This article provides an overview of the current state of the legislative process and then briefly presents some of the most relevant innovations and existing controversies.
Status of the legislative procedure
The legislative procedure is being carried out as an ordinary legislative procedure in accordance with Art. 294 TFEU, so that the draft by the EU Commission (available under: COM/2020/798 final) will now be followed by the first reading in the EU Parliament. This is planned, according to a status report of the European Council, in the parliamentary session in February 2022, so that an entry into force of the regulation at the time originally planned by the EU Commission on 01.01.2022 (Art. 79 of the draft) is already excluded for this reason. In addition, the four committees of the EU Parliament involved have submitted a total of more than 700 amendments in their respective opinions, which will have to be considered at least in the further legislative process in the EU Parliament. These amendment request in many cases contain significant deviations and extensions compared to the original Commission draft (opinions available at: TRAN, ITRE, IMCO (1) and IMCO (2), ENVI).
New battery category(ies)
Due to the already strong and for the future targeted enormous market growth for electromobility, in combination with the actual characteristics of the batteries used to power electric vehicles, the EU Commission has decided to take this development into account and to introduce a new category of “traction batteries” in addition to the known battery categories (portable, industrial and automotive batteries). According to the definition provided in Art. 2 No. 12 of the Commission draft, a “‘traction battery’ is a battery specifically designed for the traction of hybrid and electric vehicles for road transport.” Accordingly, these batteries would no longer be classified as industrial batteries as they are now.
In contrast, the new regulatory approach for batteries in so-called light transport vehicles, such as e-bikes and e-scooters, is still unclear. The original intention of the EU Commission was to classify batteries used in such applications as portable batteries (cf. recital (12)), thus abandoning the previous classification as industrial batteries. In contrast, the ENVI opinion provides for the introduction of a completely separate battery category for batteries for light transport vehicles in order to also take account of the significant market share and its forecast increase (cf. amendments 2 and 45).
Sustainability and safety requirements
The sustainability and safety requirements in Chapter II of the draft represent the regulatory heart of the new life cycle regulation and, apart from the substance restrictions already in place under the Batteries Directive, introduce completely new regulatory concepts. In this context, they include:
- CO2 footprint over the entire life cycle of a battery, i.e. from the extraction of raw materials to the production of the actual battery components and transport to the end customer to the collection, recycling and disposal of spent batteries (Art. 7 in conjunction with Annex II).
- Recycled content in new batteries in terms of cobalt, lead, lithium and nickel. While in a first stage only the indication of the actual recycled content is required, in two further stages increasing minimum recycled contents become mandatory.
- Performance and durability requirements.
- Removability and replaceability of portable batteries; in this context, it should be noted that this is fundamentally an obligation that relates originally to the manufacturer of electrical and electronic equipment, and is thus alien to the system in a pure battery ordinance.
- Safety of stationary energy storage systems.
In this area, too, the committee opinions propose comprehensive (detailed) adjustments. This relates in particular to the applicability of the individual obligations to different battery categories and the respective start of validity of the individual obligations or transition periods to be specified.
Labeling and information requirements
The provisions of Chapter III of the draft are intended to extend the existing labeling requirements by numerous elements. According to the relevant Annex VI to the draft, for example, hazardous substances contained in the battery (defined in Art. 2 No. 41 via a reference to certain hazard classes of Regulation (EC) No. 1272/2008 [CLP]), the date of manufacture and the date of placing on the market will have to be indicated on the battery in the future.
In addition, there is a novelty of mandatory product labeling – each battery is to be marked with a QR code in the future, which must provide access to all labeling information and numerous additional information and reports that are to be given or prepared in the course of fulfilling other obligations under the Battery Regulation. It should be noted, however, that the QR code labeling, despite being linked to all required labeling elements, will not, as currently conceived, eliminate the need for physical labeling elements on the battery (or, in exceptional cases, on the packaging and/or accompanying documentation). This is consequently a case of genuine dual marking. In this context, the question must be asked whether a 100% duplication of the labeling elements listed in Annex VI Parts A and B on the battery and via the QR code actually offers added value or whether certain elements can also be covered only via the QR code in favor of a clear physical labeling or, in any case, whether the QR code can be a fallback option if it is not possible to label the battery with all mandatory elements.
In addition to the labeling requirements, a battery management system is to become mandatory for rechargeable industrial batteries and traction batteries, which must contain data on parameters for determining the battery’s aging state and expected service life and must be accessible at all times to the legal purchaser of a battery. This is obviously intended to strengthen the secondary market for used batteries, which on the one hand conflicts with the obligation to use recycled materials from used batteries and on the other hand is an obligation that a pure battery manufacturer will not be able to fulfill, as the access possibilities will generally depend on the design of the devices and vehicles in which the battery is contained.
Conformity assessment
In order to strengthen confidence in the battery market, to place a stronger obligation on producers to comply with the requirements of the Battery Regulation and to facilitate enforcement by market surveillance authorities, Chapter IV of the draft introduces the obligation of conformity assessment for batteries. In conjunction with the specifications in Annex VIII, Articles 15 and 17 provide for two types of conformity assessment procedures, depending on the applicable obligations and the batteries concerned – either a purely internal production control or an internal production control with supervised verification by a notified body. Regardless of the specific procedure, an EU declaration of conformity for and CE marking of batteries will in any case become mandatory in the future. In this respect, battery law will ultimately be aligned with the CE legal acts that have been known for a long time.
Due diligence obligations in the supply chain
Art. 39 in conjunction with Annex X of the draft provides for extensive supply chain due diligence obligations to be fulfilled by all economic operators placing certain batteries on the market (i.e. making them available on the EU market for the first time). The due diligence requirements relate on the one hand to the relevant raw material supply chains for cobalt, natural graphite, lithium, nickel and certain chemical compounds from these raw materials, and on the other hand to aspects such as human rights, environmental concerns, human health and occupational health and safety. While the new requirements are aligned with the existing Regulation (EU) 2017/821 establishing supply chain due diligence obligations for Union importers of tin, tantalum, tungsten, their ores and gold from conflict and high-risk areas (the so-called Conflict Minerals Regulation) and the also existing proposal for a Directive on corporate due diligence and accountability, they contain significant deviations in detail. This will not facilitate implementation in cases where several areas of application are opened up simultaneously within a company. On the contrary, it will lead to a massive increase in expenses for supply chain communication.
Furthermore, it should be noted firstly that the fulfillment of the due diligence obligations must be verified by a notified body, so that compliance with the relevant requirements will become inevitable. Secondly, the opinions of the parliamentary committees predominantly even propose to make the fulfillment of the due diligence obligations by the producer of the battery a marketability requirement for the battery (in the entire supply chain) and to impose a verification obligation on the downstream economic operators in this respect.
Battery passport
The last new requirement to be presented in this article is the obligation under Art. 65 of the draft to assign a battery-specific electronic file (so-called battery passport) to industrial and traction batteries from 01.01.2026. This must be accessible online and by means of an identifier printed or engraved on the battery. The battery passport must contain comprehensive information ranging from the name of the battery producer and the composition of the battery to information on the carbon footprint, the expected service life and certain information on operation.
Forecast
Due to the fact that the legislative procedure for the Battery Regulation has been running for a year now without any substantial progress and that the committees dealing with the issue in the EU Parliament have tabled an almost unbelievable number of amendments, it can be assumed that the legislative process will not be concluded any time soon. This assumption is supported by the fact that numerous EU member states have already signaled that they have considerable reservations about a large part of the envisaged new obligations. Nevertheless, this should by no means mean that developments surrounding the draft battery regulation should only be followed on the sidelines for the time being, because numerous innovation and investment decisions that will be made in the near future will extend so far into the future that they will also have to withstand the requirements of the new battery regulation, in whatever form and with whatever content it may come. For this reason, every opportunity should also be used to influence the ongoing legislative process, highlighting practical inconsistencies, impossibilities and obstacles to innovation.
Do you have any questions about this news, or would you like to discuss the news with the author? Please contact: Michael Öttinger
