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Document 52020SC0335

COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council concerning batteries and waste batteries, repealing Directive 2006/66/EC and amending Regulation (EU) 2019/1020

SWD/2020/335 final

Brussels, 10.12.2020

SWD(2020) 335 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a Regulation of the European Parliament and of the Council

concerning batteries and waste batteries, repealing Directive 2006/66/EC and amending Regulation (EU) 2019/1020











{COM(2020) 798 final} - {SEC(2020) 420 final} - {SWD(2020) 334 final}


Table of contents

1.    Introduction and policy context    

1.1.    Policy context    

1.2.    Legal context    

1.2.1.    The Batteries Directive    

1.2.2.    EU environmental law    

1.2.3.    Internal market regulation    

1.3.    Environmental and social context    

1.4.    Economic context: increasing demand for and production of batteries    

1.4.1.    Demand    

1.4.2.    Future production    

1.5.    Public context    

2.    Problem definition    

2.1.    What are the problems?    

2.1.1.    Lack of framework conditions providing incentives for sustainable investment    

2.1.2.    Barriers to the functioning of recycling markets    

2.1.3.    Problems related to environmental and social impacts    

2.2.    What are the problem drivers?    

2.3.    The current regulatory framework    

2.4.    How will the problem evolve?    

2.5.    Who is affected and how?    

3.    Why should the EU act?    

3.1.    Legal basis    

3.2.    Subsidiarity: need for EU action    

3.3.    Subsidiarity: Added value of EU action    

3.4.    Nature of the instrument    

4.    Objectives    

5.    Baseline    

6.    Policy options    

6.1.    Measures and sub-measures    

6.2.    Policy options    

7.    Impact of the policy options    

7.1.    Measure 1: Classification and definition    

7.2.    Measure 2: Second life of industrial batteries    

7.3.    Measure 3: Collection rate for portable batteries    

7.4.    Measure 4: Collection rates for automotive, EV and industrial batteries    

7.5.    Measure 5: Recycling efficiencies and material recovery    

7.6.    Measure 6: Carbon footprint of rechargeable industrial and EV batteries    

7.7.    Measure 7: Performance and durability of rechargeable industrial and EV batteries    

7.8.    Measure 8: Non-rechargeable portable batteries    

7.9.    Measure 9: Recycled content    

7.10.    Measure 10: Extended producer responsibility    

7.11.    Measure 11: Design requirements for portable batteries    

7.12.    Measure 12: Reliable information    

7.13.    Measure 13: Supply-chain due diligence for raw materials in industrial and EV batteries    

8.    Preferred option    

8.1.    Conclusions based on the analysis of the impacts of all options    

8.2.    Regulatory burden and simplification    

8.3.    Future proofing    

8.4.    International competitiveness    

9.    Monitoring and evaluation    

9.1.    Arrangements    

9.2.    What would success look like?    



Glossary

Term or acronym

Meaning or definition

‘alkaline batteries’

Batteries that contain Zinc, Zinc oxide, Manganese dioxide and potassium hydroxide, as the main components.

‘automotive battery’

Any battery used for automotive starter lighting or ignition power.

‘batteries placed on the market’

Batteries made available, whether in return for payment or free of charge, to a third party within the European Union market.

‘battery’ or ‘accumulator’

Any source of electrical energy generated by direct conversion of chemical energy. They may be non-rechargeable (primary) or rechargeable (secondary).

The terms ‘batteries’ and ‘accumulators’ are considered synonyms and used indiscriminately in this report.

‘battery collection point/ battery return point’

A designated collection place where consumers can bring their waste batteries for recycling. Return points usually include a container or box where consumers can drop their spent batteries. The Batteries Directive requires that return points for portable batteries be free of charge.

‘battery pack’

Any set of batteries or accumulators that are connected together and/or encapsulated within an outer casing so as to form a complete unit that the end user is not intended to split up or open.

‘button cell’

Any small round portable battery or accumulator whose diameter is greater than its height and which is used for special purposes such as hearing aids, watches, small portable equipment and back-up power.

‘collection rate’

For a given Member State in a given calendar year, it is defined as the percentage obtained by dividing the weight of waste portable batteries and accumulators collected in that year by the average weight of portable batteries and accumulators placed on the market during that year and the preceding 2 years.

‘end-of-life’ batteries

Batteries that are unable to deliver electricity any longer or that are unable to be recharged.

‘durability’

The ability of a product to perform its function at the anticipated performance level over a given period (number of cycles-uses-hours in use), under the expected conditions of use and under foreseeable actions.

‘industrial battery’

Battery (primary or secondary) designed for exclusively industrial or professional use or used in any type of electric vehicle.

‘Joint Research Centre’

The European Commission's science and knowledge service.

‘lead-acid batteries’

Any battery where the generation of electricity is due to chemicals reaction involving lead, lead ions, lead salts or other lead compounds, having an acid solution as electrolyte.

‘lithium batteries’

Any battery where the generation of electricity is due to chemical reactions involving lithium, lithium ions or lithium compounds.

‘material recovery’

Any operation the principal result of which is waste serving a useful purpose by replacing other materials that would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy.

‘portable battery’

Any battery, button cell, battery pack or accumulator that:

(a) is sealed; and

(b) can be hand-carried; and

(c) is neither an industrial battery or accumulator nor an automotive battery or accumulator.

‘recyclates’

Raw material sent to, and processed in, a waste recycling plant or materials recovery facility.

‘recycling’

Any operation, which reprocesses waste materials into useful products, materials or substances.

‘recycling efficiency’

A measurement of the volume of material recovered in a recycling process. The Batteries Directive sets minimum material return levels (in % weight) resulting from the recycling of lead and nickel-cadmium batteries. The rules for calculating recycling efficiencies of processes are set by Commission Regulation (EU) No 493/2012 of 11 June 2012.

‘second life’

Status of batteries that are used in a context different to the one for which they were designed and placed on the market.

‘state of health’

Reflects the battery performance. It is measured in % and it is related to three main indicators:

Capacity - the ability to store energy;

Internal resistance - the capability to deliver current; and

Self-discharge - reflecting the mechanical integrity and stress-related conditions.

‘treatment’

Any activity carried out on waste batteries after they have been handed over to a facility for sorting, preparation for recycling or preparation for disposal.

'waste batteries available for collection'

In broad terms, calculated weight of generated waste batteries, taking into account the differing life cycles of products in the Member States, of non-saturated markets and of batteries with a long life cycle.



List of acronyms

Term or acronym

Meaning or definition

3C industry

Computer, communications and consumer electronics

Ah

Ampere-hour, a unit of electric charge, used in measure of battery capacity

BAU

Business as usual

BEV

Battery Electric Vehicle

BMS

Battery Management System

CAGR

Compound Annual Growth Rate

EPR

Extended Producer Responsibility

ESS

Energy-Storage Solution

EV

Electric Vehicle

FTE

Full Time Equivalent

GHG

Greenhouse gas

GPP

Green Public Procurement

GWh

Giga watt hour, a unit of energy representing one billion watt hours

IEC

International Electro technical Committee

ISO

International Organisation for Standardisation

LCA

Life Cycle Analysis

LIBs

Lithium-ion batteries

LME

London Metal Exchange

NACE

Statistical classification of economic activities in the European Community

OEM

Original Equipment Manufacturer

PEFCR

Product Environmental Footprint Category Rules

PHEV

Plug-in hybrid electric vehicle

POM

Placed on the Market

SME

Small and medium enterprise

SoH

State of Health

WEEE

Waste Electric and Electronic Equipment

1.Introduction and policy context

Batteries development and production is a strategic imperative for Europe in the context of the clean energy transition and is a key component of the competitiveness of its automotive sector. In the EU, transport causes roughly a quarter of greenhouse gas (GHG) emissions and is the main cause of air pollution in cities. 

A broader uptake of electric vehicles will help reduce GHG and noxious emissions from road transport. In the EU, a strong increase in the electrification of passenger cars, vans, buses and, to a lesser extent, trucks is expected to take place between 2020 and 2030, mainly driven by EU legislation setting CO2 emission standards for carmakers. The electrification of some housing services, like energy storage or heating, will follow and will contribute to further reducing GHG emissions.

According to estimates by the World Economic Forum, to accelerate the transition to a low-carbon economy, there is a need to scale up global battery production by a factor of 19 for every step of the value chain (see Figure 1 ).

Figure 1: Factor increase needed worldwide in every segment of the batteries value chain 1

In the EU, from 2025 onwards, there is an opportunity to capture the market for batteries valued at up to €250 billion a year. They would be produced in at least 10 to 20 Gigafactories (battery cell mass production facilities) and help meet EU demand. 2  

The aim of this initiative is to update the EU's legislative framework for batteries. It is an integral part of the Green Deal, the EU's new growth strategy that aims to transform the EU into a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases by 2050, where economic growth is decoupled from resource use, and where no person and no place is left behind.

Policy context

This initiative builds on several reports adopted by the European Commission and commitments made.

In May 2018, the Commission adopted the strategic action plan on batteries as part of the third ‘Europe on the Move’ mobility package. 3 The action plan sets out measures to support efforts to build a battery value chain in Europe, from raw material extraction, sourcing and processing, battery materials, cell production, battery systems, reuse to recycling.

The Commission subsequently published in April 2019 a report on the implementation and on the impact on the environment and the functioning of the internal market of the Batteries Directive (2006/66/EC). It also published a report evaluating the Batteries Directive. 4

In the European Green Deal 5 , the Commission announced that it would “continue to implement the strategic action plan on batteries and support the European Battery Alliance. It will propose legislation in 2020 to ensure a safe, circular and sustainable battery value chain for all batteries, including to supply the growing market of electric vehicles.” It also calls for the decarbonisation of transport and industrial sectors, stating that “the Commission would consider legal requirements to boost the market of secondary raw materials with mandatory recycled content and continue to support research and innovation on batteries”.

The new circular economy action plan, "For a cleaner and more competitive Europe" 6 adopted in March 2020, requires the proposal for a new regulatory framework for batteries to include assessing the rules on recycled content, measures to improve the collection and recycling rates of all batteries to ensure the materials recovery. It should also examine non-rechargeable batteries with a view to progressively phasing out their use where alternatives exist. Furthermore, sustainability and transparency requirements (taking into account e.g. the carbon footprint of battery manufacturing, ethical sourcing of raw materials and security of supply) should be set to provide guidance to consumers and facilitate reuse, repurposing and recycling.

In its new industrial strategy for Europe 7 , the Commission highlights its intention to uphold Europe's industrial leadership in areas where it has a global competitive advantage, where it meets the highest social, labour and environmental standards and allows Europe to project its values. It clearly includes the emerging EU manufacturing industry of advanced batteries.

Furthermore, in the document ‘Europe's moment: Repair and Prepare for the Next Generation’ 8 , the Commission states that the new Strategic Investment Facility will invest in technologies key for the clean energy transition, such as batteries, and that the work of the European Battery Alliance will be fast-tracked. 

In December 2019, the European Commission approved under EU State aid rules an important project of common European interest for a pan-European research and innovation project in all segments of the battery value chain supported by seven Member States. In the coming years, Belgium, Finland, France, Germany, Italy, Poland and Sweden will together provide up to approximately €3.2 billion in funding for this project, which is expected to unlock an additional €5 billion in private investment. 9 A second important project of common European interest on batteries is expected to be approved by the end of 2020.

In September 2020, the Commission presented an action plan on critical raw materials including the 2020 list of critical raw materials 10 and a foresight study on critical raw materials for strategic technologies and sectors with an outlook to 2030 and 2050 11 . The list of critical raw materials has been updated and now includes lithium in addition to cobalt and natural graphite as it is essential for a shift to e-mobility.

Lastly, the Commission's sustainable and smart mobility strategy aims to achieve a 90% reduction in transport-related greenhouse gas emissions by 2050.

In addition to the Commission’s work, both the Council and Parliament have called for action on policies that support the transition to electro-mobility, carbon neutral energy storage and a sustainable batteries value chain.

The Council conclusions on ‘more circularity – transition to a sustainable society’ from 4 October 2019 call for action on batteries on several fronts, including for the “transition to electro-mobility to be accompanied by coherent policies supporting the development of technologies that improve the sustainability and circularity of batteries …”. Furthermore, they call for an urgent revision of the Batteries Directive, noting that it should “include all relevant batteries and materials and consider, in particular, specific requirements for lithium and cobalt as well as a mechanism allowing adaptation of the Directive to future changes in battery technologies”. 12 The Council conclusions of 2 October 2020 stated that "the EU must pursue an ambitious European industrial policy to make its industry more sustainable, more green, more competitive globally and more resilient", and confirmed the importance of "stepping up the assistance to the existing Important Projects of Common European Interest on Batteries […] so as to overcome market failures and enable breakthrough innovation". 13

In July 2020, Parliament's Committee on Industry, Research and Energy adopted a motion for a resolution on a comprehensive approach to energy storage. The motion includes several points on batteries, such as:

-the concern that the EU has a very low lithium-ion battery manufacturing capacity and relies on production sourced outside Europe,

-concern about the EU’s high dependence on imports of raw materials for battery production, including from sources where their extraction involves environmental degradation, breaches to labour standards and local conflicts over natural resources;

-a call for design for recycling;

-a call on the Commission to develop guidelines and/or standards for repurposing batteries from electric vehicles, including testing and grading processes, as well as safety guidelines; and

-a call to the Commission to propose ambitious collection and recycling targets for batteries based on critical metal fractions etc. 14

In May 2020, the European Investment Bank announced that it expects to increase its support for battery-related projects to over €1 billion of financing in 2020. This matches the level of support the EIB has provided over the last decade. Since 2010, battery projects financed by the EIB totalled €950 million, funding €4.7 billion of overall project costs. EIB support was provided under a successful partnership with the European Commission, which has created new financing instruments such as the InnovFin Energy Demonstration Programme, a tool to facilitate the demonstration phase of innovative energy projects, including battery pilot lines. 15

Legal context

The Batteries Directive

The Batteries Directive is the only piece of EU legislation that focuses specifically on batteries.

The objective of the Directive is to minimise the negative impact of batteries and waste batteries on the environment, to help protect, preserve and improve the quality of the environment and to ensure the smooth functioning of the internal market. It also seeks to improve the environmental performance of businesses involved in the life cycle of these products and related processes, e.g. producers, distributors, end users and operators involved in processing and recycling waste batteries.

The Directive addresses the environmental impacts of batteries related to the hazardous components they contain. If spent batteries are landfilled, incinerated or improperly disposed of at the end of their life, there is a risk that the substances they contain leach out into the environment, compromising environmental quality and human health. To address these risks, the Directive promotes the reduction of hazardous components in batteries and sets out measures to ensure the proper management of waste batteries.

The Directive requires Member States to maximise the separate collection of waste batteries and sets targets for waste battery collection and for recycling efficiencies. Member States must ensure that, by 2016, up to 45% of the waste portable batteries placed on the market are collected. All batteries collected must be recycled through processes that reach the minimum efficiencies set under the Directive, in order to attain a high level of material recovery. It sets targets for three groups of batteries: lead-acid, nickel-cadmium and all other batteries.

Producers of batteries and of products incorporating batteries are responsible for managing the waste generated by the batteries they place on the market (‘extended producer responsibility’).

Further details about the Batteries Directive can be found in Annex 5.

Article 23 of the Batteries Directive: Implementation review and scope for revision if necessary

Article 23 of the Directive tasks the Commission with reviewing the implementation of the Directive and its impact on the environment and on the functioning of the internal market. In April 2019, the Commission published an evaluation of the Batteries Directive 16 , in line with the Commission's Better Regulation guidelines and taking into account the specifications of Article 23. Annex 6 provides a summary of the Batteries' Directive Evaluation report.

Article 23 also states that, if necessary, proposals should be made to revise the applicable provisions of the Directive. 17

EU environmental law

Although the Batteries Directive covers some of the environmental impacts related to the end-of-life stage of batteries, there are also environmental risks related to the other stages in the life cycle. Examples include adverse impact related to the extraction of raw materials, emissions resulting from the production or recycling of batteries, the impact on health and the environmental of the hazardous substances used in batteries etc. In the EU, most of the environmental impacts related to battery production are also covered by EU environmental law.

One key example is the Industrial Emissions Directive 18  (IED), which regulates emissions of pollutants from industrial activities, including the production of chemicals and the processing of non-ferrous metals. During battery production, several stages of the value chain (e.g. production of the required chemical compounds, recycling) may generate significant sources of emissions that pollute the air, soil, and water. As part of the revision process of the IED, the Commission is currently assessing whether there are gaps in the scope of the IED with regard to industrial activities that are part of the battery value chain.

Internal market regulation

There is currently no legislation at EU level that specifically covers battery performance and sustainability aspects. A number of international standards exist to test the performance of rechargeable batteries, but they are not considered fit for the purpose of providing presumption of conformity with minimum performance requirements. Therefore, a related standardisation request is being formulated in parallel with the regulatory proposal.

Creating a regulatory framework to gradually bring in performance and sustainability requirements for batteries will therefore help avoid potential regulatory differences between Member States.

Environmental and social context

In the EU, transport generates roughly a quarter of GHG emissions and is the main cause of air pollution in cities.  Road transport in particular is the main contributor to transport-related GHG emissions.  Ensuring a swift transition to electric transport is one of the biggest levers to reduce GHG emissions and pollution from transport. This is why the EU's commitments made in the Green Deal, including the sustainable and smart mobility strategy, will have the key objective to deliver a 90% reduction in transport-related greenhouse gas emissions by 2050.

Batteries are the major driver in the short term to decarbonize road transportation and support the transition to a renewable power system. For road transport for example, automotive original equipment manufacturers are launching more than 300 electric vehicle (EV) models in the next five years 19 . A recent study carried out for the Commission using a life cycle assessment approach found that electric vehicles have a better environmental performance compared to conventional vehicles 20 , 21 across all assessed indicators. The study also concluded that environmental benefits from the use of battery electric vehicles would increase in the future, particularly in view of the steadily decarbonised electricity mix.

Nevertheless, to ensure sustainability and avoid the substitution of negative environmental and social effects, attention will need to be paid to lowering the emissions during the production phase, eliminating human rights violations across the value chain and improving repurposing and recycling.

Economic context: increasing demand for and production of batteries

Demand

In 2018, global demand for batteries was 184 GWh, a high share of which was provided by lead-acid batteries. 22 , 23  On average, the worldwide battery market increased by 9% per year between 2010 and 2017.

The transition to a low-carbon economy will lead to an exponential increase in the demand for batteries (see Figure 2 ). According to estimates by the World Economic Forum and the Global Batteries Alliance, global demand for batteries is set to increase 14 fold by 2030 (compared to 2018 levels), mostly driven by electric transport.

Figure 2: Compound annual growth rate for batteries 24 , 25

For the EU, estimates made by the World Economic Forum and the Global Batteries Alliance indicate that demand could be the second highest worldwide, worth 170 GWh by 2025 and 443 GWh or 17% of the total global demand by 2030 26 .

·In the short term, the expected demand for battery capacity will be driven primarily by passenger electric vehicles. Currently, electric vehicles only account for a relatively small market share of the EU fleet, but the numbers of registered electric vehicles have been increasing steadily over the last few years (see also Annex 7). 27  

·Further growth is expected in the coming years, driven by stricter CO2 targets for manufacturers that came into force at the beginning of 2020, more targets that will come in force in 2025 and 2030 and the Green Deal commitment to deliver a 90% reduction in transport-related greenhouse gas emissions by 2050.

Batteries: a quick introduction

The batteries value chain

·The batteries value chain consists of several stages, starting from raw material extraction, manufacturing, use and end-of-life (see Figure 3 )

Figure 3: Battery life cycle

How batteries are typically categorised

·Batteries can be either primary (non-rechargeable) or secondary (rechargeable) types.

·Batteries can also be categorised according to use, technology or size. The most common market segmentation, used by the Batteries Directive, is to distinguish between portable batteries (mostly used in the 3C sector: consumer electronics, communication and computing), automotive batteries (used for automotive starter, lighting or ignition power and traction batteries used in electric and plug-in-hybrids) and industrial batteries.

Production in the EU

·In 2015, the total volume of batteries placed on the EU market was about 1.8 million tonnes. Automotive batteries represented by far the largest share in weight with 61%, amounting to 1.10 million tonnes (see figure 4 in Annex 7). The second largest share, 27% or about 0.49 million tonnes, were industrial batteries. The remaining 12%, 212 000 tonnes, were portable batteries.

·In 2018, the EU produced €8.4 billion of batteries. Around €3.9 billion worth were exported and €7.5 billion worth were imported, so in total €12 billion worth of batteries were placed on the EU market.

·In the medium term, there will be a significant increase in the volume of lithium-ion batteries placed on the market (see Figure 4 ).

For other chemical compositions, estimates indicate that EU demand for lead-acid batteries will fall from around 100 GWh in 2018 to about 80 GWh in 2030. Global demand for lead-acid batteries is likely to remain stable or slightly increase from 450 GWh in 2018 to 490 in 2030. 28  

As regards alkaline batteries, which are mostly used in the 3C sector, total EU demand in 2030 is expected to remain relatively stable in absolute terms. 29 The 3C sector, which is the main destination for this type of batteries, is expected to continue growing over the medium term, but at a much lower rate than the other sectors.

Figure 4: Batteries projected to be placed on the EU market (2020-2035, in tonnes) 30

·Whereas forecasts about demand for batteries by 2025 is consistent among studies, uncertainty about the expected demand rises in the medium to long term. Figure 5 shows a minimum and a maximum scenario for battery capacity demand generated by electric vehicles and energy storage solutions applications until 2049. It shows that the expected EU demand for battery capacity will amount to 180-230 GWh in 2025 and to 450-730 GWh in 2030. According to this study, in 2049 the minimum scenario points to a demand of approximately 1500 GWh and the maximum scenario to 2400 GWh.

Figure 5: Battery capacity demand derived from new installations in electric vehicles (passenger EV, commercial EV) or energy storage systems and replacements in existing systems in EU-28

Annex 7 provides more facts and figures about the increasing demand for batteries.

Future production

If the demand forecast overleaf materialises, annual global battery production revenues in 2030 could reach up to $300 billion, of which over $30 billion could be in the EU, according to the Global Battery Alliance. 31

The global manufacturing capacity of lithium-ion cells for electric cars and energy storage is about 150 GWh per year. The EU does not have yet a large-scale lithium-ion cell production capacity but this is rapidly changing. In 2019, certain EV producers were struggling to ramp up production of some of their models due to delays in the production capacity of the tier-one battery cells they need. 32  

For the EU automotive sector, consolidating an EU battery value chain is particularly important. In electric vehicles, traction batteries and the electric powertrain can represent up to 40% of their value. This was one of the reasons that prompted the European Commission and EU Members States to launch, back in 2017, the European Battery Alliance.

According to the information provided by members of the European Batteries Alliance on the industrial plans of its members and the information of publically announced investments in the EU, the production of lithium-based cells within the EU (by EU and non-European manufacturers) could reach up to around 370 GWh per year in 2025. If these levels of production materialise, this could serve the demand in Europe. 33  This would also make the EU the second highest region of production worldwide (see Figure 6 ). 34  

Figure 6: Lithium-ion cell production capacities for industrial batteries within the EU in GWh per year by location of plants

Mass manufacturing, through economies of scale and experience in production, could halve the costs of lithium-ion batteries by 2030, and an additional 50% reduction may be achievable after that, i.e. a lithium-ion battery that today costs about €200/kWh may ultimately cost €50/kWh. This is attainable based on advanced battery chemistries, but does not take into account potential disruption in raw material prices (e.g. cobalt). 35  

Efforts to build manufacturing capacity in Europe will primarily target lithium-ion cells with cathodes employing nickel, manganese and cobalt (NMC) in different proportions, and anode mainly graphite. 36 , 37  An increasing number of car makers are choosing full NMC chemistry to achieve higher energy density and thus extend vehicle battery autonomy. 38

Annex 7 provides more facts and figures on battery production.

Public context

There is a general acknowledgement among the public that there is a need for a regulatory initiative that covers the entire battery value chain in an integrated manner. Stakeholders who responded to the public consultations generally acknowledged that technological, economic and social changes justify the need for a new regulatory framework for batteries. They also called for a better harmonisation of existing rules and an EU framework covering the entire life cycle, comprising common and stronger rules for batteries, components, waste batteries and recyclates, for the purpose of ensuring the function of the EU’s internal market.

The main needs expressed by representatives from industry are for a stable regulatory framework that provides investment certainty, a level playing field that enables the sustainable production of batteries and the efficient functioning of recycling markets. The main concerns expressed by representatives of civil society include sustainable sourcing and implementing the principles of the circular economy to the batteries value chain.

A detailed analysis of the stakeholder consultations is provided in Annex 2 and (per topic) in Annex 9.

2.Problem definition

The aim of this initiative is to tackle three groups of highly interlinked problems related to batteries ( Figure 7 ).

Figure 7: Problem tree

The first group relates to the lack of framework conditions providing incentives to invest in production capacity for sustainable batteries. These problems are linked to potentially diverging regulatory frameworks within the internal market. Another underlying cause is the lack of reliable and comparable information.

The second group of problems relates to sub-optimal functioning of recycling markets and insufficiently closed materials loops, which limits the EU's potential to mitigate the supply risk for raw materials. A number of shortcomings in the current regulatory framework are a drag on the profitability of recycling activities and put a strain on investment in technologies and the capacity to recycle batteries in the future. These shortcomings include a lack of clear and sufficiently harmonised rules, and provisions in the Batteries Directive that take into account recent technological and market developments.

The third group of problems relates to social and environmental risks that are currently not covered by EU environmental law. It includes a lack of transparency on sourcing raw materials, hazardous substances and the untapped potential to offset the environmental impacts of battery life cycles.

What are the problems?

Lack of framework conditions providing incentives for sustainable investment

To enable the transition to a low-carbon economy, an exponential increase in the production of batteries is needed (see Section 1), which requires considerable investments. In view of achieving carbon neutrality and environmental protection, stimulating a race to the top and avoiding lock-in, it is important to channel these investments to batteries with minimised environmental impacts over their life cycle. Currently, however, there a number of barriers that prevent this, such as lack of reliable information to make informed decisions and diverging regulatory frameworks across the Member States.

Environmental impact and carbon footprint

The carbon footprint of batteries critically depends on the energy source used in the manufacturing phase, and can differ significantly across producers. Compared to regular combustion engines, the potential for reducing GHG emissions savings ranges between 48-60% for the better performing ones and 19-26% for some others. 39  

Currently, however, the data needed to calculate carbon impact is not always readily available and often not comparable. This hampers sustainable choices and investment in the transitions underway in the mobility and energy-storage sectors.

The carbon footprint of products is likely to become more prominent in trade and climate policy discussions over the coming years.

Battery performance and durability

The lack of requirements or information on performance and durability of rechargeable batteries leads to potential regulatory differences for batteries placed on the EU market. Even though consumer awareness of sustainable consumption is rising, insufficiently detailed or harmonised labelling requirements mean that it is currently not possible to make informed purchasing decisions. As a result, market competition is currently largely price driven with insufficient incentives or rewards for businesses that produce batteries with a lower environmental impact.

Second life market for industrial batteries

The emerging market for second life batteries is an example of a market that is hampered by a lack of a harmonised regulatory framework in the EU.

When the functionality of EV batteries falls to 75-80 % of its original value after a certain usage, the battery is unable to perform as required for automotive use. These batteries can be repaired or repurposed and then reused (for the same use), or be adapted to have a ‘second life’ (different to the original use). The global second-life battery market is forecast to reach 26 GWh by 2025.  40

The Batteries Directive does not explicitly cover ‘second life’ batteries. Moreover, applying the general waste policy principles to this particular case is far from straightforward. As a result there are currently different approaches arising across the Member States: some Member States treat end-of-life batteries as waste while others treat them as products, which results in different legal requirements. This gives rise to market fragmentation, leads to uncertainty for business and could hinder the development of related economic activities.

Barriers to the functioning of recycling markets

Finally, with regards to the recycling of batteries, the evaluation of the Batteries Directive found that one of the shortcomings of the Directive is that its provisions are insufficiently detailed on certain aspects, leading to uneven implementation and creating significant barriers to the functioning of recycling markets. Examples include the classification of batteries, the definition of recycling, the requirement on battery removability, labelling provisions, and requirements for extended producer responsibility.

As a result, implementation of the Directive is uneven and the levels of batteries collected and recycled are sub-optimal. One specific example is the lack of detailed provisions for producer responsibility organisations (PROs), on which the evaluation of the Batteries Directive identified several examples of unfair competition. For example, there are PROs that compete for the collection of profitable battery types only (known as "cherry picking"), even collecting batteries from non-private end users, while ignoring other types of batteries.

These sub-optimal levels of collection are problematic, given that recycling technologies are rather capital-intensive and require significant economies of scale, in some cases beyond what EU national markets can provide. In this context, metal refiners have stated that they are willing to invest in building up capacity, provided there is sufficient security of feed later on. 41

Barriers to the functioning of recycling markets

The global exponential growth in demand for batteries will lead to an equivalent increase in demand for raw materials. The Global Batteries Alliance forecasts that four battery metals will see the highest impact from this growth. By 2030, demand for cobalt, lithium, class 1 nickel and manganese is set to rise by a factor of 2.1, 6.4, 24, and 1.2 respectively compared to 2018 levels (see Figure 8 ).

This trend is expected to increase the supply risk for EU producers for two reasons.

Firstly, the supply of raw materials is rather inelastic due to long planning cycles: the time between exploring a mineral deposit and building a mine can be 10 years or more 42 .

Secondly, the reserves of some minerals needed for batteries are geographically concentrated in a few countries, some of which are characterised by weak governance and use different policy tools (such as export restrictions on raw materials) to support their domestic industry. This may pose an additional supply threat to downstream battery producers in the EU. For example, in September 2010, China (which, at the time, was producing 93% of the world’s rare earth minerals and was the dominant world supplier of rare earth metals) introduced significant export restrictions. These severely affected car manufacturers and high-technology-producing companies.

Figure 8: Expected growth in the global demand of materials for batteries 43

This supply risk could at least partially be reduced by closing the materials loop as much as possible, i.e. by promoting the durability extension, removability and replaceability, and where feasible the repair and reuse of batteries, and the use of secondary materials coming from recycling instead of virgin materials. 44 For example, secondary production of one ton of lithium could be achieved by recycling 28 tonnes of used batteries (from around 256 electric vehicles). However, within the EU, the volume of metals recovered that are used in battery production is low. Only 12% of aluminium, 22% of cobalt, 8% of manganese, and 16% of nickel used within the EU are recycled 45 . Only for lead-acid batteries is the volume of recovered materials used in manufacturing higher than the volume of primary materials 46 .

In the current situation of market development, mostly as result of market failures, the potential for recycling within the EU remains largely untapped. This has resulted in 1) sub-optimal collection of waste batteries, 2) sub-optimal levels of recycling efficiencies, material recovery and uptake of recycled content and 3) factors that drag down the profitability of recycling industries. These problems are further discussed below.

Sub-optimal collection of waste batteries

The collection and proper treatment of waste batteries are essential to material recovery to make secondary materials available and avoid the risk of pollution from the hazardous substances found in batteries. For example, in 2015, about 37 000 tonnes of portable Li-ion batteries were placed on the EU market. If all these batteries had been collected and recycled 47 , about 1,500 tonnes of secondary cobalt could have been recovered, a sufficient volume to manufacture approximately 200,000 Li-ion batteries for battery electric vehicles (BEV), enough to cover all BEV placed on the market in Europe in 2015. 48

In practice however, in 2014, 60% of waste portable batteries (128,000 tonnes) were not collected, falling to 52% in 2018. Of these, an estimated 35,000 tonnes of waste portable batteries were disposed of as part of municipal waste. The rest may inadvertently remain with the last end user (a phenomenon called ‘hoarding’) or erroneously enter the WEEE stream if the battery is not removed from its discarded appliance.

The evaluation of the Batteries Directive notes that it is difficult to identify a single reason to explain the failure of some Member States to meet the collection rate target for waste portable batteries. One possible explanation is the difficulty in implementing certain provisions such as awareness raising or the accessibility of collection points for waste portable batteries, due to the Directive's lack of detail in the provisions for extended producer responsibility and producer responsibility organisations.

Figure 9: Waste portable batteries generated and collected in the EU 49

The Batteries Directive does not set explicit targets for the collection of industrial or automotive batteries, but it includes an implicit "no loss" policy by requiring that all industrial and automotive batteries must undergo proper treatment and recycling. When the Batteries Directive was adopted, it did not set an explicit target, based on the assumption that the recycling of industrial batteries is profitable and that business would ensure that these batteries are properly collected and recycled. However, data show that 11% of industrial batteries placed on the market are not collected at the end of their life and could be lost.

In the future, the share of uncollected industrial batteries is expected to increase, mostly due to industrial batteries used and owned outside professional or industrial contexts, such as batteries in EV vehicles, e-bikes, e-scooters and private energy-storage systems. This is partly a result of the lack of collection, monitoring and reporting systems and the lack of an explicit target. This analysis is confirmed by the evaluation of the Batteries Directive, which found that the fact that there are only collection rate targets for spent portable batteries could cause confusion and prevent the achievement of the Directive's objectives.

Sub-optimal levels of recycling efficiency, material recovery and uptake of recycled content

In addition to collection rate targets for waste batteries, the Batteries Directive also includes a provision setting a minimum level of recycling efficiency 50 for lead-acid batteries (65%), nickel-cadmium batteries (55%) and "other" batteries (including lithium-ion) (50%). It also sets the obligation to recover lead and cadmium content to the highest degree that is technically feasible while avoiding excessive costs (but does not set a quantified target).

When the Directive was adopted, the approach taken to include both the input to the recycling process (i.e. the collection rate) and the efficiency of the recycling process was innovative. It has stimulated the development and roll-out of state-of-the art metallurgical processes and increased material recovery rates in the EU. Research 51 suggests that this has resulted in the Batteries Directive indirectly contributing to making the EU a global leader in recycling capacity for spent batteries.

This approach to set recycling efficiency and material recovery targets has been successful to a very large extent:

·For nickel-cadmium batteries, nearly all EU Member States achieved 75% recycling efficiency or higher in 2018 (with some exceptions), as shown in Figure 10 below.

·For lead-acid batteries, nearly all EU Member States achieved 65% recycling efficiency or higher in all reference years from 2012 to 2018. To date, the recycled input to lead-acid battery production in the EU is above 80%, making it an almost fully circular business.

Despite the relative success of the approach, to date the provisions in the Batteries Directive are no longer fit-for-purpose, as pointed out in the evaluation. Although the recycling efficiency targets are broadly met, the Directive's current provisions have not resulted in a high level of material recovery. The Directive no longer provides an incentive to roll out state-of-the art recycling facilities for lead-acid and nickel-cadmium batteries.

Figure 10: Recycling efficiencies for nickel-cadmium batteries, 2012 and 2018, data from Eurostat.

For lithium-ion batteries, the problem is even more pronounced. There are no specific provisions for lithium batteries, despite their growing market and economic importance or the valuable materials they contain such as nickel, cobalt and copper. This discourages recycling of these batteries and is a barrier to the development of high-quality recycling processes.

The recycling of lithium-ion batteries is a complex and costly process hindered by the wide variety of chemistries and battery formats. It has long been insignificant because of dissipative end-uses (e.g. lubricating greases, metallurgy), non-functional recycling (e.g. glass and ceramics)), or reusable end-uses (such as catalysts). The only waste flow with lithium recycling potential is spent lithium batteries 52 .

Today, almost no lithium is recovered in the EU because it is considered not cost-effective in comparison with primary supplies, leading lithium-ion battery recycling plants to focus on recovering cobalt, nickel, and copper, which have a higher economic value than lithium, although there are some examples of industrial-scale lithium recovery. The recycling technologies for lithium-ion batteries in use at industrial scale in Europe are lithium recovery from the slag fraction through a pyro-metallurgical process, hydrometallurgical recycling process and a combination of mechanical processing and subsequent hydrometallurgical processing 53 . 

Where lithium is recovered, its quality is mostly insufficient to be used in batteries. Instead, it is used in other sectors such as ceramics, glass and alloys. Demand for lithium from these sectors is however set to grow at a much lower rate than demand for EV batteries. Therefore, as soon as EV batteries become available for recycling, scientific research indicates that, as soon as 2021, the supply of recovered (low-grade) lithium would exceed demand. 54 This will also be a barrier to the substitution of primary lithium by secondary lithium, thus leaving the potential to lower environmental impact untapped.

Factors that are a drag on the profitability of recycling

Currently, recycling activities in the EU are not operating at an optimal level because there are a number of factors that negatively affect these operations' profitability.

The viability and economics of battery recycling depend first on the costs of collecting, sorting, handling and disassembling the batteries that enter the recycling process, and second on the material value of batteries recycled. 55

For batteries that are a component of a device (e.g. mobile phones, power tools, e-bikes), ease of removal is a factor influencing the efficiency of the recycling process. Although the Batteries Directive includes an obligation of removability, data from the ProSUM project 56 estimates that on average only 1-20% of batteries are removed from electric and electronic equipment at the end-of-life. According to recyclers 57 , there are several reasons why battery removal is becoming more complicated, such as the decreasing size of batteries and the trend to use soft pouch cells and to glue batteries into devices.

Once batteries have been removed, they are usually sorted according to their chemistries, which is currently mostly carried out manually. Here the problem is that there is currently no mandatory or harmonised labelling system to provide information on the chemical (and other component) composition of the batteries. This can result in batteries being sent to landfills or being wrongly classified, which is reported to have increased the number of fires and safety incidents. This in turn increases operational costs and insurance costs. However, even for batteries that do have labelling codes, the lack of specific labels for the different chemistries within the Li-ion battery category (e.g. lithium-cobalt oxide, nickel-manganese-copper etc.) leads to a less-pure recyclable fraction and thus a missed opportunity to extract valuable materials. 58

Problems related to environmental and social impacts

Transparency on the sourcing of raw materials

Extracting some of the raw materials used to produce batteries can sometimes pose substantial social and environmental risks or challenges. There is the issue of extractive waste: producing one tonne of lithium for example requires, depending on the ore content, around 250 tonnes of the mineral ore hard rock mineral (‘spodumene’) or 750 tonnes of mineral-rich brine. 59 , 60 , 61 , 62  

In addition, the deposits of some of these minerals are partially located in conflict-affected and high-risk areas, where their extraction may give rise to, either directly or indirectly, to unacceptable social and environmental impacts. Battery manufacturers, regardless of their position or leverage over suppliers, are not insulated from the risk of contributing to such adverse impacts on the local communities and workers involved in the mineral supply chain. Risks include indirect contribution to armed conflict and associated human rights abuses, dangerous working conditions, or harm to the surrounding environment in the form of leakage of hazardous substances to the air, water and soil.

International organisations and NGOs have regularly documented their concerns about the responsible sourcing of raw materials used in batteries 63 . Cobalt mined in the Democratic Republic of Congo (DRC) is a particular concern, but a recent JRC report also identified other materials, such as lithium from Bolivia, graphite from Tanzania or Mozambique, and nickel from the Philippines or Indonesia. 64 The expected rise in demand for batteries may exacerbate these risks and jeopardise the sustainability of the energy transition.

None of these materials are covered by the EU Conflict Minerals Regulation 65 . When it enters into force in 2021, the Regulation will lay down supply chain due diligence obligations for importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas. However, these provisions apply to imports of the raw materials and not to materials present in imported intermediate or finished products (e.g. batteries) placed on the EU market. The Conflict Minerals Regulation will be reviewed by 2023 and a potential extension of the scope will be evaluated as part of the review process. The Commission has also announced a horizontal initiative on due diligence for 2021 66 and it is currently in the process of reviewing the Non-Financial Reporting Directive, which includes due diligence requirements for EU companies. 

Although the metals industry is making efforts to improve due diligence and supply chain transparency and increase compliance with ILO core labour conventions, it is still difficult for EU downstream operators to identify the smelters/refiners in their own supply chains.

In an effort to address these challenges, operators across the supply chain run several initiatives that aim to promote sustainable sourcing practices 67 . These initiatives are voluntary and thus remain open to free-riding. In addition, the effectiveness of the initiatives is unclear. A recent report, based on research from a number of Harvard University academics, found that "multi-stakeholder initiatives can be powerful forums for building trust, experimentation, and learning. However, multi-stakeholder initiatives are not designed or equipped to be effective tools for protecting rights holders against human rights violations, holding corporations accountable for abuse, or providing survivors and victims with access to remedy." 68

Furthermore, although it is true that battery raw materials are also used by other industries, it is important to note that for some raw materials, over half of global production is for use in battery applications. For example, over 50% of the global demand for cobalt (64% originating from the DRC) is used for battery production and over 60% of the world's lithium is used for electric vehicle production. Taking vertical policy action in the batteries value chain specifically can thus be justified based on the potential to create a leverage effect. On this point, the stakeholder consultation that accompanied this impact assessment revealed that a broad range of stakeholders support the view that mandatory supply chain due diligence obligations are necessary to ensure responsible sourcing of raw materials and to create a level playing field for business by creating a set of common rules.

Hazardous substances

One of the environmental concerns related to batteries is linked to the hazardous materials they contain. These substances pose no particular environmental or health concerns when they are inside the battery in use or even when the battery is spent. However, when batteries are not properly collected and treated, these substances can leach into the environment and create significant risks to public health and to the environment. Organic compounds, electrolyte salts, metals and metallic compounds from batteries disposed of under non-controlled conditions may pollute water, vaporise into the air when incinerated, or leach into groundwater after landfilling and expose the environment to highly corrosive substances. Recycling operations may also be significant sources of emissions of such pollutants to the air, the soil, and water.

In response to these risks, the Batteries Directive provides for a ban on batteries containing mercury and cadmium, lays down obligations for the collection of waste batteries and encourages the reduction of hazardous substances used.

However, other than for mercury and cadmium, the Directive has not led to a reduction in the other hazardous substances. Even ‘new’ batteries contain harmful substances such as cobalt and some organic electrolytes, which are highly volatile and toxic (see Annex 7).

Untapped potential to offset life cycle environmental impacts

Longer lasting and better performing batteries have a lower overall environmental impact as they provide more energy for longer periods.  This applies to both rechargeable and non-rechargeable batteries, although durability considerations and degradation patterns may be quite different, and, in both cases, application-specific.

The volume of portable batteries placed on the market is increasing. The highest share (around 70%) is for primary (i.e. non-rechargeable) batteries. In some cases, consumers choose to use primary batteries because they are cheaper (e.g. AA, AAA); in others because secondary batteries are not be available in all formats (e.g. button cells).

For non-rechargeable batteries, the potential to offset the environmental impacts related to their production and end-of-life phases is much more limited compared to secondary batteries because they can only be used until the battery is spent. The Batteries Directive sets no threshold for the durability of primary batteries, which allows operators to place low-scoring batteries on the EU market. It doesn't set any other restrictions on primary batteries.

For rechargeable batteries, high performance battery life is one of the features that end users appreciate the most. 69 In smartphones and similar handheld devices, poor battery life contributes to customer dissatisfaction more than any other feature. 70 Premature obsolescence and discontinued battery lines exacerbates not only customer disappointment, but also the waste of resources. For EVs, the driving range is already a competitive factor amongst vehicle manufacturers, but for the moment, measuring battery performance or degree of degradation represents several complexities, and there is not yet a universally used standard.

Current provisions are insufficient to enable end-users to make informed choices and do not set rules governing battery lifetime and durability. This does not encourage the placing on the market of batteries with adequate levels of performance and durability.

Another way to lower the environmental impact of batteries is to extend their lifetime, in particular for industrial batteries. Life-cycle assessments 71 indicate that, under certain conditions, second-life batteries used for energy storage could help offset the environmental impact of their manufacturing processes by providing a longer and more efficient use of resources. It is widely acknowledged that the viability and the environmental impact of this approach depends on many factors, in particular the legal framework, which is currently non-existent or uneven across the Member States. On the other hand, extending EV battery lifetime will delay their availability for recycling.

What are the problem drivers?

At the root of the issues described above are two main problem drivers: market and information failures, which are both related to the functioning of the internal market. In addition, they are exacerbated by a third driver, the complexity of battery value chains. Value chains comprise many different stages, from mining, refining and active materials production to cell and pack production, device manufacturing and finally collection and recycling. Most stages take place in different geographical locations and are carried out by different market players.

The first problem driver is market failure, i.e. situations where the market outcome is sub-optimal from a societal point of view. In such situations, the costs to public health, social conditions and the environment are not factored into the market price and are thus borne by society as a whole. One example is the misalignment of incentives across the value chain, e.g. the profitability of recycling operations depends on factors that are outside recyclers' control, such as ease of removability and the cost of collection.

The second problem driver is information failure, i.e. situations where not all market players have the same information available, preventing them to make informed choices. This can lead to unfair competition or to sub-optimal levels of material recovery (e.g. battery removal is difficult because it is unclear where the battery is located).

These problem drivers lead to three main groups of consequences, as set out in the problem tree ( Figure 7 ,  p. 17):

·The problems identified have negative impacts on the functioning of the internal market. This can, for example, result in under-investment in capacity and innovation and act as a drag on productivity growth in the market and higher costs for consumers.

·In addition, the problems identified lead to an inefficient use of resources, which hampers the development of a proper circular economy, increases the need for primary raw materials and leaves the potential to mitigate supply risk and increase value chains' resilience untapped.

·Lastly, they lead to a number of environmental and social risks along the supply chain. As well as generating impact in Europe, there are resulting risks outside Europe given that the upstream part of the value chain is predominantly located outside the EU. The environmental impacts include increased greenhouse gas emissions. Social impacts include child labour, severe health and safety risks, and hazards to workers.

The current regulatory framework

The current regulatory framework comprises (specifically) the Batteries Directive and (more generally) the Waste Framework Directive, the Industrial Emissions Directive and chemicals legislation. 

Reports on implementation and evaluation of the Batteries Directive found that the Directive has yielded positive results in terms of a better environment, the promotion of recycling and better functioning of the internal market for batteries and recycled materials. However, limitations in some legal provisions or their implementation prevent the Directive from fully meeting its objectives, particularly as regards waste battery collection or efficient recovery of materials. In response, the reports propose setting new targets for collection and recycling.

One such shortcoming is that the Batteries Directive mostly focuses on the end-of-life phase of batteries and does not sufficiently cover other sustainability aspects related to the production and use phases of batteries such as durability, GHG emissions or responsible sourcing, for which there are currently no legal provisions in the EU. This is out of step with current EU approaches on sustainable management of materials and waste, which focus on optimising products and production processes. 72  

Another shortcoming is the lack of sufficient detail on certain provisions, which leads to a lack of harmonised rules across the EU and hampers the functioning of recycling markets. Examples include labelling, removability requirements and requirements for producer responsibility organisations.

The Batteries Directive is also not well equipped to keep pace with new technological developments. An example is lithium-ion batteries, which are becoming the most important battery chemistry in the market, but are not specifically covered by the Directive. Another example is the development of the second-life market for industrial batteries, where the lack of a regulatory framework leads to diverging national approaches and thus market fragmentation. Another example are new products or appliances such as e-bikes, which are currently classified as "industrial batteries" even though they are used by consumers. As a consequence, these batteries may not be properly collected or recycled.

In sum, the current regulatory framework for batteries is not sufficiently powerful to drive the EU battery market towards higher levels of sustainability, neither in terms of production processes (manufacturing, use and end-of-life battery processing) nor in terms of products (reliability, durability, etc.).

How will the problem evolve?

Driven by the transition to a low-carbon economy and by consumer demand, the use of batteries in the EU is set to continue to increase significantly.

Although it is expected that there will be changes to the products and batteries placed on the market (e.g. more efficient and durable batteries), these changes will not fundamentally affect the sustainability and market-related problems across the batteries life cycle as described above. On the contrary, some problems are expected to become more pronounced due to the expected exponential growth in demand. This applies in particular to new technologies and applications that are not yet specifically regulated such as second-life for industrial batteries or the collection of small industrial batteries (i.e. batteries used in light transport or energy small storage applications).

Who is affected and how?

Society as a whole (general public). If the environmental burden inherent in battery production is not factored into the market price, they represent a hidden cost to society, either now or in the future (e.g. public health, environmental remediation etc.).

EU consumers. EU consumers currently lack sufficient, reliable and comparable information to be able to make informed purchasing choices about batteries, e.g. regarding their carbon footprint, expected lifetime, etc.

Non-EU citizens. The environmental and social risks inherent in extracting the raw materials needed to produce some types of batteries significantly affect citizens in non-EU countries where these materials are extracted in an unsustainable manner. This includes workers in supply chains, who may experience labour rights violations, in particular in conflict-affected regions.

Public authorities. Public authorities are currently in charge of monitoring, reporting and enforcing the Batteries Directive. Some uncertainties about batteries classification may result in higher administrative costs and uneven approaches taken in the different Member States.

Battery producers. Battery producers that apply high environmental standards face unfair competition from producers that are not subject to the same rules. The lack of a stable and predictable regulatory framework is also a barrier to making the investment needed in sustainable battery production in Europe.

Downstream industries. Notwithstanding the importance of global value chains, clustering or integrating certain production stages is common. The COVID-19 crisis has demonstrated that disruptions in upstream segments of the value chain can have significant negative implications on downstream producers. In addition, for downstream producers proximity to the supply of battery cells and modules contributes to lower transport costs, closer collaboration on the design and quality of the cells, innovation and the development of know-how.

Brands. Producers of appliances that include battery production with links to human rights abuses, dangerous working conditions or harm to the surrounding environment and which are called into question by NGO campaigns carry the risk of significant reputational damage.

Battery recyclers. Batteries are typically recycled in three steps:

-Waste battery collection. This usually takes place at local or regional level and commonly involves small and medium enterprises. Logistics and funding are usually organised by producer responsibility organisations. Collection is currently covered by the provisions in the Batteries Directive, which are insufficiently precise to be effective.

-Dismantling and pre-processing. This usually takes place at local, regional or inter-regional level, involving small and medium enterprises, but also some large waste companies. Businesses operating at this stage are affected by the lack of alignment of incentives across the value chain (e.g. irremovable batteries), which affects profitability.

-Material recovery. Key players at this stage of recycling are mostly large companies who source their feed at international level. These companies are affected by the sub-optimal levels of collection as their operations are very capital-intensive and thus require economies of scale.

3.Why should the EU act?

Legal basis

It is the intention to adopt the proposal on the basis of Article 114 of the Treaty on the Functioning of the European Union (TFEU), which is to be used for measures that aim to establish or ensure the functioning of the internal market.

The current Batteries Directive 2006/66/EC is based on Article 175 TEC (now Article 191 TFEU) and on Article 95 TEC (now Article 114 TFEU) for the identified product-related provisions, namely restrictions of certain hazardous substances and labelling. For the current Directive, the Commission in its proposal had identified the situation of diverging national measures on, for example, marketing restrictions or marking obligations, which constituted barriers to trade and, if not addressed, potentially compromised the functioning of the internal market.

Section 2 of this impact assessment demonstrated that there are a number of key problems related to the internal market. These include barriers to the functioning of recycling markets, uneven implementation of the Batteries Directive, the imperative need for large-scale investment to respond to the changing market, the need for economies of scale, and the need for a stable fully harmonised regulatory framework.

Section 2 also set out a number of environmental problems related to the production, use and end-of-life management of batteries. It is important to note that the environmental problems that are not directly covered by EU environmental law and that thus require regulatory action can all be linked to the functioning of the internal market. One example is the adverse impacts of hazardous substances contained in batteries when they are not properly disposed of, a problem that can be solved by proper battery collection and recycling. One of the reasons why collection levels are so low is that setting up collection systems has a cost, and the internal market is not providing an adequate and harmonised implementation of the polluter pays principle. Sub-optimal levels of collection are also problematic from a business profitability perspective, given that recycling technologies are rather capital-intensive and thus require significant economies of scale, in some cases beyond what EU national markets can provide. Another example is the untapped potential of lowering the total environmental impact of batteries by increasing the circularity of the battery value chain. Here the main driver is again market failure, i.e. the lack of alignment of incentives (and information) between different operators across the value chain, or, in the case of the market for second life EV batteries, a lack of legal certainty.

The objective of this proposal is thus to ensure the functioning of the internal market for economic actors operating in the market. The measures lead to further harmonisation of product requirements for batteries placed on the EU market and the level of waste management services provided by economic operators. The proposal will also set requirements to create a well-functioning market for secondary raw materials. In addition it will create a regulatory framework that will prevent and reduce the environmental impact from the production and use of batteries as well as their processing, including recycling, at their end-of-life. This will promote a circular battery industry and avoid market fragmentation due to diverging national approaches.

The manufacture and use of batteries, the underlying value chain, and the processing of end-of-life batteries are cross-cutting issues, relevant to many policy areas of policy. Therefore, in addition to pursuing internal market objectives, the proposal will also contribute to objectives related to environment, transport, climate action, energy and international trade. The analysis of the impact of the proposed measures (see Section 7) demonstrates that in most cases, the internal market objectives are predominant and the environmental benefits are complementary. Therefore, it is appropriate to use Article 114 TFEU as the sole legal basis.

Subsidiarity: need for EU action

The necessity test is the question of whether the objectives can be sufficiently achieved by action taken by the Member States alone. In this case, they cannot. It is essential to ensure a level playing field for manufacturers, recyclers, importers and economic operators more broadly in terms of the requirements to be met when placing a battery on the EU market by putting in place a common set of rules within the EU internal market and by providing reliable information to end-users. For these reasons, EU-wide legislation is necessary.

In the absence of EU level action to set harmonised rules, action at national level would lead to a divergence in the requirements for economic operators.

In addition, the evaluation of the Batteries Directive showed that the legislation did not meet its objectives. In light of the exponential increase in demand for batteries and fundamental changes to the batteries market, the evaluation identified the need to modernise the legislative framework to adequately support the circular economy and low-carbon policies and to adapt to technological and economic developments in the battery market.

Subsidiarity: Added value of EU action

There is clear added value in setting common requirements at EU level that cover the full lifecycle of batteries.

Harmonisation supports investment as the batteries value chain is capital-intensive and thus needs economies of scale. Achieving this requires a harmonised and well-functioning internal market across all Member States and, therefore, a level playing field for businesses operating in the battery value chain in the EU.

The proposed measures do not go beyond what is necessary to provide the regulatory certainty required to stimulate large-scale investment in the circular economy while ensuring a high level of protection of health and the environment.

The transition to a circular economy, including fostering innovative and sustainable business models, products and materials, requires setting common binding provisions. The aims cannot be sufficiently achieved by the Member States but can be better achieved at EU level given the scale and effects of the action. EU action is therefore justified and necessary.

As demonstrated above, and thereby fulfilling the requirement of Article 114(3) TFEU, the Commission’s proposal related to the functioning of the internal market is based on a high level of protection in terms of health, safety, environmental protection and consumer protection.

Nature of the instrument

The evaluation of the Batteries Directive and the analysis preceding the impact assessment revealed that harmonisation is necessary in the form of a regulation, rather than a directive, as used in the previous and more limited approach.

A regulation would set direct requirements applicable to all operators, thus providing the necessary legal certainty and scope for enforcement of a fully integrated market across the EU. A regulation would also ensure that the obligations are implemented at the same time and in the same way in all 27 Member States.

In line with the one-in-one-out principle 73 , the proposed regulation should replace the current Batteries Directive.

Differing national measures on waste collection and recovery have led to an uneven regulatory framework. The existing barriers in the form of differing national regulatory frameworks can only be removed by more detailed, harmonised rules on the organisation of collection and recovery processes and related responsibilities, including rules that should apply directly to economic operators.

The instrument will also mandate the Commission to develop implementing measures to flesh out the Regulation further, where necessary, allowing for common rules to be set swiftly. This will reduce uncertainty over the timescale during the transposition process in an area where time and legal certainty are of the essence due to investment-related issues and expected increases in market size.

4.Objectives

The aim of the regulatory action is to foster the production and placing on the EU market of high performing, sustainable and durable batteries and components, produced with the lowest environmental, social and human health impacts possible along the entire battery lifecycle and in a way that is cost-effective.

The objectives are broken down into three levels of action:

1.Areas of action under the Treaty, namely on internal market and, to a lower extent, on the environment;



2.General objectives

1.Strengthening the functioning of the internal market (including products, processes, waste batteries and recyclates), by ensuring a level playing field through a common set of rules;

2.Promoting a circular economy;

3.Reducing environmental and social impact throughout all stages of the battery life cycle.

3.Specific objectives

1.Strengthening the functioning of the internal market:

oFostering the production and placing on the EU market of high-quality batteries;

oEnsuring functioning markets for secondary raw materials and related industrial processes;

oPromoting innovation and the development and take-up of EU technological expertise.

2.Promoting a circular economy:

oIncreasing resilience and closing the materials loop 

oReducing the EU’s dependence on imports of materials of strategic importance;

oEnsuring appropriate collection and recycling of all of waste batteries.

3.Reducing environmental and social impact:

oContributing to responsible sourcing;

oUsing and source resources, including raw and recycled materials, efficiently and responsibly;

oReducing GHG emissions across the entire battery life cycle;

oReducing risks to public health and to environmental quality and improve the social conditions of local communities.

5.Baseline

This scenario involves taking no action at EU level. The situation would evolve as described in Section 2.4, which outlines several ways in which the problems inherent in the life cycle of batteries are likely to worsen in the absence of EU action.

Driven by the transition to a low-carbon, circular economy, demand for batteries is set to grow rapidly. This trend will be exacerbated by the recent COVID-19 crisis, which has given a strong boost to sales of EVs (see text box below). Unless the problems and their drivers identified above are addressed, the negative consequences they create will only worsen.

The impact of the COVID-19 crisis on EV sales

The COVID-19 crisis has had an impact on the uptake of e-transport, both for cars and light means of transport as e-bikes. As carmakers must meet the EU’s CO2 targets, sales of electric cars are booming in Europe. 74

While European sales of passenger cars fell by about 50%, sales of electric vehicles increased and in March 2020, they reached an all-time high market share of 10% of all passenger car sales. 75  

The upward trend in sales of EVs is likely to continue in the future as all but one Member States have put in place some form of incentive for EV purchases, including purchase tax or VAT exemptions, car ownership tax reductions, company car deductibility and purchase incentives. 76 Additional public measures include increasing availability charging facilities, access to restricted traffic and free parking. 77  

Similarly, after an initial stall due to the lockdown and retail store closures, sales of e-bikes and other light means of transport are now booming. Many brands have reported increased sales that have already compensated for the losses incurred during the lockdown weeks.

Currently, there have been announcements for investments in several battery factories, and four companies have announced investments in the production of cathode materials.

In the absence of a regulatory framework and common rules for all batteries that are placed on the EU market however, a lack of a level playing field may result, especially for producers or recyclers who are subject to stricter environmental rules. This may prevent the investments needed to boost battery production capacity. More importantly, it would also have negative environmental consequences, because it would create lock-in and fail to steer the market towards adopting the best environmentally performing batteries.

Furthermore, to reach a market optimum, all actors across the value chain need to have sufficient, comparable and reliable information to make efficient choices. Most participants in the public consultation on the evaluation of the Batteries Directive agree that, although there have been advances in labelling and information, this is still insufficient, especially given the changes expected in the market.

In terms of social and environmental risks (including waste management), due to complex global value chains, it is unlikely that unguided market forces will lead to sustainable outcomes. On the contrary, investment in sustainable sourcing or investment to reduce the environmental impact of production (including the carbon footprint) may not be made at all.

In terms of the inefficiencies across the supply chain, it is very likely that the problem will lead to many missed opportunities to increase resource efficiency, namely as regards material recovery. An increasing volume of batteries will fall outside the scope of the collection targets under the Batteries Directive. In addition, because the Batteries Directive mostly covers the end-of-life stage of the batteries value chain, the problem of misaligned incentives across the value chain (e.g. changes in design than can facilitate reuse or recycling) is unlikely to be resolved.

With regard to research and innovation, the EU is mobilising all its channels of support covering the entire innovation cycle, from fundamental and applied research to demonstration, first deployment and commercialisation. It is expected that this will facilitate breakthroughs in terms of battery materials and components, battery performance and durability, new chemical systems and even alternatives to currently used batteries. More details about the EU's research and innovation support for batteries can be found in Annex 8.

6.Policy options

Measures and sub-measures

This impact assessment includes 13 measures to address the problems and their negative consequences identified in Section 2 and to reach the objectives set out in Section 4. They are based on the analysis carried out as part of the evaluation of the Batteries Directive, the public consultations on this initiative, multiple support studies and political commitments such as the Green Deal, which are listed in Section 1.1. The measures reflect the fact that a series of responses are needed along a complex value chain.

Table 1  gives an overview of the measures that contribute most strongly to the objectives.

Table 1: Overview of how the measures contribute to the objectives

Objectives

Internal market

Circular economy

Environmental and social impacts

Measures

1. Classification and definition

2. Second life of industrial batteries

3. Collection rate target for portable batteries

4. Collection rate target for industrial batteries

5. Recycling efficiencies and material recovery

6. Carbon intensity

7. Performance and durability for rechargeable batteries

8. Non-rechargeable batteries

9. Recycled content

10. Extended producer responsibility

11. Design

12. Provision of reliable information

13. Due diligence for the origin of raw materials

Under each of the broad policy measures set out above are several sub-measures, which are presented in Table 2 .

Table 2: Overview of the sub-options for the different measures (italic = sub-measure discarded in an early stage; (+) = cumulative)

Baseline

Sub-measures

a

b

c

d

e-f

1. Classification and definition                    

Current classification of batteries based on their use

New category for EV batteries or new sub-category in industrial batteries

Weight limit of 2 Kg to differentiate portable from industrial batteries

Weight limit of 5 Kg to differentiate portable from industrial batteries

New calculation methodology for collection rates of portable batteries based on batteries available for collection

2. Second-life of industrial batteries

No provisions at present

At the end of the first life, batteries are considered waste (except for reuse) and therefore the EPR and product compliance requirements restart when they ceased to be waste and a new product is placed on the market

At the end of the first life, batteries are not waste, second life batteries are considered new products, and therefore the EPR and product compliance requirements restart

At the end of the first use cycle, batteries are not waste but second life batteries would not be considered a new product and the EPR and product compliance requirements would be kept by the producer

Mandatory Second life readiness

3. Collection rate for portable batteries

45 % collection rate

55% collection rate in 2025

65% collection rate in 2025

70% collection rate in 2030

75% collection target rate in 2025

e) Deposit and refund schemes

f) A new set of collection targets per chemistry of batteries

4. Collection rate for automotive and industrial batteries

No losses of automotive and industrial batteries

New reporting system for automotive, EV and industrial batteries

Explicit collection target for industrial, EV and automotive batteries

Collection target for batteries powering light means of transport

5. Recycling efficiencies and recovery of materials

Recycling Efficiencies defined for lead-acid (65%), nickel-cadmium (75%) and other batteries (50%)

‘Highest degree of material recovery’ obligation for lead and cadmium without quantified targets

Lithium-ion batteries:

Recycling efficiency lithium-ion batteries: 65% in 2025 (a-1), 70% in 2030 (a-2)

Material recovery rates for Co, Ni, Li, Cu: resp. 90%, 90%, 35% and 90% in 2025 (a-1), 95%, 95%, 70% and 95% in 2030 (a-2) (+)

Lead-acid batteries:

Recycling efficiency lead-acid batteries: 75% in 2025 (b-1), 80% in 2030 (b-2)

Material recovery for lead: 90% in 2025 (b-1), 95% in 2030 (b-2) (+)

Recycling conditions

Add Co, Ni, Li, Cu and Graphite to the list of substances to be recovered to the highest possible technical degree (without quantified targets)

Multi-metal quantified target values for the degree of recovery

6. Carbon footprint for industrial and EV batteries

No provisions at present

Mandatory declaration of carbon intensity

Carbon footprint performance classes and maximum carbon intensity thresholds

7. Performance and durability of rechargeable industrial and EV batteries

No provisions at present

Information requirements on performance and durability

Minimum performance and durability requirements

8. Non-rechargeable portable batteries

No provisions at present

Technical parameters that set out minimum performance and durability requirements:

Phasing out primary portable batteries of general use

Phasing out of all primary batteries

9. Recycled content in industrial, EV and automotive batteries

No provisions at present

Information requirements on levels of recycled content for industrial batteries in 2025

Mandatory levels of recycled content for industrial batteries in 2030 and 2035 (+)

 

Adding graphite and / or auxiliary materials to the list

10. Extended Producer Responsibility

EPRs and PROs obligations reflect the provisions of the WFD, as amended.

Clear specifications for Extended Producer Responsibility obligations for all batteries that are currently classified as industrial

Minimum standards for Producer Responsibility Organisations (PROs)

11. Design requirements for portable batteries

Obligations on removability

Strengthened obligation on removability

Additional requirement on replaceability (+)

Requirements on interoperability (+)

12. Reliable information

Specifications on information and labelling

Provision of basic information (as labels, technical documentation or online)

Provision of more specific information to end-users and economic operators (selective access) (+)

Setting up an electronic information exchange for batteries and a battery passport (for industrial and electric vehicle batteries only) (+)

13. Supply chain due diligence for raw materials in industrial and EV batteries

No provisions at present

Voluntary supply chain due diligence policy

Mandatory supply chain due diligence policy

b1) Self-certification of supply chain partners

b2) Third-party auditing

b3) Third-party verification based on Notified Bodies

The sub-measures are in many cases alternatives to each other (e.g. for Measure 3, the remedy could be to set collection rate targets for portable batteries of either 65% or 75% by 2025, but not both). In other cases, the sub-measures are designed so that they can be cumulative and/or complementary, or a different sub-measure is proposed for different categories of batteries (e.g. for Measure 13, a battery passport for industrial batteries works on top of information obligations).

Overall, over 50 sub-measures are tabled. All sub-measures are analysed in proportionate detail in Annex 9, with an assessment of their impacts compared to the business-as-usual or baseline scenario.

Annex 9 also includes some further details about the issue of green public procurement (GPP) as an enabler that is not tabled as a measure in this impact assessment. GPP is a route to ensuring that the best performing batteries are procured and used by public authorities, which often have significant weight to shift the market in terms of demand. GPP criteria and the approach to using them will be assessed in line with current approaches i.e. with the involvement of stakeholders, and with the consideration of making the criteria mandatory and setting targets.

Annex 9 also includes a short synthesis of issues related to safety. It also clarifies how the assessment of chemicals in batteries will be carried out within the REACH framework, namely with the involvement of the European Chemicals ECHA agency. That said, for reasons of legal certainty, the new regulatory framework will extend the existing ban on mercury and cadmium-containing batteries.

Policy options

To facilitate the analysis, the sub-measures listed in Table 3 are grouped into three main policy options, which are compared against a business-as-usual scenario.

·Option 1, business-as-usual, keeps the Batteries Directive, which mostly covers the end-of-life stage of batteries, unchanged. For the earlier stages in the value chain, there is currently no EU legislation in place and so this will remain unchanged. Further details on this option are given in Section 5 on the baseline and in Annex 9.

·Option 2, with a medium level of ambition, builds on the Batteries Directive, but gradually strengthens and increases the level of ambition. For the earlier stages in the value chain for which there is currently no EU legislation, the proposed change is to bring in information and basic requirements as a condition for batteries to be placed on the EU market.

·Option 3, with a high level of ambition, is an approach that changes some of the current provisions, for example in terms of the calculation method for the collection rate of portable batteries and further increasing some of the current targets such as for recycling efficiencies and recovery of materials. It also sets some new mandatory targets rather than proposing information requirements, for example as regards collection rate for automotive and industrial batteries, carbon footprint, performance and durability, supply-chain due diligence and the use of non-rechargeable portable batteries. This option is clearly more disruptive and is more ambitious in its objectives and for many measures indeed it is expected to achieve more significant results. 

·Option 4¸ with a very high level of ambition, is similar to option 3 but proposes a few even more ambitious targets: mandatory second-life readiness, increase the collection rate for portable batteries even further, set an explicit collection target for industrial, EV and automotive batteries and a complete phase-out of portable batteries. These measures are designed to achieve extremely ambitious environmental benefits.

Table 3  presents an overview of the different sub-measures included in the policy options. A number of observations:

·A cross-reference to the sub-measure letter (a, b, c, …) used in Table 2 and Annex 9 is given in brackets;

·To limit the scope of the analysis, only the most relevant sub-measures are included in Options 2, 3 and 4. For some measures, additional sub-measures were assessed in the form of a sensitivity analysis (e.g. a 55% collection rate target for Measure 3). Table 4 provides an overview of the reasons why certain sub-measures are not included in the Options. A further analysis of these measures is included in Annex 9.

·Option 3 should be seen as a higher level of ambition than Option 2. The level of "disruptiveness" is not the same across all measures.

·Given that the scope of the measures is different, for some measures no "high" or "very high" level of ambition was identified.

Table 3: Content of the different policy options

Measures

Option 2 - medium level of ambition

Option 3 - high level of ambition

Option 4 – very high level of ambition

1. Classification and definition    

New category for EV batteries (a)

Weight limit of 5 kg to differentiate portable from industrial batteries (c)

New calculation methodology for collection rates of portable batteries based on batteries available for collection (d)

/

2. Second-life of industrial batteries

At the end of the first life, used batteries are considered waste (except for reuse). Repurposing is considered a waste treatment operation. Repurposed (second life) batteries are considered as new products which have to comply with the product requirements when they are placed on the market (a)

At the end of the first life, used batteries are not waste. Repurposed (second life) batteries are considered as new products which have to comply with the product requirements when they are placed on the market. (b)

Mandatory second life readiness (d)

3. Collection rate for portable batteries

65% collection target in 2025 (b)

70% collection target in 2030 (d)

75% collection target in 2025 (c)

4. Collection rate for automotive and industrial batteries

New reporting system for automotive, EV and industrial batteries (a)

Collection target for batteries powering light transport vehicles (c)

Explicit collection target for industrial, EV and automotive batteries (b)

5. Recycling efficiencies and recovery of materials

Lithium-ion batteries and Co, Ni, Li, Cu: (a-1)

Recycling efficiency lithium-ion batteries: 65% by 2025

Material recovery rates for Co, Ni, Li, Cu: resp. 90%, 90%, 35% and 90% in 2025

Lead-acid batteries and lead: (b-1)

Recycling efficiency lead-acid batteries: 75% by 2025

Material recovery for lead: 90% in 2025

Lithium-ion batteries and Co, Ni, Li, Cu: (a-2)

Recycling efficiency lithium-ion batteries: 70% by 2030

Material recovery rates for Co, Ni, Li, Cu: resp. 95%, 95%, 70% and 95% in 2030

Lead-acid batteries and lead: (b-2)

Recycling efficiency lead-acid batteries: 80% by 2030

Material recovery for lead: 95% by 2030

/

6. Carbon footprint for industrial and EV batteries

Mandatory carbon footprint declaration (a)

Carbon footprint performance classes and maximum carbon thresholds for batteries as a condition for placement on the market (b)

/

7. Performance and durability of rechargeable industrial and EV batteries

Information requirements on performance and durability (a)

Minimum performance and durability requirements as a condition for placement on the market (b)

/

8. Non-rechargeable portable batteries

Technical parameters for performance and durability of portable primary batteries (a)

Phase out of primary portable batteries of general use (b)

Total phase out of primary batteries (c)

9. Recycled content in industrial, EV and automotive batteries

Mandatory declaration of levels of recycled content, in 2025 (a)

Mandatory levels of recycled content, in 2030 and 2035 (b)

/

10. Extended producer responsibility

Clear specifications for extended producer responsibility obligations for industrial batteries (a)

Minimum standards for PROs (b)

/

/

11. Design requirements for portable batteries

Strengthened obligation on removability (a)

New obligation on replaceability (b)

Requirement on interoperability (c)

12. Provision of information

Provision of basic information (as labels, technical documentation or online) (a)

Provision of more specific information to end-users and economic operators (with selective access) (b)

Setting up an electronic information exchange system for batteries and a passport scheme (for industrial and electric vehicle batteries only) (c)

/

13. Supply-chain due diligence for raw materials in industrial and EV batteries

Voluntary supply-chain due diligence (a)

Mandatory supply chain due diligence (b)

/

Table 4: Overview of sub-measures that were not included in the Options

Measure

Sub-measure

Reason for being not being included in the Options

1.Classification and definition

1.b) Weight limit of 2 Kg to differentiate portable from industrial batteries (with exceptions)

Carried out as a sensitivity analysis. Analysis shows that a 5 kg weight limit (sub-measure 1.c) would lead to a clearer demarcation.

2. Second life of industrial batteries

2.c) At the end of the first use cycle, batteries are not waste but second life batteries would not be considered a new product and the product compliance requirements would be kept by the producer

Early analysis showed that this sub-measure would lead to some contradictions and possible divergent interpretations, because batteries would be neither waste nor a new product. This would not provide legal certainty to economic operators.

3. Collection rate for portable batteries

3.a) 55% collection target

Carried out as a sensitivity analysis. Not included in the options because environmental benefits are non-linear (i.e. significantly higher when the target is increased to 65%).

3.d) Deposit and refund schemes

Early analysis showed that this sub-measure would lead to major challenges related to costs, implementation, voluntary collection, tourism and the market of fake batteries.

3.e) A new set of collection targets per chemistry of batteries

Early analysis showed that this measure would not be very (cost-)effective, as it would lead to a multitude of requirements (different containers, collection points, management measures, …), which would increase costs without significantly contributing to the objective of increasing resource efficiency.

5. Recycling efficiencies and recovery of materials

5.c) Recycling conditions for lithium-batteries

Early analysis showed that this sub-measure would imply a strong market intervention that could have unintended negative impacts. At the same time the objective can also be achieved by Measure 11 and product policy measures.

5.d) Add Co, Ni, Li, Cu and Graphite to the list of substances to be recovered to the highest possible technical degree (without quantified targets)

Stakeholders pointed out during the consultation period that this sub-measure would not be sufficiently effective to promote recycling activities within the EU.

9. Recycled content in industrial batteries

9.c) Adding graphite and / or auxiliary materials to the list

Early analysis showed that there is no evidence supporting that setting mandatory levels of recycled content for graphite would be environmentally beneficial. For auxiliary materials (steel, copper and aluminium used in the casing and periphery) early analysis showed that setting a target for recycled content would not be effective, as it would just lead to a redistribution of recycled content from non-regulated applications to batteries.

7.Impact of the policy options

The impact of the two policy options and their constituent sub-measures have been analysed based on the main problems and drivers identified (see Section 2) and the general objectives (see Section 4).

A detailed analysis was carried out based on the following assessment criteria:

·Effectiveness

·Economic impact

·Administrative burden

·Environmental impact

·Social impact

·Technical feasibility and stakeholders' views

For the measures for which this was relevant, a mass flow model was constructed to allow for quantification based on type of batteries, and their treatment. This mass flow model enables a number of impacts to be quantified for different measures. Annex 4 provides further methodological details.

To put the findings into perspective, four important qualifications need to be made:

1)To ensure the robustness of the findings, assumptions have been made in a way that they produce conservative estimates. One example is the measure on recycling efficiency and material recovery: the estimations are based on the assumption of closed loop recycling (i.e. recycled materials are only used in batteries), while in practice open loop processes are legally allowed and used, which yields additional volumes of recovered materials.

2)With regards to the environmental impact, it is important to note that this impact assessment only included direct environmental impact, such as reduced GHG emissions, human toxicity or resource depletion. However, the indirect environmental benefits that these measures will bring about by accelerating the greening of mobility cannot be accurately quantified but should also be taken into account. For example, note that in the EU, transport generates roughly a quarter of greenhouse gas emissions and is the main cause of air pollution in cities 78

3)Similarly, the estimated direct economic and social impact from the measures are rather low compared to the indirect economic benefits of having a stable regulatory framework to facilitate the development of a new value chain in the EU. For example, the direct impact on jobs of the measures assessed in this impact assessment are never higher than 3,000 additional jobs. By contrast, according to the JRC, creating a competitive lithium-ion cell manufacturing capability in the EU is expected to create between 90 and 180 direct jobs per GWh/y production volume 79  and the additional jobs created both upstream (e.g. cathodes and anode production) and downstream will likely be equally significant. Another report estimates that 15 jobs are created for the collection, dismantling and recycling per ton of lithium-ion battery waste. 80

4)All measures except Measure 11 on design requirements for portable batteries and Measure 13 on due diligence will be fleshed out in secondary legislation, which may be accompanied by a specific and proportionate impact assessment.

This section presents a summary of the assessment of the impact of the measures, focusing on the economic impact (including administrative costs/burden and social impacts when relevant), environmental impact, feasibility and stakeholder acceptance. It provides an analysis of Options 2, 3 and 4 compared to Option 1, the business-as-usual scenario. A more detailed analysis for the different measures is provided in Annex 9.

Measure 1: Classification and definition

The purpose of Measure 1 is mostly to clarify the current provisions on the categories of batteries and to update them to the latest technological developments. This will help identify and apply specific provisions applicable to different types of batteries.

More specifically, for this measure Option 2, the medium level of ambition option, proposes to create a new battery category for EV batteries and to set a 5 kg threshold to distinguish portable batteries. Option 3, the high level of ambition option, proposes to introduce a new calculation methodology for the collection rate of portable batteries based on "batteries available for collection" (to replace the current methodology, which is based on "batteries placed on the market").

This measure is not expected to have any significant economic or social costs, or bring about significant additional administrative burden (given that similar provisions already exist). A new calculation methodology based on "available for collection" would provide a better picture on the mass flows of battery raw materials, but will require collecting some additional information and some further assessment.

Option 2 is not expected to have a direct environmental impact, but it will indirectly facilitate the increased collection of waste batteries. Currently some batteries (e.g. e-bikes and e-scooters) may, for example, be placed on the market as belonging to one class and be collected and recycled as another, which distorts producer obligations and the funding of collection and recycling schemes. To set the threshold at 5 kg, a sensitivity analysis was carried out based on a 2 kg threshold. It found that a 2 kg threshold would classify small industrial batteries as portable and could artificially split product lines, i.e. batteries using the same chemistry and placed on the market by the same producer would be classified differently, making it more difficult to manage the system (batteries of e-scooters and of power tools are examples).

The stakeholder consultation showed clear support for creating sub-categories or sub-classes in the current industrial batteries class. Producers of batteries and equipment were in favour of using a weight threshold to distinguish between portable and industrial batteries, a practice already in use in some Member States. Stakeholders also supported the development of the new calculation method for portable batteries. They argued that, due to the increasing lifespan of batteries and the significant changes in the market, the current "placed on the market" methodology (based on a three-year average) is no longer suitable and does not allow collection schemes to properly plan operations or report on their efficiency.

Measure 2: Second life of industrial batteries

Measure 2 includes provisions that should provide legal certainty to facilitate the development of a market for second-life industrial batteries. To this end, Option 2 proposes to follow the provisions in the Waste Framework Directive and let batteries go through waste status, only allowing the battery to be classed as a "new product" when the waste battery is prepared for reuse or has undergone other transformations to have a second life. Option 3, by contrast, only lets batteries become waste when the battery holder decides to discard the battery. Otherwise, second-life batteries are automatically classed as new products, and therefore the product compliance requirements restart. This option requires additional regulatory provisions to specify the conditions under which it will be implemented, namely to prevent unduly classifying waste batteries as second-life batteries with the aim only to circumvent heavier administrative and technical procedures (e.g. for export).

Options 2 and 3 bring in equivalent costs to place the batteries on the market again (i.e. costs related to the conformity processes). They differ however, in the administrative costs they would entail. The administrative costs for Option 2 would be high, because operators would need specific licences to manage hazardous waste. The administrative costs for Option 3 would be lower, because the applicable procedures for hazardous goods are less cumbersome than for waste. The lower cost of Option 3 would thus be more likely to facilitate the market penetration of this technology.

Stimulating a market for the second life of industrial batteries could generate a positive environmental and economic impact. In particular, the economic impact would depend on the level of market penetration, but if it reaches 25 %, it would generate around €200 million in 2030 and create around 2000 FTE jobs, for both Option 2 and Option 3.

With regard to environmental impact, for the same level of market uptake, both options give a significant advantage. Estimates show an overall gain in global warming potential savings (up to 400,000 tonnes of CO2 per year by 2035), equivalent for Options 2 and 3.

In terms of feasibility and stakeholder acceptance, regulating the second life of industrial batteries is a highly complex matter. Although all stakeholders recognise the business opportunity and the importance of providing legal certainty, opinions are divided on a number of technical issues. Overall, automotive producers are in favour of Option 3 (second-life batteries are not waste but become new products), as it would generate lower administrative costs than Option 2 (batteries become waste). Recyclers, however, expressed concern about the delayed availability of automotive batteries for recycling and the possibility of "losses" through (illegal) exports.

Measure 3: Collection rate for portable batteries

The aim of Measure 3 is to increase the collection rate of portable batteries to maximise resource efficiency and minimise the environmental impact of incorrect battery disposal. To this end, Option 2 proposes a collection target of 65% by 2025. Option 3 proposes a 70% target by 2030 and Option 4 a 75% target by 2025.

In terms of environmental impact, the mass flow model shows that the environmental benefits are non-linear. This is due to the additional types and volumes of batteries that would need to be collected to achieve the target. The higher the target, the lower the loss of lithium batteries, the higher the environmental benefits would be. This is demonstrated by the sensitivity analysis carried out based on a 55% collection target (sub-measure a), for which the model estimates significantly lower environmental benefits.

Figure 11 shows the greenhouse gas emissions savings that would be generated by achieving the different targets as calculated during this process. It shows that a 55% target (sub-measure a, not included in the Options) would lead to annual GHG savings of 4% compared to the baseline in 2030. For Options 2, 3 and 4 on the other hand these annual GHG reductions would amount to 51%, 53% and 56% respectively. Similar results are obtained for the indicators ‘abiotic depletion potential’ and ‘human toxicity potential’ (for example, the incorrect disposal of batteries through WEEE is a non-negligible source of dust and heavy metal emissions).

Figure 11: GHG emissions savings generated from battery collection and recycling by achieving different collection rates (in tonnes of CO2 equivalent per year).

Setting increased collection rate targets would increase the cost of collection. Estimating the additional cost of meeting these collection targets is not an easy task, given the limited data available. Table 5 below presents an overview of estimated annual costs per capita of the different options. It is noted that the cost estimates presented above are subject to a high degree of uncertainty, given that they are based on only a few data points.

Table 5: Estimated annual costs to meet the collection rate targets

Collection rate

Estimated annual cost

Baseline (45%)

EUR 0.23-0.51 / capita

Option 2 (65% by 2025)

EUR 1.09 / capita

Option 3 (70% by 2030)

EUR 1.43 / capita

Option 4 (75% by 2025)

EUR 2.07 / capita

Based on the Polluter Pays Principle, the Batteries Directive requires that these costs are covered through the Extended Producer Responsibility mechanism (see also Measure 10). It is unclear to what extent the cost estimates above, which are expressed in terms of cost per capita, will be passed on from producers to the consumers. Data on the collection of waste portable batteries in Belgium indicate that a 65-70% collection rate can be achieved at a cost of around €0.057 per portable battery placed on the market.

There are a number of reasons indicating that the costs estimates for Options 3 and 4 are overestimates.

-A study commissioned by the European Portable Batteries Association 81 indicates that increases in the collection rate are hindered by the sub-optimal market functioning, e.g. due to a lack of clarity on the definition of portable batteries, a lack of clear requirements for PROs (e.g. minimum awareness raising campaigns requirements) and distortion of competition between PROs. These issues are addressed by Measure 1 and Measure 10, which should facilitate the achievement of higher collection rates.

-Evidence indicates that systems increase their efficiency. The PRO that is active in Belgium for example reports that the fee it charges to its members has decreased by 54% since 2013.

-Evidence also indicates the importance of awareness raising campaigns to increase collection rates 82 . Compared to the costs of setting up the collection points, the costs of these campaigns are low, thus leading to decreasing costs to scale.

On the other hand there are also number of reasons that costs may not go down, and that the estimates can be seen as an underestimate:

-Data points used mostly cover densely populated countries and with labour costs that are higher than the EU average;

-As collection targets increase, the share of Li-ion batteries increase, which might have a higher cost.

Costs can be partially offset by revenue from recycled materials, but for portable batteries (contrary to automotive and industrial batteries) this revenue is currently not sufficient to cover all the costs. According to the model estimates, Option 2 would lead to an annual increase in the volume of recovered materials compared with the baseline of 42%. For Option 3, this would be 51% and for Option 4, this would be 61%. Using current prices, in 2030 this would lead to revenue of €72.7 million for Option 2, €77 million for Option 3 and €81.3 million for Option 4.

The number of jobs that would be created by increasing the collection rates is estimated to be 2500 for Option 2 and 5500 for Option 4. These jobs would mainly be created in small and medium-sized enterprises involved in collection and transport.

Achieving a collection rate of 65% and 70% (Options 2 and 3) for portable batteries is feasible in 2025 and 2030 respectively. The average collection rate in 2016 was 48%. Belgium for example, demonstrates that a 65% and even a 70% target can be achieved (Options 2 and 3). As a generally accepted principle, stakeholders welcome higher collection targets as long as they are realistic, and have enough time to meet them. There are some differences of opinion though, mostly reflecting countries' current divergence in performance.

Measure 4: Collection rates for automotive, EV and industrial batteries

The purpose of Measure 4 is to ensure the highest level of collection for automotive, EV and industrial batteries. To this end, it proposes bringing in a new reporting system for automotive and industrial batteries (Option 2), and to set a specific collection target for batteries used in light transport vehicles (Option 3). Option 4, proposes to convert the implicit "no loss" policy into an explicit 100% collection target for industrial, automotive and EV batteries.,

Option 2 is expected to give rise to some minor additional administrative costs, although the new reporting system can build on existing systems under the End-of-Life Vehicles Directive and the Waste Framework Directive. Putting in place a reporting system will both improve data availability and result, according to estimates, in a 3% increase in the collection of lithium industrial batteries, which will generate additional revenue and environmental benefits.

Option 2 is considered to be fully feasible. It is also accepted by producers, because they are aware of the advantages of reliable information on the status of industrial batteries.

Option 3 proposes bringing in a collection target for batteries used in light means of transport. To set the target at the appropriate level however, it would be necessary to develop the "available for collection" methodology (see Measure 1). This methodology – equivalent to the approach used in the WEEE Directive for waste electric and electronic equipment – makes it possible to estimate the volume of waste batteries (and their weight) that have reached their end-of-life at a given moment. The estimates made during the work on this impact assessment indicate that setting a target for batteries powering means of light transport could result in an increase of nearly 30% in the volume of waste batteries collected (as compared to the baseline). Assuming that these batteries are recycled, this would lead to a reduction in GHG emissions of around 22%.

Option 4, an explicit 100% collection target, was not assessed in detail because early analysis showed that it is rather complicated from an administrative point of view and the same results could be achieved by bringing in a reporting system (Option 2).

Measure 5: Recycling efficiencies and material recovery

The aim of Measure 5 is to ensure sufficient levels of recycling efficiency and material recovery. For lithium-ion batteries and for cobalt, nickel, lithium and copper, Option 2 proposes bringing in target levels to provide a regulatory incentive for the roll-out of state-of-the art recycling technologies by 2025. Option 3 increases the level of ambition by 2030, but still based on what should be technically possible in the near future. For lead-acid batteries and lead, for which the Batteries Directive already includes a provision, Option 2 proposes to increase the current target levels on recycling efficiencies and introduces a quantified target for material recovery. Option 3 increases the level of ambition by 2030, but still based on what is currently already technically feasible. No Option 4 was considered for this measure.

Assessing the impacts of the targets has proven to be rather complicated.

In terms of the economic impact, there are too many variables to make reasonable predictions far into the future. First, for lithium recycling, this is a market still in its infancy. Compared to the volume of end-of-live EV batteries that will become available for recycling in the coming years, current levels of recyclables are still rather low. Recycling technologies exist (pyrometallurgy, hydrometallurgy or direct recycling), but are not yet rolled out at large scale.

Data on recycling costs are scarce due to confidentiality issues. Costs are likely to go down in the future due to economies of scale and further technological developments. Data obtained during the study to support this impact assessment indicate a cost range of €2290-3730 (in 2020) per tonne of waste batteries (including collection, transport, dismantling and recycling), which may fall to €860-1300 by 2035. Data on revenue are equally uncertain. For lithium, for example, prices have more than doubled over the period 2013-2019, from €5,000 to €11,000 per tonne. This would thus suggest that overall the economic impacts would be positive. Certainly from a societal point of view it would be positive, given that the measure would not only stimulate the roll-out of state-of-the-art recycling technologies, but because it would oblige recyclers to not disregard the recycling of lower-value components (e.g. anodes). It could also be argued that the market for lead has shown that setting recycling efficiency and material recovery targets can be a major driver for investment in technological innovation and recycling capacity.

In terms of administrative costs, this measure is not expected to create any significant additional administrative burden, given that the basis for these provisions are already included in the Batteries Directive.

Given the high degree of uncertainty about future technological developments, it has proven difficult to quantify the exact environmental impact of the proposed measure. This is why the study underpinning this impact assessment opted to produce very conservative estimates, for example through the assumption of "closed loop recycling", i.e. processes in which only the materials recovered with a grade that would allow its use in battery manufacturing processes are considered as "recycled". In reality, open loop processes yield additional volumes of recovered materials, albeit not all at the same level of quality, and are less energy-intensive, resulting in additional environmental gains. However, even under the assumption of closed loop recycling, the proposed measure is estimated to yield environmental benefits in terms of greenhouse gas savings, abiotic depletion and human toxicity. In any case, the overall environmental impact of producing secondary raw materials (i.e. recycling) are lower for most environmental indicators (e.g. energy and water intensity, resource use, toxicity). For example, in the production of primary lithium, data indicate that 400 litres of water are needed to produce one kilo of lithium 83 .

This measure meets both criteria of feasibility and stakeholder acceptance. It is considered feasible because the targets set are based on what is technically achievable. The stakeholder consultation has shown that there is a general recognition that current values of recycling efficiency are not resulting in an increase in material recovery and that the lack of a specific recycling efficiency value for lithium batteries does not incentivise the deployment of this sector. For many stakeholders, legal obligations would stimulate the innovation needed.

Measure 6: Carbon footprint of rechargeable industrial and EV batteries

Measure 6 proposes provisions to deal with the issue of batteries' carbon footprint. Option 2 proposes to do this by means of a mandatory carbon footprint declaration, while Option 3 proposes setting carbon footprint performance classes and maximum carbon thresholds for batteries as a condition for batteries to be placed on the EU market. No Option 4 was considered for this measure.

In terms of environmental impact, life-cycle analyses suggest that the production phase is a significant contributor to life-cycle GHG emissions of lithium-ion batteries. Setting commonly accepted carbon footprint rules and datasets for EV and industrial batteries will provide an incentive for market differentiation based on the relative carbon intensity of batteries. This is expected to prompt manufacturers to choose greener electricity providers/contracts, which will contribute to the process of decarbonising electricity generation. It is not technically possible to quantify this environmental benefit but it is estimated to be higher for Option 3 than for Option 2.

Quantifying the economic impact of Measure 6 on battery prices has not been feasible since no methodology is available to estimate the effect of this regulatory proposal in isolation from other cost drivers. More analysis is needed and any introduction of maximum carbon thresholds via secondary legislation will be subject to a proportionate and dedicated impact assessment. As a proxy indication, manufacturer feedback indicates a willingness to pay premium prices to secure renewable electricity generation for their factories in order to lower the carbon footprint of battery production and thus attain green credentials.

The administrative costs of Measure 6 would be relatively low, equivalent for Options 2 and 3. One-off costs per “battery type” would be in the range of €100–5 000, depending on the availability of the company-specific data needed and consultancy costs. Additional verification costs would be €2 000-7 000 per battery type with small follow-up costs on top. Overall, assuming that on average 50 producers would be subject to this provision, the total cost for industry would be in a range of €500 000-3 000 000, with some costs for support in the Commission.

Stakeholder support for Measure 6 is significant. Almost 54% of respondents to the public consultation supported a reporting obligation on all environmental impact categories of batteries’ life cycle, including climate change. Environmental NGOs view this measure as a lever to push further for the decarbonisation of economic activity. . Battery manufacturers support this measure, as long as the carbon declaration rules are clear and widely accepted, and they are already taking steps to be ready for carbon transparency.

Further developing Measure 6 relies on the availability of a battery database or a battery passport, or both, to collect market information on the relative carbon content of battery cells/modules placed on the market. This is even more necessary for Option 3, which constitutes a market restrictive measure, so the thresholds would need to be set carefully, to avoid creating unintended supply restrictions. The Commission will facilitate this measure by providing battery databases and battery passports, to enable data collection and transmission (see Measure 12 for further details).

Measure 7: Performance and durability of rechargeable industrial and EV batteries

Measure 7 proposes bringing in information requirements on battery performance and durability (Option 2) or setting minimum thresholds as a condition for placement on the EU market (Option 3). No Option 4 was considered for this measure.

Option 2 would bring in a requirement to provide information on battery characteristics such as capacity, internal resistance, energy round-trip efficiency or estimated lifetime (before significant degradation). This will facilitate the establishment of a level playing field and better enable economic operators to take informed decisions. By removing uncertainty from transactions, it will help generate economic value.

Supporting harmonised standards or technical specifications would be required to measure and describe the performance parameters. Meeting these standards or specifications would be unlikely to cause additional economic impact for battery manufacturers/importers as they already measure these parameters as part of their internal quality controls and their contractual obligations. It may, however, give rise to some administrative costs for public authorities related to verification of the information requirements, which may involve testing batteries in laboratories.

Option 3 would be more effective than Option 2 by removing the worst performing batteries from the market in terms of performance and durability. This option would impose some economic costs on battery manufacturers, for example if they need to adapt certain manufacturing processes and choice of materials. The administrative costs for industry should be similar to those in Option 2, or slightly higher due to the need to calculate minimum characteristics, and more stringently verify compliance. For battery users, however, it should generate economic benefits (e.g. by providing better value for money).

Similarly to Measure 6 on batteries' carbon footprint, Measure 7 should lead to a switch in the market towards better performing batteries, and to a lower environmental impact. Option 3, setting minimum performance thresholds, would have additional environmental benefits over and above Option 2, by reducing the supply of under-performing batteries.

Option 2 for Measure 7 on performance and durability could be a first step in defining minimum performance requirements (Option 3) at a later stage. In itself, it is unlikely to make a significant difference in the market in the short term. Standardisation work triggered in parallel should help draw up minimum requirements in the medium term (3-5 years), once proper measurement methods for performance are in place. Over the same timeframe, it will be possible to build a publicly accessible data bank of real-life performance data, to enable fit-for-purpose measurement methods and accurate minimum requirements.

Most environmental NGOs support setting minimum performance requirements. Battery manufacturers on the other hand generally prefer information requirements over minimum performance requirements, as they claim this gives them greater freedom in the design of batteries for different applications.

Measure 8: Non-rechargeable portable batteries

The purpose of Measure 8 on non-rechargeable batteries is to address the problem of their environmental impact. To this end, Option 2 proposes to bring in performance and durability requirements with the aim of ensuring minimum quality levels. Option 3 and Option 4 go a step further and propose a partial (general purpose batteries only) or a total phase out of non-rechargeable batteries.

The economic impact of Option 2 would be limited. For consumers, it may bring some economic benefits by enabling consumers to identify the best value for money battery (by providing information on performance and durability (in low-drain appliances)) or by making the long-term economic benefit of rechargeable batteries more obvious (in high-drain appliances). For producers and public authorities, Option 2 would generate some administrative costs – for the development of standards and a market surveillance system – which are considered to be relatively low. As a benefit, this option would also level the playing field for producers of batteries with better performance and durability.

The environmental impacts of Option 2 would depend on the performance categories and criteria set. Similar experiences with, for example, eco-design requirements show that this can be a very effective measure to steer the market towards products that have a better environmental performance.

For stakeholders, Option 2 is the preferred option over Options 3 and 4. A stakeholder group representing producers of portable batteries has expressed positive views on minimum quality standards and identified the existing IEC standard 60068-2 as a good starting point.

The impacts of Options 3 and 4 would be much more far-reaching, because they would lead to the total or partial phasing out of primary batteries. Depending on the device in which they are used, this would result in a shift to removable rechargeable batteries or a need to replace the device. This will have significant implications for the producers and recyclers of primary batteries (loss of business) and for the producers of the devices that would need to be redesigned. In the long term, the economic impacts for consumers may be positive, though in the short term they may need to buy new rechargeable batteries, chargers and/or new devices.

The assessment of the environmental impacts of phasing out primary batteries is a complex matter, because it depends on a multitude of factors, such as the appliances they are used in (high drain vs low drain), the batteries' chemistries, the number of recharge cycles. For this reason, the evidence and data on this topic is relatively scarce. There are indications that rechargeable batteries may be preferable from an environmental point of view for high consumption devices such as cameras, torches, and electronic toys, because these devices should allow for a number of charge cycles that is required as a minimum (50-150) to lead to a significant reduction of the environmental impact indicators across the batteries' life cycle.

Given the far-reaching negative impacts of Options 3 and Option 4, they are opposed by EU producers and recyclers of primary batteries.

Measure 9: Recycled content

Measure 9 on recycled content proposes a number of provisions that aim to stimulate the development of cost-efficient technologies that can deliver battery-grade recycled material, with a view to ensuring their use for the manufacturing of lithium and lead-acid batteries.

As explained in Section 2, lithium recovery is not yet cost-efficient, and in the absence of technologies that can produce battery-grade lithium and other substances, there is a risk that the supply of (low-grade) secondary lithium would significantly exceed demand. Based on experience with recycling and recovering other materials, it has been shown that legislative requirements can be a means to overcome the "valley of death". It gives the market legal certainty to invest in technologies that would otherwise remain undeveloped because they cannot become cost-competitive due to market failures. This is the rationale for proposing under Measure 9 to bring in a mandatory declaration of recycled content for industrial batteries by 2025 (Option 2) and to bring in mandatory levels for key materials in industrial batteries by 2030 and 2035 (Option 3). No Option 4 was considered for this measure.

Table 6 sets out the current level (baseline) and proposed targets for recycled content for lithium, cobalt, nickel and lead in 2030 and 2035 (Option 3).

In terms of the economic impact of Option 2, there are no precedents to draw on to estimate the cost of bringing in a declaration of recycled content in a regulatory context. Since this presents a similar level of complexity as Measure 6 (carbon footprint declaration), the expected calculation costs per battery type would be in the range of €100-5,000, plus verification costs estimated to be in the range of €2000-7000 per battery type, an approximate total of €2100-12000 per battery type. Assuming that by 2025 the declaration of recycled content would apply to approximately 250 lithium-ion battery types (domestically produced plus imported) and approximately 340 lead-acid battery types (idem), the total (one-off) cost of this obligation for industry would be in a range of €1 180 000 and €7 080 000 (see Annex 9 for more details). For public authorities, this would also require some additional resources for market surveillance authorities to enforce this new obligation.

Table 6: Proposed minimum levels of recycled content in lithium batteries

Baseline

Target

Target

Recycled content 2020

Recycled content 2030

Recycled content 2035

Lithium

0%

4%

10%

Cobalt

0%

12%

20%

Nickel

0%

4%

12%

Lead

67%

85%

-

Option 2 is an intermediate step towards Option 3, setting mandatory targets for recycled content for lithium, cobalt, nickel and lead in 2030 and 2035. The main benefit is that they would provide long-term investment certainty to recyclers, which is a necessary incentive to invest in recycling technologies that will contribute to promoting the circular economy and mitigating the supply risk for certain materials.

Setting mandatory recycled content targets will also generate environmental benefits. Adopting this measure could save a cumulated total of about 2.3 million tonnes of CO2-eq by 2035, compared to the baseline situation, with similar results for resource depletion and human toxicity.

Stakeholder views on this measure are mixed. Some manufacturers of large EV batteries are against it because they consider that there will not be enough secondary raw materials to meet the criteria due to the expected exponential demand for battery materials over the coming years. Other manufacturers in the same sector not only accept the positive benefit of these measures but also commit to delivering products that go beyond the levels discussed here.

Measure 10: Extended producer responsibility

Measure 10 on extended producer responsibility (EPR) builds on the already set out in the Batteries Directive, but proposes setting better-defined and more specific EPR obligations and to set minimum standards for producer responsibility organisations (PROs). This measure does not give a high ambition option since it mostly involves fine-tuning existing provisions in the Batteries Directive.

On extended producer responsibility, this measure proposes clearer EPR requirements for dismantling, collecting, transporting and recycling traction batteries of electric vehicles (EV) and for private energy-storage systems, and to specify obligations on a subset of industrial batteries such as "batteries sold to private costumers and / or used in non-industrial contexts". The aim is to ensure that, in line with the EPR principles, producers cover the costs of dismantling, safe storage, logistics and recycling waste industrial batteries and facilitate higher collection rates of, for example, batteries used in light transport or energy small storage applications. In this way, it would not be up to the end user to cover these costs.

For producers of traction batteries, the cost or reporting obligations would not change significantly compared to the current situation. The benefit of the measure would be in levelling the playing field by allocating clear responsibilities for the cost of end-of-life battery management and ensuring that producers that exit the market before batteries have reached their end-of-life will have contributed their due share.

For PROs that currently do not collect privately owned industrial waste batteries, the costs will increase as a result of the additional volume of batteries they need to accept (potentially from new collection points, i.e. e-bike shops), although these costs will of course in part be compensated by increased revenue from recycled materials. Some extra administrative costs may arise for data collection, reporting and auditing, but they are expected to be negligible.

The environmental impact of the redefined EPR requirements for EV batteries and private energy-storage systems could not be quantified, because the Batteries Directive includes an implicit 100% collection target. The improved allocation of responsibilities would, however, facilitate improved enforcement and may be an additional trigger to opt for second-life use of traction batteries. By contrast, the new EPR requirement for e-bikes is estimated to increase their collection rate significantly compared to the baseline, and thus to reduce GHG emissions.

In terms of stakeholder acceptance, consumer organisations and environmental NGOs have consistently supported the adoption of measures ensuring that industrial batteries held by private actors are collected and recycled properly. Stakeholder groups representing industry, by contrast, are not necessarily convinced of the need to make the EPR obligations more specific.

Regarding producer responsibility organisations, this measure proposes a requirement for PROs within a Member State to coordinate their awareness raising campaigns plus a requirement to assess the distribution of collection points (network density, convenience, accessibility). The aim is to increase the cost-effectiveness of PROs and to facilitate the increase in battery collection rates.

The economic impact of the requirements for PROs are expected to be minimal. PROs may incur some additional set-up costs, but they should be offset by a number of factors, such as increased revenue from increased collection, economies of scale and peer learning.

The environmental impact of the new requirements for PROs could not be quantified. They are expected to be positive through their contribution to increased collection rates.

This measure responds to a request from some PROs to ensure a level playing field within the internal market. Coordinated nationwide campaigns and standards were the preferred options, based on their proven effectiveness without distorting competitiveness.

Measure 11: Design requirements for portable batteries

Measure 11 covers design requirements for portable batteries aiming at facilitating their circularity at end-of-life (reduce, reuse, recycle). Option 2 includes a strengthened obligation on battery removability (compared to the current Article 11 in the Batteries Directive) and Option 3 proposes to add a new obligation on battery replaceability. Option 4, a requirement on interoperability – which in theory could trigger a reduction in the number of batteries needed to operate a certain number of appliances – was not analysed in further detail because of the far-reaching consequences it would have in terms of design and product compliance obligations (including liabilities).

In terms of environmental impact, Measure 11 would lead to an increase in the number of batteries recycled and appliances that can be repaired by facilitating removability and replaceability. WEEE would reach the treatment plants with lower volumes of non-removed batteries, expected to result in a fall in the number of safety accidents. This, in turn, would lead to a decrease in environmental pollution, such as emissions to air and water.

The economic costs of Measure 11 are considered to be negligible. Given that the costs of (re)design make up only a very small fraction of total production costs, it would not have a significant impact on producers. The fact that requirements will be clearer and easier to enforce would level the playing field for companies operating on the EU internal market. In terms of additional administrative burden, this measure is not expected to have a significant impact, given that a similar provision already exists under the Batteries Directive.

For recyclers, this Measure would generate benefits, including lower costs related to battery removal and fewer fires and safety incidents (linked to fewer lithium-ion batteries ending up in the wrong waste stream). Likewise, consumers would get net benefits in longer-life products (thanks to replaceable batteries) and easier repair. The latter is also expected to have an impact on employment: according to estimates from RREUSE, reuse and repair can create between 5 to 10 times more jobs than recycling. 84  

Based on similar requirements such as eco-design, this measure is considered to be feasible.

Stakeholder views vary, depending on the costs and benefits that this measure would entail. Manufacturers are generally of the opinion that the level of battery integration in a product should be a manufacturer’s decision, based on functionality, durability and safety considerations. Waste operators, consumer organisations and environmental groups however emphasise the positive environmental impacts and contribution the measure would make to facilitate reuse, repair and recycling.

Measure 12: Reliable information

Measure 12 includes a number of provisions that would provide more reliable and comparable information about batteries to economic operators. The goals of these provisions are multiple and depend on the type of batteries. They include avoiding regulatory differences between Member States, facilitating sustainable consumption choices, facilitating verification of compliance with legal requirements, facilitating the development of the second-life market and facilitating the sorting of batteries at their end-of-life.

Option 2 covers two provisions to ensure the provision of static information, both printed and online (e.g. through a QR code). The first provision (sub-measure a) is an extension of the existing labelling provision under the Batteries Directive, aimed at private consumers. It covers all basic information about a battery, such as the battery's chemistry, charging capacity and carbon footprint. The second provision (sub-measure b) covers more specialised information such as a detailed list of hazardous chemicals, standards, technical norms or any other guidance for dismantling and sorting, etc. The proposed digitalisation (included in both provisions) would help simplify administrative processes and reduce the cost of information.

The economic impact of Option 2 for manufacturers is estimated to be minor, as several battery manufacturers already provide additional information online to consumers and/or to registered dealers/repairers. The software to generate QR codes exists, as do the apps for users to read them. Essentially, the information is currently available to manufacturers, and it is just a question of them providing it systematically and transparently. For consumers, better information about batteries’ expected performance, durability and associated carbon footprint would enable them to take better-informed decisions and possibly to reduce the total cost of battery use and ownership. For recyclers, harmonised, improved labelling including accessible and more detailed information on battery chemistries would have a positive effect on the profitability of recycling, because it would improve battery sorting, the health and safety conditions of operations and even has the potential to increase the purity of the recyclable fraction.

In terms of environmental impact, this measure would stimulate a market shift towards more environmentally sound batteries by enabling consumers to take better-informed purchasing decisions. Consumers are increasingly aware of the environmental impact of their consumption and it is likely that more and more consumers will wish to know before they purchase batteries what they can expect in terms of and what choices they have in terms of the environmental impact of their purchase. Improved labelling of batteries would also contribute to better battery collection and recycling.

Option 2 is considered to be fully feasible, given that energy labels have been common in appliances for the last 15 years and are accepted as being useful. All stakeholders generally accept the provisions of this option.

Option 3, which is complementary to Option 2, proposes the creation of an electronic information exchange system (mostly based on the information generated by the provisions of Option 2), and for industrial and EV batteries also a battery passport scheme. The electronic information exchange system or battery dataspace would include static information, such as material composition by element (including recycled content and CRMs), information on dismantling and recycling (including the producer organisation that would finance the cost of collection and recycling), hazard and safety information, battery efficiency (consumer information) etc. This type of information applies to all models of batteries. The battery passport would generate a unique digital ID for each industrial and EV battery, which would ensure that each battery has an individual (digital) record holding static and dynamic information that would be added to throughout its lifecycle.

The economic and administrative costs of Option 3 for economic operators and public authorities would depend on how the battery passport and the supporting IT infrastructure is implemented. This would require a dedicated discussion with stakeholders and an assessment of the different implementation options, which exceeds the scope of this evaluation.

These costs can be justified by the economic and environmental benefits that the battery open dataspace and passport would generate, including optimising the operational life and the use of materials in batteries, facilitating the second-life battery market and improving the availability of data for recyclers. It would give public authorities a powerful tool to enforce the obligations in the proposed regulation, as well as a market intelligence tool to revise and refine the obligations in the future. Producers, recyclers and re-purposers could have first-hand information on the technical characteristics of the different models, and could anticipate the expected volume of batteries reaching the end-of-life.

In terms of feasibility, this option is ambitious and costly but not impossible. In January 2020, 42 global organisations expressed their support for the idea of an interoperable battery passport as proposed by the Global Battery Alliance 85 . This option is favoured in particular by the businesses that stand to reap more gains from creating a battery passport and a traceability management system, such as second-life battery operators and recyclers. By contrast, some battery manufacturers expressed concerns about the cost of developing and maintaining the battery database and the battery passport system.

Measure 13: Supply-chain due diligence for raw materials in industrial and EV batteries

For Measure 13, Options 2 and 3 propose bringing in either a voluntary or a mandatory supply-chain due diligence approach for raw materials in industrial and EV batteries. No Option 4 was considered for this measure.

Table 7  summarises the cost categories and the cost ranges provided by a study on the costs and benefits of due diligence carried out for the OECD 86 . The cost ranges include the cost of collecting information and reporting, IT systems and software, strengthening internal management systems, consulting and training and possibly audits and are relatively low.

Overall, the number of battery and vehicle manufacturers that would be directly affected by this obligation is estimated to be around 50. Extrapolating the OECD cost estimates gives a range of between €2-15 million in one-off costs and between €2-20 million in annual costs. The expected costs are commensurate with those identified by some of the studies carried out to quantify the cost of implementing the non-financing reporting Directive 87 (NFRD), which imposes greater obligations than due diligence in the supply chain. It found that the annual cost of non-financial reporting (at company level) ranged from €155,000-€604,000.

Table 7: Cost estimates related to supply-chain due diligence at company level 88  

Cost category

Typology

Cost range

One-off/recurring

Changes to corporate compliance policies and supply-chain operating procedures

Staff time

Consultants fees

Training

€3,150 to €205,000

One-off

Setting up the necessary IT systems

Procurement, installation and support of IT systems

€36,000 to €90,000

One-off

Data collection and verification

Staff time

Consultants fees

€12,600 to €72,000

Annual

Audits

Third-party fees

€13,500 to €22,500 for small companies

€90,000 for large companies

Annual

Carrying out due diligence and reporting

Staff time

Consultants fees

€12,500 to €365,000

Annual

For companies implementing a supply-chain due diligence framework, there are also economic benefits, which include the company’s improved knowledge of its operations and supply chain as well as its ability to detect problems and risks early. The prevention or/and mitigation of these risks reduces a company’s exposure to potentially high remediation costs that it could incur if the risk were not addressed and protects the company from long-term damage. These benefits may translate into increased transparency, credibility, reputation and public image and higher levels of trust in supply-chain partners.

The main social and environmental benefits of this measure could not be quantified. They include improving political and social stability for local operators and communities in conflict regions (including protecting human and labour rights), strengthening environmental aspects, reducing contamination and health issues. These benefits are expected to be greater for Option 3.

In terms of stakeholder views, 60% of respondents to the public consultation held in 2019 were in favour of setting reporting obligations on the responsible sourcing of raw materials. Multiple public stakeholder meetings and informal meetings held with stakeholders during the regulatory process indicated a fair degree of consensus on mandatory supply-chain due diligence provisions for battery manufacturers/importers, rather than a voluntary system.

8.Preferred option

Conclusions based on the analysis of the impacts of all options

Table 8  gives an overview of the analysis of the impacts as discussed in Section 7 and Annex 9. It summarises the conclusions on the economic and environmental impacts, on feasibility and on stakeholder acceptance. Table 9  gives an overview of the preferred option.

The preferred option is a combination of Option 2 and Option 3. The blend of the medium and high-level ambition options chosen would result in a balanced approach in terms of effectiveness (achievement of the objectives) and efficiency (cost-effectiveness). It would facilitate the EU's response to fast-changing market conditions and ambitiously support a switch towards a more low-carbon economy, without risking excessive costs or disruption.

The objective of Measure 1 on classification and definition is to clarify the current provisions on battery categories and update them in line with the latest technological developments (Option 2). The administrative changes to some provisions in the current Batteries Directive would improve the effectiveness of several other provisions, without generating any significant economic costs or administrative burden. Stakeholders have said that they fully accept this measure. The possibility to set a new methodology for the collection rates based on "available for collection" (Option 3) is proposed to be re-assessed through a review clause.

For Measure 2 on second life of industrial batteries the estimated economic and environmental benefits for Options 2 and 3 would be equivalent (assuming equal levels of market penetration). The administrative costs of Option 3 – in which batteries are not necessarily considered as waste at the end of their first life (only when the battery holder decides to discard the battery) – are significantly lower than those for Option 2. This is also why most stakeholders believe that Option 2 – in which batteries become waste, leading to extra costs for permits needed to deal with hazardous waste – would for many prevent the development of this technology since it would make it non-viable from an economic point of view. This is why the preferred option for this measure is Option 3.

For Measure 3 on a collection rate target for portable batteries, the preferred option is Option 2, a 65% collection target in 2025 and Option 3, a 70% target in 2030. These options are estimated to cost around €1.09 and €1.43 per capita per year respectively, to be financed through the mechanism of Extended Producer Responsibility. The reason for increasing the collection targets significantly compared to the baseline is twofold. First because the environmental benefits increase in a non-linear way due to the increased collection of lithium-ion batteries. Second because evidence shows that there are economies of scale and efficiency gains to be made. As a generally accepted principle, stakeholders accept higher collection targets as long as they are realistic and they have enough time to meet the targets. This is considered not to be the case for Option 4, a collection target of 75% by 2025.

The preferred option for Measure 4 is Option 2, a new reporting system for automotive and industrial batteries. This measure is not expected to give rise to any significant economic costs or administrative burden but they would result in increased collection rates. Option 3, a specific collection target for batteries used in means of light transport, is expected to lead to significant increase in collection rates. However, due to the need to first develop the "available for collection" methodology, this Option is proposed to be re-assessed through a review clause.

The preferred option for Measure 5 on recycling efficiencies and material recovery is Option 2, increasing the targets for lead-acid batteries and Option 3, bringing in new targets for lithium-ion batteries, cobalt, nickel, lithium and copper. Option 2 sets targets for 2025 based on what is currently technically feasible, while Option 3 sets targets for 2030 based on what will be technically feasible in the future. Due to the high degree of uncertainty on a number of variables, quantifying the economic and environmental impact of these options has proven difficult. Modelling estimates indicate that, even under the most conservative assumptions, it would have a positive impact.

For Measure 6 on the carbon footprint of EV batteries, the preferred option is Option 2, a mandatory declaration, possibly complemented, over time, once sufficient market knowledge has been acquired and once further assessment is carried out,, with Option 3, setting carbon footprint performance classes and maximum threshold values as a condition for the placement of batteries on the EU market. These options are essential to achieve the objective of carbon neutrality and environmental protection, which were set out for example in the as stated in the new Circular Economy Action Plan for a cleaner and more competitive Europe 89 . This will be carried out first by bringing about carbon footprint transparency and later on enable a verifiable regulatory framework to reward batteries with relatively lower carbon emissions.

For Measure 7 on the performance and durability of rechargeable industrial and electric-vehicle batteries, the preferred option is Option 2, bringing in information requirements in the short term. This would help harmonise the calculation and availability of performance and durability characteristics of batteries and hence enable consumers and businesses to take informed decisions. Once the necessary information is available and the standardisation work has been completed, it will be possible to introduce minimum performance requirements (Option 3) at a later stage. The Commission concluded this option is more effective in the long term to help the market switch to better-performing batteries, and so trigger a shift to a lower environmental impact.

For Measure 8 on non-rechargeable portable batteries, the preferred option is Option 2, setting electrochemical performance and durability parameters to minimise the inefficient use of resources and energy. These parameters will also be taken up by the labelling requirements that are covered by Measure 12 to inform consumers’ batteries' performance. With regards to Options 3 and 4 the conclusion is that there is currently insufficient evidence available to demonstrate the effectiveness and feasibility of a partial or complete phase out of non-rechargeable batteries. Producers and recyclers of non-rechargeable batteries are opposed to these two more ambitious options.

The preferred option for Measure 9 is both Option 2, bringing in a mandatory declaration of recycled content, in the short term, and Option 3, setting mandatory targets for recycled content for lithium, cobalt, nickel and lead in 2030 and 2035. The two options are complementary and would contribute to providing a predictable legal framework that would encourage market players to invest in recycling technologies that would otherwise not be developed because they are not cost-competitive with the production of primary raw materials.

For Measure 10 on extended producer responsibility and producer responsibility organisations, no high level ambition option was proposed since it mostly involves fine-tuning existing provisions under the Batteries Directive. The proposed measure would level the playing field for EPR schemes for EV and industrial batteries that are currently classified as industrial batteries and for PROs for portable batteries. The economic costs of this measure are expected to be negligible and largely offset by the environmental benefits of increased collection rates.

For Measure 11 on design requirements for portable batteries the preferred option is a strengthened obligation of battery removability (Option 2) and a new obligation of battery replaceability (Option 3). The economic costs of these options are negligible, while they will generate environmental benefits and resource savings. It will do so by facilitating the reuse, repair and recycling of batteries and the appliances in which they are integrated.

For Measure 12 on the provision of reliable information, a combination of both Option 2 and Option 3 is preferred. Option 2, bringing in a printed and an online labelling system providing basic and more tailored information is preferred because it would help provide better information to consumers and end users and stimulate a market shift towards more environmentally sound batteries. The principle of Option 3, an electronic exchange system and battery passport, as proposed by the Global Batteries Alliance, is accepted by several global organisations. The electronic exchange system will have a one-off administrative cost for setting it up, but will lead to administrative simplification and lower implementation costs in the long term. The battery passport should furthermore enable second life operators to take informed business decisions and allow recyclers to better plan their operations and improve their recycling efficiencies.

For Measure 13 on due diligence for raw materials, the preferred option is Option 3, a mandatory approach. There is a fair degree of consensus among stakeholders that this option would be more effective in reducing the social and environmental risks related to raw material extraction.

Table 8: Overview of the analysis of the impacts of all options

Measure

Option 2

Option 3

Option 4

Economic impact

Environmental impact

Feasibility & acceptance

Economic impact

Environmental impact

Feasibility & acceptance

Economic impact

Environmental impact

Feasibility & acceptance

1. Classification and definition

~0

+

+

~0

~0

+

/

2. Second-life of industrial batteries

+

+

-

+

+

+

/

3. Collection rate target for portable batteries

-

+

++

- -

++

+ & -

- -

++

-

4. Collection rate target for industrial batteries

+

+

+

+ & -

+

+ & -

+

+

-

5. Recycling efficiencies and materials recovery

+ & -

+

+

+& -

+

+

/

6. Carbon intensity of industrial batteries

+ & -

+

++

+ & -

++

+

/

7. Performance and durability of rechargeable batteries

+ & -

+

+ & -

+ & -

++

+ & -

/

8. Non-rechargeable batteries

-

+

+

- -

?

-

- -

?

- -

9. Recycled content of industrial batteries

-

~0

+

+ & -

+

+ & -

/

10. Extended producer responsibility

+ & -

+

+

/

/

11. Design requirements for portable batteries

+

+

+ & -

+

+

+ & -

-

~0

-

12. Provision of reliable information

+

+

+

+ & -

+

+ & -

/

13. Supply-chain due diligence requirements for raw materials in industrial batteries

-

~0

+

-

+

+

/

Legend: green = preferred option; light green = preferred option pending a revision clause; all symbols indicate impact relative to the baseline situation, with "+ & -" = positive and negative impacts, "~0" = negligible, and " ?" = further assessment needed

Table 9: Preferred option

Measures

Option 2 - medium level of ambition

Option 3 - high level of ambition

Option 4 – very high level of ambition

1. Classification and definition    

New category for EV batteries

Weight limit of 5 kg to differentiate portable from industrial batteries

 New calculation methodology for collection rates of portable batteries based on batteries available for collection

/

2. Second-life of industrial batteries

At the end of the first life, used batteries are considered waste (except for reuse). Repurposing is considered a waste treatment operation. Repurposed (second life) batteries are considered as new products which have to comply with the product requirements when they are placed on the market

At the end of the first life, used batteries are not waste. Repurposed (second life) batteries are considered as new products which have to comply with the product requirements when they are placed on the market.

Mandatory second life readiness

3. Collection rate for portable batteries

65% collection target in 2025

70% collection target in 2030

75% collection target in 2025

4. Collection rate for automotive and industrial batteries

New reporting system for automotive, EV and industrial batteries

Collection target for batteries powering light transport vehicles

Explicit collection target for industrial, EV and automotive batteries

5. Recycling efficiencies and recovery of materials

Lithium-ion batteries and Co, Ni, Li, Cu:

Recycling efficiency lithium-ion batteries: 65% by 2025

Material recovery rates for Co, Ni, Li, Cu: resp. 90%, 90%, 35% and 90% in 2025

Lead-acid batteries and lead: 

Recycling efficiency lead-acid batteries: 75% by 2025

Material recovery for lead: 90% in 2025

Lithium-ion batteries and Co, Ni, Li, Cu:

Recycling efficiency lithium-ion batteries: 70% by 2030

Material recovery rates for Co, Ni, Li, Cu: resp. 95%, 95%, 70% and 95% in 2030

Lead-acid batteries and lead: 

Recycling efficiency lead-acid batteries: 80% by 2030

Material recovery for lead: 95% by 2030

/

6. Carbon footprint for industrial and EV batteries

Mandatory carbon footprint declaration

Carbon footprint performance classes and maximum carbon thresholds for batteries as a condition for placement on the market

/

7. Performance and durability of rechargeable industrial and EV batteries

Information requirements on performance and durability

Minimum performance and durability requirements as a condition for placement on the market

/

8. Non-rechargeable portable batteries

Technical parameters for performance and durability of portable primary batteries

Phase out of portable primary batteries of general use

Total phase out of primary batteries

9. Recycled content in industrial, EV and automotive batteries

Mandatory declaration of levels of recycled content, in 2025

Mandatory levels of recycled content, in 2030 and 2035

/

10. Extended producer responsibility

Clear specifications for extended producer responsibility obligations for industrial batteries

Minimum standards for PROs

/

/

11. Design requirements for portable batteries

Strengthened obligation on removability

New obligation on replaceability

Requirement on interoperability

12. Provision of information

Provision of basic information (as labels, technical documentation or online)

Provision of more specific information to end-users and economic operators (with selective access)

Setting up an electronic information exchange system for batteries and a passport scheme (for industrial and electric vehicle batteries only)

/

13. Supply-chain due diligence for raw materials in industrial and EV batteries

Voluntary supply-chain due diligence

Mandatory supply chain due diligence

/

Legend: Green = preferred option; light green = preferred option pending a revision clause; italics = discarded at an early stage

Regulatory burden and simplification

In terms of the overall regulatory burden, although the financial costs and benefits of the overall package is uncertain, it appears likely that it would not have a significant impact on the price of batteries.

The current annual market volume of the EU batteries market is €12 billion and set to grow. The impact assessment shows that the cost of the legislative proposal is mostly determined by the cost of the collection target for portable batteries, which is estimated to be EUR 1.09 per capita per year. Adding this up to the cost estimates of the measures for which there are currently no provisions in the Batteries Directive, like for example the measures on second life, carbon footprint, supply chain due diligence etc, for which the impact assessment shows that the regulatory cost is negligible – a prudent estimate for the regulatory cost of the entire package would be around EUR 500 million per year (not taking into account the investment costs for Measure 5 on recycling efficiencies and material recovery).

Cost estimates are in any case highly uncertain as markets and technologies are still developing and likely to become more efficient. Likewise it is rather difficult to monetise the environmental benefits or the improvements in batteries' efficiency and performance.

Three further qualifications can be made regarding the administrative burden and simplification potential related to this policy proposal:

1)The evaluation of the Batteries Directive 90 found that “Implementing the Directive involves necessarily complex procedures that could sometimes entail significant costs for local authorities. However, national administrations do not perceive that implementing the Directive results in unnecessary regulatory burdens.”

2)This policy proposal includes several measures that cover areas identified in the evaluation of the Batteries Directive where the lack of harmonisation or insufficiently detailed provisions leads to sub-optimal outcomes in terms of a level playing field and cost-efficiency (e.g. producer responsibility organisations). Likewise, it includes a number of measures that ensure that the regulatory environment is up-to-date and fit for purpose to adapt to technological novelties, such as EV batteries, light transport vehicles or second-life industrial batteries.

3)This policy proposal makes maximum use of the potential of digitalisation to reduce administrative costs. To this end, Measure 12, for example, proposes setting up an electronic information exchange system or battery dataspace of information on every portable and industrial battery model placed on the market and a battery passport for each industrial battery placed on the market. Although developing this tool would entail some costs to both the Commission and to economic operators, it would provide Member State authorities and the Commission with a powerful tool to enforce the obligations in the proposed regulation, as well as a market intelligence tool to feed into future revisions and refinements of the obligations.

Future proofing

Future proofing legislation means striking a proper balance between predictability and legal certainty and allowing the sector to respond to technological progress. This is especially important for the battery sector, which is undergoing fast-changing demand, and innovation in battery characteristics and performance. Careful consideration has been taken of the market and of Europe’s research agenda (see Annex 8) in particular, so the revision is careful to avoid being overly prescriptive / restrictive in order to support innovation.

The proposed Regulation has two features that should combine to make the policy framework future proof and innovation friendly:

1)All measures except Measure 11 on design requirements for portable batteries would be further fleshed out in secondary legislation, which would facilitate adaptability and regulatory responsiveness in line with technological and market developments.

2)For some measures, the impact analysis found that an incremental approach is the most suitable. For instance, this is the case for the discussion on performance and durability requirements, which involves setting information obligations as the first step and then setting or enforcing limit values later on when more information is available.

International competitiveness

An assessment of the economic impact demonstrates that the proposed regulation would not affect production costs in a significant manner. The proposed Regulation would thus not affect the EU's international competitiveness.

Requirements would apply in a proportionate manner both to European producers and to importers, and would be consistent with the EU’s international obligations. Likewise, European producers would not be disadvantaged in their ability to function inside or outside Europe.

9.Monitoring and evaluation

Arrangements

The aim of the proposed change to the classification of batteries is to update the existing rules to ensure they cover all batteries, including possible new battery types. Monitoring arrangements would need to ensure that the new measures are implemented and enforced as intended.

Setting a new collection rate target for portable batteries requires monitoring the collection rate in Member States. This was set up for the current target of 45% and involved Eurostat collecting information from Member States on a yearly basis. Setting a new target would therefore not entail additional reporting obligations.

Creating a reporting system for automotive and industrial batteries requires collecting information that is already generated at national level. Moreover, for automotive and EV batteries, the reporting system could be built on top of the system set up by the End-of-life Vehicles Directive.

The recycling efficiency target for lithium batteries is set at 65% starting in 2025. Eurostat has collected data on recycling efficiencies for lead, cadmium and other batteries on a yearly basis since 2014. It would therefore be a minor addition to include the recycling efficiency of lithium to the established data collection procedure.

The obligation to report the carbon footprint associated with the overall lifecycle (excluding the use phase) of batteries placed on the market requires developing an IT tool that allows manufacturers to enter the information directly. The Commission intends to offer a web-based tool and free access to the libraries of secondary datasets to facilitate the process of calculating carbon footprint, based on the adopted rules. The data submitted could be used to set benchmarks for GHG emissions, to assess whether bringing in classes of GHG intensity performance would be useful to improve the carbon footprint and environmental performance of batteries and to assess the need for additional incentives and/or market conditionality measures.

Similarly, the obligation to provide information on performance and durability should form part of the technical documentation. Depending on the type of battery, this information should also be made available online in a battery database and/or in the battery passport.

The obligation for producers to provide information on the volume of recycled content would follow a harmonised methodology.

Provisions on the carbon footprint and recycled content declarations, and on the due diligence policy for the responsible sourcing of raw materials would require third-party verification, in principle, via notified bodies.

National market authorities would be responsible for checking the validity of the information provided to fulfil all the obligations in the regulation. The regulatory proposal would include the option for the Commission to carry out additional compliance checks, as it does for type-approval legislation for vehicles.

What would success look like?

The aim of the monitoring arrangements detailed above is to collect factual data on the implementation of the new provisions on batteries. This would help assess whether the new provisions achieve the intended objectives and help identify any unintended consequences.

As part of a future evaluation of the new rules, the Commission would expect to observe the following improvements as a measure of the success of the new rules:

·Quality of batteries: increased quality of primary batteries placed on the market;

·Raw materials: better recycling efficiency and better material recovery for nickel, cobalt, lithium and copper (batteries would contain a higher degree of recycled and recovered materials);

·Collection: more portable and industrial batteries collected and recycled at a lower unit cost; light personal transport batteries would also be collected and all industrial batteries would be counted, tracked and reported;

·Recycling: all collected batteries would be recycled. The recycling processes would be highly efficient and pose lower occupational health and safety risks, contributing to supplying materials to the battery industry and reducing the environmental burden of their production from raw materials;

·Information: end users would have better and more accessible information on the batteries they buy: what they are made of, how they will perform (including expected durability) and how their production meets environmental and social standards;

·Health, environmental and social impacts: all industrial batteries would have a calculation of their CO2 footprint and manufacturers of industrial lithium batteries, except light personal transport batteries, would also provide information on responsible sourcing;

·EU batteries market: battery manufacturers would have a clear and predictable legal framework that supports innovation and competitiveness in a growing market.

(1)

     World Economic Forum and Global Batteries Alliance, A vision for a sustainable battery value chain in 2030: Unlocking the potential to power sustainable development and climate change mitigation, 2019.

(2)

     Figures from COM(2018) 293.

(3)

     Annex to COM(2018)293 final.

(4)

     COM(2019)166 and SWD(2019)1300.

(5)

     COM(2019)640 final.

(6)

     COM(2020)98 final.

(7)

     COM(2020)102 final.

(8)

     COM(2020)456 final.

(9)

      https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6705 .  

(10)

     COM/2020/474 final.

(11)

      https://ec.europa.eu/docsroom/documents/42881 and https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020DC0474

(12)

      https://www.consilium.europa.eu/media/40928/st12791-en19.pdf  

(13)

      https://www.consilium.europa.eu/media/45910/021020-euco-final-conclusions.pdf  

(14)

     European Parliament Committee on Committee on Industry, Research and Energy (2020) 'Report on a comprehensive European approach to energy storage', (2019/2189(INI)), https://www.europarl.europa.eu/doceo/document/A-9-2020-0130_EN.html .  

(15)

      https://www.eib.org/en/press/all/2020-121-eib-reaffirms-commitment-to-a-european-battery-industry- to- boost-green-recovery.

(16)

     SWD(2019)1300.

(17)

   The Directive has been amended several times: in March 2008 (Directive 2008/12/EC, L 76, 19.3.2008), November 2008 (Directive 2008/103/EC, L 327, 5.12.2008), November 2013 (Directive 2013/56/EU L 329, 10.12.2013) and June 2018, (Directive 2018/849/EU, OJ L 150, 14.6.2018).

(18)

     Directive 2010/75 on industrial emissions.

(19)

     World Economic Forum and Global Batteries Alliance, A vision for a sustainable battery value chain in 2030: Unlocking the potential to power sustainable development and climate change mitigation, 2019.

(20)

     Comparing different powertrains running on different fuels.

(21)

     E4Tech, Determining the environmental impacts of conventional and alternatively fuelled vehicles through LCA, 2020, study commission by the European Commission

(22)

   Avicenne, The Rechargeable Battery Market and Main Trends 2017–2025, 2018.

(23)

     In 2018, over 70% of world rechargeable energy charging capacity was provided by lead-acid batteries.

(24)

     World Economic Forum and Global Batteries Alliance, A vision for a sustainable battery value chain in 2030: Unlocking the potential to power sustainable development and climate change mitigation, 2019.

(25)

     Compound annual growth rate (CAGR) is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period.

(26)

     These forecasts are in line with the conclusions of a recent JRC report, see Tsiropoulos, I., Tarvydas, D., Lebedeva, N., Li-ion batteries for mobility and stationary storage applications – Scenarios for costs and market growth, doi:10.2760/87175, JRC113360.

(27)

     European Environment Agency (2019), Electric vehicles as a proportion of the total fleet, at

https://www.eea.europa.eu/data-and-maps/indicators/proportion-of-vehicle-fleet-meeting-4/assessment-4 (accessed on the 11 March 2020).

(28)

     Global Battery Alliance & World Economic Forum, A Vision for a Sustainable Battery Value Chain in 2030, 2019.

(29)

     ENV Study 2020.

(30)

     Study report to support the impact assessment.

(31)

     Global Battery Alliance & World Economic Forum, A Vision for a Sustainable Battery Value Chain in 2030, 2019.

(32)

     Mathieu, Carole, The European Battery Alliance is moving up a gear,

https://energypost.eu/the-european-battery-alliance-is-moving-up-a-gear/ , 2019.

(33)

     Based on announced investments at the time of writing.

(34)

     VITO, Fraunhofer and Viegand Maagøe, Study on eco-design and energy labelling of batteries, 2019.

(35)

     Steen, M et al., EU Competitiveness in Advanced Li-ion Batteries for E-Mobility and Stationary Storage Applications – Opportunities and Actions, JRC Science for Policy Report, doi:10.2760/75757, 2017.

(36)

     Steen et al., EU Competitiveness in Advanced Li-ion Batteries for E-Mobility and Stationary Storage Applications – Opportunities and Actions, JRC Science for Policy report, 2017.

(37)

     D. T. Blagoeva et al., Assessment of potential bottlenecks along the materials supply chain for the future deployment of low-carbon energy and transport technologies in the EU, 2017.

(38)

     EC Report on Raw Materials for Battery Applications, CSWD(2018)245/2 final.

(39)

     World Economic Forum and Global Batteries Alliance, A vision for a sustainable battery value chain in 2030: Unlocking the potential to power sustainable development and climate change mitigation, 2019.

(40)

     ‘Battery second life: Hype, hope or reality? A critical review of the state of the art’, Renewable and Sustainable Energy Reviews 93, 2018, p.701-718.

(41)

     Hagelüken, "The recycling of (critical) metals", in The Critical Metals Handbook, John Wiley & Sons, 2014.

(42)

     European Innovation Partnership on Raw Materials, Raw Materials Scoreboard, 2016.

(43)

     World Economic Forum and Global Batteries Alliance, A vision for a sustainable battery value chain in 2030: Unlocking the potential to power sustainable development and climate change mitigation, 2019.

(44)

     See e.g. Mathieux, F., et al. (2017). Critical raw materials and the circular economy - Background report (Issue December). https://doi.org/10.2760/378123 ; Matos C.T, et al "Material System Analysis of five battery-related raw materials: Cobalt, Lithium, Manganese, Natural Graphite, Nickel," doi: 10.2760/519827, JRC119950. In Press.

(45)

     European Innovation Partnership on Raw Materials, Raw Materials Scoreboard, 2018.

(46)

     European Innovation Partnership on Raw Materials, Raw Materials Scoreboard, 2018.

(47)

     Assuming a 95% rate of recycled co-content.

(48)

     Study underpinning the evaluation of the Batteries Directive.

(49)

     Data from Eurostat.

(50)

     According to Commission Regulation 493/2012, ‘recycling efficiency’ of a recycling process means the ratio obtained by dividing the mass of output fractions accounting for recycling by the mass of the waste batteries and accumulators input fraction expressed as a percentage.

(51)

     Mayyas A., Steward D. and Mann M., ‘The case for recycling: Overview and challenges in the material supply chain for automotive li-ion batteries’, Sustainable Materials and Technologies 17, e00087, 2018.

(52)

     Study on the EU's list of Critical Raw Materials (2020) Critical Raw Materials Factsheets

(53)

     Study on the EU's list of Critical Raw Materials (2020) Critical Raw Materials Factsheets.

(54)

     Ziemanna S., Müllerb D.B., Schebekc L. and Weila M., ‘Modeling the potential impact of lithium recycling from EV batteries on lithium demand: A dynamic MFA approach’ Resources, Conservation & Recycling 133, 2018, p.76–85.

(55)

     World Economic Forum and Global Batteries Alliance, A vision for a sustainable battery value chain in 2030: Unlocking the potential to power sustainable development and climate change mitigation, 2019.

(56)

      http://www.prosumproject.eu , a Horizon 2020 project financed by the EU.

(57)

     EuRIC quoted in the consultant's report.

(58)

     Tecchio, P., Ardente, F., Marwede, M., Christian, C., Dimitrova, G. and Mathieux, F., 'Analysis of material efficiency aspects of personal computers product group' – JRC Technical Report, 2019.

(59)

     Meshram, P., Pandey, B. D. & Mankhand, T. R. (2013) 'Extraction of lithium from primary and secondary sources by pre-treatment, leaching and separation: a comprehensive review', Hydrometallurgy 150, 2014, p.192–208.

(60)

     Tedjar, F. (2018) in Challenge for Recycling Advanced EV Batteries.

(61)

     H. Stahl et al., ‘Study in Support of Evaluation of the Directive 2006/66/EC on Batteries and Accumulators and Waste Batteries and Accumulators’, 2018.

(62)

   Huisman, J., Ciuta, T., Mathieux, F., Bobba, S., Georgitzikis, K. and Pennington, D., RMIS, Raw materials in the battery value chain, Publications Office of the European Union, Luxembourg, ISBN 978-92-76-13854-9, doi:10.2760/239710, JRC118410, 2020.

(63)

     See e.g. ‘Amnesty challenges industry leaders to clean up their batteries’, Interconnected supply chains: a comprehensive look at due diligence challenges and opportunities sourcing cobalt and copper from the Democratic Republic of the Congo, OECD, 2019. ( https://www.amnesty.org/en/latest/news/2019/03/amnesty-challenges-industry-leaders-to-clean-up-their-batteries/ ).

(64)

     Mancini, L., Eslava, N. A., Traverso, M., Mathieux, F., ‘Responsible and sustainable sourcing of battery raw materials’, JRC Technical Report, 2020.

(65)

     Regulation (EU) 2017/821.

(66)

     A study on due diligence requirements through the supply chain funded by the Commission (Directorate General for Justice and Consumers), Study on due diligence requirements through the supply chain, https://op.europa.eu/en/publication-detail/-/publication/8ba0a8fd-4c83-11ea-b8b7-01aa75ed71a1/language-en , January 2020.

(67)

     Examples include the Initiative for Responsible Mining Assurance (IRMA), Certification of Raw Materials (CERA), the Responsible Minerals Initiative (RMI), the Cobalt Industry Responsible Assessment Framework (CIRAF) etc. For more detailed information, see Annex 9.

(68)

     MSI Integrity (2020) "Not Fit-for-Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Global Governance" - http://www.msi-integrity.org/not-fit-for-purpose/ .

(69)

      https://www.prnewswire.com/news-releases/camera-and-battery-features-continue-to-drive-consumer-satisfaction-of-smartphones-in-us-300466220.html .  

(70)

      https://www.digitaltrends.com/mobile/j-d-power-consumers-most-dissatisfied-with-smartphone-battery-life/ .  

(71)

     Bobba, S. et al., ‘Life Cycle Assessment of repurposed electric vehicle batteries: an adapted method based on modelling energy flows’, Journal of Energy Storage 19, 2018, pp. 213–225. https://doi.org/10.1016/j.est.2018.07.008

(72)

     ‘Paving the way for a circular economy: insights on status and potentials’, EEA, 2019.

(73)

     The working methods of the von der Leyen Commission aim to cut red tape as much as possible. The Commission therefore strives to implement the “one in, one out” principle, whereby each legislative proposal creating new legislative burden should relieve people and business of an equivalent burden at EU level in the same policy area. See: https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6657  

(74)

     ‘Can electric cars beat the COVID crunch? The EU electric car market and the impact of the COVID-19 crisis’, Transport & Environment, 2020.

(75)

     Market Monitor, International Council on Clean Transportation, 2020.

(76)

     Market Monitor, International Council on Clean Transportation, 2020.

(77)

     Electric vehicles: tax benefits & purchase incentives, ACEA, 2020.

(78)

      https://ec.europa.eu/eurostat/statistics-explained/pdfscache/1180.pdf .  

(79)

     Steen, M et al., ‘EU Competitiveness in Advanced Li-ion Batteries for E-Mobility and Stationary Storage Applications – Opportunities and Actions’, JRC Science for Policy Report, doi:10.2760/75757, 2017. 

(80)

     Drabik E. and Rizos V., ‘Prospects for electric vehicle batteries in a circular economy’, 2018.

(81)

Perchards and SagisEPR (2017) 'The collection of waste portable batteries in Europe in view of the achievability of the collection targets set by Batteries Directive 2006/66/EC – 2017 update'

(82)

One survey indicates that an average family owns 131 batteries, of which 26 are non-rechargeable and empty

(83)

      https://danwatch.dk/en/undersoegelse/how-much-water-is-used-to-make-the-worlds-batteries/  

(84)

     ‘Briefing on job creation potential in the re-use sector’, RREUSE, 2015.

(85)

      https://www.weforum.org/press/2020/01/42-global-organizations-agree-on-guiding-principles-for-batteries-to-power-sustainable-energy-transition/ .  

(86)

     ‘Quantifying the Costs, Benefits and Risks of Due Diligence for Responsible Business: Conduct, Framework and Assessment Tool for Companies’, study for the OECD, University of Columbia, School for International Affairs, 2016.

(87)

     Directive 2014/95/EU lays down the rules on disclosure of non-financial and diversity information by large companies.

(88)

     ‘Quantifying the Costs, Benefits and Risks of Due Diligence for Responsible Business: Conduct, Framework and Assessment Tool for Companies’, study for the OECD, University of Columbia, School for International Affairs, 2016.

(89)

COM (2020) 98 final

(90)

     SWD(2019) 1300 final.

Top

Brussels, 10.12.2020

SWD(2020) 335 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a Regulation of the European Parliament and of the Council

concerning batteries and waste batteries, repealing Directive 2006/66/EC and amending Regulation (EU) 2019/1020

{COM(2020) 798 final} - {SEC(2020) 420 final} - {SWD(2020) 334 final}


Table of contents

1.    Annex 1: Procedural information    

2.    Annex 2: Results of the public and stakeholder consultations    

3.    Annex 3: Who is affected and how? Overview of costs and benefits    

4.    Annex 4: Analytical methods    

5.    Annex 5: The Batteries Directive    

6.    Annex 6: The Batteries Directive Evaluation    

7.    Annex 7: Facts and figures    

8.    Annex 8: EU research and innovation support for batteries    

1.Annex 1: Procedural information

Lead DG, Decide planning / CWP references

The preparation of this file was co-led by two Directorates–General: DG Environment (ENV) and DG Internal Market, Industry, Entrepreneurship and SMEs (GROW). It was included as the following items in the DECIDE/Agenda Planning database: PLAN/2019/5391, Modernising the EU’s batteries legislation, Proposal for a Regulation (or a Directive) of the European Parliament and of the Council on batteries and accumulators and waste batteries and accumulators and repealing Directive 2006/66/EC

The reference in the Commission Work Programme is in ANNEX I (New Initiatives) Point 9.

Organisation and timing

On 11 December 2019 the Commission announced that it would propose legislation in 2020 to ensure a safe, circular and sustainable battery value chain for all batteries, including to supply the growing market of electric vehicles in its Communication on the Green Deal. Earlier on, in May 2018, the Commission adopted the the third ‘Europe on the Move’ mobility package 1 , to which a Strategic Action Plan on Batteries was annexed.  This set out measures to support efforts to build a battery value chain in Europe, embracing raw materials extraction, sourcing and processing, battery materials, cell production, battery systems, as well as re-use and recycling.

As part of the evaluation exercise started in 2017, the Commission also published in April 2019 the Report on the Implementation of the Batteries Directive and the Report on the Evaluation of the Batteries Directive

Following a political decision from the relevant cabinets, it was decided in December 2019 that a single legal instrument would be replacing the Batteries Directive and incorporate the sustainability requirements for rechargeable batteries on which DG GROW had been working since mid 2018.

The Inception Impact Assessment Roadmap was published on 28 May 2020. At its closure, on 9 July.

To support the analysis of the different options, the Commission awarded several support contracts to external experts:

·Study assessing the feasibility of measures addressing shortcomings in the current EU batteries framework

·Study addressing particular topics on batteries (second life, restrictions, deposit and refund schemes, etc), legal statuses, restrictions, etc).

·Preparatory Study on Ecodesign and Energy Labelling of rechargeable electrochemical batteries with internal storage

·Follow-up feasibility study on sustainable batteries

·Impact assessment on Ecodesign and Energy Labelling of rechargeable electrochemical batteries with internal storage.

These experts worked in close cooperation with the Commission throughout the different phases of the study.

The Inter Service Steering Group (ISSG) for the Impact Assessment was set up by the Secretariat-General (SG). It included the following DGs and services: CLIMA (Climate Action), CNECT (Communications Networks, Content and Technology), COMP (Competition), ECFIN (Economic and Financial Affairs), EMPL (Employment, Social Affairs and Inclusion), ENER (Energy), ESTAT (Eurostat), JRC (Joint Research Centre), JUST (Justice and Consumers), MARE (Maritime Affairs and Fisheries), MOVE (Mobility and Transport), OLAF (European Anti-Fraud Office), REGIO (Regional and Urban policy), RTD (Research and Innovation), SJ (Legal Service), TAXUD (Taxation and Customs Union) TRADE (Trade). Meetings were organised between February and September 2020. Further consultations with the ISSG were carried out by e-mail.

The ISSG discussed the Inception Impact Assessment and the main milestones in the process, in particular the consultation strategy and main stakeholder consultation activities, key deliverables from the support study, and the draft Impact Assessment report before the submission to the Regulatory Scrutiny Board.

Consultation of the RSB

The Regulatory Scrutiny Board (RSB) delivered a positive opinion with reservation on a revised draft of the Impact Assessment on 18 September 2020.

The table below presents an overview of the RSB's comments and how these have been addressed.

RSB comments

How the comment has been addressed

The report does not sufficiently present recent and emerging developments in the batteries sector in the EU. The baseline is, therefore, not a good basis for comparison.

Section 5 on the baseline was complemented with data on the announced number of investments (see also further comment below).

The argumentation behind the composition of measures in the options is not clear and coherent.

The options table has been restructured. A new column has been added to group sub-measures with a "very high level of amibition", labelled as Option 4, and some sub-measures were moved from the "medium level of ambition" (Option 2) to the "high level of ambition" Option 3. This intervention ensures more transparency and coherence about the composition of the Options without fundamentaly changing the impact assessment.

A table has been added in Section 6 to explain why certain sub-measures were not included in the Options (see also further comment below).

The report could strengthen the internal market dimension of the problem with additional evidence, especially on the extent to which competition is currently distorted in the EU. For this purpose, and to depict the global supply situation, the main report could integrate some information from annex 7. When referring to a ‘lack of level playing field’, the report should systematically specify who is affected and how. Furthermore, the report could also better present the current state of implementation of the existing legal framework and investigate to which degree the problem differs across Member States.

An additional figure from Annex 7 was added to Section 1.3.1. on future demand. Likewise in Section 1.3.2 on future production a figure was added depicting lithium-ion cell production capacities for industrial batteries within the EU in GWh per year by location of plants.

A sentence was added in the introduction of Section 2 to clarify the definition of the term "level playing field". Sections 2.1.1.1 to 2.1.1.3 provide examples of who is affected by this problem and how. The use of the term "level playing field" was also reduced in Section 3.

Information on the state of implementation of the Batteries Directive is included in various sub-sections of Section 2.1, including on collection, recycling efficiencies, removability, hazardous substances and labelling. The report on the implementation of the Directive (COM(2019)166) does not include any further information on differences between Member States.

The report should better cover recent rapid developments in the EU batteries market. It should better assess to what extent problems remain after the ongoing and announced investments in EU battery capacity. In particular, it should explain remaining risks to fair competition within the EU. The baseline should include these developments.

Section 5 on the baseline was complemented with data on the announced number of investments.

Section 5 now also better explains which problems will remain and what the risk of unfair competition are.

Furthermore two paragraphs were added in Section 2.1 on the problem definition to explain the example of the second life market for industrial batteries, which may result in market fragmentation if no regulatory action is undertaken.

The main report should explain the selection of ‘most relevant sub-measures’ in the options. It should clarify the reasons for discarding certain non-preferred sub-measures (as analysed in annex 9) and maintaining others.

A table has been added in Section 6 to explain why certain sub-measures were not included in the Options. This table sums up the key points of what is mentioned in the Annex 9.

The table on costs and benefits of the preferred option (annex 3) should use the standard template, distinguishing more clearly between costs and benefits. It should not include unnecessary information, such as stakeholders’ views. It should contain all available quantification. In addition, the text of the annex should describe the practical implications of the preferred option for different stakeholder groups.

Annex 3 was revised using the template from the Better Regulation Toolbox, thus better distinguising between costs and benefits. All the available quantified data are included.

Stakeholder views have been removed from the table and have been been clarified beneath the table where they concern practical implications.

In an earlier stage the Regulatory Scrutiny Board (RSB) delivered a negative opinion on a draft of the Impact Assessment on 24 July 2020 after the meeting on 22 July 2020.

The table below presents an overview of the RSB's comments and how these have been addressed.

RSB comments

How the comment has been addressed

The report does not explain clearly enough what the problem is with regard to the internal market and EU domestic production.

The explanation of the problem with regard to the internal market and EU domestic production has been improved in Section 2 of the report (see also more detailed comment below).

The report does not sufficiently justify the composition of the options. It does not explain what (part of the) measures it proposes to leave for future secondary legislation.

The composition of the options has been clarified in Section 6 of the report, by adding a table that includes all the sub-measures and another table with an overview of the policy options that makes a cross-reference to the table with the sub-measures (see also more detailed comment below).

The report does not sufficiently explain and assess the combination of measures included in the preferred option.

The explanation of the combination of the measures included in the preferred option has been improved in Section 8 (see also more detailed comment below). The simplification potential of the preferred option has also been added to the analysis.

The report should better explain the internal market dimension of the problem. It should be specific how the ‘level playing field’ is not guaranteed for the different stages of the battery value chain. It should clarify how competition is distorted in the EU. It should better justify that the internal market problems are more significant than the environmental problems. The report needs to strengthen the arguments in favour of EU domestic production of batteries. It should include an account of the recent changes in EU industry capacity expansion.

Section 2 on the problem definition has been significantly redrafted to address the points listed in this comment including clarifying the problem related to responsible sourcing. An account of recent changes in EU industry capacity could not be added because until now there have not been any significant changes. Regarding planned investments in future capacity expansion no comprehensive data are available.

The report should more clearly spell out the political and inter-institutional commitments that have been made in this area (e.g. in the context of the Strategic Action Plan on Batteries, the Green Deal and Industrial policy agenda) and to what extent these influence the starting point of this impact assessment.

Section 1.1 has been completed with a point on a resolution for the EP Committee on Industry, Research and Energy and with a point on an announcement of the EIB to increase its backing of battery-related projects to €1 billion. Section 6 has further clarified the starting point of the Impact Assessment.

The report should better explain and justify which measures it includes in each option. It should more clearly argue why it discards some measures at an early stage. It should explain what part of the measures will be included in the revision of the Directive and which will be developed in secondary legislation.

Section 6 has been redrafted to better explain the selection of the measures and the composition of the policy options. A new section explains the common measures and why they are not discussed in detail. An explanation has also been added on why some measures were discarded in an early stage, and also on which measures will be further developed through secondary legislation.

The report should strengthen the comparison of the medium and high-ambition options and document it transparently. It should better justify the composition of the preferred option.

Section 7 has been redrafted so as to present a clearer, self-standing summary of the detailed analysis that was carried out for all the measures. For every measure section 7 now includes a summary of the economic and environmental impacts and of the measure's feasibility and stakeholder acceptance (including minority views) Building on this summary, Section 8 has also been redrafted to provide a short explanation for every measure what the preferred option is. In addition Annex 9 has also been significantly redrafted in view of improving the clarity of the analysis including adding an introduction which further elaborates the logic of the Annex.

The report should include a clear synthetic overview of all costs and benefits of the preferred option. The required standard cost and benefit table in annex should contain all quantitative and qualitative cost and benefit data related to the preferred option.

Section 7 has been redrafted and now includes a concise discussion of the costs and benefits of all the measures. Annex 3 of the report has also been redrafted. It now includes an overview of all the quantitative and qualitatitve impacts of the preferred option.

The report should be a self-standing document. It should contain the main elements of the analysis, leaving more detail to the annexes.

Thanks to the redrafting of Sections 2, 6, 7 and 8 the main report is now a self-standing document that includes all the key elements for all the measures.

The RSB had previously given some indications of what was required through an upstream support meeting organised on 18 March 2020. The table below presents an overview of the RSB's suggestions and how these have been addressed.

RSB comments

How the comment has been addressed

ENV and GROW should continue to work closely together on the file given its industrial and environmental dimensions. To note that there have been two distinct processes until recently: the Batteries Alliance (GROW) and the revision of Batteries (ENV) Directive. These are now pulled together.

A Task Force was established consisting of officials from DG ENV and DG GROW. The Task Force functioned as a team and prepared the IA together.

In terms of objectives, industrial competitiveness and the need to meet Europe’s increasing demand for batteries should feature prominently in the objectives section of the Impact Assessment.

Industrial competitiveness and the need to meet Europe's demand for batteries have been included in section 4 on the objectives. It is also discussed in Section 2 on the problem definition

Addressing market failures and reinforcing the requirements in terms of efficiency and recycling is key. The evaluation showed the need for additional requirements for recycling but also for production (recyclability).

Market failures and inefficiencies in the use of resources have been highlighted in section 2 on the problem definition. Several measures included in the proposed options aim to address these issues.

The report should reflect on the relationship and any trade-offs, for instance between a possible increase in transport battery costs as a result of the initiative and the decarbonisation of transport.

The impacts of the measures are assessed against 5 criteria, one of which is economic impacts (including possible additional costs to producers or end-users). These are discussed in Section 7 on the assessment of the impacts and in more detail in Annex 9.

Board members noted that revisions of the battery Directive are likely to have a wide range of impacts on a wide range of stakeholders. Rather than comprehensiveness, they will be looking for clarity on what political decisions need to be taken. Informing these decisions should serve as the focal point for evidence gathering and presentation.

The key political decisions to be made are presented in section 6 on the policy options and in section 7 on the impacts of the policy options. The political aspects have been made the centre of the presentation.

Given the numerous challenges related to the environmental and industrial dimensions, it will be important to position the new legislation in the international dimension and to assess how the initiative would affect the EU’s competitiveness with third countries.

The impacts of the proposed measures on the EU's competitiveness vis-à-vis third countries are discussed in Section on international competitiveness.

On stakeholder consultation, Board members stressed the need to gather information from different stakeholder groups on how they perceived likely impacts and consequences of the different policy options. Targeted activities aimed at NGOs and the civil society could supplement or fill gaps in the public consultation.

There have been several consultation processes on batteries. DG ENV carried out extensive stakeholder consultations as part of the Evaluation of the Batteries Directive. There was later a similar process with the preparation of sustainability criteria as a possible development under the eco-design directive. Stakeholders have been consulted through targeted interviews and sectoral meetings. NGOs participation in these processes has been noticeable.

Board members stressed the importance of specifying what success would look like. What benchmarks are relevant to determine that the policy will have had the intended effects? Clear objectives and transparency about the trade-offs is essential.

Relevant benchmarks on what success will look like are discussed in Section 9 on monitoring and evaluation.

Board members stressed that clarity and reader-friendliness is important, including plain language with minimal jargon. This applies especially to the executive summary.

The IA has been written such that it is accessible to non-experts. To this end it also includes an extensive "glossary" that explains the main terms". The executive summary is written in a clear and concise manner.

Board members and the SG mentioned the need to consider the one-in-one-out principle. Both administrative and compliance cost increases/savings should be quantified as far as possible.

The IA does it (see Annex 3) and there is a discussion in Section 8 of Regulatory Burden and Simplification

Technical changes made to the impact assessment after the RSB's approval

To reflect new data and insights, a number of technical changes were made to the impact assessment after approval by the RSB. These include:

For Measure 3, an additional intermediate target of 70% by 2030 (Option 3) was included and assessed. This was done on the grounds that the cost benefit assessment showed that increasing the target (70%) while prolonging the timeline (2030) would be comparable to the costs and benefits of Option 2.

For Measure 5: changes to the target levels for lead-acid batteries to take into account the inclusion of outer casings. This was done based on modelled data to reflect a change in the definition of the rates, which includes the outer casing in the proposed Regulation because this is important for Li-ion batteries (contrary to the Batteries Directive, which doesn't cover Li-ion batteries and excludes the outer casing for other battery types, notably lead-acid batteries).



2.Annex 2: Results of the public and stakeholder consultations

The Impact Assessment accompanying the Batteries Regulation was subject to a thorough consultation of all stakeholders to ensure that view from different organisation were presented and considered.

As part of the preparation of the reports on the Implementation and the Evaluation of the 2006 Directive, the Commission carried out consultation activities consisting of a 12-week public consultation, consultations with Member States experts, stakeholders and relevant NGOs. In addition, expert-group meetings and targeted interviews provided for a more detailed and technical perspective 2 .

The Eco-design preparatory Study for Batteries also included an 8-week public consultation 3 and targeted interviews.

The Commission has in addition carried out further targeted consultations with Member State experts, stakeholders, NGOs and consumers’ associations, in addition to welcoming the feedback on the Inception Impact assessment.

This synopsis report presents a summary of these consultation activities and their results. It should be noted that Annex 9 shows in detail the views of the stakeholders on the measures under discussion.

Feedback to the Inception Impact Assessment.

The Inception Impact Assessment was published on 28 May 2020 and the period to provide feedback was closed on 9 July 2020. 4 A high level of response was received, largely supporting positions set out by stakeholders earlier in the process (for example, during the targeted stakeholder consultations).

Figure 1: Origin of respondents to the consultation on the Inception Impact Assessment 5

One hundred and three valid contributions were received. In addition, more than 50 statements have been uploaded as attachments. The country origin of the respondents is presented in Figure 1 .

The analysis of the stakeholders' input shows a general recognition of the need for this regulatory initiative. Respondents acknowledge that technological, economic and social changes would justify the establishment of a new regulatory framework for batteries.

In general, respondents think it is appropriate that a single instrument contains all (or the majority) of legal provisions concerning batteries, along its entire value chain and life cycle.

The ambition of the initiative is pointed out as a difficulty for the assessment, in particular as regards the scope of the changes considered. Several contributors underlined the difficulties to conciliate diverse and, sometimes, very different policy objectives like competitiveness and environmental sustainability.

In the majority of cases, the measures proposed by stakeholders were already considered by the Inception Impact Assessment. In some cases, however, very specific sub-measures were proposed that did not fit in with the scope of the initiative. Several contributions proposed criteria and feasibility conditions to be considered when assessing possible measures.

Some important topics received particular attention from the respondents and were considered during the Impact Assessment process.

·A Regulation, not a Directive. The large majority of contributors welcome a change of the type of legal instrument, to reach full harmonisation and assure a level playing field. Some point out the risks of having a single instrument with such a broad scope and indicate the need not to dismiss taking the route of product-specific legislation, e.g. on eco-design.

The Impact Assessment process has kept the door open to such approach, in particular when dealing with product-design sub-measures, as, e.g. on interoperability.

·A new methodology for the calculation of collection rates, since the currently existing one, established by the 2006 Directive and based on the weight of batteries placed on the market is sharply criticised. Several stakeholders propose to use a new methodology based on the concept of waste batteries ‘available for collection’, even as a possibility for the calculation of collection rates for automotive and industrial batteries

The Impact Assessment process has adopted a practical approach in this regard, keeping the current calculation methodology for the evaluation of the impacts and considered moving towards the proposed new methodology.

·Several recyclers insist on avoiding closed-loops approaches as in their view they would result in increased environmental impacts and losses of efficiency in the use of materials. Other stakeholders proposed to enlarge the closed-loop recycling possibilities and incorporate additional materials (as, e.g. battery casing) to the assessment.

The approach taken in the Impact Assessment process is to assume closed-loop recycling in view of obtaining a conservative estimate, while making clear that the legal definition of recycling includes open-loop processes.

·A number of respondents underlined the importance of verification and certification processes to ensure the success of sustainability requirements namely as regards their compatibility with existing international initiatives. This would allow increasing the transparency and ensuring a level playing field for battery producers globally.

The Impact Assessment process has considered this and in particular, the setting of a verification system as regards responsible sourcing, carbon intensity and recycled content. In the case of responsible sourcing, the link with international initiatives like for example the OECD Guidelines on Due Diligence is taken into account.

·Several respondents underlined the risks that some possible measures would trigger changes in the development and use of existing (or future) battery technologies. There was also the concern that some measures could entail important changes in the demand and supply of battery raw materials within the EU market, leading to results that could be contrary to the desired effects.

The Impact Assessment has taken note of these opinions. Nevertheless, the spirit of the initiative is to ensure an adequately designed schedule for the entry into force of the measures that will allow avoiding or at least minimising the risk of adverse effects. This is why for some measures the Impact Analysis found that an incremental approach is the most appropriate and that revision clauses should be foreseen.

·Many respondents insisted on the fact that the Impact Assessment should consider the use of IT systems for most of the regular monitoring, reporting or information actions being considered.

This concern has been taken into account and for the sub-measures that require monitoring or verification, the Impact Assessment has considered all options for digitalisation.

·Many stakeholders have emphasised the convenience of reducing the number of legal instruments on batteries as far as possible. Nonetheless, when the coexistence of different legal instruments is needed, stakeholders consider the coherence between the legal provisions concerned essential.

The basic assumption of this initiative is that a single instrument should be prepared. Particular care has been taken to exclude from the assessment areas where existing EU legislation is sufficiently developed (as, e.g. chemicals). In other cases, for instance in relation to the end-of-life vehicles Directive, the existence of possible synergies has been taken into consideration.

2019 Public consultation

In the context of the preparation of a regulatory initiative on sustainability requirements for batteries, a first consultation round was organised by DG GROW between June and November 2019. It consisted of an open public consultation for which 180 contributions were received, and three public stakeholder meetings on the findings of two feasibility studies. 6

Figure 2 gives an overview of the respondents to the DG GROW open consultation.

Figure 2: Type of respondent to the public consultation by category

The main results of this open consultation are presented below.

The importance of the batteries value chain

DG GROW’s open consultation aimed at eliciting feedback on market trends and forecasts for the batteries market and the type of EU policy and regulatory interventions that would be most appropriate for the promotion of the European batteries ecosystem.

More than three quarters of respondents agreed with the idea that Europe will be an important player in the global market for batteries. Only 14% of respondents disagreed with this prospect. Amongst those disagreeing, the reasons put forward were very scattered, although almost 10% stated that European manufacturers will not be able to compete with Asian ones.

In terms of the drivers for Europe being an important player, 60% of respondents agreed that having a strong battery value chain in the EU is of strategic importance, and 55% considered that batteries are key to sustainable mobility and to the integration of renewable electricity generation in the grid.

Policy and regulatory interventions

When asked about the appropriate policy and regulatory interventions for the promotion of battery manufacturing in Europe, three categories came clearly on top: strict sustainability requirements (68%), R&D funding (67%) and financial instruments (63%). Figure 3 below provides the complete breakdown of the replies to this question.

More than 40% of respondents believe there are barriers to the manufacturing and trading of new and used batteries in the EU. In terms of trading, the lack of harmonisation of rules on the transportation of hazardous waste (i.e. used batteries for re-use or recycling) was, by far, the most quoted barrier.

Figure 3: Type of policy and regulatory measures for the promotion of batteries manufacturing in Europe (multiple replies were possible)

Sustainable sourcing

When asked about the most relevant social and environmental impacts in battery production, almost 60% of respondents were in favour of setting reporting obligations on the responsible sourcing of raw materials. Furthermore, almost 54% of respondents supported a reporting obligation on all environmental impact categories, including climate change. Only 12% of respondents were in favour of not putting in place any reporting obligations or fixing minimum standards on the social and environmental impacts of battery manufacturing.

Performance requirements

In terms of the most relevant parameters to set minimum performance requirements for batteries placed on the EU market: almost 51% of respondents chose energy density as rather or very relevant and almost two thirds of respondents (63%) stated that round-trip efficiency would be a rather relevant or very relevant parameter to consider. 58% of respondents responded that access to relevant usage data history to facilitate the State of Health (SoH) determination would be rather or very relevant, and more than 74% of respondents claimed that durability would be a relevant parameter to set performance requirements.



Recycling

Almost 78% of respondents partially or totally agreed that design for recycling requirements could help increase the efficiency of battery recycling plants, while 13% partially disagreed or did not agree.

When asked about the possibility to set minimum weight based recyclability targets at product level to help increase recycling efficiency, slightly over 53% of respondents agreed partially or totally, while 22% partially disagreed or did not agree.

In regulatory discussions, some stakeholders put forward the claim that recycling technology and market-based solutions are more important than design requirements to achieve higher recycling efficiency rates. in. More than 53% of respondents either partially or completely agreed with this assertion, and a further 32% did not disagree. However, the fact that an overwhelming 78% agreed with the important role that design for recycling can play in achieving higher efficiency recycling rates would suggest that the recycling discussion may be trapped in a false dichotomy of either or.

Finally, more than 70% of respondents either partially or completely disagreed with the idea that no further action is needed to achieve higher recycling efficiency rates for batteries in the EU.

2020 consultation activities

Following a political decision that a single legal instrument would replace the Batteries Directive and incorporate the sustainability requirements for rechargeable batteries on which DG GROW had been working since mid 2018, a second round of consultation activities was undertaken between February and May 2020, including

·Targeted interviews with representatives of the battery value chain, consumers and environmental associations;

·Survey for economic operators (manufacturers, waste managers and recyclers)

·Survey for research and innovation projects’ representatives (funded under H2020 and LIFE programs);

·Sectoral meetings with stakeholders;

·Meeting with Member States Expert Group.

The main results of this new consultation round are presented below.

Collection rates of portable batteries

The main controversial aspect discussed by the stakeholders in relation to the collection rates of portable batteries is the method for its calculation – placed on the market (PoM) vs. available for collection (AfC). The majority of stakeholders defend the AfC approach because this would take into account losses such as batteries exported with equipment and the one retained/in use by the consumers. The retention effect (hoarding) was indicated as an important reason for the delay of the entrance of spent batteries in the waste chain – collection and recycling. Also, in some cases, batteries can last for several years resulting in a long lifetime before being discarded. However, the main problem of the AfC approach is the lack of an objective quantification method and hence the difficulty in achieving reliable data. Some stakeholders explained that in some cases targets based on PoM, might become unachievable because they might be higher than the amounts available for collection. The important role of consumers was also discussed, as implementation of collection targets is clearly dependent on consumer behaviours.

Concerning the target, 65% was seen an easily achievable target in several countries but a high ambition for the ones that did not comply with the current 45% target. In addition, the cost associated with high collection targets was mentioned as an important constrain.

Critical Raw Materials

Some of the raw materials used in battery manufacturing (e.g. cobalt, manganese, nickel and natural graphite) have a high economic impact as well as high supply risks and are screened by the European Commission as Critical Raw Materials (CRMs).

More than 73% of respondents either partially or totally agreed with the proposal to establish specific criteria to facilitate the recovery of CRMs, while 74% agreed partially or totally with the idea to set minimum recyclability targets for CRMs at product level.

When asked about the possibility to set specific requirements to guarantee a minimum recovery rate of the CRMs contained in batteries, the replies were too scattered to be significant, although almost 32% did not agree with the idea.

Recycling efficiencies / material recovery

Concerning recycling efficiencies, one of the concerns raised by the stakeholders was the scope for certain batteries. For example, in the case of Li-ion batteries, as there are several types of Li-ion batteries the question was if one target would be used for all types. Recyclers of alkaline batteries explained that they have their own internal targets and do not see the need for an official/mandatory one so they suggest keeping alkaline batteries out of the scope.

Another point of discussion was related to the material recovery rates and particularly the advantages and disadvantages of establishing targets for individual elements or for groups of elements. For the latter, one suggestion was to introduce different weights to the different metals of the group. Some stakeholders suggested that if the target is set for each metal everybody will go in the same direction and flexibility will be lower. Stakeholders also raised the question of which metals should be considered as valuable materials to be recovered and hence have defined targets, particularly manganese and graphite. Moreover, recyclers supported by producers, advocate that the current situation in which manganese is recovered not as a substance but in the steel production should be taken into account.

Concerning the individual or group metals approach, a consensus was not reached. Some stakeholders support the flexibility of targets per group and others did not see any advantage of such an approach.

Finally, the fact that black mass should be considered an intermediate product and not a final recovered material, was agreed by all the stakeholders,

Second-life applications for EV Li-ion batteries

In the academic literature on the second life applications for rechargeable batteries, there is an ongoing debate and inconclusive evidence on their economic feasibility and net environmental impact. This sparked a debate on the economic and environmental impact that a generalisation of second life applications for batteries would have. Almost 53% of respondents stated that this should have a positive economic and environmental impact, while 15% stated that recycling batteries after their first use would be more efficient in economic and environmental terms. Access to the battery management system to make a battery suitable for a second use was seen as relevant but this could create some issues mainly related to safety and control. This aspect was clarified by some producers who said that this is not necessary. Another important aspect raised by some stakeholders was the need to clarify the nomenclature – repurpose, reuse, 2nd life and remanufacturing.

Also, the health state of the batteries, the quality grades, possible certification means and transfer of EPR were aspects raised by several stakeholders.

In relation to other measures, in the case of 2nd life, batteries will have an extended life time and will hence not be available for recycling in the short term. This impact the minimum recycled content measure.

Recycled content

Stakeholders most directly affected by provisions of recycled content – producers and recyclers –expressed a generally favourable opinion on the introduction of a provision on mandatory recycled content in the new regulation. However, they raised some questions concerning the types/chemistries of batteries and the materials to be included in the provision, dates of entry into force, the recycling routes and expected rates of recovered materials, the carbon footprint balance of recycled vs. virgin materials, the costs of the processes and their impact on the batteries’ costs and the verification/certification processes. The main advantages highlighted were the job creation, the boosting of the market for secondary raw materials, the potential for urban mining and the expected effect on the promotion of batteries collection.

Portable primary batteries restrictions

The first aspect raised by several stakeholders was the use of the expression "single-use batteries" for primary or non-rechargeable batteries. They expressed that, in opposition to other single-use products, primary or non-rechargeable batteries are not single-use. They can be used several times, even in different appliances, until they are spent.

Several producers explained that primary batteries, particularly alkaline batteries, are the best choice in several situations for example for low/medium drain appliances in which they are much more energy-efficient and last longer than rechargeable batteries. Additionally, the convenience factor of having a battery ready to be used is sometimes overlooked when primary batteries are compared to rechargeable ones. Moreover, for some appliances, there are currently no rechargeable alternatives.

The quality/performance of the batteries was also a point of concern of the consulted stakeholders. They consider the low-quality batteries available in the European market as the main reason for the bad reputation of primary batteries and for their impact on the environment.

Recyclers mentioned that some materials that would be necessary to produce the additional rechargeable batteries needed to replace all the alkaline ones are very scarce, for example cobalt.

Both producers and recyclers anticipated a significant social impact if primary batteries were banned from the market, mainly for alkaline batteries, which currently dominate the market. There are European recyclers only targeting alkaline primary batteries, whose processes cannot be converted to recycle rechargeable batteries and producers for which this segment is their core business. According to them, the loss of jobs in Europe will be significant.

The main conclusion from this part of the consultation was that primary and rechargeable batteries should coexist because they are used in very different applications. However, quality/performance should be a factor to take into account if restrictions are considered.

Classification of batteries

The stakeholder consultation showed clear support for creating a sub-category of EV batteries in the current industrial batteries category or the creation of a separate category for EV batteries. They did however not see the need for a drastic change in the current classification.

Several stakeholders such as producers of batteries and equipment expressed a favourable opinion on the use of a weight threshold to distinguish between portable and industrial batteries. In practical terms, this means that some batteries considered industrial under the current classification, would be considered as portable. This is already common practice in some Member States.

There was no consensus on what the weight limit should be for a battery to be classified as portable or industrial. Advantages and disadvantages were put forward in both cases. The main discussion was about the most adequate category for e-bikes, e-scooters and other e-mobility equipment and that a low weight threshold might divide batteries with similar purposes such as the ones used for e-mobility and for power-tools between two different categories.

EPR for the collection of industrial batteries

The consulted stakeholders raised several questions related to the EPR particularly concerning the practical arrangements at the end of the life of a battery. The most commented issues were the expected business model, the batteries’ labelling system, and to which entity the costs would be charged – manufacturer, retailer or consumer. Some examples were given such as the German system, which follows a voluntary scheme. Linkages to the ELV Directive were also mentioned.

3.Annex 3: Who is affected and how? Overview of costs and benefits

Direct and indirect benefits

The table below summarises the direct and indirect benefits that will arise from the provisions of the Batteries Regulation. The stakeholders' positions are provided as text under the table.

I.Overview of Benefits (total for all provisions) – Preferred Option(s)

Description

Amount

Comments

Direct benefits

More targeted requirements for EV batteries

Introducing a new sub-category for EV batteries allows for specific requirements for these batteries.

Increase of EPR contributions

Introducing a 5 kg threshold for portables means that more producers will contribute with fees covering emerging categories of batteries handled by consumers.

Second-life of industrial batteries

GWP savings of 400000 tonnes of CO2 per year by 2035

Lower administrative costs due to less cumbersome procedures for dangerous goods

At the end of first life, batteries are not waste, second-life batteries are considered new products, and the EPR and product compliance requirements restart. Reliable information needs to be provided to economic actors for them to evaluate second-life possibilities.

Higher collection rates of portable batteries

Additional 40 000 to 43 000 tons of portable batteries collected (2025) representing a value of € 90 million per year.

GHG savings of around 50% compared to baseline.

Setting a collection rate target of 65 % for portable batteries in 2025 and a target of 70% in 2030

Higher collection rates of automotive and industrial batteries

A 3% increase in the collection rate of lithium industrial batteries would lead to the recovery of 300 t/a more secondary cobalt in 2035

Establish reporting mechanisms for industrial batteries

Improved recycling efficiencies and recovery of materials

Additional amounts collected (cumulative 2025-2035): 11 500 t of Co, 5 300 t of Ni, 22 000 t of Li and 57 000 tons of Cu are recovered 2025-2035

For lithium batteries about 11000 t of Co, 30700 t of Ni, 21500 t of Li and 56000 tons of Cu are additionally recovered from 2025 to 2035 (cumulative) compared to the baseline.

For lead batteries about 191 000 tonnes of lead would be recovered from 2020 to 2035 (cumulative).

This represents:

For lithium batteries, under very conservative assumptions, estimated revenues range from € 23 million per year at present to € 497 million per year in 2035. For lead batteries this would be around about 32 million € per year until 2035.

-Cobalt revenues from 9.5 million € in 2025 to 80 million € in 2035,

-Nickel revenues from 2,4 million € in 2025 to 90 million € in 2035,

-Lithium revenues from 8 million € in 2025to 255 million € in 2035,

-Copper revenues from 3.3 million € in 2025 to 72 million € in 2035.

GHG savings: 9.8 million tonnes of CO 2-eq for lithium and 189 000 tonnes for lead between 2020 and 2035

15 % reduction of ‘Human Toxicity’

Lithium-ion batteries and Co, Ni, Li, Cu:

Recycling efficiency lithium-ion batteries: 60% by 2025, 65% by 2030

Material recovery rates for Co, Ni, Li, Cu: resp. 90%, 90%, 35% and 90% in 2025, 95%, 95%, 70% and 95% in 2030

Lead-acid batteries and lead:

Recycling efficiency lead-acid batteries: 75% by 2025, 80% by 2030

Material recovery for lead: 90% in 2025, 95% by 2030

Transparency and comparability for consumers

Information made available on carbon intensity, and performance and durability.

Better quality batteries on the EU market

Reinforces the benefits of rechargeable batteries in high drain products and leads more users to shift to such batteries.

For low drain products, consumers could use better quality batteries, which may be more costly at purchase but will have longer lives.

Restriction of primary batteries that do not fulfil certain criteria

More mature secondary materials market

Mandatory levels of recycled content will contribute to the development of cost-efficient recycling activities that can deliver battery-grade recycled materials. The market will have the legal certainty it requests to invest in technologies that would otherwise remain undeveloped.

Information requirements on mandatory levels of recycled content and mandatory levels of recycled content

Battery design to facilitate battery removal

Increase in material recovery and related revenues.

Decrease in safety incidents.

Strengthened obligation on removability and additional requirements on repairability and replaceability/

Better informed purchase decisions

Basic information available on battery or packaging and complete information available online

Reduced environmental impact through due diligence obligations

Basic information available on battery or packaging and complete information available online

Indirect benefits

Job creation

2000 FTEs by 2030 for second-life market linked to expected revenues of € 200 million by 2030.

3100 FTEs for additional collection and recovery of portable batteries as well as for automotive and EV batteries.

2168-3272 new jobs in 2030 and 5481-7302 in 2035 compared to the baseline in recycling and recovery of materials.

Job creation in batteries removal and treatment facilities

Expected positive impact in employment of high quality batteries’ producers

Higher quality data for EV batteries

Introducing a new sub-category for EV batteries allows linking the reporting system for EV batteries to the existing EU-wide reporting system for vehicles. The data will be more granular with transparent mass flows and will still be comparable to existing data.

Shift to greener electricity providers/contracts

Mandatory carbon footprint declaration may prompt manufacturers to choose greener electricity providers/contracts.

Increased secondary materials demand

Mandatory recycled content targets will increase secondary material demand, in turn driving increased collection of batteries and recycling.

Improved knowledge of supply chain, better risk management and capital allocation

Increased transparency, credibility, reputation and public image

Due diligence obligations will improve transparency of information

Improved employment stability and reduced health issues for operators and communities in sourcing and manufacturing regions.

Due diligence obligations will improve transparency of information

There is clear support from stakeholders to create a sub-category for EV batteries so that specific requirements can be targets to this segment, which is estimated to represent such a large part of the batteries market in the future. There is also support for the 5 kg threshold for portable batteries as this measure puts similar batteries together in the same group. Some Member States have already introduced measures to distinguish purely industrial batteries from lighter ones typically used by consumers.

As regards the EPR obligations, producers are opposed to a mechanism where the operator placing the battery on the market for the first time would be responsible for its second-life. In terms of access to dynamic information stored in the Battery Management System, stakeholders have raised concerns in terms of the risk of intellectual property rights infringement, security issues and misuse.

Stakeholders recognise the need to increase the collection targets for portable batteries: both producers and recyclers support high collection targets. Some stakeholders consider that the PoM methodology is unsuitable due to the increased battery lifespan while collectors are reluctant unless the calculation methodology is changed. Member States suggested using 6 years in the calculation of PoM to address this issue.

Stakeholders recognise that the risks of losses on non-EV batteries is higher than for EVs and that, in practice, the obligation to collect and recycle the entirety of the batteries concerned is far from being achieved.

There is broad stakeholder support to boost recycling activities within the EU by establishing a separate recycling efficiency target for lithium-ion batteries and increasing current value for lead acid batteries. Some stakeholders pointed out possible problems to ensure a level playing field for all actors since a minority of industrial processes are not fit to deliver these type of targets.

There is also broad stakeholder support to establish mandatory carbon footprint declaration and information requirements on performance and durability if the rules are clear and widely accepted. Battery manufacturers prefer information requirements to mandatory thresholds in order to retain design freedom.

European producers support the idea of restricting primary batteries that do not fulfil certain criteria.

In terms of mandatory recycled content, stakeholders are concerned that market prices of secondary materials could increase due to the increase in demand and that targets could hence become harder to achieve. They propose that the targets are adopted with some delay to avoid market distortions.

Some stakeholders argue that specific and elaborated EPR obligations are not needed as there are currently voluntarily schemes while PROs request a guarantee of a level playing field.

Direct and indirect costs

The table below indicates the direct and indirect costs that will arise from the Batteries Regulation for different stakeholder groups: citizens/consumers, businesses and administrations. The table also specifies whether these costs are one-off or recurrent.

II.Overview of costs – Preferred option(s)

Citizens/consumers

Businesses

Administrations

One-off

Recurrent

One-off

Recurrent

One-off

Recurrent

New sub-category for EV batteries in industrial batteries

Direct costs

Amend the categories

Indirect costs

Reporting linked to existing EU-wide reporting system for vehicles

Set 5 kg threshold for portables batteries category

Direct costs

EPR contributions

Amend the categories

Indirect costs

Second-life

Direct costs

-

Indirect costs

Availability of secondary raw materials is postponed

EPR and product compliance requirements are split between the producer and the downstream economic operators

Increase collection rate target portable batteries

Direct costs

EUR 1.24-1.43 per capita per year

Some costs to change the reporting methodology

Some costs for waste stream analysis

Indirect costs

Collection rate target for automotive and industrial batteries

Direct costs

PRO to establish monitoring system

Monitoring collection rates

Indirect costs

Setting recycling efficiencies and material recovery targets

Direct costs

Recycling costs: €2290-3730/tonne in 2020

Going down to €860-1300 in 2035 due to economies of scales and technological progress

Existing reporting systems for recycling efficiencies to be modified

New reporting system for compliance on material recovery rates

Indirect costs

Managing public access to information

Mandatory rules for the calculation of the carbon footprint

Direct costs

Data collection, calculation and third party verification: € 0.5 – 3 million

Commission: IT tool €60.000

2 FTEs

Member States: hiring/training costs for checking declarations and third party verification

Commission: €125.000 for secondary data every four years

IT tool €20.000 for periodic maintenance

Indirect costs

Performance and durability requirements

Direct costs

Admin cost to disclose available information

Member States: 1 FTE each

Indirect costs

Supporting harmonised standards or technical specifications

Supporting harmonised standards or technical specifications

Restriction of primary batteries that do not fulfil certain criteria

Direct costs

Costs of market surveillance

Indirect costs

Mandatory levels of recycled content

Direct costs

Reporting and auditing/controlling system for recycled content.

€ 1 180 000 and € 7 080 000

Reporting and auditing/controlling € 85 000 /yr

Indirect costs

Risk that high recycled content targets lead to increasing prices (Co, Ni, Li, Pb), if the increased demand cannot be met by existing (or future) sources of secondary materials.

Design obligations

Direct costs

Cost for redesign

Reporting obligation

Surveillance cost

Indirect costs

Provision of reliable information to consumers

Direct costs

Set up site to provide static information

Update the static information

Indirect costs

Provision of reliable information to economic actors

Direct costs

Update the dynamic information

Commission: develop dataspace and traceability management system

Decentralised system

7.8 million € versus centralised system 5.6 million € for the period 2021-2026

Maintain dataspace: 2.7 million € per year for a decentralised system versus 1.3 million € per year for a centralised system

Indirect costs

Due diligence obligations with third-party verification based on notified bodies

Direct costs

Set-up due diligence obligations € 2-15 million

Annual due diligence € 2-20 million

Commission: develop dataspace and traceability management system

Maintain dataspace

Indirect costs



4.Annex 4: Analytical methods

Oeko-Institut study model and analytical tool

The feasibility study is based on a model developed by the Oeko-Institut in the context of the study procured by the Commission. The model is based on mass flows on the end-of-life stages of the battery life cycle.

The model aims to assess the impacts of applying the different measures proposed. The impacts covered are the protection of the environment, the promotion of the circular economy and the smooth functioning of the internal market. The calculation model delivers quantitative results on some of the economic, environmental, and social issues and it also identifies the relationships, dependencies and linkages between different stakeholders or operators and along the entire lifecycle of batteries even when it was not possible to develop quantitative impacts.

Description of the model

The main task of the model is to determine the impacts of the proposed measures intended to address the shortcomings identified in the Batteries Directive. On the one hand, the model contains a baseline that represents the status quo and a projection describing the development if no changes occur. On the other hand, when the proposed measures are applied - all at once, separately or as a mix of both – the changes in impacts are assessed. Measures include e.g. collection rate, recycling rate etc.

The outcome of the model, however, will not be restricted to outputs of quantitative data. As an analytical tool, relationships, dependencies and linkages between different stakeholders or operators and also along the entire lifecycle of batteries will be identified, analysed and clarified. Particularly, the mass flows from placed on the market (PoM) until the end-of-life stages of the battery life cycle will play a key role in the model.

A full range of impacts and thus a relevant share of the results of the measure are directly linked and are proportional to the mass flows. This applies especially to environmental impacts. Some economic data is directly linked to mass flows too.

The model focuses on the battery life cycle from PoM to the end-of-life so the production of batteries is considered less important. Therefore, the consultant aggregated the initial life cycle stages of resource extraction, material processing, cell production and battery assembly to a common process ‘battery production’. Thus, the mass flows will start with the stage ‘placed on the market’, which comes along with the footprint of the battery production (e.g. carbon footprint, x kg CO2eq per tonne of battery; material footprint, x kg cobalt per tonne of battery). The battery life cycle ends with recycling and recovery of secondary battery materials.

The model covers the EU-27, thus excluding the United Kingdom. It covers the period up to 2035 because beyond this timeframe the technical possibilities and developments become largely unpredictable, especially in battery chemistry. In addition, considering the fast changing nature of this market, the Batteries Directive could be subject to a review again before 2035. To develop, check and adapt the modelled battery mass flows, the study uses a time series starting in 2009. The most recent data from Eurostat is available for the reference year 2018. The future perspective is based on other data sources.

Annex 4 could be accompanied by a section that spells out the strengths and limitations of this model for assessing the initiative concerned. For example, the model seems to focus more on the end-of-life and less on the upstream design and production phase. In addition, it would be useful to spell out the main assumptions adopted when working with the model.

Chemical types of batteries

For each individual life cycle stage, the mass flows are differentiated for the following battery chemistries:

·Pb-acid,

·Li-ion,

·NiMH

·NiCd,

·Alkaline (and ZnC).

This means that the study takes a simplifying assumption: primary portable batteries are represented by alkaline and zinc carbon batteries while button cells, Li primary batteries, etc. are not modelled separately. On the other hand, up to six different chemical types of Li-ion batteries are in use, depending on the respective application and the technological developments over time. A differentiation according to chemical type and category or application of batteries is presented in the section below.

Modelling of categories and applications

A general distinction is made in the model according to the Batteries Directive’s three categories: portable, industrial and automotive batteries. Among these, again there are possibilities to differentiate according to applications of the batteries.

The main applications and the relevant battery chemistries of each category are listed below. For each of the listed applications, separate mass flows and results can be calculated.

Portable (alkaline, ZnC, Li-ion, Pb-acid, NiCd, NiMH): electronic equipment, power tools, new applications, other applications.

Industrial:

·e-vehicles (Li-ion, NiMH) and second life;

·e-bikes (Li-ion, Pb-acid, NiCd, NiMH);

·other industrial batteries incl. stationary electricity storage systems (Pb-acid, Li-ion, NiCd, NiMH).

Automotive (Pb-acid): automotive SLI.

Impact categories

A full range of impacts and thus a relevant share of the results of the measure are directly linked and are proportional to the mass flows. This applies especially to environmental impacts. Some economic data are directly linked to mass flows too, depending on the measures and options that are selected for assessment.

There are three main categories of impacts that were evaluated through the model and described in the report:

·Climate change (GWP in t CO2 eq),

·Human toxicity potential (HTP in t 1,4-DB eq),

·Depletion of abiotic resources (in t Sb eq).

A further 13 environmental impact categories are included in the model, including e.g. acidification potential, ozone layer depletion, photochemical oxidation or eutrophication and can be assessed according to the specific measure considered.

The impacts are linked to individual life cycle stages of the mass flows as described above for the example of the production footprint linked to ‘placed on the market’. Other life cycle stages with relevant environmental impacts are ‘recycling’ and a comparison of the raw materials needed for the production of primary and secondary battery materials (e.g. lithium, cobalt, nickel and lead). LCA studies and LCA databases are the source for the calculation of the environmental impacts.

Vehicle batteries example

For a better understanding of how the model functions, the example of automotive batteries is described in more detail below using the example and illustrated in the figure below.

   Schematic causal loop diagram for batteries from vehicles

The model delivers mass flows based on the development of different types of vehicles. It includes passenger cars, light commercial vehicles and heavy commercial vehicles with a variety of different propulsion types (Internal combustion engine, hybrid, plug-in hybrid electric vehicle and battery electric vehicle). Moreover, the model differentiates between different cell chemistries of Li-ion batteries as well as different sizes. Each type of vehicle also contains information regarding a lead-acid battery. Since the average lifetime of lead-acid batteries is a lot shorter than that of a vehicle, the model also calculates the volumes of exchange batteries.

The model determines both the mass flow of batteries placed on the market (PoM) and the amounts that are generated at the end of life (EoL) based on different average lifetimes and end-of-life distributions for each vehicle type and each year. Since the model includes detailed information related to battery compositions it allows for the estimation of recycling potentials. For example, the estimation of realistic recycling content figures is based on the comparison of material that comes from recycling operations and the demand resulting from the market development.

The most important input to the model in this case is the evolution of the EV market. The share of EVs in the EU passenger car segment is calculated individually for each MS based on the registration statistics starting from 2009 and the specific growth rates for the different EV propulsions types in each country. Moreover, each EV propulsion type (ICEV, HEV, PHEV and BEV) is accompanied by information concerning battery chemistry and size including changes in the course of the projection. Therefore, the current trend towards Li-ion battery cell chemistries with less cobalt and more nickel is also reflected in the model. Accordingly, the first BEVs reaching their end-of-life are modelled to contain more cobalt. This kind of differentiation allows for a very detailed economic assessment regarding the revenues of recycling. Moreover, the model includes material recovery rates that change over time. For example, the share of lithium recovery is likely to increase (in measure 7). Therefore, the tool can also reflect effects of changing raw material specific recovery rates (in the baseline the rates do not change).

Overall, the output of the mass flows can be controlled via different measures and variables, such as adjusting the export quotas of EoL batteries, adjusting the share of second life batteries, changing recovery rates for certain raw materials or increasing collection rates etc.

Therefore, the model works as a helpful tool that contains the most recent information on the market development of EVs and cell chemistries allowing for the estimation of effects resulting from measures envisaged for the revision of the Batteries Directive.



5.Annex 5: The Batteries Directive

The Batteries Directive (2006/EC/66) is the only piece of EU legislation that is entirely dedicated to batteries. Its provisions address the lifecycle of batteries, i.e. design, placing on the market, end-of-life, collection, treatment and the recycling of spent batteries. It defines objectives, sets targets 7 and outputs, identifies measures to meet them and establishes additional provisions to enable and complete these key requirements.

The Directive applies to all batteries and classifies them according to their use. Classes of battery include:

·portable batteries (e.g. for laptops, or smartphones or typical cylindrical AAA or AA-size batteries);

·automotive batteries (e.g. for starting a car's engine or powering its lighting system) excluding traction batteries for electric cars; and

·industrial batteries (e.g. for energy storage or for mobilising vehicles such as fully electric vehicles or electric bikes) 8 .

The Directive's primary objective is to minimise the negative impact of batteries and waste batteries on the environment to help protect, preserve and improve the quality of the environment. It also aims to ensure the smooth functioning of the internal market and avoid the distortion of competition within the EU.

The Directive links the environmental impacts of batteries to the materials they contain 9 . Due to the presence of hazardous components, in particular mercury, cadmium and lead, the mismanagement of batteries at the end of their life is the key concern. Batteries are not a particular environmental risk when they are safely used or stored, but if spent batteries are landfilled, incinerated or improperly disposed of at the end of their life, the substances they contain risk entering the environment, affecting its quality and affecting human health.

The Directive does not address negative externalities affecting the environment, for example, resulting from the massive extraction of raw materials, or from energy and water extensive recycling processes.

The Directive addresses the risks in two ways:

1)by reducing the presence of hazardous components in batteries; and

2)by establishing measures to ensure the proper management of waste batteries.

The total prohibition of batteries containing mercury 10 and, partially, of those containing cadmium, is the most effective way of reducing hazardous components. As such, this measure for regulating the placing of batteries on the market is in line with the Directive's objectives to ensure the smooth functioning of the internal market and to avoid the distortion of competition within the EU.

The Directive's labelling requirements 11 also intend to harmonise market requirements for batteries.

The Directive requires Member States to ensure that appropriate collection schemes are in place for waste portable batteries 12 and sets targets for the collection rates 13  (25 % in weight of the amount placed on the market by September 2012 and 45 % by September 2016). It also requires Member States to set up collection schemes for waste automotive batteries 14 and to ensure that producers of industrial batteries do not refuse to take back waste industrial batteries from end-users 15 .

All spent batteries collected must undergo treatment and recycling 16 . In this regard, the Directive establishes minimum levels of recycling efficiency 17 and the general obligation to recycle lead and cadmium to the highest degree 18 , and requests that all processes concerned comply with relevant EU legislation 19 .

Member States have to monitor collection rates and recycling efficiencies and submit relevant data to the Commission.

The Directive's overarching objective 20 is that Member States take the necessary measures to maximise the separate collection of waste batteries and to minimise the disposal of batteries as mixed municipal waste. However, there is no target or monitoring obligation linked to this objective.

The Directive also seeks to improve the environmental performance of batteries and the activities of everyone involved in their lifecycle 21 , e.g. producers, distributors and end-users, particularly those directly involved in treating and recycling waste batteries. The Directive does not establish any concrete targets for this but it mentions promoting research.

Provisions on extended responsibility 22 give producers of batteries and producers of other products that incorporate batteries the responsibility for the end-of-life management of the batteries they place on the market. The Directive specifies the national schemes' 23 tasks and objectives, including financial aspects 24 .

Producers must therefore fund the net costs of collecting, treating and recycling all waste portable batteries and all waste industrial and automotive batteries as well as any public information campaigns on the topic.



6.Annex 6: The Batteries Directive Evaluation

Article 23 of the Batteries Directive tasked the Commission with reviewing the implementation of the Directive and its impact on the environment and on the functioning of the internal market. This Article specified that the Commission should evaluate:

·the appropriateness of further risk management measures for batteries containing heavy metals;

·the appropriateness of the minimum collection targets for all waste portable batteries;

·the possible introduction of further targets; and

·the appropriateness of recycling efficiency levels set by the Directive.

In April 2019 the Commission published an evaluation of the Batteries Directive 25 , in line with the Commission's Better Regulation guidelines. Independent consultants supported the assessment of the information collected. The public, industry stakeholders and representatives of national administrations participated in the process. The evaluation addressed the usual evaluation criteria of relevance, effectiveness, efficiency, consistency and EU added value, along with the topics requested by Article 23, mentioned above.

This Annex presents the key conclusions from the evaluation.

Lessons learnt

Although the Directive has provided a broad EU framework, it is too general on the nature and extent of the objectives to be achieved and on important measures that the Member States have to implement. The Directive has problems with definitions, which hinders the achievement of its objectives.

For example, the links between long-term goals, quantified targets and the measures to reach them are not always suitably or clearly formulated. Nor is the expected outcome of the Directive detailed in depth. Key objectives, such as achieving a high level of material recovery — and obligations, such as ensuring that all collected waste batteries are recycled — are not sufficiently highlighted. Considerable time and effort has been devoted to discussing basic concepts with the Member States and the results were not always convincing. A clearer description of the Directive's internal logic and links would have improved its transposition and implementation.

The evaluation process has pinpointed some concepts in the Directive that are understood differently by different Member States — the role of producers’ organisations (PROs) for example. Our assessment shows that the overall organisation and requirements imposed on PROs vary widely between Member States. This helps explain the differences in Member States' performance and the internal market's current imbalance and distortion risks. The recently adopted provisions on extended producer responsibility in the WFD will help to address these risks.

Some Member States and businesses have a different understanding of whether slags should be considered as recycled products. The situation is similar for the obligations on collecting waste industrial batteries or for classifying spent batteries (as wastes). These differences contribute to the distortion of the internal market, cause misreporting and lessen the Directive's impact. The Commission issued guidance to address these and comparable issues, but it does not seem to have been enough. A more detailed definition of the concepts concerned would have helped to avoid these problems.

Experience with the Directive shows that producing information depends on establishing precise targets and metrics, and clear and meaningful reporting obligations. The Directive's relatively small number of measurable targets makes assessing its implementation and impacts challenging. Directive's overarching objectives such as reducing the amount of waste portable batteries that are disposed of in municipal waste streams, are not quantified and there are no reporting obligations associated. Additional and more detailed reporting obligations could have ensured better information on the EU batteries sector including on the Directive's impact on the sector.

While the Directive has been effective in ensuring that portable and automotive batteries are labelled, ensuring that information reaches end-users could be improved. Labelling alone is not enough. Other activities, like public information campaigns would increase effectiveness. A clear definition of producers' obligation for financing these activities would have helped to inform end-users better on their expected role on ensuring spent batteries are collected.

Relevance

The environmental concerns addressed by the Directive are still relevant today: batteries contain hazardous substances and present a risk to the environment when improperly disposed of. While mercury-containing batteries are being phased-out, old and ‘new’ batteries still contain other hazardous substances.

The two main approaches to facing these risks (i.e. the reduction of hazardous components and the management of waste batteries) are suitable, even if new and stronger complementary measures are needed to deal with the huge amount of waste batteries that is expected to be generated in the coming years.

Several important elements of the Directive's circular economy-related approaches correspond to the main elements of the circular economy policy, to address material recovery, set conditions for recycling processes or establish supportive regulatory mechanisms, for example. However, not all stages are included in the Directive and provisions on sorting or other pre-recycling stages of waste batteries, for example, are lacking.

The evaluation also shows that the Directive cannot sufficiently incorporate easily technical novelties. For instance, lithium-based batteries are included in the scope of the Directive but not specifically considered. Likewise, the Directive does not address the possibility of giving advanced batteries a second life, making developing re-use approaches more difficult.

Effectiveness

The Directive contributed to reducing the use of hazardous substances in batteries and to preventing waste portable batteries from being landfilled or incinerated, but this was not achieved up to the level expected.

Only half of Member States have met the Directive’s target on collection of waste portable batteries. An estimated 56.7 % of all waste portable batteries are not collected, of which around 35 000 tonnes enter municipal waste streams annually, resulting in environmental harm and loss of resources.

The problems to meet the collection rate target reveal deficiencies in the Directive. The current targets for collecting waste portable batteries do not promote a high level of collection. Furthermore, the Directive has different approaches for managing end-of-life batteries. The fact that collection rate targets only exist for spent portable batteries could be confusing and prevent the achievement of the Directive's objectives.

The Directive's methodology for compiling, assessing and reporting information on waste portable battery collection rates creates some practical difficulties. As reporting obligations only apply to portable batteries, it is even more difficult for public authorities and industrial operators to access reliable information on the collection of waste batteries.

On the other hand, the Directive has ensured the highly efficient recycling of collected waste batteries. Current targets of recycling efficiencies appear to be easily achievable by the EU industry.

However, the general objective of achieving a high level of material recovery has not been achieved. Recycling efficiencies are defined for only two substances: lead and cadmium, ignoring other valuable components such as cobalt and lithium. In addition, these definitions are not oriented towards increasing material recovery. Therefore, current recycling requirements are not considered appropriate to promote a high level of recycling and recovery from waste batteries and accumulators.

The implementation of extended producer responsibility has taken place through collective producer schemes in many Member States. This is a success of the Directive. The positive role of these organisations could be strengthened if the Directive provided incentives to increase collection rates above established minimum values.

Problems to reach the Directive's targets indicate that end-users do not always receive adequate information about their expected contribution. Defining in detail Member States' awareness-raising obligations, establishing clear objectives and making use of more up-to-date means of communication, notably social media, could help increase the end-users' involvement and hence collection rates.

The Directive also lacks a proper system to inform end-users of the quality of the batteries placed on the market.

Efficiency

The efficiency analysis shows that the Directive has had an impact on the economy of batteries’ manufacturing and recycling sectors. Businesses consider that implementing the Directive has entailed significant costs but they and other stakeholders broadly agree that these are outweighed by present or future benefits.

Implementing the Directive involves necessarily complex procedures that could sometimes entail significant costs for local authorities. However, national administrations do not perceive that implementing the Directive results in unnecessary regulatory burdens.

The Directive's provision on recycling all collected batteries is key to ensuring the viability of recycling activities. This obligation actively contributes to ensuring the supply to recyclers and its absence could cause investment risks. If higher levels of supply, i.e. higher collection rates of all types of batteries were achieved, better results for recycling activities would have been expected.

In addition to lowering the reliance on imports of particularly important raw materials, including critical ones, recycling may have economic benefits. However, the Directive unnecessarily limits these benefits, as it only establishes efficiency targets for lead and cadmium. The recovery of other valuable materials, such as cobalt, lithium or critical raw materials is not specifically promoted.

Extended producer responsibility obligations for industrial batteries are not well-defined. There are no detailed provisions for collection, setting up national schemes and financing aspects for industrial batteries, which will be increasingly relevant in future as using these batteries is considered vital for low carbon policies in the EU.

This absence of a specific provision in the Directive makes it difficult to ensure that all industrial waste batteries will be properly collected and recycled (or reused) in the future and affects regulatory framework's ability to appropriately deal with the expected growth of the industrial batteries sector.

Coherence With other Legislation

Stakeholders generally want the provisions on batteries to be concentrated in fewer legislative acts, particularly for chemicals and end-of-life issues, and that the relationships between these acts are clearly outlined.

While the Directive encourages developing batteries with smaller quantities of dangerous substances, it does not specify any criteria for identifying the substances concerned or the type of management measures that could be adopted. It should therefore be considered whether REACH is more adequate for managing chemicals in batteries.

Guidance documents have been prepared to ensure consistency and avoid contradictions between the Directive and other legal instruments. However, this may not be sufficient to guarantee that the requirements of the instruments concerned are fully implemented and that possible synergies are effective.

The development of new batteries, cars and electric and electronic equipment technologies requires clear demarcation lines for the obligations that apply to the products concerned, independently of the legal instrument concerned (i.e. the directives on Batteries, WEEE and ELV).

Internal consistency

The Batteries Directive has no obvious contradictions or duplications. However, some of its basic concepts are not well-defined and some objectives remain vague, particularly when there are no specific measures to be implemented or targets to be met.

The Directive only sets targets for the separate collection of portable waste batteries and the recycling efficiencies of certain types of collected waste batteries. In particular:

there is no target for reducing the disposal of batteries as municipal waste;

there are no quantitative targets for the separate collection of automotive and industrial batteries; and

the obligation to ensure the treatment and recycling of ‘all’ collected waste batteries is not explicitly spelled out.

Reporting obligations are only established when targets are set. The absence of quantified targets makes it very difficult to assess Member States' performance on these particular aspects.

There are cases where the lack of detail in the definition of the obligations may distort the internal market such as the classification of batteries, exemptions to obligations on removability or labelling, and the consideration of slag as a recycled product.

EU Added Value

There is significant support for the conditions for the sale, collection and recycling of batteries to continue being set at EU level. Stakeholders consider that the Directive has been the major contributor to ensuring the harmonisation of the batteries market. Most stakeholders also consider that the Directive has contributed to the well-functioning of the single market for batteries and that trade barriers are lower compared with what national regulations could have achieved.



7.Annex 7: Facts and figures

Mass flows, demand and production

Mass flows

In 2015, the total amount of batteries placed on the EU market in 2015 was about 1.8 million tonnes. Automotive batteries represented by far the largest share in weight in 2015, amounting up to 1.10 million tonnes, which correspond to 61 % of the weight of all batteries placed on the market (see figure 6 below). In 2018, more than 70 % of world rechargeable energy charging capacity was provided by lead-acid batteries. 26  

The second largest share, 27 % or about 0.49 million tonnes, corresponded to industrial batteries and accounted for nearly half the weight compared to automotive batteries. The remaining 12 %, 212 000 tonnes, were ‘portable batteries’. 27

Figure 4: Mass flow of the different types of batteries (and their chemistries), in 2015. 28

Although significant changes in mass flows take time to materialise, it is expected that the prevailing position of lead-acid batteries (mostly automotive ones) disappears in the near future as regards energy stored by batteries. 29 In terms of weight placed on the EU market, however, the situation described in Figure 4 above could still exist.

Demand

Different sources diverge as regards the exact growth in demand of batteries in the near future within the EU, but not in the main driver.

In the medium and long term, the increases in the demand will be triggered by mainly by EVs and also by Energy Storage Systems (ESS) sectors (see Figure 5 below).

Figure 5: Battery capacity demand generated by Electric Vehicles and Energy Storage Systems applications in the EU28 in minimum and maximum scenarios from 2015 to 2050 and average scenario shares for each battery application 30

 

31 32 Despite the small number of electric vehicles within the EU fleet and their small market share - about 321 000 in 2017, 1.5 % of new passenger vehicles - their registration numbers have increased steadily over the last few years (see Figure 6 below). Even if the combined share of PHEVs and BEVs in all car sales remained low in 2018 - 2 % - ACEA reports an exponential growth in the registration of electric cars already in 2019. The Covid-19 crisis has had an impact on the uptake of e-mobility for both cars and light means of transport as e-bikes.

33 34 While European passenger cars sales have gone down by about 50%, sales of electric vehicles have increased and in March 2020, they reached an all-time high market share of 10% of passenger cars sales. The upward trend in the sales of EVs is likely to continue in the future as all but one Member States have put in place some form of incentive for EV purchases including acquisition tax or VAT exemptions, car ownership tax reductions, company car deductibility and purchase incentives. Additional public measures include increasing availability charging facilities, access to restricted traffic, free parking, etc. Similarly, after an initial stall due to lockdown and retail store closures, the sales of e-bikes are now booming. Stakeholders have reported increased sales that have already compensated for the losses during the lockdown weeks.

Figure 6: Electric vehicles registered within the EU (2010-2018)

In very broad terms, and keeping in mind the large margin of variation in the figures estimated by different sources, the most conservative estimations result in a range of 450 GWh and 500 GWh 35   36 for the demand for batteries within the EU in 2030, compared to less than 50 GWh in 2020. These forecasts are in line with the conclusions of a recent JRC report. 37  

In 2015, consumer electronics was the biggest sector with 50 % of the lithium batteries global market 38 . This situation is expected to change, 3-C batteries which in 2019 accounted for more than 20 % globally, would only represent the 2.5 % in 2030. Within the EU, this sector would continue to grow in the period considered, but at a much lower rate than the others. Based on mass-flows assessments, it can be estimated that, for alkaline batteries, the total EU demand in 2030 will be about 13 GWh (assumption: ca. 85 kWh/tonne of battery). 39

Portable rechargeable lead-acid and NiCd batteries together accounted for about 4 % of all portable batteries placed on the market. Primary batteries account for about three-quarters of all portable batteries, of which alkaline batteries were the most important type (covering e.g. 61 % in Germany or 64 % in France). Amongst portable rechargeable batteries, Li-ion batteries were the most relevant ones.

As regards lead-acid batteries (including automotive and industrial batteries) the global demand in 2018 was 450 GWh. 40 In that year, lead-acid batteries provided approximately 72% of the world rechargeable battery capacity (in GWh). 41 Within the EU market, it is estimated that the current demand for this type of batteries, 100 GWh, will be reduced to about 80 GWh in 2030.

Production

If the expected demand presented above materialises, annual global battery production revenues in 2030 could amount up to $300 billion, of which more than 30 would correspond to the EU. 42

If these forecast materialise the EU would nevertheless continue to be in deficit as regards the production of lithium – ion batteries.

As shown in Table 1 below, in 2016, the EU industry manufactured 15 % of the global production of lead-acid batteries, and the EU was a net exporter of this type of battery. Concerning primary cells and batteries, the EU was also a net exporter, although to a lower extent. The volume of NiCd (nickel-cadmium), NiMH (nickel metal hydride) and lithium-based batteries manufactured in the EU was around 5 % of the global output. The EU is a net importer of Ni - based batteries.

Table 1: Battery production (EU-28), import and export values by 2016, million € 43

Production

Import million €

Export
million €

Lead-acid batteries

5 141

1 346

1 452

Primary cells and primary batteries

812

763

354

Nickel cadmium, nickel metal hydride, lithium-ion, lithium polymer, nickel iron and other batteries

1 083

3 418

738

Total

7 037

5 526

2 545

Table 2: Battery Production (EU-27), import and export values in 2018, million €, source Prodcom data, ESTAT

Prodcom Code

Exports

Imports

Production

Placed on the market

27201100 - Primary cells and primary batteries

520

771

1.039

1.290

27201200 - Parts of primary cells and primary batteries (excluding battery carbons, for rechargeable batteries)

15

29

8

21

27202100 - Lead-acid accumulators for starting piston engines

1 169

530

3 815

3 176

27202200 - Lead-acid accumulators, excluding for starting piston engines

800

881

1.666

1 747

27202300 - Nickel-cadmium, nickel metal hydride, lithium-ion, lithium polymer, nickel-iron and other electric accumulators

1 186

4 831

1 559

5 204

27202400 - Parts of electric accumulators including separators

260

503

337

580

Total

3 951

7 543

8 424

12 017

In broad terms, the EU’s share of global lithium – ion battery production was only 3% in 2018, of a total of 147GWh.

Pack manufacturing and system integration and assembling for industrial lithium-ion batteries is taking place on large scale in Europe, due to the importance of the car manufacturer sector within the EU. The lack of large-scale cell production constitutes a significant gap in the value chain of this industry.

This situation is likely to change in the future, if the industrial plans brought forward by the members of the European Batteries Alliance finally materialise. They state that they plan investments intended to establish cell manufacturing facilities within the EU in coming years. The production of lithium base batteries could amount up to around 340 GWh per year in 2030.

According to the information provided by members of the European Batteries Alliance on the industrial plans of its members and the information of publically announced investments in the EU production of lithium-based cells within the EU (by EU and non-European manufacturers) could reach up to around 370 GWh per year in 2025. If these levels of production materialise, this could serve the demand in Europe. 44  This would also make the EU the second highest region of production worldwide, after China (see Figure 7 ). 45 .

Figure 7: Lithium-ion cell production capacities for industrial batteries within the EU in GWh per year by location of plants

Efforts for establishing manufacturing capacity in Europe will primarily target lithium-ion cells with cathodes employing nickel, manganese and cobalt (NMC) at different proportions, and anode mainly graphite. 46   47 An increasing number of carmakers are choosing full NMC chemistry to achieve higher energy density and thus longer autonomy of the vehicles concerned. 48

Raw materials

While the number of components and raw materials of alkaline and lead-acid batteries is low, lithium-ion batteries are composed of many substances, in different rates, and require more numerous raw materials for their manufacturing.

The demand of particular substances strongly depends on the technical evolution that batteries undergo. Thus, for instance, NMC 910 batteries, i.e. without cobalt, could be the prevailing technology in lithium-ion batteries in 2035, with the logical consequences in the whole sector. 49

Batteries manufacturing is becoming one of the main drivers for the extraction of raw materials. The development of the battery market in recent years is linked to the increasing amount of cobalt in this sector, the use of cobalt in lithium ion batteries went from 25 % in 2005 to 44 % in 2015. 50 In the case of nickel the rate of variation for lithium is estimated at 35 % and more than 50 % for nickel.

The actual demand will be determined by the type of battery which is produced and placed on the market. Even inside the same technological/chemical group (lithium-ion) variations in the composition of cathodes (nickel-manganese-cobalt in this case) entail differences in the demand of components, as shown in Table 3  below.

Table 3: Elements required for the preparation of three NMC types of cathodes (kg/kWh)

Cathode

Cobalt

Lithium

Nickel

Manganese

NMC 111

0,394

0,139

0,392

0,367

NMC 622

0,214

0,126

0,641

0,200

NMC 811

0,094

0,111

0,750

0,088

Very little extraction of non-energy raw materials occurs within EU Member States. Even if different minerals that after treatment and transformation yield usual components are exploited within the EU (see Table 4 below), the domestic supply of battery raw materials from mining activities is currently limited.

Of the six substances mentioned in the Table 4  below, cobalt, lithium and natural graphite display a particularly high risk of supply shortage in the next years and are particularly important for the value chain and are considered critical raw materials. 51   52

Table 4: EU Member States where minerals used for the manufacturing of batteries are extracted (situation at 2017) 53

Cobalt

Lithium

Nickel

Manganese

Lead

Graphite

Austria

ü

Belgium

ü

Bulgaria

ü

ü

ü

Czech R.

ü

Finland

ü

ü

France

ü

ü

Germany

ü

Greece

ü

ü

Hungary

ü

Ireland

Italy

ü

ü

Poland

ü

ü

Portugal

ü

ü

Romania

ü

ü

ü

Slovakia

ü

Spain

ü

ü

ü

Sweden

ü

ü

Moreover, the sourcing of some particularly important raw materials is concentrated in a few countries. The 69 % of the global supply of natural graphite comes from China, the 64 % of global cobalt supply comes from the Democratic Republic of Congo, and the 83 % of the actual global supply of lithium comes from brines and mine sites located in Chile, Australia, Argentina and China (see Figure 8 below).

While the supply of these materials is potentially vulnerable to disruption, there is a general recognition that the sources of most materials contained in lithium-ion batteries should be able to meet the demand for the near future. 54 A number of conditions should however be taken into consideration for this equilibrium to materialise. If national or international policies incentivize the uptake of electric vehicles, including for instance taxes on fossil fuels, demand could outpace supply for some battery-grade materials (even for lithium in the very near term). 55 However, there is consensus on that there is enough reserves of lithium minerals, but there will be difficulties to adapt its production levels and develop new projects if the demand grows too fast..

Figure 8: Countries accounting for largest share of EU supply of battery materials 56

The case of lead is different. Disruption of supply seems very unlikely. Moreover, the provision of secondary lead covers around 80 % of the demand (see Figure 9 below).

Figure 9: Amounts (in thousands of tons) of secondary and primary refined lead produced within the EU, and level of coverage of needs by secondary material (%) 57

GHG emissions from batteries manufacturing

In the EU, transport causes roughly a quarter of Green House Gas (GHG) emissions and is the main cause of air pollution in cities, 58 Road transport in particular is the main contributor to transport-related GHG emissions. 59  

A broader uptake of electric vehicles will help to reduce GHG and other noxious emissions from road transport. In the EU, a strong increase in the electrification of passenger cars, vans, buses and, to a lesser extent, trucks is expected to take place between 2020 and 2030, mainly driven by the EU legislation setting CO2 emission standards for new vehicles. The electrification of some housing services, like energy storage or heating, will follow and contribute to further reducing the emissions concerned. 60

A recent study for the European Commission has elaborated and applied a methodology for assessing and comparing the environmental impact of vehicle types equipped with different powertrains and running on different fuels using a Life Cycle Assessment approach.  61  

The study shows the better environmental performance of electric vehicles compared to conventional vehicles across all assessed indicators. It is also concluded that environmental benefits from the use of battery electric vehicles will increase in the future, in particular in view of the steadily decarbonised electricity mix. Results on human toxicity or abiotic depletion are less outspoken as they are influenced by the use of specific materials in the electronic systems or wiring of the vehicles.

Technological developments have made lithium-ion batteries the preferred choice for batteries used in electric vehicles and for stationary energy storage, even if other technologies are also used.

The manufacturing of all type of batteries entail GHG emissions, in addition to other environmental impacts. According to the PEFCR, in LCA terms, Global Warming Potential accounts for about one fourth to one third of the total environmental impact of Li-ion batteries over their entire life cycle. 62 The most important GHG emissions across the lifetime of such batteries take place during the production phase, 63 i.e. extraction, processing and production of materials, cell production and battery assembly altogether. This is due to mining, extraction, processing and refining activities needed to transform minerals into components of the battery, as well as to energy-intensive chemical processes needed to build the cell (e.g. coating and drying).

To maximise the environmental benefits of electric vehicles, the batteries used in them and the industrial processes to manufacture them have to be highly resource, energy and carbon efficient. This will allow the placing on the market of batteries that require lower amounts of energy or materials in their production or that have longer lifetime or better roundtrip efficiency.

Although the recycling of waste batteries contributes to mitigate the environmental impacts, it also produces emissions, even if its impact is relatively low. 64 Recycling systems that rely on intensive energy use (as e.g. pyro metallurgical treatments) are likely to produce higher emissions, while hydrometallurgical process, which make use of selective dissolution by specific solvents are likely to have higher impact in environmental quality terms. 65

The use and recycling of rechargeable batteries (including portable ones) is in principle less energy-intensive. The total balance, however, depends strongly on the number of charging cycles they are able to undergo, and on the recovery of the materials that these batteries contain.  66

In any case, recycling is key aspect to maximize the benefits of using battery technologies for decarbonisation. Increased levels of recycling will feed into the raw materials supply and ease the pressure on raw materials and reduce the GHG emissions associated with the production of substances needed for the cells and other components of the batteries.

Hazardousness of components

The hazardousness 67 of the most relevant chemical components of the batteries mentioned above is presented in this annex.

Lead - acid batteries

The lead-acid battery is based on lead dioxide as the active material of the positive electrode, metallic lead, in a high surface area porous structure, as the negative active material and sulphuric acid solution.

·Lead itself (Pb) is a toxic heavy metal. This substance may damage fertility or the unborn child, causes damage to organs through prolonged or repeated exposure, is very toxic to aquatic life with long lasting effects, may cause cancer, is very toxic to aquatic life and may cause harm to breast-fed children.

·Lead oxide (PbO) and dioxide (PbO2) may damage fertility or the unborn child, are very toxic to aquatic life with long lasting effects, may intensify fire (oxidiser), are harmful if swallowed or if inhaled and may cause damage to organs through prolonged or repeated exposure. Lead dioxide is believed to be carcinogenic.

·Sulphuric acid (H2SO4) causes severe skin burns, eye damage, and is toxic if inhaled.

Alkaline batteries

Alkaline cells contain Zinc, Zinc oxide, Manganese dioxide and potassium hydroxide, as the main components. 68

·Manganese dioxide (MnO2) is harmful if swallowed and is harmful if inhaled. Additionally, the classification provided by companies in REACH registrations identifies that this substance causes damage to organs through prolonged or repeated exposure.

·Zinc oxide (ZnO) is very toxic to aquatic life with long lasting effects. This substance may damage fertility or the unborn child, is harmful if swallowed, is harmful if inhaled and may cause damage to organs through prolonged or repeated exposure.

·Zinc (Zn) is very toxic to aquatic life and is very toxic to aquatic life with long lasting effects.

·Potassium hydroxide (KOH) causes severe skin burns and eye damage and is harmful if swallowed.

As an improvement seeking longer life or higher power for this type of batteries, the compound nickel oxide-hydroxide is used as additive.

·Nickel oxide-hydroxide (NiO) may cause cancer by inhalation, causes damage to organs through prolonged or repeated exposure, may cause long lasting harmful effects to aquatic life and may cause an allergic skin reaction.

Nickel-cadmium batteries

The active materials of this type of batteries contain cadmium, nickel oxyhydroxide and a solution of potassium hydroxide. 69

·Cadmium (Cd) is fatal if inhaled, very toxic to aquatic life, also with long lasting effects, may cause cancer, causes damage to organs through prolonged or repeated exposure, is suspected of causing genetic defects, is suspected of damaging fertility or the unborn child and catches fire spontaneously if exposed to air.

Lithium – ion batteries

Electrochemically active materials in these batteries are a lithium metal oxide or a lithium metal phosphate and a lithiated graphite. Current lithium-ion batteries contain cobalt, nickel or manganese. Electrolytes are usually constituted of fluorinated lithium salts.

·Cobalt oxide (CoO) is very toxic to aquatic life with long lasting effects, is harmful or even fatal if swallowed and may cause an allergic skin reaction. It may cause cancer, may damage fertility or the unborn child and may cause allergy or asthma symptoms or breathing difficulties if inhaled.

·Lithium hexafluorophosphate (LiPF6), is toxic if swallowed, causes severe skin burns and eye damage, causes damage to organs through prolonged or repeated exposure and causes serious eye damage.

Electrochemically active materials in these batteries are a lithium metal oxide or a lithium metal phosphate and graphite. Current cathode materials in lithium-ion batteries may contain cobalt, nickel or manganese. Electrolytes are usually constituted of fluorinated lithium salts dissolved in highly volatile and flammable organic solvents.

·Cobalt oxide (CoO) is very toxic to aquatic life with long lasting effects, is harmful or even fatal if swallowed and may cause an allergic skin reaction. It may cause cancer, may damage fertility or the unborn child and may cause allergy or asthma symptoms or breathing difficulties if inhaled.

·Lithium hexafluorophosphate (LiPF6), is toxic if swallowed, causes severe skin burns and eye damage, causes damage to organs through prolonged or repeated exposure and causes serious eye damage. LiPF6 can react with water, releasing HF and further potentially harmful species, becoming an additional health hazard.

·Organic volatile compounds in electrolytes (e.g. ethylene carbonate, diethyl carbonate, dimethyl carbonate) are highly volatile, flammable and toxic if inhaled.

Mercury-containing batteries

Mercury oxide chemistries have been used for button cells containing mercury oxide, cadmium components and zinc components. In addition, amalgamating zinc and mercury has been in the past the approach to counteract the tendency for corrosion in zinc-air batteries.

Mercury (Hg) is fatal if inhaled, may damage fertility or the unborn child, causes damage to organs through prolonged or repeated exposure, is very toxic to aquatic life, also with long lasting effects.

Analysis of the sector

Data is available for manufacturers of batteries and accumulators in Europe, using data from Eurostat. The Table 5 below shows the number of companies, their turnover, number of employees and cost structure. This uses NACE classification code 27.20 (section C Manufacturing) 70 .

In summary, there are almost 500 such firms in Europe (data below does not include a firm count for Italy) with a turnover of around 9 billion Euros per annum for the sample covered, and perhaps 13 billion Euros per annum overall. This suggests an average turnover of around 26 million per firm. Around 30,000 people are employed, or around 60 per firm.

Table 5: Eurostat data for batteries and accumulators

Country

Enterprises Number 2018

Turnover or Gross Premiums (millions EUR) 2018

Turnover from the principal activity at 3-digit level NACE Rev. 2 - (million euro) 2017

Gross Operating Surplus (millions EUR) 2017

Employees number 2017

Persons employed number 2018

Turnover per Person Employed (thousand EUR) 2017

Cost Structure

Total Purchases of Goods and Services (million EUR) 2018

Wages and salaries (million EUR) 2018

Personnel costs (million EUR) 2017

European Union - 27 countries (from 2020)

450

:

:

:

:

29,900

:

9,000.0

1,000.0

:

European Union - 28 countries (2013-2020)

:

:

:

:

31,909.0

31,699

:

:

:

:

European Union - 27 countries (2007-2013)

:

:

:

:

:

:

:

:

:

:

Belgium

7

189.4

181.6

30.5

945

913

196.7

99.6

44.7

59.8

Bulgaria

12

249.7

211.6

12.2

1,053

1,114

221.7

220.1

11.6

12.0

Czechia

42

597.7

572.8

33.9

1,350

1,390

427.9

542.1

26.9

34.4

Denmark

5

:

:

:

:

:

:

:

:

:

Germany

76

3,365.8

3,151.1

87.7

9,923

8,843

391.3

2,987.9

403.2

555.7

Estonia

:

:

:

:

:

:

:

:

:

:

Ireland

:

:

:

:

:

:

:

:

:

:

Greece

13

211.7

227.9

22.9

807

780

284.3

176.0

15.9

20.4

Spain

23

1,105.7

1,048.8

77.4

2,211

2,239

475.2

954.6

74.1

100.1

France

27

1,128.2

538.9

71.3

2,207

:

430.9

902.4

142.6

133.9

Croatia

5

0.7

0.6

-0.3

40

32

33.8

0.6

0.2

0.3

Italy

:

1,465.7

1,380.9

86.8

2,869

2,926

472.9

1,259.4

96.1

138.4

Cyprus

0

0.0

0.0

0.0

0

0

:

0.0

0.0

0.0

Latvia

2

:

:

:

2

2

:

:

:

:

Lithuania

0

0.0

0.0

0.0

0

0

:

0.0

0.0

0.0

Luxembourg

3

:

:

:

:

:

:

:

:

:

Hungary

12

6.7

25.0

2.3

115

40

258.4

6.8

1.3

1.5

Malta

:

:

:

:

:

:

:

:

:

:

Netherlands

31

:

:

:

89

124

:

:

:

:

Austria

9

625.2

503.8

19.7

954

991

593.1

516.5

55.1

66.8

Poland

61

1,056.3

841.7

54.1

4,038

5,143

226.2

953.0

69.0

70.9

Portugal

3

132.6

127.8

1.4

445

446

297.2

117.6

11.6

15.7

Romania

5

104.4

:

:

817

822

120.1

:

:

:

Slovenia

3

:

:

:

:

:

:

:

:

:

Slovakia

6

6.4

:

:

:

25

:

5.7

0.2

:

Finland

10

2.5

2.3

0.4

30

33

69.6

3.0

1.1

1.4

Sweden

19

:

:

:

:

:

:

:

:

:

*the indicator for the employees number is expressed in number of people (not thousands or millions )

*Reported data missing for some countries because it is confidential or not reported

Analysis of the companies using the ORBIS database

The Joint Research Centre (JRC) undertook an analysis of firms using information extracted from the Orbis commercial database, provided by Bureau van Dijk, a Moody’s Analytics Company. The database contains information on private corporations across the world, presenting it in comparable formats. The information in the Orbis dataset is collected from the firms’ balance sheets reporting duties. Since the balance sheet reporting requirements vary according to different country legal frameworks and firms’ listing status, the data collected is affected by limitations in terms of missing information. This has implications on the type (size) of firms sampled, and on the obligation of reporting certain variables. In many cases, this leads to the absence of financial and other information for a number of firms. For these reasons, the Orbis database is known to under-represent SMEs, which typically have fewer reporting obligations. As such, the result of any analysis conducted with this dataset must be interpreted with caution as the samples derived by it are not necessarily representative of the industry.

The sample covers EU28 companies whose “primary” economic activity is registered under the NACE code 2720 - manufacture of batteries and accumulators. Note that a given firm’s activity can be registered in several primary NACE economic classifications. In these cases it is relevant to consider the firm’s “core” activity. These may also include firms whose main activity is under the NACE code 2711 - manufacture of electric motors, generators and transformer. The sample used in this analysis refers to the period 2015-2019.

The financial variables selected from the Orbis dataset and used to characterize the firms in the market are:

ˆ Total assets (in millions), equal to the sum of fixed and current assets;

ˆ Turnover (in millions);

ˆ Sales (in millions);

ˆ Number of employees;

ˆ Cost of labour force (in millions);

ˆ Cost of materials (in millions);

Due to missing information, other variables initially considered are not available (i.e. gross profit, investments in R&D, and partially also the number of patents). Keeping in mind that we cannot claim a perfect representativeness of the universe of relevant firms (neither at the European nor at the country level), the largest companies are present in Austria, Germany, Portugal, France, Spain, Slovenia, and Czech Republic.

The ORBIS database also provides a static analysis as if all balance sheets referred to the same period. This simplification entails keeping only the most recent observation for each company and for each variable. This is intended to maximize the sample size at the expense of time consistency across variables. It shows that materials make up a significant part of the cost base for the sector, which is not a labour intensive sector (rather it is capital intensive).

Table 6: ORBIS Analysis of Battery manufacturers

count

mean

sd

min

25th

75th

max

Total assets

480

24.51

100.95

0

0.1

6.87

1230.26

Turnover

313

38.66

122.65

-0.26

0.11

11.58

1467.62

Sales

281

39.32

124.64

0

0.09

11.52

1430.74

Employees

352

89.45

207.89

0.00

3

47

1456

Cost of labour force

236

5.39

12.86

0.00

0.08

3.55

100.24

Cost of materials

205

38.16

116.08

-0.01

0.08

16.03

1194.97

All variables are measured in millions of euros, with the exception of number of employees. This sample contains the latest available information for each company and for each variable. This is intended to maximize the sample size at the expense of time consistency across variables. In other words, the table neglects the fact that observations may refer to 2015, 2016, 2017, 2018, or 2019.

The variable “number of patents” has non-missing values in 132 out of 778 distinct companies. No time trend is observable since this measure is constant over time. Moreover, non-reported information could be considered non disclosed or equal to zero. The cumulative number of patents held by the firms by country of registration. This number is obtained by summing up all the patents in the countries. Patents’ ownership is extremely skewed, with some countries declaring no patents and three countries (Germany, Spain, and France) with more than 100 patents on average per firm.

Examples of Battery Companies in Europe

The following is list of example companies 71 . The companies highlighted in bold have as single/main activity battery manufacturing, whereas others have other activities sometimes to a much more significant degree than manufacturing.

Company

Location

Specialty

Number of Employees

Annual Revenue in EUR

Company activity

Akasol

Germany

High performance battery systems

72

For the financial year 2019, AKASOL expects an increase in revenue to at least EUR 60 million

leading manufacturer of high performance battery systems for different applications - buses, commercial vehicles, rail vehicles, marine

ARTS Energy

France

Lithium-ion, Ni-MH and Ni-Cd chemistries

270

53 Million

High performance batteries specialist for industrial businesses.

Blue Solutions

France

Lithium polymer batteries

413

38.2 Million

Bosch

Germany

Pb-acid and Lithium-ion batteries

400,000

78.5 Billion

BroadBit

Finland

sodium-based chemistries

BroadBit is a technology company developing revolutionary new batteries using novel sodium-based chemistries to power the future green economy.

Continental AG

Germany

Lithium-ion (incl. all-solid-state) batteries for electric vehicles

243

44.4 Billion

EAS Batteries

Germany

Cylindrical Lithium-ion cells with stainless steel containers

via extrusion

28

4.5 Million

Solutions for hybrid electric and electric applications for ships, underwater vehicles and on shore harbor equipment 

E4V

France

Lithium-ion batteries

based on LiFePO4

21

15.4 Million

Battery solutions to electric vehicles

European Battery Technologies

Finland

Lithium-ion based prismatic cells

Industrial batteries

Johnson Matthey Battery Systems

England/

Poland

Lithium-ion batteries for electric vehicles

520

100 Million

Part of the Johnson Matthey group. Europe's largest independent designer and manufacturer of lithium-ion battery systems. 

Leclanché

Switzerland

Lithium-ion batteries

163

45 Million

World provider of energy storage solutions, based on lithium-ion cell technology. 

NorthStar

Sweden

Pb-acid batteries

500

144 Million

Northvolt

Sweden

Greenest Lithium-ion batteries

250

18 Million

Northvolt is a supplier of sustainable battery cells and systems.

Saft

France

Lithium-ion batteries

4,500

827 Million

advanced-technology battery solutions for industry,

SK battery

Hungary

Hungary

Lithium-ion batteries

979

4.5 Million

manufacture lithium-ion batteries for electric vehicles

Super B

Holland

Lithium-ion batteries

based on LiFePO4

59

12.7 Million

Super B develops and produces advanced Lithium Batteries for Marine, Automotive, Motorcycle, UPS, Recreational and Industrial applications

Tiamat Energy

France

Na-ion batteries

31

5.5 Million

Tiamat designs, develops and manufactures sodium-ion batteries for mobility and stationary energy storage

Triathlon Batteries Solutions, Inc.

Germany

Pb-acid and Lithium-ion batteries

7

5.6 Million

assembly manufacturer and developer of Lead-Acid batteries and  Lithium-Ion batteries ,

Varta

Germany

Pb-acid and Lithium-ion batteries

130

362 Million

Wyon

France

Miniaturized Lithium-ion batteries

List of top Global Batteries Manufacturers

The following is a list of some of the largest global manufacturers. The companies highlighted in bold have as single/main activity battery manufacturing, whereas others have other activities sometimes to a much more significant degree than manufacturing.

Company

Location

Specialty

Number of Employees

Annual Revenue in USD

Company activity

SAMSUNG SDI

South Korea

Lithium-ion batteries

10,650

8 Billion

A subsidiary of Samsung electronics, Samsung SDI is dedicated to fuel research and innovation in lithium ion technology, both for in-house use and for potential clients elsewhere. Currently, the firm is engaged in the production of lithium ion batteries, solar energy panels, and energy storage systems among other things

Panasonic Corporation

Japan

Lithium-ion batteries and others

71.8 Billion

worldwide leader in the development of diverse electronics technologies and solutions

Toshiba

Japan

Lithium-ion batteries

business conglomerate that focuses on Information Technology, electronics, energy, social infrastructure and communications sectors.

LG Chem

South Korea

Lithium-ion batteries

14,974

24.7 Billion

LG Chem is a manufacturer and supplier of petrochemicals, polyvinyl chloride resins and engineering plastics for industrial applications.

Contemporary Amperex Technology Co. Limited

China

Lithium-ion battery power

solutions

24,875

6.6 Billion

 battery manufacturer and technology company

BYD

China

Lithium-ion battery power

solutions

229,000

18.2 Billion

The firm makes both lithium ion batteries along with electric cars

TESLA

USA

Lithium-ion batteries for

automotives and solar power storage

A123 Systems Inc.

USA

Automotive Lithium-ion Solutions

3,000

500 Million

A123 Systems develops, manufactures and supplies nanophosphate lithium iron phosphate batteries and energy storage systems.

Aquion Energy

USA

Aqueous hybrid-ion (AHI)

chemistry

87

17 Million

Aquion Energy is the manufacturer of proprietary Aqueous Hybrid Ion (AHI™) batteries and battery systems for long-duration stationary energy storage application


Battery Streak

USA

Ultra Fast Charging

lithium-ion cells

38

7 Million

Electrovaya

Canada

Lithium-ion battery power

solutions

 123

5.6 Million

for automotive, power grid and medical industries.

ENOVIX

USA

3D Silicon Lithium-ion battery

120

28 Million

Exide

USA

Pb-acid batteries

8,986

2.9 Billion

Exide Technologies is an American multinational lead-acid batteries manufacturing company. It manufactures automotive batteries and industrial batteries. 

The following two tables show the top Battery Manufacturers 72

Table 7: Top 12 Global Li-ion Battery Manufacturers

Rank*

Company

2017 Installed Manufacturing Capacity**

Country

Revenue***

Market Cap****

1

LG Chem

17 GWh

Korea

$23.1 Billion

$23.9 Billion

2

BYD

16 GWh

China

$15.5 Billion

$15.4 Billion

3

Panasonic

8.5 GWh

Japan

$71.8 Billion

$31.8 Billion

4

AESC

8.4 GWh

Japan

NA

NA

5

CATL

7.5 GWh

China

$3.0 Billion

$23.3 Billion

6

Guoxuan High-Tech

6 GWh

China

$718 Million

$2.3 Billion

7

Samsung SDI

6 GWh

Korea

$5.7 Billion

$14.0 Million

8

Lishen

3 GWh

China

NA

NA

9

CBAK

2.5 GWh

China

$58.4 Million

$19.2 Million

10

CALB

2.4 GWh

China

NA

NA

11

LEJ

2.3 GWh

Japan

NA

NA

12

Wanxiang

2.1 GWh

China

$1.7 Billion

$2.6 Billion

Table 8: Key Global Non-Li-ion Battery Manufacturers

Rank

Company

Non-Li-ion Battery Technology

Country

Founded

Revenue** (Billions)

1

Gridtential

Lead Acid

USA

2010

NA

2

Sumitomo Electric

Vanadium Redox

Japan

1897

$43.5

3

Enerox

Vanadium Redox

Germany

2018

NA

4

UniEnergy

Vanadium Redox

USA

2012

NA

5

Vionx Energy Inc.

Vanadium Redox

USA

2002

NA

6

Primus Power

Zinc Bromide Flow

USA

2009

NA

7

NGK Insulators

Sodium Sulfur

Japan

1919

$3.7

8

FIAMM

Lead Acid

Italy

1942

NA

8.Annex 8: EU research and innovation support for batteries

Context

This section presents the current policy context at EU level as well as the related research and innovation activities linked to the batteries ecosystem. An overview of the different EU-funded projects is provided to illustrate the extent of the funding and the variety of topics investigated. Details of the funded projects, their funding topics and the subject of their research are detailed for reference.

In its long-term vision for a climate-neutral economy by 2050 – “A Clean Planet for All” 73 , the Commission shows how Europe can lead the way to climate neutrality, providing a solid basis for work towards a modern and prosperous climate-neutral economy by 2050. This vision makes clear that electrification is set to be one of the main technological pathways to reach carbon neutrality.

Batteries will be one of the key enablers for this transition given the important role they play in stabilising the power grid and in the roll-out of clean mobility. Driven by the ongoing clean energy transition, demand for batteries is expected to grow rapidly in the coming years (more detail in Annex 9), making this an increasingly strategic market at global level. Batteries development and production is a strategic imperative for Europe and is a key component of the competitiveness of its automotive sector as detailed in EUROPE ON THE MOVE 74 .

Therefore, batteries have been identified by the Commission as a strategic ecosystem, where the EU must step up investment and innovation in the context of a strengthened industrial policy strategy aimed at building a globally integrated, sustainable and competitive industrial base.

Batteries offer a very tangible opportunity to use this deep transformation to create high value jobs and increase economic output. They can become a key driver for the EU’s industrial competitiveness and leadership, notably for Europe’s automotive industry.

To prevent a technological dependence on our competitors and capitalise on the job, growth and investment potential of batteries, Europe has to move fast in the global race to consolidate technological and industrial leadership along the entire value chain. The Commission is working together with many Member States and key industry stakeholders to build a competitive, sustainable and innovative battery ecosystem in Europe, covering the entire value chain.

This is the main objective behind the European Battery Alliance (EBA), an industry-led initiative, which the Commission launched in October 2017, to support the scaling up of innovative solutions and manufacturing capacity in Europe. The EBA is helping to foster cooperation between industries and across the value chain, with support at both the EU-level and from EU Member States.

In this context, in May 2018, the Commission adopted the Strategic Action Plan on Batteries 75 which brought together a set of measures to support national, regional and industrial efforts to build a battery value chain in Europe, embracing raw materials extraction, sourcing and processing, battery materials, cell production, battery systems, as well as re-use and recycling. The measures include securing the supply of primary raw materials for batteries from EU and external sources, increasing the contribution of secondary raw materials, supporting research and innovation, working with investors to promote scalability and manufacturing capacity of innovative solutions, and investing in specialised skills.

Europe needs sustained and coordinated efforts to support investments in research and innovation in battery advanced materials and chemistries to enhance its performance on lithium-ion (Li-ion) battery cell technologies, and to pursue leadership in the next generation of battery technologies. Current state-of-the-art batteries are largely based on lithium-ion chemistry, but the demand for higher energy density and performance requires short- to medium-term improvements, together with more radical changes towards a new generation of post-Li-ion batteries based on new advanced materials. EU companies are well placed to take advantage of these technological developments.

In the area of batteries, the EU is mobilising all its support instruments covering the entire innovation cycle, from fundamental and applied research to demonstration, first deployment and commercialisation.

Coordinating battery-related research activities is key to harnessing the potential of this sector. Building on the collaborative efforts of the Strategic Energy Technology (SET) Plan and the Strategic Research and Innovation Agenda (STRIA), the Commission has launched a European Technology and Innovation Platform (ETIP) “Batteries Europe” to advance battery research priorities bringing together industrial stakeholders, the research community and EU Member States to foster cooperation and synergies between relevant battery research programmes. This platform enables co-operation between the numerous battery-related research programmes launched at EU and national levels, as well as private sector initiatives.

The Strategic Action Plan on Batteries also foresees the launch of a large scale and long term research initiative on future battery technologies called Battery 2030+. Battery 2030+ aims at ‘inventing the batteries of the future’ by developing the next generation of ultra-performing, sustainable and safe batteries. The objective is to provide European industry with high-performing and competitive battery technologies to regain technology leadership in the next decade.

The Commission, together with private partners is proposing a co-programmed partnership on batteries in the future Research and Innovation Framework Programme, “Horizon Europe”, starting in 2021. This vision and objective-oriented policy activity will gather concrete commitments from the industry in order to accelerate research on European level through Horizon Europe activities together with a set underlying actions undertaken by industry, research organizations, associations and Member States. This coherent framework will allow moving towards a competitive European industrial battery value chain for stationary applications and e-mobility

The EU budget is already providing important funding opportunities to support research and innovation in batteries. The EU’s Framework Programme for Research and Innovation for 2014-2020, Horizon 2020, has granted EUR 1.34 billion to projects for energy storage on the grid and for low-carbon mobility. In 2019, Horizon 2020 added a call to fund, under the European Battery Alliance, battery projects worth EUR 114 million. This was followed by a call in 2020 amounting to EUR 132 million, covering batteries for transport and energy. The European Regional Development Fund is also providing support for research and innovation to promote an energy-efficient and decarbonised transport sector.

The projects on batteries funded under H2020 programme

In this section, projects on batteries funded by the EC under H2020 programme are presented. They were selected for funding from calls/topics of different parts of H2020, some calls specifically addressing batteries and others more generalist. In terms of structure, the range of funding schemes, the expected Technology Readiness Level (TRL) of the proposed solutions, the number of participants and the budget/EC contribution, is very wide. In relation to the technical dimension, the focus of the projects regarding the components, types of batteries, steps of the value chain and aspects addressed is huge.

Projects are grouped by the agency/DG in charge of their grants because this division represents to some extent the specificity of the calls and of the funding schemes.

Projects granted by DG Research and Innovation (R&I) through INEA. The H2020 call of 2019 is the cross-cutting call Building a Low-Carbon, Climate Resilient Future: Next-Generation Batteries (H2020-LC-BAT-2019-2020). It is organised in 15 topics covering a relevant spectrum of activities in the field of electric batteries technology: short term research for advanced Li-ion electrochemistry and production processes, short to medium term research for solid-state electrochemistry, modelling tools, new materials for stationary electric batteries, hybridisation of battery systems, next generation batteries for stationary energy storage, next generation and validation of battery packs and battery management systems, networking of pilot lines and skills development and training. Four of them kick-start a large-scale research initiative on Future Battery Technologies that will ensure the European knowledge base in long term battery research. This new large-scale, long-term research initiative was announced in May 2018 as part of the Third Mobility package, with its research activities starting to receive support in 2020 from Horizon 2020. In addition to the COP 21 Paris Agreement and decarbonisation, all topics under this call are in line with the Energy Union policies as well as the SET-plan and STRIA. This call has been managed by INEA.

From the 2019 call, 20 projects were selected for funding. They started this year and so no relevant results are yet available. However, some of them participated in the stakeholders consultation implemented in the framework of the preparation of the regulation addressed in the present document.

Under the topic LC-BAT-1-2019 - Strongly improved, highly performant and safe all solid state batteries for electric vehicles (RIA, TRL from 3 to 6), the following projects are funded:

·Astrabat (All Solid-sTate Reliable BATtery for 2025);

·SAFELiMOVE (advanced all Solid stAte saFE LIthium Metal technology tOwards Vehicle Electrification);

·SOLiDIFY (Liquid-Processed Solid-State Li-metal Battery: development of upscale materials, processes and architectures); and

·SUBLIME (Solid state sUlfide Based LI-MEtal batteries for EV applications); aims at developing further the current solid state battery technology and present solutions beyond the current state-of the art of solid state electrolytes for electric vehicles.

For the topic LC-BAT-2-2019 - Strengthening EU materials technologies for non-automotive battery storage (RIA, TRL from 4 to 6), projects are:

·CoFBAT (Advanced material solutions for safer and long-lasting high capacity Cobalt Free Batteries for stationary storage applications);

·ECO2LIB (Ecologically and Economically viable Production and Recycling of Lithium-Ion Batteries); and

·NAIMA (Na+ Ion materials as essential components to manufacture robust battery cells for non-automotive applications); address the development of more price competitive, better performant and highly safe battery storage solutions taking into account aspects such as safety and sustainability, including recycling.

The projects CompBat (Computer aided design for next generation flow batteries); and SONAR (Modelling for the search for new active materials for redox flow batteries), selected under the topic LC-BAT-3-2019 - Modelling and simulation for redox flow battery development (RIA), aims at developing mathematical models for numerical simulation and high-volume pre-selection of multi-species electrolyte flow and electrochemistry validated with experimental examples from known chemistries and representative prototypes, and show how new chemistries can be explored.

Under the topic LC-BAT-4-2019 - Advanced redox flow batteries for stationary energy storage (RIA, TRL from 3 to 5) the projects are:

·Baliht (Development of full lignin based organic redox flow battery suitable to work in warm environments and heavy multicycle uses);

·CuBER (Copper-Based Flow Batteries for energy storage renewables integration);

·HIGREEW (Affordable High-Performance Green Redox Flow Batteries); and

·MELODY (Membrane-free Low cost high Density RFB); will develop and validate Redox flow batteries based on new redox couples and electrolytes that are environmentally sustainable, have a high energy and power density, maximise lifetime and efficiency, while minimising their cost.

For the topic LC-BAT-5-2019 - Research and innovation for advanced lithium-ion cells (generation 3b) (RIA), the projects are:

·3beLiEVe (Delivering the 3b generation of LNMO cells for the xEV market of 2025 and beyond);

·COBRA (CObalt-free Batteries for FutuRe Automotive Applications);

·HYDRA (Hybrid power-energy electrodes for next generation lithium-ion batteries); and

·SeNSE (Lithium-ion battery with silicon anode, nickel-rich cathode and in-cell sensor for electric vehicles); have a multidisciplinary approach that includes the system knowledge for the most promising electrochemistries to achieve possible production-readiness by two to three years after the end of the project. The whole system performance for batteries are addressed and related monitoring systems / smart management are expected to be developed.

Under topic LC-BAT-6-201 - Lithium-ion cell materials and transport modelling (RIA, final TRL 5 or higher), the projects are:

·DEFACTO (Battery DEsign and manuFACTuring Optimization through multiphysic modelling) and

·MODALIS2 (MODelling of Advanced LI Storage Systems) address advanced modelling approaches, systematic measurements of basic input parameters for modelling and manufacture of prototype cells or cell components.

For the topic LC-BAT-7-2019 - Network of Li-ion cell pilot lines (CSA), the project LiPLANET (Li-ion cell pilot lines network) was selected for funding.

The evaluation results for the topics of 2020 are not yet available.

Apart from this projects, the INEA portfolio on batteries also includes projects from other calls in the fields of mobile applications and energy storage, launched between 2014 and 2018. These projects already finished or are close to the end. The EC contribution accounts for ca. 53.4 Million Euros.

The following projects concern mobile applications:

·eCAIMAN (Electrolyte, Cathode and Anode Improvements for Market-near Next-generation Lithium Ion Batteries);

·SPICY (Silicon and polyanionic chemistries and architectures of Li-ion cell for high energy battery); and

·FIVEVB (Five Volt Lithium Ion Batteries with Silicon Anodes produced for Next Generation Electric Vehicles), finished in 2018 and were funded under the topic GV-1-2014 - Next generation of competitive Li-ion batteries to meet customer expectations.

These projects aimed at developing a multidisciplinary approach to pursue the optimisation of the electrochemistry to hone parameters critical to customer acceptance: cost, safety aspects, resistance to high-power charging, durability, recyclability and the impact of hybridisation with other types of storage systems, as well as consideration of scale-up for manufacturing.

For the same topic, in 2018, the project i-HeCoBatt (Intelligent Heating and Cooling solution for enhanced range EV Battery packs) was selected for funding. It will finish in 2021.

The projects GHOST (InteGrated and PHysically Optimised Battery System for Plug-in Vehicles Technologies) and iModBatt (Industrial Modular Battery Pack Concept Addressing High Energy Density, Environmental Friendliness, Flexibility and Cost Efficiency for Automotive Applications) were funded under the topic GV-06-2017 - Physical integration of hybrid and electric vehicle batteries at pack level aiming at increased energy density and efficiency (they will finish in 2021 and 2020 respectively).

The IMAGE (Innovative Manufacturing Routes for Next Generation Batteries in Europe) project was also funded by a topic of 2017, GV-13-2017 - Production of next generation battery cells in Europe for transport applications, and will finish in 2021.

In the field of energy storage, the projects:

·NAIADES (Na-Ion bAttery Demonstration for Electric Storage) was funded under the topic LCE-10-2014 - Next generation technologies for energy storage, while

·BAoBaB (Blue Acid/Base Battery: Storage and recovery of renewable electrical energy by reversible salt water dissociation) and

·EnergyKeeper (Keep the Energy at the right place!) under the topics LCE-01-2016 - Next generation innovative technologies enabling smart grids, storage and energy system integration with increasing share of renewables: distribution network.

In summary, batteries thematic is addressed in INEA’s H2020 portfolio for mobile applications and for stationary electric storage. INEA currently has 30 projects researching and developing innovative solutions for the different areas of the value of chain both in the transport and the energy sectors.

In regards to transport applications, the main goal of the research activities on battery is the increase of the energy density (volumetric and gravimetric), the increase of battery cycle life, the decrease of costs and the decrease of charging times. The achievement of these goals would allow electric vehicles to close the performance gap versus conventional powered vehicles (petrol and diesel), allowing EV to perform long trips with minimum travel interruptions.

The main focus in EU research for stationary batteries for energy applications is on lithium-based batteries and redox flow batteries. In the field of lithium-based batteries, the focus is on cost and the environmental impact over the product life-cycle. The current projects look at reducing the cycle-related costs per energy (€/kWh/cycle) while maximizing the recycling of lithium and the use of domestic materials. In the field of redox flow batteries, different projects focus on different technologies including copper-based technologies as well as technologies relying on organic electrolytes. The projects aim at costs reduction while increasing the number of cycles. All battery projects are planning tests with prototypes in laboratory and field test environments.

Other projects granted by DG R&I. Additionally to the previous projects granted through INEA, the portfolio of DG R&I on batteries includes 9 relevant projects in the field of batteries. They mainly focus in advanced systems and materials with very higher performance than the existing ones.

The projects ALION aiming at developing aluminium-ion battery technology for energy storage application in decentralised electricity generation sources; and ZAS, aiming at improving the performance of rechargeable zinc-air batteries, were selected under the topic NMP-13-2014 - Storage of energy produced by decentralised sources. They finished in 2019 and 2018 respectively.

The projects ALISE - Advanced Lithium Sulphur battery for xEV an HELIS - High energy lithium sulphur cells and batteries were selected for funding under the topic NMP-17-2014 - Post-lithium ion batteries for electric automotive applications. These type of batteries are considered a viable candidate for commercialization among all post Li-ion battery. The projects addressed the development and commercial scale-up of new materials and on the understanding of the electrochemical processes involved in the lithium sulphur technology and several issues connected with the stability of the lithium anode during cycling, engineering of the complete cell and questions about LSB cell implementation into commercial products (ageing, safety, recycling and battery packs). These projects finished in 2019.

The project SINTBAT - Silicon based materials and new processing technologies for improved lithium-ion batteries, recently finished, was selected under the topic NMP-16-2015 - Extended in-service service of advanced functional materials in energy technologies (capture, conversion, storage and/or transmission of energy). It aimed at developing a cheap energy efficient and effectively maintenance free lithium-ion based energy storage system offering in-service time of 20 to 25 years.

Under the topic LC-NMBP-30-2018 - Materials for future highly performant electrified vehicle batteries (RIA, from TRL 3 to TRL 5) aiming at investigating phenomena and problems at the interfaces of the components of the battery cell electrode systems that are often not well understood and solving the safety issues encountered by the current Li-ion chemistries, including thermal runaway (e.g. through the use of solid-state electrolytes instead of flammable, liquid electrolytes), 3 projects were selected for funding – SPIDER (Safe and Prelithiated hIgh energy DEnsity batteries based on sulphur Rocksalt and silicon chemistries); LISA (Lithium sulphur for SAfe road electrification) and Si-DRIVE (Silicon Alloying Anodes for High Energy Density Batteries comprising Lithium Rich Cathodes and Safe Ionic Liquid based Electrolytes for Enhanced High VoltagE Performance.). They started in 2019 and will finish in 2022/23.

The project NanoBat (GHz nanoscale electrical and dielectric measurements of the solid-electrolyte interface and applications in the battery manufacturing line, 2020-2023), selected for funding under the topic DT-NMBP-08-2019 - Real-time nano-characterisation technologies (RIA), focus on the nanoscale structure of solid electrolyte interphase layer, which is of pivotal importance for battery performance and safety, but which is difficult to characterize and optimize with currently available techniques.

For this group of projects the EC contribution accounts for ca. 62.5 million Euros

Projects granted by EASME. The portfolio of EASME in the field of batteries is very diverse – it includes actions funded under topics of societal challenge 5 (Climate Action, Environment, Resource Efficiency and Raw Materials) and by the SME instrument programme of H2020. Additionally there is one project on batteries, not funded under a Horizon 2020 call/topic but instead funded by the LIFE programme. The topics to which the proposals were submitted are not batteries-specific, they are calls/topics that address other more general areas such as raw materials, waste and circular economy, in which batteries are a possible target, among others, not always explicitly mentioned in the call texts.

Nine projects were funded under SC5 topics on waste (2 projects), raw materials (5 projects) and circular economy (2). The funding schemes includes CSAs (3), IAs (4) and RIAs (2) and they address raw materials processing (2), data collection (2), recycling/recovery (4) and battery integration application (1). Some of their objectives and results are presented below. The EC contribution for these 9 projects is ca. 56 Million Euros.

The project ProSUM (is Latin for “I am useful”) - Prospecting Secondary raw materials in the Urban mine and Mining waste (2015-2017) is a CSA (Coordination and Support Action) funded under the topic WASTE-4c-2014 - Secondary raw materials inventory. By establishing an EU Information Network (EUIN). The project gathered secondary CRM data and collated maps of stocks and flows for materials and products of the “urban mine”. The scope is the particularly relevant sources for secondary CRMs: Electrical and electronic equipment, vehicles, batteries and mining tailings. A comprehensive inventory identifying, quantifying and mapping CRM stocks and flows at national and regional levels across Europe was constructed.

The project CloseWEEE - Integrated solutions for pre-processing electronic equipment, closing the loop of post-consumer high-grade plastics, and advanced recovery of critical raw materials antimony and graphite (2014-2018) is a RIA funded under the topic WASTE-3-2014 - Recycling of raw materials from products and buildings. It integrates three interlinked research and innovation areas for an improved, resource-efficient recycling of polymer materials and critical raw materials from electrical and electronics equipment (EEE): (1) Efficient and effective disassembly of EEE; 2) Developing resource-efficient and innovative solutions for closing the loop of post-consumer high-grade plastics from WEEE; and (3) Improved recycling of Lithium-ion batteries through increasing the recovery rates of cobalt and researching a recovery technology for the critical raw material graphite from those batteries.

Under SC5-11b-2014 - Flexible processing technologies, the project FAME - Flexible and Mobile Economic Processing Technologies (2015-2018) is a mineral processing RIA which seeks to provide novel mineral processing solutions to facilitate better exploitation of three types of ore that are commonly found throughout Europe, namely: skarn, greisen and pegmatites. These ore types contain a wide range of potential commodities including a large number of Critical Raw Materials and Lithium.

The CSA CIRCULAR IMPACTS - Measuring the IMPACTS of the transition to the CIRCULAR economy (2016-2018) was funded under SC5-25-2016 - Macro-economic and societal benefits from creating new markets in a circular economy. It aimed at developing a web based search tool that helps to make several relevant information collections funded by past EU research framework programs visible again, by connecting their evidence base to the circular economy agenda. The project collected missing information in 3 case studies having been one of critical raw materials. That case study deals with the end-of-life electric vehicle batteries which was selected due to the expected significantly increase of the electric vehicles demand over the next few decades and the fact that an electric vehicle battery is about one thousand times larger than a mobile phone battery.

The project SIMS-Sustainable Intelligent Mining Systems (2017-2020) was funded under the topic SC5-14-2016 - Raw materials Innovation actions. It aimed at developing, testing and demonstrating new innovative well-developed mining operations technologies. It has a work package on "Battery Powered Mining Equipment" that demonstrated state-of-the-art clean mobile-mining technology in use in a mining environment. This technology enables a diesel-free underground mine using mobile machinery powered by battery technology.

Under the same topic but in 2017 (SC5-14-2017) the project CROCODILE-first of a kind commercial Compact system for the efficient Recovery Of CObalt Designed with novel Integrated LEading technologies (2018-2022), was selected for funding. It aims at demonstrating the synergetic approaches and the integration of the innovative metallurgical systems within existing recovery processes of cobalt from primary and secondary sources at different locations in Europe, to enhance their efficiency, improve their economic and environmental values, and will provide a zero-waste strategy for important waste streams rich in cobalt such as batteries.

The project ORAMA-Optimising quality of information in RAw MAterials data collection across Europe (2017-2019) is a CSA selected for funding under the topic SC5-2017- Raw materials policy support actions. It focused on optimising data collection for primary and secondary raw materials in Member States aiming at to analyse data collection methods and recommendations from past and ongoing projects to identify best practices, develop practical guidelines and provide training to meet specific needs. For Mining Waste, Waste Electrical and Electronic Equipment, End of Life Vehicles and Batteries, the focus was on developing ‘INSPIRE-alike’ protocols.

The more recent and still ongoing projects are CarE-Service - Circular Economy Business Models for innovative hybrid and electric mobility through advanced reuse and remanufacturing technologies and services (2018-2021) and CIRCUSOL - Circular business models for the solar power industry (2018-2022). They are IAs selected for funding under the topic CIRC-2017-Systemic, eco-innovative approaches for the circular economy: large-scale demonstration projects.

CarE-Service aims at demonstrating at large scale the feasibility of innovative circular business models applied to Electric and Hybrid Electric Vehicles (E&HEVs). One of the objectives of this action is to establish three new circular European value chains for the re-use, remanufacturing and selective recycling of high added-value parts of E&HEVs (batteries, metal and techno-polymeric components). A demonstrator on the re-use of batteries is foreseen and it is dedicated to Li-ion batteries. It includes: Remanufactured/certified batteries will be used as stationary energy storage in solar panels produced by one member of the Stakeholder Group (SG); Remanufactured batteries will be produced by one beneficiary and will be used as components of electric bikes by another member of the SG; Li and Co recovered by recycled batteries will be used as pigments of coatings produced by one member of the SG; Functionalities of an ICT platform supporting the integration between beneficiaries and stakeholders for the information management and showcase of remanufactured/recycled batteries will be demonstrated. Quantitative simulation of the economic sustainability of the new batteries reuse business model and the Environmental impact assessment will be performed using real demonstration data.

CIRCUSOL will develop two main blocks of a circular PSS model: circular product management with re-use/refurbish/remanufacture (“second-life”) paths in addition to recycling, and value-added new product-services for residential, commercial and utility end-users. Among others the foreseen demonstrators will explore and test the following value propositions: Storage-as-a-service with second-life batteries for an industrial end-user; Energy management service with second-life PV and battery and Market adoption of second-life PV and batteries without subsidy.

The only project of this document not funded under H2020 programme is the project LIFE-LIBAT - Recycling of primary Lithium BATtery by mechanical and hydrometallurgical operations. This project aims at developing and demonstrating the feasibility of an innovative technological solution for the recycling of primary lithium batteries, particularly lithium-manganese batteries. Its proposed process integrates mechanical pretreatment with a hydrometallurgical treatment. The project will design and construct a prototype plant in northern Italy, with a processing capacity of 50 Kg primary lithium batteries per day, with the aim of achieving targets set in the Battery Directive. It also aims to significantly reduce processing costs, by avoiding the transport and treatment of spent batteries at specialized industrial plants outside Italy. The EC contribution is ca. 0.8 Million Euros.

Additionally to these projects, EASME granted 15 projects of SME Instrument Phase 2 programme. This instrument, part of H2020 programme, offers small and medium-sized businesses funding for innovation projects in two phases; phase 2 targets innovation projects. Some of the projects related to batteries address aspects such as: next-generation charging station for electric vehicles (EVs); novel hydrometallurgical process technology to recycle waste Lead-acid batteries in a highly energy efficient, non-polluting and cost effective way, a car-starting battery, which contains no hazardous materials, with extended life time and significant CO2 savings. Some projects propose alternatives to conventional batteries. The total EC contribution for this group of projects is ca. 22 Million Euros.

Projects granted by REA. The portfolio of REA on batteries accounts for 26 projects: 19 are MSCA-IF (Marie Skłodowska-Curie Actions - Individual Fellowships), 3 are MSCA-ITN (Marie Skłodowska-Curie Actions - Innovative Training Networks), and 4 are Research and Innovation Actions funded under FET Open (Future & Emerging Technologies). MSCA-IF actions are for experienced researchers from across the world; MSCA-ITN bring together universities, research institutes and other sectors from across the world to train researchers to doctorate level; FET OPEN programme invests in transformative frontier research and innovation with a high potential impact on technology, it aims at bringing together the brightest European minds at an early stage of research to pave the way for innovations, radical new ideas and novel technologies that challenge current thinking.

The project VIDICAT - Versatile Ionomers for DIvalent CAlcium baTteries (from 2019 to 2023) intends to develop a new material concept based on nanocomposite ionomers that will offer highly stable electrolytes. The project will also search for positive electrodes in its work towards building trustworthy and safe calcium batteries. It was funded under FETOPEN-01-2018-2019-2020 - FET-Open Challenging Current Thinking.

Two new types of batteries are proposed by projects (that will finish in 2020) funded under the call FETOPEN-01-2016-2017 - FET-Open research and innovation actions. The project SALBAGE - Sulfur-Aluminium Battery with Advanced Polymeric Gel Electrolytes aims at developing a new secondary Aluminium Sulfur Battery focusing in the synthesis of solid-like electrolytes based on polymerizable ionic liquids and Deep Eutectic Solvents. The new battery is expected to have a high energy density (1000Wh/kg) and low price compared with the actual Li-ion technology (-60%). The project CARBAT - CAlcium Rechargeable BAttery Technology, aims at achieving a proof-of-concept for a Ca anode rechargeable battery with > 650 Wh/kg and > 1400 Wh/l.

The project LiRichFCC - A new class of powerful materials for electrochemical energy storage: Lithium-rich oxyfluorides with cubic dense packing (finished in 2019) explored an entirely new class of materials for electrochemical energy storage termed “Li-rich FCC” comprising a very high concentration of lithium in a cubic dense packed structure (FCC). It was funded under the topic FETOPEN-RIA-2014-2015 - FET-Open research projects.

The EC contribution for these 4 FET-open actions is ca. 12 Million Euros.

The commitment to training and networking in the field of batteries are expressed in the 3 projects granted under MSCA-ITN (Innovative Training Networks) calls. The total EC contribution is ca. 8.4 Million Euros.

The project POLYTE - European Industrial Doctorate in Innovative POLYmers for Lithium Battery Technologies (from 2018 to 2021) aims at training scientists who may face some of the upcoming European energy and transportation challenges. The project will search the development of new polymeric materials to increase the performance and security of actual and future batteries. It was funded under the call MSCA-ITN-2017 and the funding scheme MSCA-ITN-EID - European Industrial Doctorates.

The projects FlowCamp – European Training Network to improve materials for high-performance, low-cost next- generation redox-flow batteries, and POLYSTORAGE – European Training Network in innovative polymers for next-generation electrochemical energy storage, are ongoing projects funded in 2017 and 2019 calls, respectively. They both have German coordinators.

The 19 MSCA-IF - Individual Fellowships granted by REA were funded under the calls H2020-MSCA-IF from 2014, 2015 (3 projects in each), 2016 and 2017 (4 projects in each) and 2018 (5 projects). They address aspects such as design, development of new or improved materials, characterisation, production, monitoring, modelling, safety, sustainability and cost-effectiveness for a wide range of batteries including Li-, Na- and Mg-ion, redox flow batteries and new concepts. The TRL of these projects is low, they are considered fundamental research and only 4 of them have a strong link to industry. The total EC contribution for these 19 actions accounts for ca. 3.8 Million Euros.

Projects granted by ERCEA. The portfolio of ERCEA on batteries includes 36 individual grants – mainly starting, advanced, or consolidator grants. These type of grants are submitted by one main researcher but more beneficiaries may be involved. Subjects are diverse. Alternatives to batteries are addressed by the projects Powering_eTextiles, NANOGEN, Portapower and 3DScavengers; Electrochemistry of batteries including electrodes, electrolytes, corrosion and redox work are considered in projects CAMBAT, BATNMR, FUN POLYSTORE, CAPSEL and INTELLICORR; Advancements in Li-ion batteries are targeted in the projects ARPEMA, BATMAN, Worlds of Lithium and HDEM; Materials for batteries, including additives, films and aerogels are in the objectives of projects, 3D2DPrint, ReSuNiCo, MOOiRE, MAEROSTRUC, ELECNANO and CORRELMAT; Computational modeling of batteries are addressed in projects COMBAT, ARTISTIC, StruBa, AMPERE; Supercapacitors, including structures, chemistries and integration are addressed in the projects SuPERPORES, CapTherPV, CITRES, IMMOCAP and 3D-CAP; Flow batteries are in research in the projects MFreeB, NanoMMES, ELECTRO-POM; Additionally, other subjects such as printed batteries, high-energy and stretchable batteries, oscillating heat pipes and software for embedded batteries are addressed in projects such as iPES-3DBat, OMICON, GEL-SYS, POHP and POWVER. The TRL of these projects is very low, they are considered as fundamental research and bottom-up initiatives. The total EC contribution is around 5.7 Million Euros.

Additionally to the projects mentioned above it was identified a project granted and coordinated by EMPIR (The European Metrology Programme for Innovation and Research) in the framework of EURAMET, (The European Association of National Metrology Institutes). The project LiBforSecUse “Quality assessment of electric vehicle Lithium-ion batteries for second use applications” will develop a robust measurement procedure and the supporting metrological infrastructure to measure the residual capacity of Li-ion batteries, recycled from electric vehicles, by using fast and non-destructive impedance based methods; the feasibility to predict premature failure will also be investigated. Such procedures are required to enable economic and environmental reasonable re-use of large numbers of used Li-ion batteries expected to be available in the near future. Impedance based measurement and evaluation methods could serve this purpose but the underpinning metrological framework, including traceability, quantified measurement uncertainties and defined measurement procedures in order to guarantee comparability of the results, is currently lacking. Consequently, standardised protocols for life cycle testing and impedance measurements as well as practical calibration concepts and standards for impedance measurement devices must be developed. This project started in 2018 and will finish in 2021. The consortium involves 14 partners from European metrology institutes, research institutions, universities and companies. The total EC contribution is 1.8 million Euros.

Conclusion

The support and commitment of the European Commission in the research in the field of batteries are expressed by the number of projects funded under the H2020 programme (over to 100 projects) and the financial contribution to their implementation (in the region of 500 Million Euros). The interest of the stakeholders in this field started, at least, at the beginning of the current MFF (and the associated research program, Horizon 2020) but it was boosted by the emergence of the Batteries Alliance, in 2017. Some projects are already finished but the majority are ongoing.

The types of calls and topics are varied, from the most recent very high specific and dedicated call - as the cross-cutting call on batteries launched in 2019, to bottom-up initiatives - like the ones granted by ERCEA, REA and EASME (SME instrument) which are focused on innovation but open to a wide range of subjects. The expected TRLs are various. There are funded actions associated to very low TRL, usually considered fundamental research - to works with very high TRLs developed in consortia with a significant number of partners from several countries and types, as universities, research institutions, non-profit organisations, etc., and representing all steps of the value chain. Training opportunities are also addressed in some funded projects.

The subjects addressed by the projects are wide, focused in solving current problems and in the future of the field: from developments and improvement of materials to batteries recycling, projects are covering the entire value chain of different types of batteries, the existing ones but also new systems and even alternatives to the conventional batteries. In terms of batteries dimension, the variety is also significant, from batteries such as the EVs batteries to micro-batteries integrated into functional textiles. Some projects include circular economy business models in their expected results.

The results of these projects will support and promote innovation for the batteries industry in Europe. New and improved materials and batteries´ systems, improved characteristics in terms of capacity storage, lifetime, safety, sustainability and cost-effectiveness are anticipated. These will be essential to ensure the competitiveness of Europe in this field as well as to boost its economy, growth and well-being.

(1)      Annex to COM(2018) 293 final
(2)      See relevant annex to document SWD(2019)1300
(3)

     See https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/1996-Sustainability-requirements-for-batteries

(4)       https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12399-Modernising-the-EU-s-batteries-legislation  
(5)      The relatively high number of respondents from Belgium is due to companies and business associations that have an office in Brussels for representational purposes.
(6)      See the details at https://ec.europa.eu/eusurvey/runner/EcodesignBatteries2019
(7)    In this document, ‘objective’ means general or aspirational goals to be achieved in the medium or long term; ‘target’ means concrete goals that will considered met when parameters defined in the Directive reach pre-established values.
(8)    Directive 2006/66/EC, Article 3.
(9)    See page 7 of the Impact Assessment, CSWD SEC(2003) 1343.
(10)    Article 4.
(11)    Articles 20 and 21.
(12)    Article 8.1.
(13)    Article 10.
(14)    Article 8.4.
(15)    Article 8.3.
(16)    Article 12.1.b.
(17)    Annex III, part B.
(18)    Directive 2006/66/EC, Annex III.
(19)    Article 12.1.b.
(20)    Article 7.
(21)    Article 1.
(22)    Recital 19.
(23)    Article 8.
(24)    Article 16.
(25)      SWD(2019) 1300
(26)      Avicenne (2018)
(27)      H. Stahl et al.  (2018) ‘Study report in support of evaluation of the Directive 2006/66/EC on batteries and accumulators and waste batteries and accumulators’
(28)      Study in support of the evaluation
(29)      Avicenne (2018)
(30)      VITO, Fraunhofer and Viegand Maagøe (2019) "Study on eco-design and energy labelling of batteries"
(31)      European Environment Agency (2019) ‘Electric vehicles as a proportion of the total fleet’ at https://www.eea.europa.eu/data-and-maps/indicators/proportion-of-vehicle-fleet-meeting-4/assessment-4 (accessed on the 11 March 2020)
(32)      See https://www.acea.be/statistics/tag/category/electric-vehicles
(33)      ICCT, Market Monitor, 2020
(34)      ACEA, Electric vehicles: tax benefits & purchase incentives, 2020
(35)      Ecodesign preparatory study for batteries, at https://ecodesignbatteries.eu/documents  
(36)      New ENV Study
(37)       Tsiropoulos, I., Tarvydas, D., Lebedeva, N., Li-ion batteries for mobility and stationary storage applications – Scenarios for costs and market growth, EUR 29440 EN, Publications Office of the European Union, Luxembourg, 2018, ISBN 978-92-79-97254-6, doi:10.2760/87175, JRC113360
(38)    Avicenne (2017).
(39)      ENV Study 2020
(40)      Global Battery Alliance & World Economic Forum (2019) ‘A Vision for a Sustainable Battery Value Chain in 2030’
(41)      Avicenne 2019
(42)      Global Battery Alliance & World Economic Forum (2019) ‘A Vision for a Sustainable Battery Value Chain in 2030’
(43)      H. Stahl et al. (2018) ‘Study report in support of evaluation of the Directive 2006/66/EC on batteries and accumulators and waste batteries and accumulators’
(44)      Based on announced investments at the time of writing.
(45)      VITO, Fraunhofer and Viegand Maagøe, Study on eco-design and energy labelling of batteries, 2019.
(46)      M.Steen et al (2017) ‘EU Competitiveness in Advanced Li-ion Batteries for E-Mobility and Stationary Storage Applications – Opportunities and Actions’ JRC Science for Policy report
(47)      D. T. Blagoeva et al., (2017) ‘Assessment of potential bottlenecks along the materials supply chain for the future deployment of low-carbon energy and transport technologies in the EU.’
(48)      EC Report on Raw Materials for Battery Applications, CSWD(2018)245/2 final
(49)      From CLIMA study
(50)      JRC, 2017, Critical raw materials and the circular economy
(51)      Communication from the Commission ‘Tackling the challenges in commodity markets and on raw materials’ COM(2011)0025 final
(52)      New Communication/Report on Raw Materials, 2020
(53)      Minerals 4EU project, ‘EUROPEAN MINERALS YEARBOOK – DATA’, http://minerals4eu.brgm-rec.fr/m4eu-yearbook/ (accessed on 21.3.2020)
(54)      EC Raw Materials on Batteries Report
(55)      E.A Olivetti et al., (2017) Lithium-Ion Battery Supply Chain Considerations: Analysis of Potential Bottlenecks in Critical Metals
(56)      Criticality study 2017
(57)      Data from the International Lead and Zinc Study Group data base, http://stats-database.ilzsg.org/ (accessed on 21.3.2020)
(58)      Gabriel et al 2014
(59)      European Parliament study
(60)      Knobloch et al (2020) ‘Net emission reductions from electric cars and heat pumps in 59 world regions over time’
(61)      CIMA Ricardo study
(62)       http://ec.europa.eu/environment/eussd/smgp/pdf/PEFCR_Batteries.pdf (page 42)
(63)      M.A. Cosenza et al.,2019. Energy and environmental assessment of a traction lithium-ion battery pack for plug-in hybrid electric vehicles. https://doi.org/10.1016/j.jclepro.2019.01.056
(64)      Ellingsen et al 2016
(65)      M. Thomas, L. Ellingsen, C. Hung, 2019. Battery-powered electric vehicles: market development and lifecycle emissions. Available at: http://bit.ly/2HDKk0y
(66)      G. Dolci et al. (2016) ‘Life cycle assessment of consumption choices: a comparison between disposable and rechargeable household batteries’ Int J Life Cycle Assess (2016) 21: 1691. https://doi.org/10.1007/s11367-016-1134-5
(67)      Unless indicated otherwise, information on the hazardousness of the substances concerned is taken from the ECHA database at: https://echa.europa.eu/advanced-search-for-chemicals?p_p_id=dissadvancedsearch_WAR_disssearchportlet&p_p_lifecycle=0&p_p_col_id=column-1&p_p_col_count=2 ECHA makes use of information provided within the EU harmonised classification and labelling system, established by the CLP Regulation, and as a result of REACH registration procedures.
(68)      Linden’s handbook of batteries
(69)      Linden’s handbook of batteries
(70)

  Source: http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do

(71)      The main sources are https://uenergyhub.com/world-battery-companies/ and for the Number of Employees and the Annual Revenue are: www.owler.com ; www.growjo.com , https://rocketreach.co/  
(72)  Source: https://www.thomasnet.com/articles/top-suppliers/battery-manufacturers-suppliers/
(73)      COM/2018/773
(74)      COM(2018) 293, “EUROPE ON THE MOVE Sustainable Mobility for Europe: safe, connected, and clean
(75)      COM(2019) 176, Implementation of the Strategic Action Plan on Batteries: Building a Strategic Battery Value Chain in Europe
Top

Brussels, 10.12.2020

SWD(2020) 335 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a Regulation of the European Parliament and of the Council

concerning batteries and waste batteries, repealing Directive 2006/66/EC and amending Regulation (EU) 2019/1020

{COM(2020) 798 final} - {SEC(2020) 420 final} - {SWD(2020) 334 final}


Annex 9: Detailed analysis of the Measures and their Sub-measures

Table of Contents

Annex 9: Detailed analysis of the Measures and their Sub-measures    

Introduction    

Glossary    

Measure 1: Classification and definition    

Measure 2: Second-life of EV and industrial batteries    

Measure 3: Collection rate for portable batteries    

Measure 4: Collection rates for automotive, EV and industrial batteries    

Measure 5: Recycling efficiencies and recovery of materials    

Measure 6: Carbon footprint for industrial and EV batteries    

Measure 7: Performance and durability of rechargeable industrial and EV batteries    

Measure 8: Non-rechargeable portable batteries    

Measure 9: Recycled content in Electric Vehicle batteries, industrial batteries and automotive batteries    

Measure 10: Extended Producer Responsibility    

Measure 11: Design requirements for portable batteries    

Measure 12: Reliable information    

Measure 13: Supply chain due diligence for raw materials for industrial and EV batteries    

Clarification of the management system of chemicals in batteries    

Enabler: Safety    

Enabler: Green public procurement and batteries    

Introduction

This Impact Assessment includes an analysis of 13 measures set out in the proposal for a Regulation on batteries and waste batteries.

Table 1  includes an overview of the 13 measures and their sub-measures that have been analysed in detail.

Overall, more than 50 sub-measures have been considered. These sub-measures are in some cases alternative (e.g. collection rate targets for portable batteries can be 65% or 75% but not both). In other cases, they are designed to be additional and cumulative or can work alongside other sub-measures for different categories of batteries without replacing the other sub-measures entirely (e.g. a requirement on battery replaceability can come on top of a requirement on removability).

For each of these sub-measures this Annex includes a detailed analysis of their effectiveness, economic impacts, administrative burden, environmental impacts, social impacts and of stakeholders' views. For every measure, these impacts are summarised at the end of each chapter in a summary table that indicates which are the preferred sub-measures.

Unless specified otherwise, the data used in this Impact Assessment originate from the support studies that were commissioned for this purpose. These studies are referenced in Annex 1.

Table 1: Overview of the sub-measures for the different measures ( italic = sub-measure discarded in an early stage; (+) = cumulative)

Baseline

Sub-measures

a

b

c

d

e

1. Classification and definition                    

Current classification of batteries based on their use

New category for EV batteries or new sub-category in industrial batteries

Weight limit of 2 Kg to differentiate portable from industrial batteries (with exceptions)

Weight limit of 5 Kg to differentiate portable from industrial batteries (with exceptions)

New calculation methodology for collection rates of portable batteries

2. Second-life of industrial batteries

No provisions at present

At the end of the first life, batteries are considered waste (except for reuse) and therefore the EPR and product compliance requirements restart when they ceased to be waste and a new product is placed on the market

At the end of the first life, batteries are not waste, second life batteries are considered new products, and therefore the EPR and product compliance requirements restart

At the end of the first use cycle, batteries are not waste but second life batteries would not be considered a new product and the EPR and product compliance requirements would be kept by the producer

Mandatory Second life readiness

3. Collection rate for portable batteries

45 % collection rate

55% collection rate in 2025

65% collection rate in 2025

75% collection target rate in 2025

Deposit and refund schemes

A new set of collection targets per chemistry of batteries

4. Collection rate for automotive and industrial batteries

No losses of automotive and industrial batteries

New reporting system for automotive and industrial batteries

Explicit collection target for industrial, EV and automotive batteries

Collection target for batteries powering light means of transport

5. Recycling efficiencies and recovery of materials

Recycling Efficiencies defined for lead-acid (65%), nickel-cadmium (75%) and other batteries (50%)

‘Highest degree of material recovery’ obligation for lead and cadmium without quantified targets

Recycling efficiency lithium-ion batteries: 60% in 2025

Material recovery rates for Co, Ni, Li, Cu: resp. 90%, 90%, 35% and 90% in 2023

95%, 95%, 70% and 95% in 2028 (+)

Recycling efficiency lead-acid batteries: 75% in 2025

Material recovery for lead: 95% (+)

Recycling conditions for lithium-batteries

Add Co, Ni, Li, Cu and Graphite to the list of substances to be recovered to the highest possible technical degree (without quantified targets)

Multi-metal quantified target values for the degree of recovery

6. Carbon footprint for industrial and EV batteries

No provisions at present

Mandatory declaration of carbon intensity

Maximum carbon intensity thresholds

7. Performance and durability of rechargeable industrial and EV batteries

No provisions at present

Information requirements on performance and durability

Minimum performance and durability requirements

8. Non-rechargeable portable batteries

No provisions at present

Partial restrictions applicable to primary batteries aimed at ensuring minimum quality levels (measured as performance or durability)

Total restriction of primary batteries

Restrictions of general purpose primary batteries, (namely AA and AAA models)

9. Recycled content in industrial batteries

No provisions at present

Information requirements on levels of recycled content for industrial batteries in 2025 (+)

Mandatory levels of recycled content for industrial batteries in 2030 and 2035* (+)

 

Adding graphite and / or auxiliary materials to the list

10. Extended Producer Responsibility

EPRs and PROs obligations reflect the provisions of the WFD, as amended.

Clear specifications for Extended Producer Responsibility obligations for all batteries that are currently classified as industrial (+)

Minimum standards for Producer Responsibility Organisations (PROs) (+)

11. Design requirements for portable batteries

Obligations on removability

Strengthened obligation on removability (+)

Additional requirement on replaceability (+)

Requirements on interoperability

12. Reliable information

Specifications on information and labelling

Providing basic information, technical parameters, end-of-life information and general compliance with EU legislation (as labels, technical documentation or online) (+)

Providing specialised information to customers and economic operators (end-of-life, refurbishment and repurposing, energy efficiency) (+)

Setting up a battery open dataspace and a passport scheme (+)

13. Supply chain due diligence for raw materials in industrial and EV batteries

No provisions at present

Voluntary supply chain due diligence policy

Mandatory supply chain due diligence policy

b1) Self-certification of supply chain partners

b2) Third-party auditing

b3) Third-party verification based on Notified Bodies

Glossary

Term or acronym

Meaning or definition

1,4-DB eq.

Human Toxicity Potentials of toxic substances are expressed using the reference unit, kg 1,4-dichlorobenzene (1,4-DB) equivalent

3C sector

Computer, communications and consumer electronics

AA

Standard size single cell cylindrical dry battery, R6 in IEC 60086 system

AAA

Standard size single cell cylindrical dry battery, R03 in IEC 60086 system

ADP

Abiotic depletion potential

Ah

Ampere-hour, a unit of electric charge, used in measure of battery capacity

‘alkaline batteries’

Batteries that contain Zinc, Zinc oxide, Manganese dioxide and potassium hydroxide, as the main components.

‘automotive battery’

Any battery used for automotive starter lighting or ignition power.

‘batteries placed on the market’

Batteries made available, whether in return for payment or free of charge, to a third party within the European Union market.

‘battery’ or ‘accumulator’

Any source of electrical energy generated by direct conversion of chemical energy. They may be non-rechargeable (primary) or rechargeable (secondary).

The terms ‘batteries’ and ‘accumulators’ are considered synonyms and used indiscriminately in this report.

‘battery collection point/ battery return point’

A designated collection place where consumers can bring their waste batteries for recycling. Return points usually include a container or box where consumers can drop their spent batteries. The Batteries Directive requires that return points for portable batteries be free of charge.

‘battery pack’

Any set of batteries or accumulators that are connected together and/or encapsulated within an outer casing so as to form a complete unit that the end-user is not intended to split up or open.

BEV

Battery Electric Vehicle

BMS

Battery Management System

‘button cell’

Any small round portable battery or accumulator whose diameter is greater than its height and which is used for special purposes such as hearing aids, watches, small portable equipment and back-up power.

Cd

Cadmium

Co

Cobalt

CO2-eq

metric measure used to compare the emissions from various greenhouse gases on the basis of their global-warming potential (GWP), by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential.

Cu

Copper

‘collection rate’

For a given Member State in a given calendar year, it is defined as the percentage obtained by dividing the weight of waste portable batteries and accumulators collected in that year by the average weight of portable batteries and accumulators placed on the market during that year and the preceding 2 years.

ELV

End-of-life vehicle

‘end-of-life’ batteries

Batteries that are unable to deliver electricity any longer or that are unable to be recharged.

EPR

Extended Producer Responsibility

EV

Electric Vehicle

‘durability’

The ability of a product to perform its function at the anticipated performance level over a given period (number of cycles-uses-hours in use), under the expected conditions of use and under foreseeable actions.

FCEV

Fuel Cell Electric Vehicle

FTE

Full Time Equivalent

GHG

Greenhouse gas

GPP

Green Public Procurement

GWh

Giga Watt hour, a unit of energy representing one billion Watt hours

GWP

Global Warming Potential

HEV

Hybrid Electric Vehicle

IEC

International Electro technical Committee

‘industrial battery’

Battery (primary or secondary) designed for exclusively industrial or professional use or used in any type of electric vehicle.

ISO

International Organisation for Standardisation

‘JRC - Joint Research Centre’

The European Commission's science and knowledge service.

LCA

Life Cycle Analysis

LCO

Lithium-cobalt oxide batteries

‘lead-acid batteries’

Any battery where the generation of electricity is due to chemicals reaction involving lead, lead ions, lead salts or other lead compounds, having an acid solution as electrolyte.

Li

Lithium

LIBs

Lithium-ion batteries

‘lithium batteries’

Any battery where the generation of electricity is due to chemical reactions involving lithium, lithium ions or lithium compounds.

LiPF6

Lithium hexafluorophosphate

LME

London Metal Exchange

LMO

Lithium-manganese batteries

‘material recovery’

Any operation the principal result of which is waste serving a useful purpose by replacing other materials that would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy.

Ni

Nickel