New York — The European Commission has ramped up its commitment to the electrification of mobility with legislative proposals aimed at sustainable battery production, including better traceability of raw materials.
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The EU was taking "another giant leap forward into a greener future", EC vice-president Maros Sefcovic said at a Dec. 10 news conference
The proposals aim to create a legally binding framework centered on responsible sourcing, carbon footprint and traceability.
There are proposed mandatory procedures to ensure sustainable and ethical sourcing of raw materials, and all batteries sold in Europe must declare a carbon footprint.
"It is now up to MEPs and EU governments to agree an ambitious and future-proof regulation that will drive the development of a competitive and sustainable European battery industry," environmental consultancy Transport & Environment said after the announcement.
"The batteries law will be the first of its kind and comes right on time as electric car sales surge and gigafactories pop up across Europe," said Alex Keynes, clean vehicles manager at Transport & Environment.
"Whether produced in the EU or globally, it will ensure batteries used in Europe are even cleaner than today, sourced responsibly and recyclable. If implemented swiftly and with ambition, it will make Europe a world leader in this strategic zero emissions technology."
The EC is stipulating that manufacturers must follow the OECD's Due Diligence framework on responsible supply chains, set out to respect human rights and ensure ethical supply chains.
Sefcovic said adoption of the framework had the potential to revolutionize the EU battery market, with Europe emerging as a "battery hotspot" with around 15 factories planned across the continent.
The EC forecasts that by 2025 there would be enough capacity in Europe to manufacture around six million EV batteries per year. The framework, hoped to be passed by 2022, would give factory developers the legal certainty needed to deploy investment, it said.
Speaking to S&P Global Platts, Vincent Ledoux Pedailles, VP business development at Vulcan Energy Resources, said the proposals would have "an immediate impact on the market, which up until now has been driven only by price".
Vulcan is aiming to produce a battery-quality lithium hydroxide chemical product with a net-zero carbon footprint from its combined geothermal and lithium resource in Germany's Upper Rhine Valley.
Pedailles said Sefcovic's statement were directly supportive "of our core values and stated goal of decarbonizing the industry".
"Our Zero Carbon Lithium processes will now be strongly supported by the new EU regulation as battery and automakers will increasingly be controlling their supply chain in order to meet their regulated targets in terms of emissions and traceability," he said.
However, James Frith, head of energy storage at BloombergNEF, said the EC's timelines for sustainable battery production were slow "and could end up damaging the growing manufacturing industry in the region".
That was particularly the case for European start-ups at a time when regulation on the carbon footprint of battery cell manufacturing could help them out-compete cells coming from Asia, Frith said.
"Now they will have to wait until 2024 before these measures are in place. However, it will give time for the auto industry to adapt to these rules."
Recycling a bugbear
Recycling of EV batteries is a hot topic as without a circular approach the idea of sustainability is somewhat undermined. The new rules look to set a clear mandate on the need to recycle EV batteries.
Managing Director and global head of ESG research & data at S&P Global, Manjit Jus said: "Transitioning to EVs is only one part of the global automotive industry's challenge and opportunity to reduce carbon emissions and meet regulatory requirements."
"EVs present their own unique risks -– largely due to the complex and carbon-intensive supply chain for mining and transporting rare materials. Ensuring that environmental and social considerations are embedded at every step of the process ensures transparency about the real positive impact that EVs bring versus their fossil-fuel predecessors," Jus said.
Companies that managed those risks early on in the absence of well defined regulations stood to benefit from broader acceptance from a new generation of customers and provide innovative solutions for a more circular economy, he said.
"While not a lot of attention has been given to the full life-cycle impact of EVs and the manufacturing of batteries, this will certainly gain traction as more and more EV's enter the market."