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Friday Five

16th Dec 2022

On Friday, 9th December, The EU Parliament and Council reached a provisional agreement to overhaul EU battery rules and consider technological developments and future challenges.

Why is there a need for new legislation on batteries?

Batteries are essential for sustainable mobility and contribute to the zero pollution ambition, and their demand will only grow in the coming years.

To make batteries a true enabler of the green transition, a new regulatory framework must be implemented.

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The existing EU Batteries Directive dates back to 2006 and is no longer up-to-date - new rules across the Union should be established.

 

The new Regulation establishes a comprehensive framework covering all types of batteries and addressing their whole life cycle from the production process to design requirements as well as second life, recycling and incorporating recycled content into new batteries.

For batteries manufactured in or placed into service on the European market, the regulation sets:

  • Collection and recovery targets,

  • Mandatory minimum levels of recycled content,

  • Requirements for measuring and reporting embedded carbon emissions,

  • Requirements for ensuring battery materials are responsibly and ethically sourced,

  • Requirements for each battery to have a “battery passport” and QR code to make transparent and visible all relevant sourcing, production, and safety information.

 

How will this proposal strengthen transparency on the EU battery market?

The proposed regulation relies heavily on digital solutions like Circulor's, specifically for labelling, online battery information, and traceability of large batteries throughout their life cycle.

 

A data exchange system (battery dataspace) will register and provide information to the public about every battery model placed on the EU market.

The data system will be linked to digital individual 'Battery Passports' - a novel essential mechanism for the traceability of large batteries and their management.

The EU Commission has proposed a Carbon Border Adjustment Mechanism (CBAM) which will put a carbon price on imports of selected products in order to prevent "carbon leakage" (i.e. companies moving carbon-intensive production outside of the EU to take advantage of lax standards).

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The CBAM is designed to comply with World Trade Organization (WTO) rules and other international obligations of the EU and will work by equalising the carbon price between domestic products and imports.

 CBAM will put a carbon price on imports of selected products to prevent "carbon leakage" (i.e. companies moving carbon-intensive production outside of the EU to take advantage of lax standards).

 

CBAM is designed to comply with World Trade Organization (WTO) rules and other international obligations of the EU and will work by equalising the carbon price between domestic products and imports. 

CBAM will initially apply only to a selected number of goods at high risk of carbon leakage: iron and steel, cement, fertiliser, aluminium and electricity generation. A simplified CBAM system will apply as of 2023 for selected products to facilitate a smooth rollout and dialogue with third countries.

The UK is introducing new Extended Producer Responsibility (EPR) laws for packaging, which will push obligations up the chain to producers of packaging in order to drive changes in design and consideration of its end of life treatment.

The new laws will apply to businesses who sell, import or handle packaged goods, and will require them to gather detailed data on their packaging from 1 January 2023. Large organisations will also need to register with the regulator by April 2023 and report data for the period January-June 2023.

Non-compliance with these legal obligations could result in civil sanctions including fines, and criminal prosecution in the most serious cases.

The new laws will also apply to businesses, subsidiaries and groups (excluding charities) who are deemed “producers” of packaging waste.

From 1 January 2023, these producers will need to report data such as the weights and composition of primary, secondary and tertiary packaging broken down into material categories, including plastic, paper, glass, wood, and “other”.

Businesses will also need to report whether or not that packaging will likely end up as household or non-household waste and in certain cases, its destination within the nations of the UK.

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              What’s coming down the road!        

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In spring 2023, Sweden will hold the Presidency of the Council of the European Union.

This means that Sweden will lead the work in the Council on behalf of all EU Member States.

Prime Minister Ulf Kristersson presented the Government’s priorities and the programme of the upcoming Swedish Presidency of the Council of the EU.

The Presidency will focus on three main areas: internal market, climate transition and security.

Sweden has several ambitions within these areas, including concluding negotiations on the EU’s Fit for 55 package and increasing the electrification of transport and industry throughout Europe. This will include working on a new Batteries Regulation and continuing negotiations to increase fossil-free energy production.

The Australian government has announced the launch of a consultation paper on developing a climate risk disclosure framework for businesses and financial institutions, with plans to make the reporting rules mandatory for large entities.

The consultation considers implementing the rules using a ‘phased’ approach, beginning as soon as 2024.

 

Key questions explored in the consultation paper include the costs and benefits of aligning with international practices; use of a phased-in approach; alignment with recommendations from the International Sustainability Standards Board; assurance requirements; materiality assessments; transition plan disclosures; data challenges in meeting new requirements.

 

The government also announced that it had tasked its Treasury department to develop a comprehensive sustainable finance strategy, with climate risk disclosure forming a part of the strategy aimed at improving transparency, developing green finance markets, and addressing opportunities presented by sustainable finance.

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