EU Batteries Regulation: Next implementation stage aims at greater transparency

The EU Batteries Regulation (the Regulation) came into force on 17 August 2023, but its provisions are being implemented in stages.

The first implementation date was in February 2024 (for an overview of what aspects of the legislation were brought into force by this first implementation deadline, see our article on the topic here). While this initial stage brought into effect only minor new provisions, the next round of implementation, which took place on 18 August 2024, contains more substantive requirements for OEMs and distributors. Several key provisions, which focus on information disclosure requirements as to the origin and constitution of batteries, have been introduced with the aim of enhancing the sustainability and safety of batteries within the EU.

All provisions below came into force from 18 August 2024 unless otherwise stated. We have focussed on provisions that will most directly affect the Auto industry. 

Restrictions on Substances (Lead Content) (Article 6)

Part of how the Regulation intends to protect consumers is by mandating strict limits on the presence of hazardous substances in batteries. From this latest implementation date, a requirement has come into effect capping the lead content in portable batteries at no more than 0.01% by weight.^[1] This applies to all portable batteries – whether incorporated or not incorporated into appliances, light means of transport, or other vehicles – and augments the requirement brought in in February 2024 that batteries must not contain more than 0.0005% mercury and 0.002% cadmium.

This new restriction on lead aims to further reduce the environmental impact of batteries and promote safer usage across the EU.

Electrochemical Performance and Durability Documentation (Article 10)

The main obligations introduced in this latest implementation relate to the provision of performance and durability related information. As of 18 August 2024, manufacturers of electric vehicle (EV) batteries, as well as rechargeable industrial batteries with a capacity greater than 2 kWh and light means of transport (LMT) batteries, must provide documentation detailing the electrochemical performance and durability parameters outlined in Part A of Annex IV.^[2] These documents must include certain key performance-related statistics of the battery, including its power, rated capacity and expected life-time. Further, the technical documentation required by Annex VIII must include additional details that effectively lay out how the performance figures were measured. Note that this obligation will not apply to batteries that are being prepared for re-use, repurposing or remanufacturing (where this preparation process started before the relevant obligation came into force).^[3]

These additional information disclosure obligations are likely to prove onerous for battery manufacturers and systems should be put in place now to ensure that compliance with such obligations can be achieved with minimal interruption.

Information on State of Health (Article 14)

Article 14 requires that EV batteries and LMT batteries must contain a battery management system that stores the information and data required to determine the state of health (SoH) and expected lifetime of the battery. This data includes, for example, the date of manufacture of the battery, in order to aid in determining its remaining expected lifetime.^[4] This data must be accessible in a read-only format to those who legally purchase the battery, facilitating the evaluation of the battery's residual value or its preparation for reuse, repurposing, or remanufacturing.

Battery manufacturers have expressed apprehension about the requirement to disclose information on the SoH of their products: as well as potential competition law issues with providing unrestricted access to this data, there are concerns regarding the parameters used to calculate a battery's SoH and how these parameters may be influenced by real-world applications, which can differ significantly from theoretical models.

Conformity Assessment and CE Marking (Article 17)

In order to ensure that the reporting standards in the above provisions (as well as certain others) are consistent across batteries, pursuant to Article 17, all batteries will be required to undergo one or more of the conformity assessment procedures listed in Annex VIII. Where compliance has been demonstrated, manufacturers must submit an EU declaration of conformity in accordance with Article 18 and affix the battery with the CE marking of conformity in accordance with Articles 19 and 20.^[5] The CE marking will serve as evidence that batteries comply with the sustainability and safety requirements set out in Chapter II of the Regulation.

A notified body will need to be involved to perform the relevant conformity assessment activities (including calibration, testing, certification and inspection). Each notified body must be independent of all business ties to the battery model it assesses and must at all times have access to the testing equipment or facilities needed for each conformity assessment procedure.

Chapter VI: Obligations of economic operators

Chapter VI ensures that the provisions laid out above apply to all economic operators in respect of batteries that are sold in the EU. This means that the manufacturer, the supplier, the importer (if any), and any distributors of any such battery are all under an obligation to ensure that the above requirements are observed, particularly with regards to the conformity assessment in Article 17. Those not directly responsible for such an assessment (such as importers) nevertheless have verification obligations to ensure that compliance has been achieved.^[6] Thus, in the case of OEMs, new obligations are imposed on EV manufacturers, due to the use of EV batteries in the production of a vehicle.

Where an economic operator has reason to believe that a battery for which it is responsible is not in compliance with the above requirements, it must take the necessary 'corrective action' to bring it into conformity (or remove the product from the market) and inform the market surveillance authorities of the member states in which the battery is being sold.^[7] This adds substantive new obligations and responsibilities to economic operators placing  batteries on the market, or putting them into service, in the EU, including OEMs, with responsibility for due diligence policies and establishing traceability throughout a battery's entire supply chain also introduced by this legislation.

Comment

The latest implementation of provisions under the Regulation represents a further shift towards greater sustainability, safety, and transparency in the European battery industry. The focus on consumer safety through the introduction of clear and stringent information disclosure obligations increases transparency in particular but does nevertheless impose significant new information disclosure obligations on all economic operators in the process of the production and sale of batteries. The extension of responsibility for the conforming process to all economic operators is a clear attempt to bolster enforcement of these rules through the expansion of oversight and responsibility. While this will likely have the desired effect of ensuring the rigour of the new requirements is enforced, the obligations on manufacturers and other stakeholders to ensure they are fully compliant will be onerous.

Driving higher environmental and safety standards and creating greater transparency as to the SoH of batteries to facilitate a secondary market and to underpin the value of the batteries, are all laudable and valuable goals. As ever, in implementing these measures, setting standards and measuring conformity, it will be critical that a sensible balance is struck between delivering on the goals, and being practical, certain and affordable to deliver. The effect that such obligations will have on an EV market that is currently showing signs of faltering may prompt questions to legislators about the economic viability of this regime .

[1] Article 6, in conjunction with Annex I

[2] Article 10(1)

[3] Article 10(4)

[4] Annex VII

[5] Article 38(3).

[6] Article 41(2)

[7] See eg Article 42(5)

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