Batteries are fueling the transition to a sustainable economy yet pose significant environmental and social challenges. This paradox has led regulators to introduce new regulations, such as the EU Batteries Regulation around how companies make and design their products. As the world moves towards a global circular economy, eliminating unsustainable products and reducing the over-exploitation of resources is crucial to ensure companies transition to a low-carbon future.
Leading the charge toward a circular economy is the European Union (EU), which introduced the EU Batteries Regulation in March 2020 as part of its Green Deal. A main feature of their Circular Economy Action Plan (CEAP) is aimed at answering the growing concerns around the increased use of batteries in electric vehicles and energy storage. Accordingly, in 2023, the EU adopted the Regulation (EU) 2023/1542 concerning batteries and waste batteries.
The EU Batteries Regulation will affect the full lifecycle of batteries and products that use batteries, from the extraction of raw materials to the design of products that use batteries (electric vehicles, phones, etc.) to the end-of-life stage. With the complete battery value chain implicated by this rule, it is critical to understand. Read on to learn more about the EU Batteries Regulation, the merits of a circular economy, and how Good.Lab can help you comply with this and other pertinent regulations.
What is the Circular Economy?
The circular economy describes a future financial system that is not based on production, consumption, and waste as opposed to the current economy. Instead, in the circular economy, goods are produced using reused, recycled, or regenerated materials, and nothing or very little is wasted.
A circular economy would allow humanity to live within our means, using resources sustainably not producing excess waste, leading to a healthier environment and long-term financial stability.
Regulations like the EU’s Battery Regulation and other similar regulations play a critical role in ensuring product designs consider the full life cycle of the product, e.g., whether the raw materials being used have been extracted by exploitative mining operations, the embodied carbon footprint of the product, etc.
As we transition to a circular economy, batteries will play a key role in both mitigating emissions and contributing to other sustainability challenges, underscoring the importance of the EU’s Battery Directive.
Why are Batteries Regulations needed?
The need for batteries is expected to grow at least fourteen-fold by 2030 globally, mainly driven by the demand for electric vehicles. With this increase comes a host of challenges, which include:
- Mining for Raw Materials: The mining of Lithium, Cobalt, and other metals in batteries has been linked to human rights abuses and environmental issues. As the need for batteries increases, without regulation, these issues will likely grow.
- Emissions: The embodied emissions of a lithium-ion electric vehicle battery can range from 2.5 – 16 tons of CO2, the equivalent of between 7000 and 40,000 miles driving in a typical gas-powered car.
- Recycling Rates: Today, only 5% of lithium-ion batteries are recycled, meaning 95% of new batteries are made from newly mined resources. However, the battery recycling market is set to become a big business as the demand grows, reaching a market value of $35 billion by 2031, raising the opportunities for recycling companies.
What is the EU Batteries Regulation?
As you can see, batteries represent some of the most significant environmental and social problems today and likely more so in the future. Herein lies the importance of the EU Batteries Regulation, which will begin a phased-in adoption, replacing an existing battery rule in February 2024.
The regulation applies to:
- All manufacturers, producers, importers, and distributors of every type of battery placed within the EU market, including US companies that produce batteries or electric vehicles and electronics with batteries and export to the EU.
- All five categories of batteries are covered. They include electric vehicles (EV), industrial batteries, Light Means of Transport (LMT) batteries, such as scooters and electric bikes, small portable batteries, and starting, lighting, and ignition (SLI) batteries. EV and LMT batteries were two categories added from the previous battery regulation.
The directive has four primary requirements, the details of which are in the table below, along with how Good.Lab can help you navigate compliance:
| Requirement | Details | How Good.Lab Can Help |
| Supply Chain Due Diligence | Beginning in 2025 the supply chain due diligence rules in the Battery Regulation refers to how companies source raw materials. The rule requires any company making over EUR 40 million in the financial year preceding the last financial year, to create public supply chain due diligence policies in line with international standards, such as the UN Guiding Principles on Business and Human Rights. They must implement systems to identify and assess risks and develop strategies to manage these risks. These policies must be verified by a third party. | Our materiality assessment will help you identify and assess risks across your supply chain, and our team of ESG experts will help you build strategies and policies to mitigate them. We can then conduct a supplier performance baseline and measure the Scope 3 emissions across your supply chains, which will help add a level of precision and transparency to supply chain due diligence programs. |
| Sustainability and Hazardous Materials | Carbon Footprint – For electric vehicle batteries, rechargeable industrial batteries with a capacity greater than 2 kWh and LMT batteries beginning with electric vehicle batteries from 2025 and phased-in thereafter, batteries must have information related to their life cycle carbon footprint and other information on clear labels or QR codes. Hazardous Materials – The bill limits the level of Lead, Cadmium, and Mercury in battery products. | Our product footprint calculator can help you measure the emissions of your products across its life cycle to ensure, the labeling is accurate and assured. Our materiality assessment will help determine all stakeholder views surrounding hazardous materials management programs giving companies better visibility into what hazardous materials their products are exposed to. |
| Product Labeling | CE labeling – Batteries must be marked with the CE label, indicating conformity with EU legislation. This will require manufacturers to carry out different assessments for each battery to ensure compliance with various criteria, including recycled content, capacity, waste labeling, and others. Companies will have to use an approved conformity assessment to acquire the CE labeling. Battery Passport – EV, LMT, and rechargeable industrial batteries with a capacity greater than 2 kWh will have to include a QR code-based product passport containing information about the model of the battery, the manufacturer name and location, and some information about the battery performance, lifespan, and material composition, and some data on how the information was acquired. | Our suite of sustainability solutions, including our GHG calculator, product footprint calculator, and others can make sure you are prepared to collect all of the information for conforming with CE labeling and ensure your products are ready for their EU trip with a battery passport. |
| EU Battery Regulation End of Life Management (Recycling) | Recycling Rates – To ensure batteries are playing a vital part in the EU’s circularity drive, different categories of batteries will have different recycling rates they need to reach to stay in compliance. For portable batteries, the recycling rate will be at least 45% by the end of 2023, 63% by the end of 2027, and 73%, by the end of 2030. For LMT batteries a recycling target of at least 51% by the end of 2028 and of 61% by the end 2030. Companies will also have to prove that for industrial batteries, except those with exclusively external storage, electric vehicle batteries and SLI batteries that contain cobalt, lead, lithium or nickel in active materials are manufactured using a certain amount of recovered materials, for each battery model per year and per manufacturing plant, by August 2031, it would be 16% cobalt, 85% lead, and 6% for lithium and nickel. By August 2036, this recycled content in batteries will expand to include LMT batteries as well, and 26% cobalt, 85% lead, 12% lithium, and 15% nickel. Removable & Replaceable Batteries – By 2027 companies that bring products into the EU must modify the design of their LMT and portable battery devices (smartphones), to ensure their batteries can be removed and replaced by end users. | Our circularity baseline offering can help measure and track year-on-year performance changes, in recycling rates, and recovered content in products, ensuring your company is meeting the minimum recycling or recovered materials rates in time. |
Meeting these requirements might prove to be difficult for some companies, as it could involve processes they have never done, and in some cases, could involve a complete redesign of their product. The primary challenges companies will likely face in complying with the EU Batteries Regulation may include:
- Carbon Footprint Transparency: Batteries must carry a label reflecting the carbon footprint and other information, covering the entire life of the battery except the use stage. This will involve complex data collection processes and emissions calculations to find the final footprint.
- Ethical Sourcing: New due diligence obligations require companies to address social and environmental risks around the sourcing, processing, and trading of raw materials and secondary raw materials, their policies for which will be audited by a third party.
- Design and Information Requirements: Batteries and products with batteries must be designed to have only a certain amount of hazardous materials, be easily removable and replaceable by users, and have increased information provided on capacity, performance, durability, and chemical composition. This could require a complete redesign of products to remain in the EU market.
EU Batteries Regulation Battery Passport
Batteries will be the first products to be added to the EU’s digital product passport (DPP), which is a critical part of the EU’s wider circular economy drive. Specifically, EV, LMT, and industrial batteries with a capacity greater than 2 kWh will have to begin sharing a whole host of information in an electric record (battery passport).
Beginning on 18 February 2027, batteries that fall under this part of the rule will have to give a host of information and put a QR code on their product where end users can view the information specific to that battery. Some of the data the passport must have includes:
- The material composition of the battery, including hazardous substances (mercury, cadmium, lead) present, amount of recovered, and recycled materials used.
- Carbon footprint information
- Expected battery lifetime.
- Temperature ranges battery can be used in.
- Original power capability, capacity, minimal, maximal, and nominal voltage.
- And much more on safety measures, components, dis and reassembly instructions, etc.
Good.Lab’s Product Footprint Calculator
A big part of the compliance factors of this regulation, and one of the most difficult parts, is measuring the carbon footprint of the battery across its life cycle. Good.Lab’s product footprint calculator enables companies to measure and manage the emissions associated with the lifecycle of their batteries, providing the necessary data to fulfill reporting obligations and informing strategies to reduce environmental impact across operations and the supply chain. The software can be customized to suit the unique needs and data attributes of the client’s business and SKU-level nuances. All of these would be essential in saving time and costs in carbon accounting and giving accurate and consistent results to meet the sustainability criteria set out in the regulation.
How Good.Lab Can Help You Comply with the EU Batteries Regulation
With batteries playing a crucial role in the transition to a low-carbon economy and inherent problems, inevitability we will see even more sustainability regulations in the future. It is likely the EU’s regulation will be the gold standard that all other global regulations are modeled after.
If you are a company that manufactures batteries or products that use batteries (e-scooters, smartphones, electric vehicles, and much more), and you supply or plan to supply the UK market, understanding this regulation will be your key to maintaining competitiveness.
Although some of the more difficult aspects of the directive won’t kick in till 2027, early adopters will benefit from a competitive advantage and ensured compliance. With our expert guidance and software tools, we can help you move beyond compliance and build a competitive advantage. Start building your strategy today.
EU Batteries Regulation FAQs
The EU Battery Directive is a legislative framework that sets out specific rules for the production and disposal of batteries in the European Union, aiming to minimize the negative impact of batteries and promote a circular economy. It considers the entire life cycle of batteries, establishing requirements for the collection, recycling, and labeling of batteries promoting sustainable design, production, and end-of-life practices.
US companies that export batteries or battery-containing products to the EU will need to comply with this regulation. This includes adhering to the sustainability, safety, and end-of-life management requirements, among others. Compliance will likely require adjustments in sourcing, manufacturing, and disposal processes to avoid penalties in the EU market and stay competitive. US companies can also anticipate similar regulations in from other regions in the future.
Yes, by August 18, 2025, EU Member States have to apply penalties for non-compliance. The penalties should be effective, persuasive, and proportionate and consider the nature, gravity, scope, intentional nature, and repetition of the infringements.
The first step towards compliance with the EU Battery Regulation would be a materiality assessment. This process helps companies identify and prioritize their most significant sustainability issues, including those related to the lifecycle of batteries. The assessment would be critical to understanding where the company’s operations intersect with the new requirements, such as sustainability, supply chain due diligence, and recycling protocols, enabling them to develop a targeted compliance strategy. After the materiality assessment, companies would typically need to map out a compliance plan, addressing the identified material aspects in line with the regulation’s demands.
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