The European Union is poised to propose new regulations next month that will bring in tougher standards for batteries that are marketed in the bloc, to make sure they are greener throughout their lifecycles.
According to EU Environment Commissioner Virginijus Sinkevivius, sustainability of batteries in what constitutes the second largest market in the world for batteries, is critical.
The EU is more focused than ever on the production of batteries within the region, now projected to reach €250bn in market value by 2025. The move is going to have some important consequences for companies that are active in the battery space, which are already concentrating on the sustainability of battery production and supply chains.
New EU regs to cover imported batteries as well
The new regulations will apply across Europe, starting in 2024. They are intended to harmonise battery requirements across the continent and reduce the environmental and social footprint of batteries being sold in Europe. This will include batteries being imported from outside the bloc.
The regulations will require full CO2 footprint transparency and by 2027 limits on carbon generated in production. At first, this will oblige all batteries sold in Europe to display labelling qualifying their carbon footprint. All types of batteries will face carbon footprint limits by 2027. Sustainable and ethical sourcing will be required and traceability will be monitored using digital passports which will document the entire environmental footprint of the raw materials used and their processing and manufacturing processes.
“This is very good news,” said Marco Romero, CEO of Euro Manganese Inc, a battery raw materials producer situated in the Czech Republic. “These are very progressive regulations. Europe is rapidly becoming the world’s second largest market and producer of electric vehicles and batteries, and it is leading the world in the greening of the battery supply chain. This has global ramifications and will force the dirtiest producers to clean up their act or be shut out of Europe.”
ASX-listed Euro Manganese [ASX:EMN / TSXV:EMN] is extracting independently-verified manganese from tailings in the Czech Republic and is well-positioned to become a strategic supplier of high purity electrolytic manganese metal (HPEMM) and high purity manganese sulphate monohydrate (HPMSM), both of which are considered essential ingredients for Europe’s lithium-ion car battery revolution.
Euro Manganese has completed baseline environmental and impact studies as part of its project to sustainably achieve very high purity product specifications.
“Clean and green producers will be rewarded in such an environment,” added Romero. “I can imagine the USA will soon follow suit. The electrification revolution is gaining momentum and it’s getting greener every day.”
The EU has already approved a €3.2bn aid package to support a battery industry across seven countries and including major manufacturers like BMW [XETRA:BMWG] and BASF [XETRA:BASFN]. The bloc is going to require that raw materials are responsibly sourced and that clean energy is being used in production. The industry’s share of hazardous substances will need to be slashed. Energy efficiency and durability will be paramount.
Readers of The Armchair Trader will already know we are big fans of the sustainable battery revolution. This was a theme discussed by Tesla [NDQ:TSLA] at its Battery Day in September and was also a big topic in our podcast with Nano One TSX:NANO CEO Dan Blondal in October. Blondal said he anticipated much more emphasis on sustainable supply chains in 2021, and Brussels certainly seems to be moving in that direction too.
The new EU framework is expected to apply to all types of batteries and all types of chemistry. It has massive implications for an electric vehicle industry in Europe, which is already taking off. Bear in mind that the EU needs to cut greenhouse gases to zero by 2050 and that means slashing transport emissions by 90%.
