In 2020, the European Commission published the Batteries Regulation proposal with the hope an agreement could be ratified within a year; however, negotiations with institutions are taking longer than expected, an agreement was not finalised before the end of last year. For the European battery industry, the delay could prove beneficial as it allows more time to discuss it with the interested parties. Here, battery association EUROBAT answers key questions on the importance of the Regulation.
Every year, around 800,000 tons of automotive batteries, 190,000 tons of industrial batteries, and 160,000 tons of consumer batteries enter the European Union, according to the European Commission. While the battery industry continues its transformation into a modern industry where ethics, sustainability and recyclability are becoming more than just buzzwords, the need for a modern legislative framework is equally important.
The current Batteries Directive was first introduced on 6 September, 2006, and came into force in September 2008. The rules included the prohibition on placing batteries and accumulators containing hazardous substances on the market, and specific rules for the collection, treatment, recycling and disposal of waste batteries. The Directive applied to all types of batteries regardless of their shape, volume, weight, material composition or use.
On 10 December, 2020, the European Commission proposed a revised Regulation that set out goals to ensure that batteries placed in the EU market are sustainable and safe throughout their entire life cycle. The Batteries Regulation (with Annexes) is a long-awaited and crucial piece of legislation, that aims to define the legislative framework for the battery industry for the next 15 years as it transitions to accommodate electro-mobility, carbon-neutral energy storage, and a sustainable battery value chain.
The proposed Regulation is the first update of the document in more than a decade and was written to reflect the latest developments in battery technology. It addresses three groups of highly interlinked concerns related to batteries:
- The lack of framework conditions providing incentives to invest in EU production capacity for sustainable batteries— due, in part, to the uneven implementation of the Batteries Directive and the lack of reliable and comparable information across the EU
- Sub-optimal functioning of recycling markets and insufficiently closed material loops, which limit the EU’s potential to mitigate the supply risk for raw materials. Shortcomings include: provisions in the Batteries Directive that did not take into account technological and market developments— that reduced the profitability of recycling activities, and held back investment in new technologies— and in additional capacity to recycle the batteries of the future
- Social and environmental risks not covered by EU environmental law, including: a lack of transparency on sourcing raw materials; hazardous substances; and the untapped potential for offsetting the environmental impacts of battery life cycles
Its aim, however, was not only to provide an updated battery policy framework— in view of the essential role of batteries in achieving a zero-emissions EU society by 2050— but also to ensure the competitiveness of Europe in the context of the Green Recovery and the global battery market.
The European Commission proposes mandatory requirements for all batteries (industrial, automotive, electric vehicle and portable) placed on the European market to be sustainable, high-performing and safe throughout their entire life cycle.
This includes, from 1 July 2024, only rechargeable industrial and electric vehicles (EV) batteries for which a carbon footprint declaration has been established, can be placed on the market.
A European Commission statement at the time read: “Batteries have to be long-lasting and safe, and at the end of their life, they should be repurposed, remanufactured or recycled, feeding valuable materials back into the economy. This means batteries that are produced with the lowest possible environmental impact, using materials obtained in full respect of human rights as well as social and ecological standards.”
Your questions answered
Here Rene Schroeder, executive director of EUROBAT— a European association with interest to battery storage manufacturers and their sub-contractors in Europe, the Middle East and Africa— answers questions about the importance of the revised Regulation and why a delay may not be detrimental to the battery industry.
Can you explain the importance of the Batteries Regulation to the battery industry?
This proposal is of crucial importance to our industry because it will literally determine the EU battery industry for the next 15 years and more. It replaces the Batteries Directive from 2006, which urgently needed a complete overhaul. Indeed, the market situation, technologies and applications have changed significantly in 15 years. With an increased focus on sustainability and energy efficiency, embedded (eg in the EU Green Deal and Fitfor55 package) batteries have become one of the drivers of the EU’s strategy of mitigating, as much as possible, greenhouse gas emissions.
While the current legislation from 2006 was a “Directive” (giving more room of manoeuvre to implement it in the national legislation of the member states), the Batteries Regulation is indeed a “regulation”— which means it will be applicable in all EU countries’ internal law immediately after its entry into force. In this sense, it can also be a step towards a level-playing field at EU level, reducing differences among national markets.
The proposal has a good general approach and we believe it has the potential of becoming a real game-changer for our industry. It considers all stages of a battery’s lifetime— from production to use-phase and end-of-life management— and it does so having in mind the interactions between chemicals management, environmental protection and industrial competitiveness in the framework of sustainability.
The Battery Regulation was published in December 2020 and is due to be implemented in January— can you explain why the negotiations have taken longer than expected? When will it be published?
The Batteries Regulation is a very complex file and probably one of the first where things are looked at holistically, from sourcing of raw materials to end of life. It is the first example of the “new generation” of environmental legislation related to specific products. It sets the blueprint for the upcoming environmental legislation. Indeed, several measures have almost no precedent, while other ones are completely new.
We knew that the initial plan of the European Commission (EC) to push the file through in less than a year would be very, very ambitious to say the least, and that was also our first comment exactly one year ago.
To us it is no surprise it has taken more time; rather, this is the normal procedure. First, the EC tabled its proposal, the European Parliament (EP) and European Council are then addressing this proposal and forming their own opinions before they move to the trilogues phase— informal tripartite meetings on legislative proposals between representatives of the Parliament, the Council and the Commission. Hence why we believe it is good for the industry that the institutions take their time to process the file (and allow more input from the industry). Although we don’t know for sure, we believe the proposal could be approved in Q3 or Q4 of 2022.
Does the delay cause problems for the European battery industry?
Not really, more on the contrary, as mentioned; due to the importance for the industry and the complexity and size of the piece of legislation (e.g. there has been tabled around 1,500 amendments at the Committee on the Environment, Public Health and Food Safety (ENVI) in the EU Parliament). We believe it is a good thing that policymakers take sufficient time and develop a deep analysis. That also gives us more time to study, understand and comment on the proposal accurately.
Which institutions are involved in the negotiations?
As in the common ordinary legislative procedure, the EU Commission drafts the proposal, which is then debated in the different committees of the EU Parliament where it will be voted in a Plenary session. In parallel, it is also debated in the Council between the Member states which will also form an opinion. After that, the “trilogues” phase starts between the three EU bodies, which should yield a final proposal and text.
How has EUROBAT been helping with the Battery Regulation document since it was announced on 10 December, 2020?
As a part of the “normal process”, the EUROBAT secretariat developed its analysis in the public consultation before the proposal was tabled. Then we thoroughly studied it after publication on 10 December 2020 and started, with the help of our members, to develop a deep and accurate analysis. We have drafted various position papers to help the co-legislators understand the position of the industry. Since the publication, we have issued more than 15 different position papers and we have organised several webinars with key stakeholders.
When our study was finalised we started outreach— sometimes with the help of other associations for more impact— to certain members of the European Parliament (MEPs) or National Permanent Representatives from member states, to convey our messages and points of concern.
Has anything changed in the proposal since it was published in December 2020?
The EP and Council are developing their own positions and, as far as we know, they are replacing some key provisions of the initial EC proposal. We expect that in the final text several things will have changed from the EC proposal.
What is your opinion overall on the current proposal? What do you find good and what are your points of concern?
EUROBAT welcomes the proposal as a necessary initiative: the Batteries Directive is outdated, as previously mentioned, and does not reflect the evolution of the battery market and its growing importance. The Regulation builds on the objectives of the European Battery Alliance and recognises that the EU is lagging behind in the production of lithium-based batteries, so a lot is at stake. The global battery market is estimated to be worth more than €130 billion ($153bn) by 2030, and Europe, with an estimated €35 billion ($39.6bn), will be the second-largest market behind China. For Europe, it will be of strategic importance to produce green, sustainable batteries in the EU, and this Regulation will create the legislative framework to make it possible. The Regulation needs to be properly designed and based on solid assessments, avoiding counterproductive measures that would ultimately damage the EU battery industry.
What are, in your opinion, the most important elements in the current proposal and which would require more fine-tuning from your side?
We believe the following areas are important and will require fine-tuning:
- Definitions, e.g. what is a battery, who is the producer etc.
- Chemicals management
- Performance and Durability
- Recycled content
- EPR & end of life management
- Carbon footprint
EUROBAT’s concerns relating to the Batteries Regulation
In September of 2021, EUROBAT highlighted a number of concerns and called for the following:
- Development of appropriate definitions and for responsibilities to be clearly assigned
Definitions should unambiguously differentiate battery types and clarify the difference between battery cell, battery module and battery as a finished product
- Avoid overlaps with horizontal measures
▷ Chemicals management: refrain from introducing a new parallel process to regulate chemicals used in batteries in Article 6, address shortcomings of REACH in the REACH revision
▷ Standardisation: refrain from creating separate regimes for battery-related standards, address shortcomings of standardisation in the revision of the Standardisation Regulation
- Decisions should be based on solid methodologies and robust impact assessments
▷ Measures to optimise recycled content should be based on solid methodologies and robust impact assessments
▷ Track the use of recycled materials at company level across all battery products by providing one annual aggregated value
- Respect the diversity of battery technologies and applications
▷ Apply performance and durability requirements to electric vehicle batteries and stationary energy storage batteries
- Adopt reasonable timelines and transition periods
▷ A general transition period of 24 months for the entire Regulation should be foreseen
▷ 24 to 36 months should be granted between the adoption of secondary legislation and their entry into force
▷ Include a grandfather clause to avoid waste of resources