Chasing Zero – Energy Transition
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16 10月 2024
Insight
Global
2m read
"Battery supply chains are complicated because there is a reliance on a variety of things, particularly the chemical content of the battery. For example, if cobalt is in there, that makes things difficult as it will mean exposure to difficult jurisdictions, such as the Democratic Republic of Congo. That brings in significant human rights considerations.
"The premier model on the market now is the lithium-ion battery. A question there is where the lithium comes from and wider considerations around labour practices. But, more importantly, it's about where the batteries have been manufactured. From a US perspective, anything from certain regions will be considered as high risk in terms of forced labour practices. We would always recommend further due diligence so the relevant project lead or investor is comfortable with their overall exposure.
In terms of regulation, the EU is ahead of the UK. The Batteries Regulation is a very important piece of policy. It recognises that batteries have undergone a huge evolution in the last 20 years.
Jannis Bille
UK Head of ESG
"In terms of regulation, the EU is ahead of the UK. The Batteries Regulation is a very important piece of policy. It recognises that batteries have undergone a huge evolution in the last 20 years. Like the UK, the EU's regulatory regime before this came into force was from the early 2000s, focused on things such as AAA batteries, which now only power things like a kitchen scale. That is something with a much smaller sustainability footprint. There is a massive environmental implication from both the size and scale of batteries, their production and treatment at end-of-life.
"The [EU Batteries Regulation] looks at batteries from a full-life perspective and regulates across that so batteries need to be created with circular economy principles in mind. It envisages various applications before ultimate recycling and end-of-life. Let's say there's an electric vehicle (EV) battery, its first life ends, it's sent back to the factory and maybe it can be repaired or restored to have a second life with its original purpose. After that, it's repurposed with a bunch of other EV batteries to become a stationary industrial battery and only after it's reached the end of that life is it ultimately recycled. The regulation also introduces the idea of the battery passport, a form of QR code which provides access to all relevant information about that battery so the recycler knows what to expect before opening up the battery.
"There is a possible reckoning with decommissioning batteries. But now we have a framework that looks at the end-of-life point and how we recycle this. It will be more difficult for earlier-generation batteries, which were created before recycling requirements came into force, but now industry is waking up to it. A key thing will be developing the relevant recycling industries. We must make sure in Europe we're not creating another industry of exporting waste to other jurisdictions and trying to evade the problems there."
Related insight: Recycling critical minerals in the circular economy
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