On June 14, MEPs voted 587-9, with 20 abstentions, to approve a deal with the Council to overhaul EU rules on batteries and waste batteries.

This provision is also known as the "EU New Battery Law". As stipulated in the legislative process, the Council must now formally approve the text and publish it in the Official Journal of the European Union, 20 days after which the regulations will enter into force.

Rapporteur Achille Variati said: "For the first time, we have enacted circular economy legislation that covers the entire life cycle of products, an approach that is good for the environment and the economy. Our overall aim is to build a stronger EU recycling sector, lithium in particular, and a competitive entire industrial sector, which will be crucial for the energy transition and strategic autonomy of our continent in the coming decades. These measures could become a benchmark for the entire global battery market.”

The passage of the EU's new battery law is not the end, but represents a new beginning. There will be more secondary legislation and a series of supporting implementation measures on the way.

01: The Past and Present of the Battery Law

Batteries are a key technology in the transition to a decarbonized climate and cleaner energy use. Global demand for batteries is growing rapidly and will increase 14 times by 2030. The EU could account for 17% of that demand.

Back in 2019, the European Commission published its assessment of the former Battery Directive. The evaluation concluded that while the battery directive has achieved positive results in terms of improving the environment, recycling, etc., its objectives, especially those related to the collection of spent batteries or the efficiency of material recycling, cannot be fully achieved. The assessment noted that the lack of a mechanism for integrating technological innovations and new uses made it difficult for the directive to keep pace with technological developments.

In December 2020, the European Commission put forward a proposal on the regulation of batteries and waste batteries, which is the prototype of the "New Battery Law" to replace the old battery directive. The proposal for a new battery law takes into account the industry's technological developments and future challenges, and will cover the entire life cycle of batteries from design to end of life.

The proposal aims to strengthen the functioning of the internal market, promote a circular economy and reduce the environmental and social impact of all stages of the battery life cycle. The initiative is closely linked to the European Green Deal, the Circular Economy Action Plan and the New Industrial Strategy

In December 2022, the European Commission agreed with the European Parliament and the European Council to reach an interim political agreement (see Global Zero Carbon article for details), and the specific content of the bill has been finalized.

The "New Battery Law" passed this time, although the detailed documents have not yet been released, judging from some indicators disclosed, there is no significant change from the version in December last year.

The first is to provide battery carbon footprint declarations and labels, requiring companies to collect and calculate carbon emission data at each life cycle stage of batteries sold to the EU in accordance with relevant standards, including upstream raw materials, product production, transportation, scrapping and recycling.

The second is to set the minimum recovery rate and material recovery target, which is the percentage of how many waste batteries can be recycled in the end.

The third is to provide battery passports, in which power batteries are clearly required to have electronic records. Only power batteries with a battery passport can enter the European market.

02: Can the high percentage of recycling requirements be realized?

According to the Batteries Act, the recycling rate targets for the next few years are as follows:

By 2027, the recovery rate of lithium should reach 50%, and the recovery rate of cobalt, copper, lead and nickel should reach 90%; by 2031, the recovery rate of lithium should reach 80%, and the recovery rate of cobalt, copper, lead and nickel rate should reach 95%.

Wu Bin, Head of International Business of Bocui Cycle’s Carbon Consulting Department, told Global Zero Carbon that the recycling methods currently used in China are mainly physical pretreatment and wet recycling. At present, the collection rate of pretreated black powder has reached 95%, while the recovery rate of lithium in the wet process can reach 85% to 90%, and the recovery rate of nickel and cobalt exceeds 98%. However, if the battery is used as the measurement standard, these two indicators need to be multiplied.

As the exact calculation details have not yet been determined, it cannot be judged whether there will be difficulties in achieving these high recovery targets.

03: Not only to calculate the carbon footprint of the battery

The new battery law requires covering the entire life cycle of products, which will force companies to consider the sustainability and recycling of batteries in the product design and production stages. Companies need to seek to use more environmentally friendly materials and production methods to reduce the environmental impact of batteries and ensure that batteries can be recycled and reused efficiently.

For enterprises, the source of battery materials, technical specifications, chemical composition, manufacturing process, carbon footprint, etc. are all displayed in the information disclosed in the battery passport, which enables enterprises to clearly understand the supply chain, deeply control the supply of raw materials, and control the cost, production capacity, Risks and opportunities are transparent.

Wu Bin said that exporting batteries with a good carbon footprint is only part of the way. Battery regulations regulate the entire life cycle of batteries, including due diligence requirements for the supply chain in the previous section, and final recycling and disposal. The digital battery passport mentioned in the regulations will require batteries in a wider ESG category.

"As for how to calculate the carbon footprint of exported batteries, the EU will also issue specific calculation rules."

For the carbon footprint of batteries, the EU JRC (Joint Research Center of the European Union) took the lead in formulating corresponding calculation rules. These rules will formulate corresponding carbon footprint calculation rules for different types of batteries, such as automotive power batteries, energy storage batteries and light vehicle batteries. Recently, the final draft of the calculation rules for power batteries has been released.

The specific calculation details and rules have not yet been finalized, and companies need to pay close attention to the release of relevant regulations, and follow the rules to verify data accounting and calculation methods.

Enterprises can choose a third party to verify the data and calculation methods, so that they only need to disclose the final results, but not the calculation details, so as to avoid the leakage of sensitive data.

04: The way to deal with green trade barriers

my country is not only the world's largest producer of lithium   ion batteries, but also the world's largest producer of battery materials and the country with the most complete lithium-ion battery industry chain in the world. accounted for more than 70% of the world.

According to statistics from the General Administration of Customs of China, the export value of lithium-ion batteries in China will be close to 342.656 billion yuan in 2022, an increase of 86.7% compared with 183.526 billion yuan in 2021, a record high. In the first quarter of this year, my country exported 109.79 billion yuan of lithium batteries, a year-on-year increase of 94.3%.

According to SNE Research data, the market share of power batteries produced in China in the EU has risen from 14.9% in 2020 to 34% in 2023.

In the past two years, the European Union and many countries in the world have successively introduced laws and regulations related to batteries, which has raised the threshold for Chinese products to enter the European and American markets.

On June 11, during the "Shanghai International Carbon Neutral Technology, Products and Achievements Exhibition", the China Chemical and Physical Power Industry Association held the release ceremony of the world's first battery industry environmental declaration (EPD) platform.

The "Power and Energy Storage Battery Product Category Rules (PCR)" was written by SGS and jointly formulated by more than 60 battery industry companies including CATL, Fudi Battery, and Envision. It aims to thoroughly implement the national carbon peak carbon-neutral development strategy, promote the green and high-quality development of the battery industry, and help domestic enterprises go overseas smoothly under the macro background of accelerated transformation of the global energy structure.

The platform has established detailed procedures and rules for battery products to carry out EPD work, and formulated battery product category rules (PCR) in strict accordance with the procedures and requirements stipulated in international standards. EPD reports on environmental data and information throughout the product life cycle and is verified by an independent third party, which is more scientific and comparable, and easier to obtain external recognition.

In the future, carrying out EPD mutual recognition work with foreign countries will help to enhance my country's influence and industrial security in the global battery industry.