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PCF 2024.03.19

What do new EU regulations mean for battery manufacturers and importers?

The European Union (EU) Battery Regulation 2023/1542 is key to the EU’s efforts to address environmental concerns, promote sustainability, and enhance energy security. Enacted on January 1, 2023 and planned to be implemented in Q2 2024, this regulation covers the entire battery lifecycle. It sets out ambitious targets and requirements from production to disposal to mitigate the environmental impact of batteries and foster the development of a circular economy. If you import batteries to the EU, you need to know its ins and outs.

Background

This new regulation replaces the Battery Directive (2006/66/EC), and will come into effect 12 months after the act passes. In the next few years more and more new requirements will come into effect that will directly impact battery manufacturers and their supply chain.

The driving force behind the new regulation is the 2019 announcement of the European Green Deal, a growth strategy that targets zero net greenhouse gas emissions by 2050. The end goal is to decouple economic growth from resource use and ensure that products marketed and sold in the EU are sourced and manufactured in a sustainable way.

The critical role batteries play in the overall green transition, from transportation to energy storage to digital transformation, makes them a key target of regulators. Although batteries are a cornerstone of sustainable development, their product lifecycle has not always been particularly clean.

Overview

The EU Battery Regulation is designed to promote the circular economy: encouraging the reuse, recycling, and recovery of battery materials. It establishes stringent requirements for the collection, treatment, and recycling of batteries. Manufacturers are required to design batteries with recyclability in mind, ensuring that they can be easily disassembled and their components recovered. Additionally, the regulation sets recycling targets for different types of batteries, incentivizing manufacturers to invest in recycling infrastructure and technologies.

The regulation addresses the environmental and social impact of battery production by imposing strict sustainability criteria on battery manufacturers. Manufacturers need to comply with environmental and social standards throughout their supply chains. By promoting sustainable sourcing and ensuring supply chain transparency, regulators aim to reduce the environmental footprint of battery production and mitigate human rights abuses associated with mineral extraction.

Beyond sustainability goals, the EU Battery Regulation aims to enhance the safety and performance of batteries. Faulty or improperly designed batteries are a consumer risk. The regulation establishes standards for battery safety and performance, including requirements for labeling, testing, and certification.

Finally, the EU Battery Regulation addresses the issue of battery waste management by establishing a comprehensive framework for the collection, treatment, and disposal of batteries. Manufacturers will assume responsibility for collecting and recycling of batteries, either individually or through collective schemes. Additionally, the regulation encourages the development of innovative recycling technologies and processes to maximize the recovery of valuable materials from spent batteries.

Specific Requirements and Timeline

Timeline of EU battery regulation requirements

*This timeline is subject to change based on when (or whether) the implementing act passes.

CE Conformity Assessment

To be traded freely in the EU, most goods need a “CE” (conformité européenne) mark. The mark affirms that goods are compliant with EU regulations.

The new regulation makes batteries one of these CE goods. All batteries, whether in a product or sold standalone, will need the mark.

In most cases the battery manufacturer needs to handle the CE conformity assessment. Different types of batteries have different requirements. The five categories are:

  • Portable batteries
  • Light means of transport (LMT) batteries
  • Starting, lighting, and ignition (SLI) batteries
  • Industrial batteries
  • Electric vehicle batteries

Manufacturers can self-certify small portable and industrial batteries (under 2 kWh). For all other batteries, a separate certification body will need to be involved.

The CE conformity assessment and marking requirements will start to apply on August 18th, 2024. Related carbon footprint and recycled content requirements will be added at a later date.

Those requirements will be:

Table of requirements for EU CE conformity assessments

You’ll notice that carbon footprint calculation is a major component of the new regulation for EV, LMT, and certain industrial batteries. The EU has mandated six requirements for battery Carbon Footprints.

Each category of battery has its own carbon footprint timeline, moving from initial carbon footprint declarations to performance class declarations, to carbon footprint threshold beginning to apply. EV and LMT battery manufacturers should take note that the footprint calculations and performance class declarations will need to be conducted before the passport is required.

EU Battery Regulation Carbon Footprint Requirements timeline

*This timeline is subject to change based on when (or whether) the implementing act passes.

Supply chain due diligence

Companies will be required to complete supply chain due diligence for batteries that contain cobalt, natural graphite, lithium, or nickel. Companies with a net turnover of less than €40mm that aren’t part of a larger corporate group are exempt.

To complete supply chain due diligence, companies must:

  • Adopt and communicate a due diligence policy
  • Establish strong supporting management systems
  • Identify and assess upstream supply chain risks
  • Design and put in place a policy to respond to those risks.

Third-party verification of these policies and their implementation will be required. Supply chain due diligence starts to apply on August 18th, 2025. 

Extended producer responsibility and registration

The new regulation updates existing producer responsibility and registration requirements.

Extended producer responsibility means that companies that bring batteries to market in the EU are responsible for their end-of-life collection and treatment. The updates introduce new targets for collection rates and recycling efficiency.

The extended producer responsibility and registration requirements will also begin to apply on August 18th, 2025.


Replaceability of batteries

New requirements obligate electronics producers to make sure that portable batteries are easy to remove and replace by the end user. LMT batteries and cells in those batteries are required to be easy to remove and replace by independent professionals.

These battery replaceability requirements will begin to apply on February 18th, 2027.

Battery passport

One of the most complex pieces of new regulation is a requirement for an individual electronic battery passport for several types of batteries. These include:

  • Industrial batteries over 2 kWh
  • EV batteries
  • LMT batteries

The battery passport will include general information about the battery and a product and sustainability data sheet.

The goal of the battery passport initiative is to strengthen supply chain transparency and quicken information exchange across each battery sample. The passport will be available through a QR code on each battery.

The battery passport requirement begins February 18th, 2027.

Glassdome is already working with our partners at the Global Battery Alliance to help some of the world’s leading battery manufacturers get ready for the battery passport era

Material recovery rates

The final piece of the regulatory puzzle to come into effect are targets for material recovery of cobalt, copper, lead, lithium, and nickel in battery recycling and treatment facilities.

These targets will start to apply starting December 31st, 2027. 

Looking ahead

The EU Battery Regulation 2023/1542 represents a significant step forward in the EU's efforts to promote sustainability, enhance energy security, and address environmental challenges. It sets a precedent for global efforts to promote sustainable battery production and consumption, paving the way for a more environmentally friendly and socially responsible future.

Need help getting ready for this new era of regulation? Glassdome can help. We’re already working with some of the world’s largest battery producers and their suppliers to build a strong compliance and reduction foundation. Drop us a line on our site, or email us at [email protected]. You’ll be glad you did.

#PCF#CBAM#EVbattery
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PCF 2024.01.16

What’s the Difference Between the GHG Protocol and CBAM?

ESG regulation never stops evolving, and the Greenhouse Gas (GHG) Protocol and Carbon Border Adjustment Mechanism (CBAM) are no different. Companies aren’t sure how to navigate and implement new regulations and standardized frameworks.

 

One of the most common question we hear is this: If your company is already following the GHG Protocol framework, do you comply with CBAM?

Overview


The GHG Protocol and CBAM (pronounced see-BAM) are closely linked, but they serve different purposes and address distinct climate action challenges.

 

The GHG Protocol is a voluntary tool that organizations can use to measure and manage their emissions. CBAM is a European Union regulation (part of The European Green Deal) designed to address carbon leakage and ensure fair competition in the international trade of goods. Figure 1 is a overview of the key differences between the GHG Protocol and CBAM:

Figure 1. Differences between the GHG Protocol and CBAM.

The GHG Protocol is voluntary, developed by non-profit organizations, considers Scope 1, 2, and 3, and covers a broad spectrum of emissions. CBAM is mandatory for several types of importers to the EU, developed by the EU, does not consider all of scope 1, 2, and 3, and is aimed solely at carbon leakage. They both apply to business, focus on greenhouse gas accounting and emission measurement and reporting, and are the result of international collaboration.

The key overall difference between the two methodologies is that CBAM is not focused on determining GHG emissions at the corporate level, but rather at the product level.

 

So while the GHG Protocol and CBAM share commonalities in their application to businesses, their focal points diverge.

 

Before we dive into details, let's look at how the transitional phase of CBAM works. If you want to navigate the regulations and stay compliant, you need to understand the workflows and governance system.

Today, CBAM only applies to a specific set of goods imported into the EU: cement, iron and steel, fertilizer, aluminum, electricity, and hydrogen.

Figure 2 illustrates the transitional phase of CBAM.

 

Figure 2. The Governance System and Workflows Included Under the Transitional Phase of CBAM.

  1. The importer gets CBAM goods from global installations outside the EU.
  2. Customs declare each import in the usual process.
  3. Customs authority informs the EU Commission via CBAM Transitional Registry of the import. This serves to verify the thoroughness and precision of quarterly CBAM reports.
  4. Reporting declarant requests embedded emissions data from CBAM goods' operators.
  5. Declarant submits quarterly CBAM report to CBAM Transitional Registry.
  6. The Commission exchanges information with EU authorities and determines which reporting declarants need to submit CBAM reports. The Commission also performs spot checks and addresses irregularities within the reports. 
  7. The importer, if penalized, informs the operator to prevent future issues.

Got it? Let's get started on the differences between the GHG Protocol and CBAM.

Already thinking you might need to look at software that’ll help you through data collection and reporting? We’ve got you covered.

#CBAM#GHG#Scope3
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PCF 2023.06.30

Carbon Regulations Heating Up: CBAM, SEC, FAR

As concerns about climate change continue to grow on a global scale, governments and regulatory bodies are taking substantial measures to address environmental issues.

 

In this blog post we’ll cover the 3 regulations receiving the most attention from Glassdome customers around the globe:

The European Union Carbon Border Adjustment Mechanism (CBAM)

 

The EU’s CBAM is an ambitious initiative aimed at addressing carbon leakage and guaranteeing European industries a level playing field on the global market. With the first emissions being calculated as of October 1, 2023, CBAM will require importers to pay a carbon border tariff equal to the carbon cost borne by European industries.

 

This regulation seeks to prevent the relocation of carbon-intensive production outside the EU to regions with lenient environmental regulations. Consequently, companies exporting products to the EU will face new compliance challenges and potential financial consequences. The first imported products to be impacted are: cement, fertilizer, iron & steel, aluminum, electricity, and hydrogen.

 

The SEC’s GHG Inventory Proposal

 

The SEC’s proposed rule seeks to improve and standardize climate-related disclosures for investors, including greenhouse gas emissions, climate risks, and transition strategies to a low-carbon economy. This initiative aims to increase transparency and enable investors to make informed decisions based on the climate-related risks and opportunities presented by companies.

 

Thousands of publicly traded companies will be impacted by the proposed rule, which will require them to provide comprehensive and consistent information regarding their climate-related performance and resilience.

 

Federal Acquisition Regulation (FAR) Case 2021-015

 

The FAR case concentrates on mandating that federal contractors disclose greenhouse gas emissions and climate-related financial risks associated with their supply chains. This regulation aims to promote sustainability throughout the federal government’s procurement process and encourage transparent climate reporting from suppliers.

 

To comply with the FAR and ensure eligibility for government contracts, businesses that receive federal contracts over $7.5m annually will be required to track and report Scope 1 and 2 emissions, while those who receive $50m+ annually will also have Scope 3 requirements. 

 

Why a Sustainability Platform is Crucial

 

As the regulatory environment surrounding carbon emissions and climate disclosures becomes more stringent, some manufacturers are getting ahead of the curve. With their emissions data logged and managed in the Glassdome cloud, they’re reducing administrative burden with a focus on 3 outcomes:

 

Product Environmental Footprints

The Glassdome Lifecycle Assessment (LCA) platform enables manufacturers to precisely measure their carbon footprints, identifying emission hot spots and potential regulatory risks. 

 

Organization-Wide GHG Emissions Inventory

With a comprehensive assessment platform, businesses can generate detailed reports on Scope 1, Scope 2, and even Scope 3 emissions by integrating data directly from suppliers.

 

Risk Mitigation and Strategy Development

By obtaining insight into climate-related risks, businesses can develop resilient strategies for transitioning to a low-carbon economy.  For example, EV battery-makers are using the Glassdome platform to compare suppliers’ emissions intensities – giving sustainable manufacturers a leg up on the competition.

 

Stay ahead of the curve and demonstrate to customers, investors, and regulators your commitment to sustainability.  Take the first step toward a compliant and sustainable future.

 

Contact us at [email protected] for more information on how Glassdome can help your business thrive in an era of stricter climate regulations

#CBAM#FAR#SEC
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#Scope3#LCA#PCF