EU Batteries Regulation: A phased approach to new sustainability and transparency targets

The EU Batteries Regulation (the Regulation), which came into force on 17 August 2023, reached its first significant implementation milestone on 18 February 2024. The Regulation, which replaces the legacy Batteries Directive of 2006, is now generally applicable, meaning that its provisions will be directly applicable in the national legal systems of EU Member States from this point.

In practice, many of its key terms are to be phased-in over the coming years (including through further implementing legislation), and so will not apply immediately. The Regulation's most significant new obligations (such as the introduction of the battery passport or the carbon footprint declarations that will be necessary for each battery) will generally start to bite from mid-2025. (For further details of the specific obligations that the Regulation will implement, please see our Energy team's analysis of the Regulation here.)

The Regulation, which lays out ambitious new sustainability and transparency targets for a wide range of stakeholders engaged in the manufacture, use or import of batteries will have significant impact on OEMs and other electric vehicle (EV) manufacturers and distributors. The preamble to the Regulation makes clear that the rise in prominence of EVs, and the expected continuance of that rise, was one of the motivations for introducing the Regulation. Where certain obligations are to be phased in over time, such that the timing of implementation differs between different categories of battery, they will generally apply first to EV batteries before subsequently biting on the other types of batteries covered by the Regulation – see, for example, the phase-in of carbon footprint declarations (on which more, see below).¹

However, for this first implementation date, there is little of immediate affect for businesses engaged with EV batteries. Batteries consisting of more than 0.002% cadmium or more than 0.004% lead by weight must be marked with the chemical symbol for the metal concerned (Cd or Pb, respectively), but, given the current lack of popularity in the automotive industry for cadmium-based batteries, this is unlikely to affect OEMs materially.²  However, due to the long lead times involved in both the sourcing of raw materials and components and the detailed specifications of cells for production models, the Regulation will have immediate effect on the industry.

As part of the new obligations being imposed by the Regulation, EV batteries with a capacity above 2 kWh will soon be required to have a 'Carbon Footprint Declaration' by which operators will provide information to consumers about the battery's carbon footprint. Each such battery will need to be clearly labelled with information detailing its carbon footprint and carbon footprint performance class. A maximum lifecycle carbon footprint threshold is also due to apply in due course³ which, once in place, could trigger a reclassification of the carbon footprint performance classes.⁴ 

The methodology for the calculation and verification of the carbon footprint and the performance classes will be provided for in a delegated act (which was due to enter into force by 18 February 2024, but which – as of the date of posting – has not yet been implemented), while the format of the carbon footprint declaration and the performance class label will be provided for in a separate implementing act.

The anticipated timeline for the entry into force of the relevant delegated and implementing acts is set out in the table below:

Comment

The high cost of EVs compared to ICE vehicles remains a challenge for the automotive industry, and the additional compliance obligations being imposed on stakeholders through this Regulation risks pushing these price points even higher.

[1] Art. 7

[2] Art. 13

[3] Art. 7(3)

[4] Art. 7(3) subparagraph 4

[5] Art. 7(1)

[6] Art. 7(2)

[7] Art. 7(3)

If you have any questions or would like to know how this might affect your business please do get in touch.

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