Batteries Regulation passed — next wave of horse trading to follow

Batteries Regulation passed — next wave of horse trading to follow

Batteries Regulation passed — next wave of horse trading to follow 200 200 Batteries International

December 22, 2022: The next iteration of the Batteries Regulation was formally agreed on December 9 in a move hailed, by many in the industry, as a major step-forward in the legislation needed to standardize Europe’s approach to regulating itself.

Although the formal political agreement has been reached and a full official declaration will be published in the coming spring, there are still major hurdles to be overcome.

“There are around 50 pieces of secondary legislation that will have to be confirmed before everything is in place,” says Steve Binks (pictured), regulatory affairs director at the International Lead Association.

“Most of these will probably have been put in place by 2028 though a couple of issues such as the maximum carbon footprint for the manufacture of batteries could take yet longer.”

The history of the Regulation dates back to the first Battery Directive in 2006. The European Commission, the administrative arm of the EU, proposed in December 2020 a wider-ranging review of the legislation to match the changing landscape of battery manufacture across Europe. It is also to achieve new targets of sustainability as set out in the EU’s Green Deal.

Rene Schroeder, EUROBAT executive director, said: “Batteries are a key piece of technology to achieve the EU ambitious Green Deal objectives. The Batteries Regulation provides a stable regulatory framework for supporting the EU climate action agenda. It’s an ambitious sustainability framework.

Effectively the Commission has aimed to achieve three things.

First, to strengthen the EU internal market for batteries. European batteries will set production standards to some of the highest in the world and the import of cheaper, less rigorously manufactured batteries from outside the EU will be controlled.

Second, it will reduce the environmental and social impacts throughout a battery’s lifecycle. This will include everything from the amount of CO2 used in the manufacture of batteries through to the environmentally responsible collection and disposal of batteries — a longstanding theme of the European Commission.

Lastly it will promote a circular economy where recycling will be key to this and which is part of the EU’s so-called Green Deal.

New guidelines for recycling of battery materials are to be introduced — 80% by weight of lead batteries will now have to be recycled by 2030 compared to the current requirement of 65%.

More challenging will be the recycling of materials in lithium batteries where some 16% of cobalt and 6% of lithium will need to be recycled at some point. At present there are no legal requirements on this issue.

A new and somewhat controversial element of the new Regulation will be new legislative requirements for including these recycled materials in battery production.

Strengthening the internal market by lifting the sustainability standards for manufacturing batteries will in the end generate more business for European manufacturers that will be global leaders in this respect. Or so the policymakers’ thinking goes.

One commentator said: “What Asian or otherwise battery manufacturer will want to be excluded from a market of 450 million people?  To have access to the European market they’re going to have to reach the higher sustainability standards.”

Another said. “This is a long term gamble that people will, in the end, prefer to buy products that are ethically sourced and made rather than cheaper inferior products. At the same time, it is also possible that European OEMs will be forced to buy more expensive batteries than their non-EU rivals excluding, for example, their competitiveness in new EV markets.”