On June 14, local time, the European Parliament passed an agreement with the European Council on the New Battery Law in December 2022 by a vote of 587 in favor, 9 against and 20 abstentions, which aims to improve the relevant provisions of the New Battery Law on the management of batteries in the European Union.
The New Battery Law, originally proposed by the European Commission in 2020, aims to regulate the entire life cycle of all types of batteries sold in the EU, including design, production and recycling. The agreement on the New Battery Law adopted by the European Parliament still needs to be formally approved by the European Council, after which it will be published in the Official Journal of the European Union (OJEU) and enter into force. The European Council is composed of the heads of state or government of the EU member states, the President of the European Council and the President of the European Commission, and is the highest decision-making body in the EU, determining the overall direction of the EU.
Once the full version of the New Battery Law comes into effect, battery manufacturers, including Chinese battery companies, will be subject to more stringent environmental and due diligence requirements if they wish to sell batteries in the European market.
New Battery Category
According to the latest announcement on the official website of the European Parliament, the agreement related to the New Battery Law adopted this time includes the following highlights.
01
The Bill will have a dual application in terms of who it applies to:
The section on waste battery management applies to all types of batteries: portable batteries, SLI batteries (designed to provide power for starting, lighting or ignition of vehicles), lightweight transportation batteries, electric vehicle batteries and industrial batteries.
The carbon footprint requirement will apply to electric vehicle batteries, light transportation and rechargeable industrial batteries, with different timelines depending on the type of battery. The regulation will apply to industrial batteries over 2kwh (except those in full external storage), EV batteries and SLI batteries 5 years after the effective date, and to batteries for light transportation 10 years after the effective date.
02
Requirements for new batteries to contain minimum levels of recycled materials:
From 8 years after the effective date of the Act, new batteries will contain recycled cobalt content of 16%, lead content of 85%, lithium content of 6%, nickel content of 6%; from 13 years after the effective date of the Act, new batteries will contain recycled cobalt content of 26%, lead content of 85%, lithium content of 12%, nickel content of 15%. Depending on the impact of market developments in battery chemistry on the types of recyclable materials, the Committee may pass an authorization bill to include further materials. Secondary batteries are exempt from the carbon footprint and recyclable material obligations (among others).
To assess the phasing out of non-rechargeable portable batteries for general use by 2030.
03
Phased Disclosure of Carbon Footprints in Battery Cells
Under the regulations, there are carbon footprint disclosure requirements for electric vehicle batteries, light vehicle batteries, and rechargeable industrial batteries with a capacity greater than 2 kWh, but there are different timelines for different battery types. For example, industrial batteries over 2kwh (other than those in full external storage), electric vehicle batteries, and starting, lighting and ignition (SLI) batteries will be required to disclose their carbon footprint 5 years after the effective date of the Act, and then 10 years after the effective date of the Act, light transportation batteries will be required to disclose their carbon footprint.
04
Requirements on due diligence:
With the exception of small and medium-sized enterprises (SMEs), operators placing batteries on the market will be subject to a due diligence obligation within two years of the entry into force of the regulation. Their due diligence policies must follow internationally recognized due diligence guidelines.
05
Requirements relating to the management of waste batteries:
The minimum collection target for waste batteries is 63% by the end of 2027 and 73% by the end of 2030, with specific collection targets for waste batteries for light transportation (51% by the end of 2028 and 61% by the end of 2031). The material recovery target for lithium is 50% by the end of 2027, increasing to 80% by the end of 2031, and the new recycling efficiency target introduced for nickel-cadmium batteries is set at 80%, to be realized by the end of 2025.
"For the first time we will have circular economy legislation covering the whole life cycle of a product, which will benefit both the environment and the economy." MEP Achille varati said, "Our overall objective is to build a stronger EU battery recycling industry, especially lithium, and a competitive industrial sector, which will be crucial for the continent's energy transition and strategic autonomy in the coming decades. These measures could become the benchmark for the entire global battery market."
Simply put, it is expected that from 2024 onwards, batteries and electric vehicles exported to the EU market will not only be required to have their battery carbon footprint certified, but will also be required to set up an information management system for their carbon footprint and supply chain.
According to the latest Reuters report, by 2030, the number of electric vehicles used within the European Union will reach 30 million, which will stimulate the demand for batteries in Europe in the next decade soaring. The EU's new battery law will soon come into force, raising the threshold for power battery companies to enter the local market.
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