European battery law will set global standard for the car industry, EU says

Proposed EU legislation to ensure materials for batteries are sourced ethically and sustainably will push up global standards, making Europe a “trailblazer” in the field, the European Commission has said.

The EU executive’s proposal, put forward in December last year, is the world’s first sustainable battery law. It aims to tackle issues in the battery supply chain, including human rights abuses, and will apply to all companies in the industry operating on European soil.

The legislation comes amid a surge in battery production and gigafactories globally, as demand for electric vehicles picks up.

But extracting the precious metals required to produce these batteries has been linked with environmental degradation and worker abuses. In 2016, Amnesty International sent tremors through the tech industry when it published a report revealing that 35,000 child labourers worked at cobalt mines in the Democratic Republic of Congo, a major source of the metal.

The proposed EU battery law will require companies to address such kinds of abuses in their supply chains or face a ban from the EU market.

It is a “protoype” for regulating products on a lifecycle basis, regardless of where they are made, said Stefano Soro, an official at the European Commission’s directorate for the internal market, industry, entrepreneurship and SMEs (DG GROW).

“If someone wants to place [batteries] on the European market… they will have to comply with our requirements,” he told a EURACTIV event on 1 October, supported by the Nickel Institute.

“Europe is an unavoidable market for all those who want to do business,” he added, referencing the EU’s status as the world’s largest trading bloc.

The legislative proposal is based on OECD guidelines for ethical sourcing and would require third party verification to prevent labour abuses, he said.

“Cobalt mining is, in some areas of the world, linked to human rights abuses, child labour and life threatening working conditions. In regulating the sustainability of factories, responsible sourcing is bound to play a significant role.”

More time needed

Industry representatives voiced support for the proposal, but warned that the one-year time frame to implement the requirements following approval of the regulation is insufficient.

“The due diligence policies will have to be implemented, but also the results will have to be verified by third party assessment bodies, and this entire system of checks will have to be established at national level,” said Francesco Gattiglio. “We do not think that one year is enough to have all of this done.”

Mark Mistry, senior manager with the Nickel Institute, said companies will welcome the opportunity “to demonstrate that [they] are ready to identify and to address environmental, social, and governance risks”.

However, he also warned that the system could backfire unless sufficient time is given for the industry to adapt.

“When we talk about ESG risks, we are talking about a list of roughly 30 to 32 items. And looking into these risks, tailoring them to your specific raw materials industry and its characteristics, is of course time demanding,” he said.

He asked lawmakers to ensure the industry is given sufficient time “to actually properly implement the standards and to allow the companies to actually demonstrate that they comply with the requirements”.

“The critical point is that this takes some time and if we start rushing we are going to end in a mess,” he added.

Exporting values

The battery regulation is a means for the EU to export “European values” globally, stated Antonius Manders, a Dutch MEP with the centre-right EPP group in the European Parliament.

“Batteries will be the oil for the next generation. Very important for our economy, but also very important for our society,” he said.

Manders said it was necessary to “change the mindset” of top industry executives, moving away from a profit-only focus that places little concern on environmental harm.

“In the last 30 years, we have focused too much on the old-fashioned way of thinking of the economy, namely making money, and no cost for environmental damage,” he said.

The Dutch MEP also called for an export ban on waste batteries to ensure raw materials within batteries are retained and to prevent environmental degradation in Asia and Africa, where the batteries are likely to end up.

The view that Europe must be the global standard setter for batteries was shared by Alex Keynes, a clean vehicles expert with the green NGO Transport & Environment (T&E).

Shaping and adhering to stricter standards will give European companies a headstart over global competition, he argued.

However, T&E warned that the threshold for what constitutes abuse is set too high in the legislation, allowing harm that does not fall under the banner of gross violations, such as torture, to be glossed over.

Keynes called for the definition to be expanded to include “land, labour, and water rights”.

The need for circularity in the battery chain – promoting 100% recycling to form a closed loop – was affirmed by all panellists at the event.

But Francesco Gattiglio, EU affairs director with battery manufacturers group Eurobat, warned that it will be some years before battery sales rise to the level where complete circularity can be achieved. At present, the industry must continue to source virgin raw materials, he said.

Thomas Becker of the BMW Group outlined the German car company’s efforts to prevent supply chain abuses, such as deciding not to source cobalt from the Democratic Republic of Congo, and issuing a study into the requirements for responsible sourcing of lithium in South America.

The company also obliges its fuel cell suppliers to exclusively use renewable energy when supplying BMW, said Becker.