, and the imperfections in battery recycling technology and operations management.
In terms of rules, China’s power battery carbon emission management is still facing a series of problems such as unclear policies, insufficient motivation of enterprises, non-uniformity of standard databases and international mutual recognition.
How to deal with the difficulties of the industry chain?
Low carbon will become one of the core competitiveness of the lithium industry in the future. As the main global battery industry chain, China’s battery enterprises should take the lead in the layout, enhance the product life cycle carbon management capabilities, the management object from the use of carbon emissions to the whole industry chain carbon emissions transition, in order to break the green trade barriers, to obtain the recognition of the capital market.
Carbon management of the whole industrial chain starts with mapping out the current status of carbon emissions in each link.
Enterprises in the industry chain should calculate the carbon footprint of their products and set corresponding emission reduction targets.
Then they should look for feasible emission reduction measures through renewable energy, material recycling and other directions, or explore brand-new solutions through new technologies and new financial instruments.
Finally, the company discloses its carbon footprint and emissions reduction progress to regulatory bodies and the public.
As low carbon has gradually become a new competitive point in the industry, disclosing carbon footprints is also conducive to attracting investment and partners.
Tritek is already taking action in areas such as battery carbon footprinting and digital battery passports. Zero-carbon batteries based on zero-carbon factories are seen as a more useful way for the industry to break through green trade barriers.
