On June 14, local time, the European Parliament passed an agreement on the "New Battery Law" with 587 votes in favor, 9 votes against, and 20 abstentions. Relevant regulations on battery management.

The New Battery Law was originally proposed by the European Commission in 2020 to regulate the entire life cycle of all types of batteries sold in the EU, including design, production and recycling. The relevant agreement of the "New Battery Law" passed by the European Parliament still needs to be formally approved by the European Council, and then it will be published in the Official Journal of the European Union and take effect. The European Council is composed of the heads of state or government of the EU member states, the President of the European Council and the President of the European Commission. It is the highest decision-making body of the European Union and determines the overall policy of the European Union.

Once the full version of the New Battery Law takes effect, battery manufacturers, including Chinese battery companies, will be subject to stricter environmental and due diligence requirements if they want to sell batteries in the European market.

According to the latest announcement on the official website of the European Parliament, the relevant agreements of the "New Battery Law" passed this time mainly include the following contents.

First, in terms of applicable objects, the bill will have a dual scope of application: the chapter on waste battery management applies to all types of batteries: portable batteries, SLI batteries (designed to provide power for starting, lighting or ignition of vehicles), light vehicles batteries, electric vehicle batteries and industrial batteries.

Requirements for carbon footprints will apply to electric vehicle batteries, light transport vehicles and rechargeable industrial batteries, with different timetables depending on the battery category. The regulation will apply to industrial batteries above 2kwh (except batteries stored entirely externally), electric vehicle batteries and SLI batteries 5 years after entry into force, and to batteries for light transport vehicles 10 years after entry into force.

Second, the regulations on the minimum level of recycled materials contained in new batteries: from 8 years after the law came into effect, new batteries contain recycled cobalt content of 16%, lead content of 85%, lithium content of 6%, nickel content of 6%; 13 years after the law came into effect, new batteries contain recycled cobalt content of 26%, lead content of 85%, lithium content of 12%, and nickel content of 15%. Depending on the impact of market developments in battery chemistry on the types of recycled materials, the Commission may pass enabling acts to include further materials in scope. Secondary batteries are exempt from carbon footprint and recycled material obligations (among others).

Third, assess the phase-out of non-rechargeable portable batteries for general use by 2030.

Fourth, regulations on due diligence: Except for small and medium-sized enterprises, operators who put batteries into the market will perform due diligence obligations within 2 years after the regulation takes effect. Their due diligence policies must follow internationally recognized due diligence guidelines.

Fifth, regulations on the management of waste batteries: the minimum collection target for waste batteries is to reach 63% by the end of 2027 and 73% by the end of 2030. Specific collection targets (51% by the end of 2028 and 61% by the end of 2031) have been set for waste batteries from light vehicles. The material recovery target for lithium is 50% by the end of 2027, increasing to 80% by the end of 2031. A new recycling efficiency target introduced for nickel-cadmium batteries is set at 80%, to be achieved by the end of 2025.

“For the first time we will have circular economy legislation covering the entire life cycle of products, which will benefit both the environment and the economy,” said Achille Varati, MEP. Building a stronger EU battery recycling industry, especially for lithium, and a competitive industrial sector is critical for the continent's energy transition and strategic autonomy in the coming decades. These measures could become a benchmark for the entire global battery market .”

According to the latest report from Reuters, the number of electric vehicles in use in the European Union will reach 30 million by 2030, which will stimulate demand for batteries in Europe to soar in the next decade.

Reuters said that in the short term, the focus of EU battery regulations in the field of electric vehicles is the mandatory declaration and labeling of the carbon footprint of electric vehicle traction batteries, as well as batteries for light transport vehicles such as electric scooters and bicycles. Type Enforcement Digital Battery Passport Policy. From 2024, battery passports must first indicate the carbon footprint of batteries, from raw material extraction to production and recycling.

The Ins and Outs of the New Battery Act
In view of the strategic importance of batteries to the EU, in October 2017, the European Commission established the European Battery Alliance.

In May 2018, the European Commission adopted a battery strategic action plan, which includes a series of measures such as raw material extraction, procurement and processing, battery materials, battery system production, battery reuse and recycling.

On 10 December 2020, building on the previous Battery Strategy Action Plan, the European Commission presented a proposal to modernize the EU battery regulatory framework to ensure the sustainability and competitiveness of the battery value chain. Specifically, the proposal introduces mandatory requirements for sustainability (such as carbon footprint rules, minimum recycled content, performance and durability standards), safety and labeling for the marketing and deployment of batteries, and requirements for recycling management. The proposal also stipulates due diligence obligations for operators in the procurement of raw materials.

This proposal is known as the "EU Batteries and Waste Batteries Regulation" (referred to as the "New Batteries Act").

On December 9, 2022, the European Parliament and the European Council reached a provisional agreement on this document. The agreed text substantially revises the Commission's original proposal, notably by including batteries for light transport vehicles such as e-bikes and e-scooters, and by strengthening due diligence requirements. In terms of recycling quotas, the agreement also goes beyond the specifications originally drafted by the European Commission.

The European Parliament notes on its official website that the battery issue touches many areas, from transport, climate action, and energy to waste and resources. The development, production and use of batteries are key to the EU's transition to climate neutrality.

Global battery demand is expected to grow 14-fold by 2030, driven by transport electrification and grid energy storage battery deployment, with the EU likely to account for 17% of this demand. According to Torre Seknis, the head of the European Battery Union, previously predicted at the 2023 World Power Battery Conference that in 2025, the EU's demand for power batteries will reach 550GWh, and in 2030, the EU's demand for power batteries will be 1000GWh.

In terms of specific battery mineral raw materials, the European Parliament predicts that by 2030, the EU's demand for lithium will increase 18 times, and the demand for cobalt will increase by 5 times. By 2050, the demand for lithium will increase by nearly 60 times, and the demand for cobalt The demand will increase 15 times.

"However, the manufacture, use and end-of-life disposal of batteries raise many environmental and social challenges. As the market grows, so does the importance of the sustainability, environmental and energy aspects of batteries," the European Parliament said.

According to calculations by the World Economic Forum and the Global Battery Alliance, the largest greenhouse gas emitter in the battery value chain is the manufacture of active materials and other components, and the carbon footprint of a battery depends largely on the energy used in the manufacturing process.

Studies have shown that the ternary lithium batteries used in the production of electric vehicles in South Korea have a global warming potential 60% higher than batteries made using hydroelectric power due to the use of coal, nuclear energy and natural gas as the main energy sources in the production process.

In addition, it is worth noting the emphasis on battery recycling in the "New Battery Law" agreement passed this time. It is understood that more than 1.9 million tons of waste batteries are produced in Europe every year. According to a Eurobat study, automotive lead-acid batteries have the highest collection and recycling rate (99%). However, the recycling rate of lithium-ion batteries in Europe is very low, because lithium battery recycling is technically challenging and costly.

Specific to metals, currently the EU hardly recycles lithium, but recycles more economically valuable cobalt, nickel and copper, and the recovery rate is not satisfactory, only 12% of aluminum, 22% of cobalt, 8% of manganese and 16% of nickel was recycled. The European Parliament believes that under ideal conditions, the recovery efficiency of cobalt and nickel in the future is estimated to be about 95%, and the recovery efficiency of copper is about 80%.

The European Parliament stated that closing the raw material loop as much as possible will help reduce the risk of raw material supply.

Torre Seknis, head of the European Battery Alliance, also said at the previous International Power Battery Conference that the power battery industry in Europe has achieved tremendous development in just five to six years. "If all conditions are met, our production capacity will be able to basically meet our needs in 2030. But the future is still a long way to go. Now, we need to build a more sustainable and resilient value chain.