ELECTROMOBILITY European Battery Regulations: a way forward for sustainability or a wishlist?
When it comes to mobility, the future is electric. Battery-powered vehicles are the future. Going rechargeable is the way forward. In 2020, the European Commission published a European Battery Regulation proposal to bring sustainability into battery manufacturing and use. Planned for enactment later this year, it has the potential to change the battery supply chain globally forever.
What’s behind the regulations?
The EU’s Green Deal regulatory framework covers the battery lifecycle from R&D to mining source materials, closing material recycling loops, and battery end-of-life management. This includes some mandatory requirements to be rolled out over the coming years. Some examples:
2024: Batteries display a carbon footprint declaration. This requires an agreed upon universal way of measuring a vehicle’s carbon footprint and agreement on the assessor.
2025: Obligations for suppliers using mandatory third-party verification regarding responsible raw material sourcing (as well as for those related to the carbon footprint and the recycled content levels).
2026: A battery passport for each industrial and EV battery placed on the market or put into service. The passport acts as a digital representation of a battery that conveys information about all applicable ESG and lifecycle requirements.
- A battery management system that stores information and data on a battery’s health and expected lifetime. This system should be accessible to battery owners and independent operators acting on their behalf (e.g. to facilitate the reuse, repurposing or remanufacturing of the battery).
- A requirement to comply with maximum lifecycle carbon footprint thresholds.
- Minimum electrochemical performance and durability requirements for portable batteries of general use.
2040: Of all battery materials (cobalt, lead, lithium, nickel), a percentage of these must be recovered from waste. Specifically per ingredient:
- Cobalt: 12 %,
- Lead: 85 %,
- Lithium: 4 %,
- Nickel: 4 %
These percentages will increase over time.
2030: By this date, the Commission will also assess the feasibiliy of phasing out non-rechargeable portable batteries.
The opportunity is deniable – so are the challenges
These targets are undeniably highly ambitious. If successful, that sets standards that will flow throughout supply chains and adjacent industries. They could create the potential for a highly sustainable battery sector within Europe, or, conversely could create confusion and obfuscation as people struggle to define the standards in practice and rollouts are delayed.
There’s already a rather predictable industry push to soften them. For example, The Nickel Institute asserts that “setting the targets - without first developing and agreeing on the appropriate methodology for calculating and verifying them – can create uncertainty on whether the targets can be met.” They recommend a gradual approach.
Recharge, the member organisation for the advanced rechargeable and lithium batteries association in Europe, believes that the requirement for recycled content disproportionately burdens European battery manufacturers and should start voluntarily.
They also note that “a regular review of targets is needed, taking into account evolutions in battery chemistry and waste volumes.” Should we consider the regulations as achievable goals or a wishlist?
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But there’s also the potential of how the regulations could impact regional manufacturing, including importers and distributors. China has already heavily invested in battery reuse and recycling with directives on battery reuse and recycling to ensure greater environmental protection and improved resource utilisation. China also has significant access to raw materials like cobalt.
Could China have a greater business advantage, especially against newer European companies invested in EV and battery manufacturing? What about the US, which has learnt the lessons of relying upon global supply chains during the pandemic and is heavily invested in local industry, including battery manufacturing and recycling? Will they have an easier time complying with EU regulations than the more nascent companies in Europe?
Strategic partnership for sustainable battery materials production
The opportunity for partnerships
What’s clear is that the auto industry is already making inroads into closed-loop recycling through partnerships with the potential to benefit not only battery makers but material suppliers and other parts of the supply chain. We can also expect to see greater R&D invested into efforts to make more powerful batteries that can also achieve the goal of being smaller and less resource intensive.
Earlier this year, the World Economic Forum partnered with car makers on The Circular Cars Initiative designed to eliminate or minimise total lifecycle emissions.
Last week Renault launched an off-shoot company called The Future is Neutral. It aims to lead the industry in closed-loop battery recycling and to develop old cars as a source of raw materials for new cars – not just for Renault but for all players in the industry.
Additionally, some automakers are setting sustainability goals as an opportunity for competitive advantage. Automaker Polestar aims to release their first carbon-neutral car.
The European Battery Regulation offers great opportunities for evolving the European battery and recycling sectors. But poorly executed, it may result in a stumbling block for sustainability and innovation, with industries still gaining ground lost during the pandemic.