The recently enacted Regulation (EU) No 2023/1542, addressing batteries and waste batteries, referred to hereafter as the “Regulation,” has been officially published in the Official Journal of the European Union, just prior to the summer break. Most of the provisions outlined in the Regulation will take effect from 18 February 2024. Over the course of 2027, these provisions will gradually replace the previous mandates established by the Battery Directive of 2006.

Compared to the previous directive, the new Regulation is notably more comprehensive. It boasts an expanded structure, now comprising 15 Annexes, and the number of articles has more than tripled. The Regulation introduces numerous fresh or more extensive provisions, significantly altering its substance. Presented below are some of the pivotal practical provisions:

Types of Battaries

Instead of the former categorization of three battery types (namely portable, automotive, and industrial batteries), the Regulation now categorizes batteries into five types: portable batteries, batteries for light transport vehicles like e-bikes (also denoted as LMT batteries), electric vehicle batteries, industrial batteries, and starting, lighting, and ignition batteries (SLI batteries). This change acknowledges the increasing significance of electromobility and provides legal clarity by including a distinct classification for electric vehicle batteries. Moreover, by renaming automotive batteries as SLI batteries, the Regulation eliminates any conceptual ambiguities.

Entire Lifecycle

The Regulation now governs batteries throughout their entire lifecycle, encompassing production, reuse, and recycling. The intention is for the battery industry to transition towards a circular economy. Previously, requirements for batteries were broadly outlined. For example, in the context of electric vehicle batteries, LMT batteries, and certain rechargeable industrial batteries, there will be a demand for carbon footprint declarations to ensure CO2 reduction. These declaration requirements will become progressively more stringent, ultimately culminating in maximum values (refer to Article 7). Additionally, the Regulation introduces mandates for battery durability and performance (Articles 9 and 10). Furthermore, industrial and electric vehicle batteries with capacities exceeding 2 kWh, LMT batteries, and stationary battery energy storage systems must incorporate a battery management system. This electronic component facilitates battery control, data storage, communication with the vehicle, and more (see Article 14). Manufacturers are primarily accountable for adhering to these obligations. Going forward, a conceptual distinction must be made between the manufacturer and the producer. The latter term encompasses not only the actual battery manufacturer but also distributors or importers subject to specific conditions.

Conformity Assessment Process

The Regulation provides a detailed framework for the conformity assessment process required to obtain a CE marking, along with corresponding obligations for economic operators regarding batteries.

Economic operators whose battery turnover exceeds €40 million will be required to fulfill specific due diligence responsibilities, including scrutiny of battery raw materials (Article 47 ff.). This encompasses implementing a risk management system and disclosing relevant information. An independent notified body will verify producers’ compliance.

Extended Producer Responsibility

The concept of extended producer responsibility, familiar from the Battery Act, as well as registration, collection, and recycling obligations, is expounded in greater detail (Article 54 ff.). In some instances, national legislation will continue to be necessary for implementation.

Moreover, mandatory collection targets for portable batteries will be incrementally heightened (Article 59). The Regulation introduces collection targets for LMT batteries as well (Article 60). Recycling and recovery targets for specific raw materials are also gradually raised (refer to Annex XII).

Battery Passport

Finally, from 2027 onwards, each LMT battery, industrial battery with a capacity exceeding 2 kWh, and electric vehicle battery will require a battery passport (Article 77 ff.). This document will need to contain information pertinent to battery models, enabling traceability.

Article 11 holds substantial interest for consumers, and consequently, all producers and distributors. Starting in 2027, end-users will need the ability to extract and replace all portable batteries installed in devices, such as mobile phone batteries.

These succinct highlights underscore that all stakeholders within the battery industry will encounter novel and substantial obligations due to the new Battery Regulation. Businesses directly affected by these changes should meticulously assess their current procedures, production methods, and procurement processes to ensure they are adequately prepared for the forthcoming European battery legislation.

Key measures foreseen by the regulation

• Carbon Footprint Declaration and Label: Electric vehicle (EV) batteries, light means of transport (LMT) batteries (like electric scooters and bikes), and rechargeable industrial batteries above 2kWh will require a compulsory carbon footprint declaration and label.

• Consumer-Friendly Battery Design: Portable batteries in appliances will need to be designed for easy removal and replacement by consumers.

• Digital Battery Passport: LMT batteries, industrial batteries above 2 kWh capacity, and EV batteries will have a digital battery passport.

• Due Diligence Policy: All economic operators, except for small and medium-sized enterprises (SMEs), will be required to follow a due diligence policy.

• Waste Collection Targets: Stricter waste collection targets for batteries: portable batteries – 45% by 2023, 63% by 2027, and 73% by 2030; LMT batteries – 51% by 2028 and 61% by 2031.

• Minimum Material Recovery Levels: Minimum material recovery levels for waste batteries: lithium – 50% by 2027 and 80% by 2031; cobalt, copper, lead, and nickel – 90% by 2027 and 95% by 2031.

• Minimum Recycled Content: Minimum recycled content from manufacturing and consumer waste for new batteries: eight years after regulation entry – 16% for cobalt, 85% for lead, 6% for lithium, and 6% for nickel; thirteen years after regulation entry – 26% for cobalt, 85% for lead, 12% for lithium, and 15% for nickel.

Rapporteur Achille Variati (S&D, IT) emphasized the significance of these measures in establishing a comprehensive circular economy approach. The focus is on creating functional, safer, and user-friendly batteries, contributing to a robust EU recycling industry, especially for lithium. This aligns with Europe’s energy transition and strategic autonomy goals. Variati believes these measures could serve as a global benchmark for the battery market.

Background

In December 2020, the Commission introduced a battery and waste battery regulation proposal to enhance the internal market’s functionality, advance circular economy principles, and mitigate the environmental and social impacts throughout the battery life cycle. This initiative supports the European Green Deal, Circular Economy Action Plan, and New Industrial Strategy.

By adopting a report, the Parliament had been addressing citizen expectations for improved energy security, sustainable infrastructure, and a circular economy, aligning with the outcomes of the Conference on the Future of Europe (Proposals 3(3), 3(6), 4(3), 5(1), 5(3), and 5(8)).

Legal Assistance

Bicak has experience advising clients on energy storage – from pumped storage hydropower to today’s batteries for electricity generated from solar and wind farms. With deep experience advising energy companies through every evolutionary step in the industry, we are positioned to handle a wide range of new ventures in energy storage.

Bicak Law stands ready to offer valuable legal assistance throughout the process of implementing the Batteries and Waste Battery Regulation. With our expertise, we are here to support and guide you in navigating the complexities of this regulatory landscape.