New EU Batteries Regulation: introducing enhanced sustainability, recycling and safety requirements

A new batteries regulation will impact the design, production and waste management of all types of batteries manufactured or sold in the European Union. The new rules extend producer responsibility and require due diligence of supply chains to assess social and environmental risks, with a key focus on the supply of cobalt, natural graphite, lithium and nickel. New labelling will provide consumers with more accurate information on the social and environmental impact of batteries. The new rules will apply to all manufacturers, producers, importers and distributors of every type of battery which are placed within the EU market; i.e. industrial, automotive, electric vehicle and portable, independent of their origin. 

Batteries play an essential role in today's tertiary economy and are integral to the European Commission's plans to deliver on the EU Green Deal, the Circular Economy Action Plan and the New Industrial Strategy. The new regulation has three aims: (i) reduce the environmental and social impacts throughout all stages of the battery life cycle; (ii) promote a circular economy; and (iii) strengthen the functioning of the internal market. 

At a Glance 

The new Batteries Regulation, which comes into force on 17 August 2023:¹

• Applies to all manufacturers, producers, importers and distributors of every type of battery placed within the EU market (defined as "Economic Operators"); 
• Extends to all batteries sold in the EU, including portable batteries, ready-to-use battery modules, industrial batteries, electric vehicle batteries, SLI batteries (supplying power for the starting, lighting or ignition of vehicles and machinery), and light means of transport ("LMT") batteries (e.g. electric bikes, e-mopeds and e-scooters); and 
• Applies independently of the origin of the batteries or raw materials. 

The Regulation introduces changes in four key areas:

1. Sustainability and Safety: Carbon Footprint and Restrictions on Hazardous Substances

All EV batteries, LMT batteries and rechargeable industrial batteries with a capacity of more than two kWh must have a "clearly legible and indelible" carbon footprint declaration and label, indicating amongst others, the levels of recycled cobalt, lead, lithium and nickel used in the battery production. By 31 December 2030, the Commission shall assess the feasibility of extending the carbon footprint declaration requirement to portable batteries, and the requirement for a maximum life cycle carbon footprint threshold to rechargeable industrial batteries with a capacity of two kWh or less.

In addition, the Regulation restricts the use of mercury, cadmium and lead.

2. Supply Chain Management: Due Diligence Requirements 

All Economic Operators, aside from SMEs, selling batteries within the EU market must develop and implement a due diligence policy compliant with international standards to address the social and environmental risks inherent in sourcing, processing and trading the raw materials and secondary materials necessary for battery production.

Specifically, Economic Operators must adopt and clearly communicate to suppliers and the public due diligence policies concerning the supply of cobalt, natural graphite, lithium, nickel and other chemical compounds based on the raw materials listed, in accordance with recognised international standards, such as the OECD Due Diligence Guidelines and the UN Guiding Principles on Business and Human Rights. 

3. Labelling and Information

Digital battery passport: EV batteries, LMT batteries and rechargeable industrial batteries more than two kWh will need a "digital battery passport", with information on the battery model, the specific battery and its use. More generally, all batteries must have labels and QR codes detailing their capacity, performance, durability and chemical composition, as well as show the "separate collection" symbol.

Labelling changes: All batteries will need to be "CE" marked to demonstrate conformity with health, safety and environmental protection standards applicable in the EU. The labelling for batteries included in a device should be affixed directly on the device in a clearly visible and legible manner. This marks a change from the current practice, in the EU and Germany for instance, where labelling is applied to the battery itself, rather than the overall device. 

The labelling and information requirements will apply by 2026; however, the QR codes will not need to be implemented until 2027.

4. Recycling – End of Life Management

The Regulation aims to ensure that batteries are subject to separate, high-quality recycling. For instance, a late change by the Council provides that the battery management system of EV batteries shall include a software reset function, in case economic operators carrying out preparation for the re-use, repurposing or re-manufacturing of EV batteries need to upload different battery management system software. This may cause certain risks, for instance, for reasons of cybersecurity. Accordingly, the Regulation provides that if the software reset function is used, the original battery manufacturer shall not be held liable for any breach of the safety or functionality of the battery that could be attributed to battery management system software uploaded after that battery was placed on the market.

The Regulation sets ambitious targets for each battery type:

• A collection rate of 45 per cent by the end of 2023, 63 per cent by the end of 2027 and 73 per cent by the end of 2030 for portable batteries; and
• A collection rate of 51 per cent by the end of 2028 and 61 per cent by the end of 2031 for LMT batteries.

The Regulation also: 

• Maintains the total prohibition on landfilling waste batteries. All waste batteries – including LMT, EV, SLI and industrial batteries – must be collected by Economic Operators free of charge for end-users, regardless of the nature, chemical composition, condition, brand or origin of the waste battery in question; and
• Sets out compulsory minimum levels of recycled content for reuse in new industrial, SLI and EV batteries: six per cent for lithium and nickel, 16 per cent for cobalt and 85 per cent for lead. Every battery will be required to specify the amount of recycled content it contains.

By the end of 2023, the Commission shall assess the feasibility and potential benefits of the establishment of deposit return systems for batteries, in particular for portable batteries of general use. 

The Regulation also imposes obligations on end-users:

• End-users shall discard waste batteries separately from other waste streams, in a designated, separate collection point set up by the producer; and
• To improve manageability, the Regulation requires that end-users must be able to remove and replace all portable batteries from the appliance for which they are used. LMT batteries must be replaceable by an independent professional. Economic Operators will have 42 months from the entry into force of the regulation to adapt the design of their products to this new requirement.

By 31 December 2030, the Commission will assess whether to phase out the use of non-rechargeable portable batteries of general use.

Around the Globe 

The new EU Batteries Regulation is expected to become the global benchmark, surpassing comparable regimes in its efforts to regulate battery sustainability, safety and end-of life management. In the US, only one jurisdiction so far – Washington, DC² – has passed a law mandating Extended Producer Responsibility ("EPR") for both single-use and rechargeable batteries.³ California has established a Lithium-Ion Car Battery Recycling Advisory Group "aimed at ensuring that as close to 100 per cent as possible of lithium-ion batteries in the state are reused or recycled at end-of-life in a safe and cost-effective manner".⁴ In June 2023, a new bill was proposed that would create strict forced labour due diligence requirements for importers of products containing metals and minerals from the Democratic Republic of Congo.⁵ However, none of these measures is as broad in scope or as comprehensive as the EU's new Batteries Regulation. 

Looking Ahead

The new Regulation comes into force on 17 August 2023 and starts to apply as of 18 February 2024. 

The Regulation provides for phased implementation of the various rules. 

• Companies should ensure the removability and replaceability of portable batteries and LMT batteries from 18 February 2027. 
• The obligations of economic operators other than due diligence policies and end-of-life management will start to apply from 18 August 2024. 
• Subject to exceptions, rules on conformity assessment procedures of batteries will also start to apply from 18 August 2024. 
• Rules relating to end-of-life management of batteries will need to be complied with from 18 August 2025.⁶

By 18 August 2025, Member States shall lay down penalties applicable to infringements of this Regulation, which shall be effective, proportionate and dissuasive.⁷ 

The Batteries Regulation will require a joint effort from manufacturers, producers, importers and distributors of all types of batteries within the EU market to make significant changes by way of labelling, end-of-life management and supply chain due diligence. Companies involved in battery production can already review the adopted text and prepare for compliance. The Regulation is a clear demonstration by the EU of its intention to embed sustainable practices within battery technologies, which, in turn, will be at the heart of the transition to a lower-carbon economy. 

_{1 Regulation (EU) 2023/1542 of the European Parliament and of the Council of 12 July 2023 concerning batteries and waste batteries, amending Directive 2008/98/EC and Regulation (EU) 2019/1020 and repealing Directive 2006/66/EC [2023] OJ L 191/1 ("Batteries Regulation").
2 Maria Rachal, Washington, DC, zero waste bill is now law, though funding remains uncertain, 5 April 2021.
3 D.C. ACT 23-542 in the Council of the District of Columbia, 22 December 2020.
4 Draft Report, Lithium-ion Car Battery Recycling Advisory Group, 15 October 2021.
5 H.R. 4443, To ensure that certain goods made with child labor or forced labor in the Democratic Republic of the Congo do not enter the United States market, to counter control of strategic metals and minerals by the People's Republic of China, and for other purpose.
6 Article 96, Batteries Regulation. 
7 Article 93, Batteries Regulation.}

Kit Goodfellow (White & Case, Associate, London) and Jia Liu (White & Case, Associate, Brussels) assisted in the preparation of this publication.

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