Auteurs

Dr. Benedikt Rohrßen

Associé

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Dr. Ulrich Spiegel

Collaborateur senior

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Auteurs

Dr. Benedikt Rohrßen

Associé

Read More

Dr. Ulrich Spiegel

Collaborateur senior

Read More

30 août 2023

Harmonization in Battery Law: EU Battery Regulation 2023 Overview

  • In-depth analysis

The European Commission has set high standards for the new EU Battery Regulation (Regulation (EU) 2023/1542, "EU-Batt-R"): It considers it a "strategic imperative" to develop and manufacture batteries, cf. the associated draft regulation from December 2020. The market is considerable: The European Battery Alliance estimates it at an annual volume of EUR 250 billion in 2025.  

The EU-Batt-R is intended to address three aspects to be improved in the existing battery market:

  • The creation of uniform framework conditions for the entire life cycle of batteries,
  • The promotion of the circular economy (recycling), and
  • The reduction of ecological and social impacts emanating from the battery industry.

The ambitious objectives have led to a comprehensive regulation. The EU-Batt-R has 143 recitals, 96 articles, and 15 annexes (or 117 pages). For comparison: The previous Battery Directive 2006/66/EC, which is repealed by the EU-Batt-R, had a mere 30 recitals, 30 articles, and 3 annexes (or 14 pages). In principle, the EU-Batt-R applies from 18 February 2024, but many essential provisions of the EU-Batt-R will only gradually become applicable or stricter over time.

Material and Personal Scope – Which batteries and which persons are covered by the EU-Batt-R? 

The scope is conceivably broad. All types of batteries and accumulators are covered, ultimately all objects that provide electrical energy by converting chemical energy and have a storage capacity. Batteries for electric vehicles ("electric vehicle batteries") and light means of transport batteries ("LMT batteries" Article 3 No. 11) such as e-scooters are also included as new battery categories in the material scope – in line with the growing importance of electric vehicles.

The new EU-Batt-R affects all economic operators that come into contact with a battery, whether as a manufacturer or producer, authorized representative, importer, dealer, or fulfilment service provider. Following the Battery Directive, the EU-Batt-R distinguishes between manufacturers and producers. In the German translation so far – at least with regard to the usual product law terms – inconsistent, the distribution of roles is expected to look as follows: "Manufacturer" (translated as "producer" in the German language version, cf. Article 3 No. 33 EU-Batt-R) is anyone who manufactures or has a battery manufactured and markets it under their own name, regardless of the location of the "manufacturer." "Producer" can be any "manufacturer," importer, or dealer who – in summary – first places a battery on the market of a specific member state. It remains to be seen whether there will be a short-term corrigendum in the German language version.

Implementation Deadlines – When does the regulation have to be implemented?

The EU-Batt-R entered into force on 17 August 2023, 20 days after its publication in the Official Journal of the European Union, Article 96 EU-Batt-R. The implementation deadlines are tight. The EU-Batt-R generally applies from 18 February 2024, but many of the essential provisions have a different start date or become stricter over time. The following list shows the start date of some obligations as examples:

  • "Classic product compliance obligations" of economic operators in Chapter VI, including conformity assessment procedures, generally apply from 18 August 2024.
  • (Supply chain) due diligence obligations of economic operators in Chapter VII from 18 August 2025.
  • CO2 footprint:
    • Obligation to (purely) declare the CO2 footprint of electric vehicle batteries: from 18 February 2025, if the Commission has defined the calculation method by then, Article 7 para. 1 second subparagraph lit. a).
    • Obligation to comply with a maximum CO2 footprint for electric vehicle batteries: from 18 February 2028, if the Commission has defined the maximum values by then, Article 7 para. 3 second subparagraph lit. a).
  • The interchangeability of batteries according to Article 11 from 18 February 2027.

Significant Changes

Regulation instead of Directive

The European Union continues its approach to direct harmonization – as recently with the Product Safety Regulation and the Machinery Regulation: Due to its regulatory character, the EU-Batt-R has direct effect in all EU member states; implementation legal acts will essentially regulate responsibilities and penalties. Such uniform and contemporary regulation is welcome given the market changes, technological developments, and increasing use of batteries.

Obligations of Economic Operators

The EU-Batt-R largely follows the so-called New Legislative Framework concerning the obligations of economic operators. Accordingly, the EU-Batt-R defines obligations at each stage of the distribution chain – from the material assessment of batteries and the preparation of corresponding documents to the mere monitoring of whether batteries appear to comply with the "applicable regulations." Additionally, manufacturer obligations also apply to re-users and remanufacturers.

The EU-Batt-R reveals its origin from the area of environmental product law. The aforementioned "applicable regulations" are largely found in Chapter II of the EU-Batt-R. According to the title, Chapter II deals with sustainability and safety requirements. Moreover, concerning specific batteries (e.g., batteries for electric vehicles), the EU-Batt-R refers to the corresponding regulations under the European Type Approval Regulation (EU) 2018/858, see recital 20.

Product Labeling and Information: CE Marking, QR Codes, and Other Information

Following the New Legislative Framework, the manufacturer's and importer's name, address, and email address must be provided. Batteries will be subject to mandatory CE marking without exception. Batteries should also be traceable; the manufacturer must indicate a model identifier and a batch or serial number on the battery. Moreover, Chapter III of the EU-Batt-R provides for extensive additional labeling and information obligations. All batteries must bear the symbol for separate collection ("crossed-out wheeled bin"), and the EU-Batt-R specifies the size of the marking. Additionally, a QR code must be attached, which – depending on the battery category – leads to specific information about the battery, such as the – also new – digital battery passport for LMT batteries, industrial batteries with a capacity of more than 2 kWh, and electric vehicle batteries.

Due Diligence Obligations of Economic Operators

(Supply chain) due diligence obligations and the German Supply Chain Act (“LkSG”) – an increasingly burning issue for more and more companies. Specific legal due diligence obligations now also apply specifically to economic operators in the battery industry. Significantly more companies will be affected than currently under the LkSG. The due diligence obligations regulated in Chapter VII apply if the respective economic operator (or its "parent/sister companies") had a net turnover of EUR 40 million or more in the penultimate financial year. The EU-Batt-R even claims priority over other due diligence obligations as "lex specialis," recital 91 sentence 1.

The EU-Batt-R takes a comprehensive approach here: The companies, essentially the economic operator who places a battery on the market or puts it into operation, have due diligence obligations concerning the raw materials used in the batteries, as well as social and environmental risks. In summary, these companies will have three essential obligations to fulfill: Companies must establish a management system, implement risk management related to due diligence, and disclose due diligence-related information. The system and plan are verified by an independent third party, a "notified body."

  • Management System and Risk Management
    The management system consists of a strategy and its monitoring. As part of the strategy, the company must define how recognized measures can be used to address the risks to humans and the environment arising from certain raw materials in the batteries. The management system must be based on documents that the company can use to plausibly explain the risks and measures. For example, raw materials used in the batteries must be described, and the names and addresses of the suppliers must be recorded.
    As part of risk management, companies must then determine appropriate strategies to adequately address the identified risks.
    The management system and risk management are tasks of the "top management level." Companies must assign a person at the "top management level" to monitor the strategy for fulfilling due diligence obligations.
  • Disclosure of Information
    The economic operator must disclose large parts of the management system and risk management to market surveillance authorities, as well as the approval of the independent "notified body." There are also disclosure obligations towards the economic operator's customers, especially concerning information that the economic operator has obtained during its own assessment. Ultimately, the economic operator must make a report publicly available, informing how it fulfills its obligations to maintain a management plan and risk management.

Restrictions on Hazardous Substances, Minimum Quality, CO2 Footprint

The EU-Batt-R restricts certain (content) substances, sets requirements for durability and the CO2 footprint of certain batteries, and prescribes recycled content in new batteries.

Article 6 EU-Batt-R prohibits the use of certain (hazardous) substances (mainly from chemical law) in batteries. The prohibition of certain amounts of mercury and cadmium is already known. The permitted lead content will be restricted in the future.

In addition, there are requirements for the performance and durability of certain batteries. The European Commission will ultimately define concrete, warranty-relevant minimum composition within delegated legal acts, for example, concerning permitted performance loss, efficiency, or service life, Article 10 EU-Batt-R. Before that, manufacturers of batteries falling under these categories will have to provide a declaration of the CO2 footprint.

To reduce the demand for rare raw materials and protect the environment, the EU-Batt-R sets requirements for the minimum content of recycled materials to be observed in the production of industrial, electric vehicle, and ‘starting, lighting and ignition batteries (“SLI” Article 8 EU-Batt-R). This process is initiated by an initial information obligation on recycled content. Over the lifetime of the EU-Batt-R, a percentage of ingredients that must consist of recycled materials will be set and then increased.

Management of Waste Batteries, Second Life Use

  • The management of waste batteries is known from the Battery Directive. The "energetic recovery" – i.e., destructive disposal – of batteries is to be avoided even more efficiently. The EU-Batt-R is by no means "old wine in new bottles." The EU-Batt-R pursues the previous goals more concretely. Although the well-known primary "triad" of waste prevention, reuse, and recycling before secondary disposal remains, the provisions have become more comprehensive. From ambitious collection quotas (e.g., at least 73% for portable batteries by 31 December 2030, Article 49 para. 3 EU-Batt-R – actually achieved in 2021 according to the Federal Environment Agency: 48.2%) to more detailed requirements for treatment plants (cf. Annex XII EU-Batt-R), the EU-Batt-R expands on what is already known. Electric vehicle batteries should be used as stationary energy storage after their use in vehicles to save resources, recital 118.
  • Persons who repair, remanufacture, or repurpose batteries have the right to access certain – from the perspective of intellectual property, protectable – information within the framework of the so-called battery passport. This is to ensure that these persons can carry out their waste prevention activities promoted by the EU-Batt-R, Article 77 para. 2 EU-Batt-R. By the way, economic operators who prepare batteries in such a way that they can be repurposed or reused, or who repurpose or remanufacture batteries, are considered producers ("manufacturers") within the meaning of the EU-Batt-R, Article 38 para. 11. They are generally subject to the full range of obligations of the EU-Batt-R, although they are privileged in some respects, for example, the due diligence obligations from Chapter VII may not apply, Article 47 second subparagraph EU-Batt-R.

Battery Exchange – "Repairability Light"

A first step towards the discussed right to repair, which seems particularly noteworthy: The EU-Batt-R does pioneering work: It stipulates that products containing portable batteries must be designed so that they can be removed and reinserted by consumers or end-users themselves. Products containing LMT batteries must be designed so that they can be easily removed or replaced by "independent professionals" at any time. The function of the respective products must be maintained after the batteries have been replaced.

Digital Battery Passport – Still No Real Digitalization

Batteries will be subject to identification requirements, Article 77 EU-Batt-R. From 18 February 2027, LMT batteries, industrial batteries with an energy capacity of over 2 kWh, and electric vehicle batteries must have a so-called battery passport. It is an electronic file containing specific information for each battery. The battery passport is divided into several sections: information accessible to the public (e.g., manufacturer information, CO2 footprint), information for market surveillance authorities (e.g., test reports for conformity assessment), and required information for privileged persons (e.g., repurposers or remanufacturers). The battery passport must be accessible via a QR code. The QR code must be affixed to the respective batteries.

As important as the provision of certain information is and as welcome as the initiative to provide it in the form of a digital battery passport is, the EU-Batt-R lacks a real digital commitment. Operating instructions and safety information must still be "included" with the batteries, Article 38 para. 1 lit. a) EU-Batt-R. So, the printed "package insert" still exists; the real digital revolution has not yet occurred.

What does the new EU Battery Regulation mean for affected companies?

The legislator itself speaks of the "novelty and complexity of this regulation," recital 55. The new EU-Batt-R will bring significant legal and practical challenges for affected (economic) actors – and with a short implementation period. Even (economic) actors who have already dealt in depth with the original draft are advised to read it carefully: The trilogue process has turned the draft "inside out" in parts, for example, concerning due diligence obligations. The previous Article 39 in the draft has become a separate chapter with 7 articles.

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