The production of batteries represents a strategic objective of the European Union as the continent aims to become a global leader in this field. In order to meet Europe’s climate ambitions and accelerate the transition towards a low-carbon economy, the European Commission (EC) decided to modernise its EU legislation on batteries.
The Commission presented its proposal for a new Regulation on sustainable batteries in December 2020, whose main objectives and provisions were summed up in our previous article. Since then, the European Parliament (EP) and the Council of the EU have started their discussions to amend the EC’s proposal. The two institutions will need to reach an agreement on a common amended text, in order for the legislation to be adopted and to enter into force in the EU. Many stakeholders, from environmental NGOs to industry representatives, also made their views on the text public. This article will give a briefing on the current positions of the EP and the Council and how the proposal was received by other stakeholders.
A first point of concern is the nature of the legislation: by choosing to address this issue through a Regulation, the European Commission wants the targets and requirements to apply immediately and harmoniously across all EU countries. The idea behind it is to ensure clarity across the bloc and to create a ‘level-playing field’. In an opinion on the proposal, the European Economic and Social Committee welcomes this choice, as it would avoid the fragmentation of the internal market. However, many ministers in the Council of the EU disagree with such approach, as all EU countries do not have the same capacity to respond to the provisions of the proposal. They would rather adopt a directive, allowing them to tailor and adapt the provisions through their national legislation for more flexibility.
The risk of administrative and financial burden
The main criticism drawn by members of the Council is that the legislative proposal as it currently stands would create administrative and financial burdens for producers, in particular SMEs, end-users, and public authorities in charge of ensuring the implementation of the provisions. The expected increase in European standards and norms and the deadlines set by the Commission seem unreachable for many countries, who fear that this would lead to a drop of competitiveness of European battery businesses and would hamper innovation.
They also identified a risk of provisions overlapping with other legislative frameworks, which would bring legislative unclarity and burden as well. For instance, the proposal addresses issues related to the management of hazardous substances found in waste batteries. Some members of the European Parliament already asked clarification on these aspects to the Commission, as it might overlap with REACH Regulation. The EC states that whereas the approach of the proposal is inspired by REACH regulation, the latter is not a tool developed to manage risks derived from the presence of chemicals in waste. The EC proposes to rely on the expertise of the European Chemicals Agency, which would be thereby assigned specific tasks related to batteries and will maximise alignment with REACH.
In its proposal, the EC introduces a mandatory carbon footprint declaration from battery producers that will cover the whole value chain, including raw materials extraction and battery-making process. This declaration is also identified by many as a potential source of administrative burden for the companies. Finally, the Commission wants the carbon footprint declaration mandatory from 2024, which is seen as unrealistic for plenty of Member States, as it would give too little time for industries to get prepared for such requirement.
All stakeholders agree to say that there is a need to have a strong methodology and calculation for the carbon footprint, in order to bring positive impacts on the environment without hampering companies’ businesses. The carbon footprint could also prove to be financially burdensome. A way to reduce it is to ensure that green and clean energy is used during the battery making process, which would mean for companies to invest in new energy providing systems.
The New regulation would also introduce compulsory information requirements, such as battery labelling for a better consumer information on topics such as recycled content and carbon footprint of the product. Environmental stakeholders welcome these provisions, as well as the one on the state of health and expected lifetime of batteries. On a related topic, environmental NGOs welcome the establishment of an electric record, so-called ‘battery passport’: they believe this measure would increase market confidence and allow the battery and EV markets to flourish, while increasing material efficiency. However, battery manufacturers’ representatives and some European institutions members fear that the implementation of a too exhaustive battery passport would lead to excessive administrative burden.
The issue of setting binding targets
The new regulation plans on introducing a series of targets on recycling and collection targets. Some stakeholders welcome such targets, like FEAD, who represents the waste management sector. Many stakeholders also point out that collection targets are only clearly planned and defined for portable batteries, but that electric vehicles (EVs) and industrial batteries are not yet concerned by such targets, which could represent a risk of illegal disposal or illegal export. The European Environmental Bureau (EEB) suggests making mandatory the implementation of free collection points to ensure that all geographical areas are sufficiently covered. This network of collection points would fall into the producers’ responsibility. Some NGOs also regret the lack of incentive for returning industrial, automotive and EV batteries.
As for recycled content targets, there is also no consensus among the various stakeholders. Battery manufacturers’ representatives (EUROBAT) and the association of national collection schemes for batteries (Eucobat) would rather advise to refrain setting recycled content targets at this stage. The EEB proposes to set lower recycled content targets to be achieved in 1-2 years and to revise these targets upwards based on the information obtained through mandatory reporting from the producers and further studies. This would allow the industries to progressively adapt to this new target scheme and to take in account developments in technology and recovery improvements for instance. Several stakeholders stress that the key for the completion of the targets will rely on an efficient and transparent methodology for the calculation and verification of recycled content; such methodology should be made available by the EC as soon as possible.
All these targets are a major source of concern expressed by the Member states. Plenty of them publicly expressed that these targets were too ambitious and would most likely be unreachable, especially in the timeframe for their completion planned by the European Commission.
Is the regulation ambitious enough in terms of batteries’ replaceability, repairability and reusability?
Some environmental NGOs regret that there is no minimum set of standards for basic components in EV and industrial batteries, which would allow better repairability and reusability of the batteries. They call for standards and measures that would allow an easy replacement of all type of batteries by professional repairers.
A provision of the proposed regulation would allow to have a better access to the Battery Management System (BMS). This is seen by the EEB as a crucial progress which could provide tremendous potential for battery reuse and smart charging applications. Indeed, it would be made possible and easier to reprogram the BMS for repurposing and remanufacturing operators, and therefore to avoid unnecessary dismantling, testing, and discarding battery pack and control system materials. However, some battery producers’ representatives such as EASE fear that the provisions focusing on BMS in the regulation would require batteries to rely on such system whereas all battery technologies do not need them. Such provision could also include control software, either by forcing manufacturers to provide updates to ensure the safe and unlimited by purpose functionality of the battery, or at least to provide the source code. Software must not prevent battery replacement, and BMS should be readable by end-users, and professionals able to modify for repurposing or reuse.
If batteries cannot be repaired or reused, then they should be subject to repurposing or remanufacturing. The NGOs welcome the fact that the proposal set clear criteria for waste batteries to be allowed to go through repurposing or remanufacturing. The proposal also states that an industrial or EV battery should only be recycled after a battery checking showing that reuse is unfeasible, either for technical or economic reasons. However, the proposal does not set targets for the repurposing or remanufacturing of the batteries, which many NGOs deem necessary. Some stakeholders wish that the proposal goes further and addresses the issues of design and availability of components: the batteries should be modular by design so that each part can be easily replaceable by professionals, and a sufficient amount of spare parts should be available to replace components during the expected lifetime of one battery’s application. Repair instructions should be available for all types of batteries and all devices with batteries, at least for professional repairers, says the EEB.
Due diligence and unfair competition from outside the EU
The proposal also focuses extensively on due diligence. Some NGOs believe that the due diligence measures contained in the proposal are welcome but should go beyond and further. Some call for the extension of the proposed list of raw materials covered under diligence requirements, to include materials such as copper, iron or aluminium. The due diligence requirements should not only apply to EU-made batteries: NGOs call for the prevention of importation of batteries that do not meet equivalent EU environmental and occupational health and safety standards. Equivalent EU standards should be mandatory when the battery travels ‘the other way around’, when sent for waste treatment to third countries.
Some ministers also objected that even if the EU should indeed always aim to meet the highest standards of human health, environmental protection and safety, all these measures might harm the competitiveness of EU businesses to export their product aboard. Conversely, the EU ministers and Members of the European Parliament want to make sure that imported batteries will be held to the same sustainability standards as those produced in Europe. The EESC also raise the issue of unfair competition from abroad, as it fears that Commission’s proposed tools might be insufficient to verify and enforce the requirements related to carbon footprint, levels of recycled content and due diligence in the supply chain.
Finally, as the proposal mostly contains restrictive measures, the EEB also calls for clearer and effective incentives promoting sustainable and environmentally friendly batteries. These incentives go from a better labelling of batteries to allow the consumers to make the best choice possible, through compulsory rules for public procurement to give preference to batteries with EU Ecolabel or equivalent characteristics.
In a nutshell, even if European institutions and stakeholders all welcome the main objective of the EC proposal – which is to bring more circularity and sustainability in the whole battery value chain – the presence of many points of concern or disagreements will fatally lead to many months of negotiations between the Commission, the Parliament and the Council of the EU. Considering the number of provisions to revise, it seems unlikely that an agreement will be reached under the Slovenian Presidency of the Council, which lasts until December 2021.
Some stakeholders regret that the legislation focuses too much on the batteries currently leading the market, therefore not adopting a technology-neutral approach, with the risk of hampering innovation and competition (EASE). There is also a pending risk on having same targets and measures for too broad categories of batteries. For instance, “industrial batteries” cover a very broad and diverse category, according to EUROBAT: it includes hundreds of different products and several battery technologies that can be used for different applications with different features. Therefore, they advocate for a better consideration of the diversity of batteries.