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Navigating the EU Battery Regulation
with PROVE by Circulor 

April 17th 2024

Europe’s New Battery Regulation

 

A pioneering regulatory framework that positions Europe at the forefront of building a sustainable, secure, and circular battery economy, driving competitiveness, and setting a global precedent for consumer transparency. 

Enforced in August 2023, Europe’s new Battery Regulation requires proof of sustainable and circular battery supply chains and mandates a digital battery passport by February 2027. It covers a range of batteries including light means of transport (LMT), electric vehicle (EV) and industrial batteries, each with specific requirements and timelines depending on the participants’ role in the battery ecosystem. The ultimate responsibility for several significant obligations sits with the ‘Economic Operators’ – the importers, manufacturers, distributors, authorized representatives, service providers, or others involved in placing batteries on the European market.    

 

However, as regulatory demands for accessing the market intensify, it's important to acknowledge that the Economic Operator isn't typically a singular entity across all stages of the battery lifecycle, and the role will likely change hands throughout the stages of a battery’s lifecycle.    

Whilst compliance could be seen as a hurdle, there are multiple benefits for companies across the battery value chain, A recent study by the Battery Pass Consortium on The Value of the EU Battery Passport found that information availability through the battery passport could increase the credibility and reliability of supply chain data and green claims for product differentiation, enable informed purchasing decisions, easy servicing, improve used battery transport risk assessment, streamline the trade of used batteries, enable industry benchmarking and an accurate market overview. 

 

Given this, organizations must consider battery passports as a strategic opportunity to generate value. However, the lead time to develop close collaboration and efficient data collection across the entire value chain, that proves meeting the minimum regulatory requirements when a battery enters the market is no small task for the industry. Circulor has the solutions and is delivering them at scale, already collaborating with 52% of global cell manufacturing capacity and covering a substantial portion of battery value chain suppliers. 

Navigating the increasingly stringent requirements

In 2024, EVs are projected to represent 20% of vehicle sales, with China leading at 38% and European sales, according to Bloomberg, expected to rise 8% to 3.4 million. The U.S. market is more uncertain, but EV sales are predicted to be just under 1.9 million, constituting 13% of new-car purchases, with emerging economies also expecting increased EV adoption.  

 

To comply with the EU Battery Regulation, these new EV batteries must adhere to specific sustainability and circularity standards in four key areas: carbon footprint, due diligence, battery passport, and material composition/recycled content.   

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Carbon Footprint (Article 7):

  • By February 2025: Provide a verified carbon footprint declaration

  • By August 2027: Classify into performance classes

  • By February 2029: Demonstrate a carbon footprint below the maximum lifecycle threshold

 

Due Diligence (Articles 48 and 49):

  • By August 2025: Establish and operate a system of control and transparency including chain of custody or traceability system for cobalt, natural graphite, lithium, and nickel supply chains.

 

Battery Passport (Articles 77 and 78):

  • By February 2027: Implement a mandatory QR-accessible battery passport.

 

Recycled Content (Article 8):

  • By August 2028: Disclose the percentage share of recycled cobalt, lithium, nickel and lead

  • By August 2031: Prove mandatory recycled content of 16% cobalt, 85% lead, 6% lithium and 6% nickel

  • By August 2036: Prove mandatory recycled content of 26% cobalt, 85% lead, 12% lithium and 15% nickel

 

Other types of batteries, for example battery energy storage systems (BESS), have different deadlines for meeting the compliance requirements compared to EVs, with carbon footprint requirements coming into effect a year later. Despite this difference, BESS manufacturers must also act promptly to identify effective solutions and meet these regulatory requirements. 

PROVE by Circulor: Paving the Way for Compliance

As manufacturers navigate the compliance challenges posed by the EU Battery Regulation, Circulor’s PROVE platform – including its Battery Passport solution - becomes a crucial facilitator, ensuring regulatory adherence while providing the visibility needed to manage supply chain risks.

 

Battery Carbon Footprints

 

As an EV Economic Operator prepares to provide the carbon footprint declaration by February 2025, which requires companies to report on the carbon footprint of batteries, per battery model, per facility and per life cycle stage (including end of life and recycling). Circulor ensures an accurate view of the suppliers and then gathers primary data from a customers’ supply chain.

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This supports the calculation of the inherited emissions needed for the battery carbon footprints (CFB) developed in line with the Product Environmental Footprint Category Rules (PEFCR) and upcoming delegated act from the European Commission, that was due in February 2024. 

​For recycling requirements, Circulor  measures the carbon emissions released by recycling processes and attributes the secondary material to the output product.

Material Sourcing and Traceability

Furthermore, an EV Economic Operator must ‘establish and operate a system of control and transparency including chain of custody or  traceability system, supported by documentation to provide proof’ for cobalt, natural graphite, lithium, nickel supply chains by August 2025​.  

PROVE’s Material Traceability is the market-leading technology built for this very challenge. The data we gather from upstream critical mineral producers and refiners proves material origin and that production processes meet ethical and sustainable expectations of the market, while detailed material information enables allocation, recycling, and retrieval. The blockchain component creates immutable records that will satisfy regulators looking for proof of activity and compliance. ​ 

PROVE can also attach any supporting documentation (due diligence, compliance, and audit reports) upstream to the flow of materials which in turn assures its incorporation into specific battery cells and packs that are delivered downstream. Through PROVE, EV OEMs can set requirements for suppliers in the platform, track updates, renewals, and certification processes via automated notifications, and manage the library of documentation. Capturing all of this information in one place to comply with global requirements saves both time and money. 

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Battery Passports

By February 2027, as EV Economic Operators ‘establish a Battery Passport, accessible through a QR code’, they are able to fold their carbon footprint declarations, material traceability data and compliance information into a Battery Passport issued by Circulor.  

Not only is our Battery Passport underpinned by granular, primary material traceability and emissions data from the supply chain, the templates used can be versioned to accommodate modifications at the product model level and are able to stay in lockstep with the regulations. PROVE’s template versioning ensures the Economic Operator can organize the information on category and sub-category level and set the differentiated access to battery data per stakeholder as needed.   

PROVE provides the data containers, the master data management, template creation and the library management companies need as they begin to collect and organise the growing data volumes and complexity needed to meet the regulation. Additionally, Circulor stores the battery passport to ensure its availability even if the economic operator ceases its activity in the Union, required under Article 78. 

More information about Circulor’s Battery Passport can be found here

Recycled Content 

By August 2028, EV Economic Operators must prove the % share of recycled content of cobalt, lead, lithium and nickel in active materials that has been recovered from battery manufacturing waste (except for lead) and/or post-consumer waste, for each battery model, per year and per facility.  

Using Circulor’s Material Traceability solution, supply chain participants gain credible insights into the recycled content (%) of each material received into their facility and each product they produce.​ This is achieved by tracking recycled content into and along the supply chain, attributing it to the flow of materials. When materials are blended to produce an output product, Circulor captures the breakdown of metals within input and output products and apportions the recycled content accordingly to calculate the precise recycled content (%) to each output product.  

​Business rules are added to data collection points to identify if recycled content % values provided by the customer do not meet minimum recycled content requirements and alert downstream customers so they can investigate further.  

How Circulor supports the evidencing of recycled content specifics with Material Traceability is explained in detail in this article. 

Towards a Sustainable Future

In an industry faced with increasingly levels of accountability, starting the journey today is prudent.   

 

Using PROVE helps organizations across the battery value chain navigate the oncoming complexities, not only ensuring compliance within deadlines but also empowering companies to build the robust data foundations that will enable them to meet their sustainability and circularity ambitions and unlock strategic opportunities that generate value.  

With three of the largest global cell producers already integrated into Circulor’s network and over 145 customer facilities actively contributing traceability and sustainability data, PROVE already covers a substantial portion of battery value chain suppliers. Collaborating with 52% of global cell manufacturing capacity, PROVE has provided supply chain visibility for over 157 million battery cells in 670,000 EVs, accumulating over 2.5 billion traceability data points.  

 

This pre-existing network is the largest of its kind and ensures a fast and simple onboarding process for OEMs/EOs as a portion of their supplier network will most likely be on the platform already.  Also, this extensive network goes beyond compliance - it establishes PROVE as the foundation for sustainable battery value chains and contributes to a more transparent and responsible industry. 

 

 

If you would like to learn more about PROVE and Circulor’s Battery Passport solution please get in touch with us here, or download information about Circulor's Battery Passport via the link below. 

 

 

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