Value chain

Without a competitive European battery value chain, there is no energy and digital transition in the EU –

Claude Chanson is the general manager, at RECHARGE – the representative association of the advanced rechargeable and lithium battery value chain in Europe. You will find more information on the position of RECHARGE on the battery regulation here.

Sustainable batteries are a key technology for a carbon-free economy and for delivering the EU’s green energy transition and digitalisation ambitions. Among other things, batteries offer solutions for storing renewable energy and powering electric vehicles (EVs) as well as for mobile communication devices. When designing the overall battery regulatory framework, policy makers must ensure that all measures of the EU Battery Regulation can contribute to advancing the energy and digital transitions while ensuring that the EU battery value chain becomes a competitive world leader.

Enforcing the new regulation and creating a level playing field is essential to ensure the success of the legislation and to avoid repeating the policy mistakes of the past which have damaged efforts to foster European industry – as we remember much of the recent history of the European photovoltaic industry.

Application – the key to delivering long lasting batteries and how to achieve it

The European Battery Value Chain warns that even measures that are likely to have real environmental, economic and social benefits can end up as red tape if not properly implemented. To have adequate application, policy makers need to ensure that sustainability provisions have an achievable reach. The European Parliament is currently proposing to broaden the scope of sustainability requirements, such as carbon footprint and recycled content declarations, to all electric vehicles, light means of transport and industrial batteries. While this approach has the good intention of ensuring sustainable batteries, it fails to take into account the risks of enforcement at Member State (MS) level, undermining the ultimate goal of ensuring the sale of sustainable products in the EU- 27.

Carbon footprint and recycled content declarations will be made per battery model and will need to be subject to third-party audits with Notified Bodies under Member State oversight. RECHARGE estimated that the inclusion of EVs and industrial batteries >2 KW/h (original Commission proposal) in the scope would lead to declarations for more than 25,000 battery models. Apart from the enormous standardization work required to establish the calculation methods, extending the scope of the measures would require enormous administrative capacity, which not all Member States would be able to provide initially. Strict enforcement would be next to impossible – opening the door to greenwashing and non-compliant batteries entering the EU market.

As a more meaningful option and to ensure implementation, the industry recommends that the scope initially be limited to EV batteries > 2KW/h and large energy storage system batteries only.

The European battery sector – a nascent and innovative industry in desperate need of a level playing field

Regulating product design and defining product performance can limit manufacturers’ ability to innovate and meet complex and ever-changing customer demands. Performance and durability requirements for industrial and EV batteries, for example, are already determined by the market, as OEMs (e.g. car manufacturers) have high standards for battery performance and durability that they buy. Moreover, the measurement of the carbon footprint in the battery regulation is already a good indicator of quality (because the C-footprint is expressed in terms of the expected lifetime).

A design requirement related to mandatory recycled content in batteries disproportionately benefits non-EU players in the value chain. The volumes of waste available for recycling are much higher in Asia, where battery manufacturing is currently mostly located. While the European battery industry acknowledges the good intentions of policymakers, the environmental benefit of mandating recycled content would be too low for the next decade, according to the Commission’s initial impact assessment. Establishing a requirement now could potentially encourage European battery producers to look for recycled materials outside of Europe to fulfill the obligation.

If a voluntary approach for recycled content is introduced first, this would allow industry to gain the experience needed for a proper market assessment in 2030 when mandatory minimum targets could be introduced.

Furthermore, to ensure a level playing field between Member States, the definition of producer included in the new regulation must identify the producer in a clear and consistent manner. This is crucial as the Extended Producer Responsibility (EPR) requirement is a key pillar to ensure batteries are properly collected and recycled at end of life. Battery manufacturers do not have access to information on where their integrated battery in a vehicle or device will be made available to customers. They are therefore not in a position to comply with the requirements of the REP, in particular for the take-back obligations.

The proposals currently being debated within the institutions maintain a disparity as to which value chain actor the definition of producer should apply to. This crucial issue must be addressed in future negotiations, by systematically awarding producer status to the OEM.

Finally, any measure that could prevent the European battery industry from playing its role in global competition (such as the ban on the export of new batteries) would in fact lead to the opposite of what was originally intended. The level of priority that non-EU countries may give to the sustainability of their imported batteries may be lower than that of the EU, preferring for example to promote the acceleration of the transition to electric mobility. Any voluntary export restraint measures would not understand the dynamics of global competition and would seriously disadvantage European manufacturers. Our rules can only become the new global standard if European industry becomes an established market leader.

VScritical time to ensure good measures deliver

The co-legislators are now at a critical moment when it comes to establishing the right measures to support the decarbonisation and digitalisation of our society and our economy, while ensuring the competitiveness of the European battery sector. The European battery industry is committed to the EU’s ambition to become one of the largest and most sustainable manufacturing regions in the world and is determined to set sustainability standards for the rest of the world. Now we need a legislative framework that will allow Europe’s fledgling industry to become competitive and able to achieve this goal.