This article is part of our special report Sustainable sourcing of batteries.
Brussels plans to wrest the title of global electric vehicle battery leader from Asia by supercharging Europe’s battery production and imposing strict green criteria that will make European products the de facto global standard.
New EU legislation seeks to make European batteries the greenest in the world by setting carbon emissions limits on production, obliging manufacturers to use recycled content, and imposing checks to prevent labour abuses in the battery supply chain.
Collectively, China, Japan, and South Korea are the world’s most prolific battery producers, making Asia the global powerhouse of electric vehicle batteries. North America is the second largest producer, with Europe taking bronze.
The steady shift to electric vehicles and an increased reliance on handheld devices in recent years has seen the demand for batteries in Europe surge.
According to EU estimates, global demand for batteries is set to increase 14-fold by 2030, with the EU expected to account for 17% of that demand.
EU leaders believe Europe can stake its place in the global battery market by making European batteries synonymous with sustainability.
“Batteries placed on our market, regardless of their origin, will be sustainable,” said European Commission vice-president Maroš Šefčovič, speaking shortly after the EU executive unveiled its proposed EU battery regulation in December last year.
In fact, adhering to the EU’s green production criteria will likely soon be a prerequisite to sell a battery within the bloc.
Stefano Soro, an official at the European Commission’s internal market directorate, said the EU would essentially set global standards. He called the EU “an unavoidable market for all those who want to do business”, a reference to the bloc’s position as the world’s largest market.
The European Commission also wants to curtail Europe’s reliance on outside nations for the raw materials necessary to make batteries. Currently, around 65% of cobalt is mined in the Democratic Republic of the Congo, with most of the world’s lithium mines currently located in South America.
The Commission-backed European Raw Materials Alliance, launched in 2020, aims to strengthen the EU’s access to rare metals, while the European Battery Alliance, established in 2017, seeks to bolster Europe’s battery cell manufacturing capacity.
These alliances are a crucial part of Brussels’ efforts to wean the continent off Asian-made batteries in favour of home-produced cells. Indeed, Vice President Šefčovič has already set a goal of meeting domestic battery demand solely from EU producers by 2025.
EU battery regulation
The most significant piece of legislation to reach the dual aims of greater sustainability and increased battery self-sufficiency is the new EU Battery Regulation, tabled in December 2020.
The draft is currently being debated by the EU’s co-legislative branches – the European Parliament and Council representing the EU’s 27 member states.
The regulation is noticeable for covering every stage of the battery process, from the extraction of raw materials, through to manufacture, until the eventual disposal of the battery.
It replaces the now obsolete battery directive from 2006, updating it to reflect advances in technology and recycling techniques.
Unlike the 2006 directive, which allowed member states to adapt the law to their national circumstances, the newly proposed legislation will apply uniformly across EU countries.
In addition to sustainability standards, the regulation sets criteria for the performance and durability of batteries and enhances transparency through labelling requirements.
This includes the introduction of so-called “battery passports”, which will show the origin of materials used in the battery.
These labelling requirements will extend to the battery’s lifespan and charging capacity, giving consumers a greater understanding of how well the battery is functioning.
It’s foreseen that providing this information will help to build confidence in the second-hand battery market, a key element in making electric vehicles affordable for more consumers.
Measuring the carbon footprint
The proposed green criteria requirements are expected to significantly curtail the number of foreign made batteries for sale in Europe.
From 1 July 2024, battery manufacturers that do not clearly label the carbon footprint of their industrial and electric batteries will face exclusion from the market. From 2027, a carbon emissions limit will apply.
This requirement has proved controversial, with questions arising over the calculation method to evaluate the battery’s carbon footprint.
“Calculating carbon footprint at manufacturing plant level could be feasible, but it would lead to inequalities in the results depending on the manufacturing location, and thus confuse end consumers,” said ACEA, a lobby group representing car manufacturers, in a recent position paper.
In addition to cleaning up the manufacturing process, the regulation aims to facilitate a more circular approach to battery disposal. Each battery must be designed in a way that makes it possible to remove the precious raw materials within it.
The use of recycled content will become an obligatory part of battery manufacturing, a move the EU says will promote the “circular economy” in which goods are reused or recycled rather than thrown away.
Thanks to increased recycling and reuse of precious metals, the amount of virgin raw materials that must be extracted to power European batteries will then gradually fall, according to the Commission’s reasoning.
Mandatory recycled content for cobalt, lead, lithium and nickel
From 2027, the quantity of recycled cobalt, lead, lithium, and nickel in each electric battery must be made public, with mandatory minimum levels kicking in from 2030.
These levels will be staggered over time, to ensure there are enough recycled batteries in the system to meet the targets.
The mandatory recycling requirements will start at 12% for cobalt, 85% for lead, 4% for lithium and 4% for nickel in 2030, and rise to 20% for cobalt, 10% for lithium and 12% for nickel by 2035.
The Commission has also significantly raised collection targets for EU countries to 65% of portable batteries by 2025 and 70% by 2030, up from the EU’s current target of collecting 45% of portable batteries.
Large batteries, including those used in electric vehicles, must be collected and recycled in full.
However, these measures have not met universal approval. Poland previously cast doubt on the feasibility of a 70% collection target by 2030, while Bulgaria said the timeline was “unrealistic”.
ACEA also warned that mandating levels of recycled content will push up the cost of batteries, making electric vehicles more expensive.
They further expressed concern that locking in specific requirements may stifle innovation in a quickly moving industry.
Preventing human rights abuses
Most metals used in battery production are primarily sourced, at present, from developing countries. And demand is accelerating.
Current EU estimates forecast that the bloc will need nearly 60 times more lithium and 15 times more cobalt by 2050 compared with the current supply.
The extraction of these metals has led to controversy. In 2016, Amnesty International sent tremors through the tech industry when it published a report revealing that 35,000 child labourers worked at cobalt mines in the Democratic Republic of Congo, the world’s leading producer of the metal.
The report led to revulsion among lawmakers and consumers, and industry vows to address abuses in the supply chain.
“Cobalt mining is, in some areas of the world, linked to human rights abuses, child labour, and life threatening working conditions,” said Stefano Soro, confirming that the regulation will play “a significant role” in ending abuses.
Under the proposed battery regulation, companies that do not act against these abuses will face a ban from the EU market.
Hewing closely to OECD guidelines for ethical sourcing of raw materials, the proposal will require third party verification carried out by accredited bodies.
The raw materials industry has generally welcomed the proposed rules, reserving criticism for the time available to implement it.
“The due diligence policies will have to be implemented, but also the results will have to be verified by third party assessment bodies, and this entire system of checks will have to be established at national level,” said Francesco Gattiglio, EU affairs director with battery manufacturers group Eurobat.
“We do not think that one year is enough to have all of this done.”
However, for an industry tarnished by reports of worker exploitation, battery sourcing verification may offer a path to redemption.
Mark Mistry, senior manager with the Nickel Institute, said he is certain that companies in the industry will embrace the due diligence requirements as an opportunity “to demonstrate that [they] are ready to identify and to address environmental, social, and governance risks”.
[Edited by Frédéric Simon]