January 1 2030 and increase over time thereafter ). It is proposed that from July 1 2024 , rechargeable industrial batteries will need a carbon footprint declaration to be placed on the EU market and , from January 1 2027 , the recycled content in batteries in the EU will need to be declared .
• Carbon footprint – It is also proposed that rechargeable industrial batteries will need a carbon footprint declaration to be placed on the EU market including related labelling concerning the environmental impact of that battery over its life cycle . The intention is to establish carbon footprint performance classes that will provide for the identification of batteries with overall lower carbon footprints . Furthermore , contracting authorities subject to the public procurement process are then obliged to consider such information ( and award criteria based on this declaration ) to ensure that batteries are chosen with significantly lower environmental impacts over their lifecycle .
• Collection rates – New targets for the collection , treatment and recycling of end-of-life batteries are also to be enshrined in law . All industrial and automotive batteries will need to be collected in full , and the collection rate for portable batteries is proposed to be raised from 45 % to 65 % by December 31 2025 and 70 % by December 31 2030 .
It was originally proposed that the Draft EU Regulation would be implemented on January 1 2022 . However , it is currently still proceeding through the standard EU legislative procedure . The Draft EU Regulation has been reviewed and commented on by various European Parliament committees , each of which has proposed that certain amendments be made . For example , the Committee on the Internal Market and Consumer Protection has proposed 237 different amendments . Given the complexity and importance of the legislation , it has taken longer to finalise and is now expected to be implemented later in 2022 .
While the Draft EU Regulation may still be amended before it is enshrined in statute , we expect the headline provisions outlined above to remain subject perhaps to adjustments to some of the projected timelines for achieving these provisions and potentially to some of the stated thresholds .
Detractors of the Draft EU Regulation argue that it may be too restrictive and stifle innovation in the European battery market , slowing down Europe ’ s transition to low emissions as well as deterring companies from entering the European battery market . The Draft EU Regulation , however , is a welcome development and , even though it is not perfect , it should help to enshrine a clear recycling and repurposing regime , establish relevant targets , increase transparency and battery-specific information sharing , and to enhance the marketability of used batteries .
UK developments In 2020 , the UK Government issued a policy statement reiterating the UK ’ s commitment to achieving a “ circular economy ” and indicating that various legislative changes are intended to be enacted ( with some steps already taken ).
The UK Government has also announced various funding and grant schemes focused on EV recycling . For example , £ 40m was made available under the Industrial Strategy Challenge for 27 projects to make EV batteries longer-lasting and cleaner in November 2017 . Additionally , in 2021 the Office for Zero Emission Vehicles funded a £ 17m competition to support the transition to zero emission vehicles , including solutions that enable battery recycling .
However , the Waste Batteries Regulations are still the prevailing legislation in this area and , as discussed above , do not address the challenges of the modern battery economy . The UK Government may be conscious that the framework established by the Draft EU Regulation could provide regulatory clarity that attracts investment in battery development within the EU in preference to the UK .
In an October 2018 BEIS report entitled “ Electric vehicles : driving the transition ”, it was noted that second life battery applications , EV end-of-life disposal and battery recycling were nascent areas that could offer significant industrial opportunities . The report recommended that the “ Government explores the potential value of these [ areas ] to the UK and takes a lead in developing those that are promising , before other countries gain a competitive edge .”
The UK Government has been beating the same drum as the EU on energy transition , batteries and on a circular economy . While it is not yet clear when the UK might overhaul the Waste Batteries Regulations or what such overhaul might look like , the pressure is mounting for the UK Government to develop this area and the UK Government is sure to at least consider the Draft EU Regulations when formulating its own policy .
Conclusion The existing battery recycling regulations in the UK , the EU and most other jurisdictions pre-date the enormous growth and further expected exponential growth in the EV and utility-scale battery market . The current regulations focus on waste management , rather than repurposing and recycling batteries in a more sustainable , circular economy . Accordingly , regulatory updates are required .
The Draft EU Regulation is a welcome and well-thought through framework to monitor and facilitate the recycling and repurposing of batteries . The experience of the EU in implementing the Draft EU Regulation will be followed closely by other countries , including the UK , who will hope to learn from the EU ’ s experience and borrow elements for the overhaul of their own regulatory regimes .
Introducing a framework for repurposing batteries is particularly significant and , coupled with an enhanced recycling regime , will improve the marketability of batteries , reinforce an additional link to a now circular supply chain and further attract investment to the energy storage sector . We will monitor with interest how these legislative developments in the EU will progress , and if nations outside of the EU will follow suit . •
72 Project Finance International Febuary 23 2022