New EU Battery Regulation focuses on sustainability, waste management and due diligence

The EU Batteries Regulation 2023 that strengthens sustainability rules for batteries and waste batteries came into force on 17 August 2023 (the Regulation). The Regulation regulates the entire life-cycle of batteries, including reuse and recycling, and ensures that the industry takes steps to reduce the adverse environmental and human health impacts associated with production and disposal. The Regulation imposes significant additional obligations and responsibilities on various economic operators, particularly in respect of conformity assessments, product labelling and extended producer responsibility requirements. 

Background

The European Commission’s Circular Economy Action Plan, adopted in March 2020, identified that a new regulatory framework was required to set out provisions for the collection and recycling of batteries to ensure both batteries and valuable material components were recovered, re-used and/or repurposed. The Regulation is therefore designed to establish such a framework and to address concerns regarding the environmental impact of batteries. It replaces the existing Battery Directive 2006, which is considered to be ineffective and has resulted in divergent implementation within different EU Member States. However, many of the obligations in the Regulation will be implemented in a progressive nature and will not be imposed, in some instances, for several years. 

All categories of batteries placed on the EU market or put into service within the EU will be covered by the Regulation regardless of its production location and whether it is standalone or incorporated into a product (such as an appliance or vehicle). There are only very limited exemptions, such as batteries incorporated (or specifically designed to be incorporated) in military equipment or equipment to be sent to space. This should enable the Regulation to play a meaningful part in reducing the carbon footprint of the battery industry, ensuring the ethical sourcing of raw materials and the improvement of practices in relation to the recycling and alternative use of waste batteries. 

Key provisions 

1. Conformity assessments and general labelling requirements

From August 2024, manufacturers will be required to carry out a conformity assessment procedure on any battery it intends to place on the market or put into service. Once compliance has been demonstrated, manufacturers must then affix the CE mark to the battery. The Regulation also provides for extended general labelling and information requirements. All batteries will have to bear the information set out under Part A of Annex VI, which goes significantly beyond the current information obligations. This requirement will come into force no earlier than August 2026.

2. Battery Passport

Eventually, LMT batteries (those used for light means of transport, such as an electric bike or scooter), industrial batteries with a capacity of more than 2kWh, and electric vehicle (EV) batteries will additionally require an electronic record (to be known as a battery passport). The battery passport that must contain various information relating to the battery as set out in Annex XIII of the Regulation (such as the material composition of the battery and information on the battery’s carbon footprint). The battery passport shall be accessible through a QR code.

3. Performance, durability and sustainability requirements for specific batteries

All EV batteries, rechargeable industrial batteries with a capacity of more than 2kWh and LMT batteries, must be accompanied by a carbon footprint declaration for each battery model per manufacturing plant. The declaration must contain information regarding the battery model, the carbon footprint of the battery, and information regarding the carbon footprint of the battery differentiated according to its life-cycle stage. Eventually, this information shall also be provided via a QR code but initially it must be in hard copy and accompany the battery. These obligations will be introduced between February 2025 and 2030 depending on the type of battery.

Additionally, such batteries will also eventually have to be accompanied by a document containing values for the electrochemical performance and durability parameters as set out at Annex IV of the Regulation.

For industrial batteries, EV batteries, LMT batteries, and SLI batteries (those used for starting, lighting and ignition), containing cobalt, lead, lithium or nickel in active materials, the Regulation stipulates certain minimum thresholds for recycled content. Further, there is  a requirement for accompanying documentation to set out the percentage share of such recycled content.

4. Performance and durability requirements for portable batteries of general use, removability and replaceability requirements

Portable batteries of general use, excluding button cells, will be required to meet minimum values for performance and durability. The relevant minimum requirements are set out in Annex III of the Regulation and can be amended by the European Commission. This is designed to reduce the environmental impact of portable batteries by increasing their efficiency. 

The Regulation also addresses the removability and replaceability of batteries on consumer goods, and places obligations on the manufacturers of products incorporating portable batteries. By February 2027, those producers must ensure that batteries are readily removable and replaceable by the end-user at any time during the lifetime of the product. For LMT batteries, producers must ensure that those batteries, as well as individual battery cells included in the battery pack, are readily removable and replaceable by an independent professional at any time during the lifetime of the product.

By the end of 2030, the European Commission must also have assessed the feasibility of phasing out non-rechargeable portable batteries of general use.

5. Due-diligence requirements

From August 2025, all economic operators with a turnover of €40million or more placing new batteries on the EU market will be required to comply with due diligence obligations. This includes having an independently verified due diligence policy concerning the social and environmental risks of specific raw materials and ensuring its supply chain is both transparent and traceable.

The policy must also set out due diligence systems and procedures to deal with the supply of cobalt, natural graphite, lithium and nickel and be consistent with existing international standards.

6. Collection of waste portable batteries

Producers of portable batteries (or appointed producer responsibility organisations) will be responsible for ensuring the collection of all waste portable batteries. This will include establishing a take-back and collection system with collection points, the transportation of waste batteries to a waste treatment facility, and ensuring they are treated in accordance with the Regulation at that facility.

The Regulation sets out specific target collection rates as follows:

- 45% by 31 December 2023

- 63% by 31 December 2027; and

- 73% by 31 December 2030.

There are similar obligations regarding collection for waste LMT, industrial, EV, and SLI batteries. To monitor compliance of producers with the requirements as to the management of waste batteries, the Regulation obliges the Member States to establish a register of producers. 

Enforcement and penalties

By 18 August 2025, each individual EU Member State must introduce rules for the enforcement of the Regulation, and penalties imposed under such rules must be “effective, proportionate and dissuasive”. However, the discretion granted in respect of the enforcement regime will almost certainly result in diversion between the regulatory sanctions and levels of penalties that will be issued where non-compliance is identified in each individual Member State.

Summary

The Regulation forms part of the EU’s efforts to create a circular economy by ensuring efforts relating to sustainability and reducing environmental impact are a key consideration at every stage of the life-cycle of a battery. It is being introduced at a time when the demand for batteries is due to increase by more than ten-fold by 2030 due to the increasing prevalence of EVs and light means of transport, and will play an important role in ensuring the battery industry focuses on recyclability, waste management and responsible sourcing whilst fulfilling that demand. Economic operators within the industry will need to be aware of and prepare for the progressive implementation of the increased product compliance requirements and extended producer responsibilities.