Insights 2023.10.17

Impact of the EU Battery Regulation

table of contents

February 18, 2025

The EU's EU Battery Regulation came into effect on August 17, 2023, regulating the entire lifecycle of battery products, from raw material procurement to the design and production process, reuse, and recycling. Carbon footprinting (CFP), a major challenge for many companies, is due to begin on February 18, 2025, and as of October 2, 2023, there is still about a year and a half until the end of the regulation. However, in discussions with government and automotive industry representatives, many voices have expressed the view that there is not much time left. The EU Battery Regulation applies to all batteries sold within the EU, including those for automotive, Industry, and portable use. In this article, we will focus on the automotive industry's response and expand on the discussion.

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European electric vehicle sales trends

The EU Battery Regulation states ^that "This Regulation should apply to all categories of batteries placed on the market or put into service within the Union, regardless of whether they were produced in the Union or imported." Therefore, let's first review the trends in electric vehicle sales in the EU (26 countries excluding Malta). Looking at the actual figures for 2022, the number of new passenger car registrations is expected to be 9,257,208 units (according to the European Automobile Manufacturers' Association ACEA ^*2 ). The total number is the lowest in the last 30 years due to factors such as a shortage of semiconductors, but two symbolic events can be seen.

The first is the rapid growth of battery electric vehicles (BEVs). The number of vehicles sold reached 1,123,778 (up 28% from the previous year), exceeding one million units for the first time in a single year and accounting for over 10% of the total. Germany had the most, with approximately 470,000 units (up 32% from the previous year), followed by France with approximately 200,000 units and Sweden with approximately 100,000 units. For reference, outside the EU, the UK had approximately 270,000 units (up 40% from the previous year) and Norway with approximately 140,000 units. BEVs accounted for 79% of new car sales in Norway. Incidentally, Japan sold approximately 59,000 units (27,000 of which were light vehicles), but this accounts for only 1.7% of all passenger cars ^*3 .

[Figure 1] BEV sales ranking by country in the EU in 2022

rank	Country name	Number of units (units)	Year-on-year change (%)	Composition ratio within total number (%)
1st place	Germany	471,394	+32.3	17.8
2nd place	France	203,122	+25.3	13.3
3rd place	Sweden	95,035	+65.4	33.0
4th place	Netherlands	73,394	+15.1	23.5
5th place	Italy	49,179	▲26.9	3.7
	EU total	1,123,778	+28.0	12.1

Source: European Automobile Manufacturers Association (ACEA)

The second is the significant decline in pure internal combustion engine vehicles. Gasoline and diesel vehicles totaled approximately 4.9 million units, still accounting for more than 50% of the total, but compared to the previous year, gasoline vehicles were down 13% and diesel vehicles down 20%. Looking at other electrified vehicles, hybrid electric vehicles (HEVs) were at approximately 2.09 million units (up 9% compared to the previous year), and plug-in hybrid vehicles (PHEVs) were at approximately 870,000 units (up 1%), meaning that the combined total of BEVs, HEVs, and PHEVs exceeded 40% for the first time. From the perspective of EU Battery Regulation, these three vehicles and FCEVs are subject to the regulations.

[Figure 2] Breakdown of passenger car sales by powertrain in the 26 EU countries (excluding Malta) from 2018 to 2022

Source: JETRO*4

Contents of the EU Battery Regulation

Returning to the main topic, let's take a look at the overall picture of the EU Battery Regulation, which applies to BEVs, HEVs, PHEVs, and FCEVs. The original text of the EU Battery Regulation is 117 pages long and consists of 14 chapters, 96 articles, and 15 annexes. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R1542

First, let's look at the objectives of this regulation. Article 2 states, "The objectives of this Regulation are to contribute to the efficient functioning of the internal market, while preventing and reducing the adverse impacts of batteries on the environment, and to protect the environment and human health by preventing and reducing the adverse impacts of the generation and management of waste batteries." Behind this humanitarian statement is a clear indication of Europe's ^intention to gain dominance in batteries, a strategic element in achieving carbon neutrality by balancing environmental and economic goals, as ^outlined in the European Green Deal. Importantly, this regulation is the first in the EU to cover the entire product Industry cycle (from resource extraction to production, disposal, reuse, and recycling). The aim is thought to be to encourage the production and circulation of batteries within Europe by incorporating regulations such as the obligation to display greenhouse gas emission amount (carbon footprint) during Manufacturing and disposal, responsible material sourcing (due diligence) in resource extraction and refining processes, and recycling.

*5 This is an action plan that sets the EU's goal of achieving "climate neutrality" by 2050, where greenhouse gas emissions are essentially zero, and includes raising the EU's climate targets toward 2030 and reviewing related regulations. While being an environmental policy, it also covers a wide range of policy areas, including Energy, Industry, transport, biodiversity, and agriculture, and is a comprehensive new economic growth strategy that aims to transform the European economy and society.

[Figure 3] EU Battery Regulation requirements in each phase

Source: Create by Zeroboard based on EU Battery Regulation

Moreover, perhaps as a result of these efforts, many battery manufacturers are already implementing or planning to construct battery factories within Europe.

[Figure 4] Battery factory construction plans of battery manufacturers

Source: OROVEL*5

I would like to proceed to check the contents. Excerpts of the titles of each chapter of the EU Battery Regulation are as follows.

CHAPTER

General provisions
Sustainability and safety requirements
Labeling, marking and information requirements Labeling, marking and information requirements
Conformity of batteries
Notification of conformity assessment bodies
Obligations of economic operators other than the obligations in Chapters VII and VIII
Obligations of economic operators as regards battery due diligence policies
Management of waste batteries Management of waste batteries
Digital battery passport Digital battery passport
Union market surveillance and Union safeguard procedures
Green public procurement and procedure for amending restrictions on substancesGreen public procurement and procedure for amending restrictions on substances
Delegated powers and committee procedure
Amendments
Final provisions

Carbon footprint required by EU Battery Regulation

Due to space limitations, it is difficult to cover everything, but this time I would like to focus on carbon footprints, which are a particularly hot topic in discussions with people in the automotive industry. The relevant sections are Article 7 of Chapter 1, "Carbon footprint of electric vehicle batteries, rechargeable industrial batteries and LMT batteries," and Annex 2, "ANNEX II CARBON FOOTPRINT."

The points are listed as follows:

The start date is February 18, 2025
CFP calculation complies with Product Environmental Footprint Category Rules (PEFCR)
Calculated for each life cycle (raw materials, Manufacturing, distribution, after use)
The usage stage is excluded from the calculation as it is not under the direct influence of the manufacturer.
Certification of CFP value by a third party is required
From August 18, 2026, CFP performance class will be listed.
From February 18, 2028, products must be below the maximum CFP threshold. If they are not Settings, they will not be able to be sold within the EU.

[Figure 5] overview of EU Battery Regulation

Source: Create by Zeroboard based on EU Battery Regulation

Automotive OEMs selling electric vehicles in Europe must collect information from the vast battery supply chain (SC) and implement the above measures by the February 18, 2025 deadline. Considering that vehicle transportation from Japan to Europe takes approximately 50–60 days and that CFP data collection is generally required for one year, they must start immediately. The biggest challenge will likely be collecting SC information. While cell and module suppliers are required to provide the information and documentation necessary to meet the requirements of this regulation, it is unlikely that the companies that make up the battery SC are currently calculating CFP for their own processes in a manner that aligns with the timeline of the EU Battery Regulation. In our next issue, we will delve deeper into how to respond under these circumstances, incorporating the "Ouranos Ecosystem," an SC data collection platform currently being developed by the Japanese government and the automotive industry.

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GHG emission amount calculation/visualization,
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＜Reference source＞
*1: EU Battery Regulation original text URL (reference: September 2023)
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R1542
*2: European Automobile Manufacturers Association ACEAURL (reference: September 2023)
https://www.acea.auto/
*3-1: Japan Automobile Dealers Association (Japan Automobile Dealers Association) URL (reference: September 2023)
http://www.jada.or.jp/
*3-2: Japan Light Motor Vehicle Association (JLMEA) URL (reference: September 2023)
https://www.zenkeijikyo.or.jp/
*4: JETRO Regional Analysis Report URL (reference: September 2023)
https://www.jetro.go.jp/biz/areareports/2023/e16ac7211362d2cc.html
*5：OROVEL Li-on Battery Gigafactories in Europe (January 2021)
https://www.orovel.net/insights/li-on-battery-gigafactories-in-europe-january-2021　

Article author

Taiji Ono(Sales Headquarters General Manager)
After graduating from university, he joined TOYOTA MOTOR CORPORATION Company, where he gained a wide range of experience in planning new models and mobility Service. He then worked full-time for the labor union. As Deputy Executive Chairman, he promoted the formulation of company-wide policies based on the two pillars of digital and carbon neutrality. He then joined the Top Support Liaison Team. In addition to external negotiations such as collaboration with the Ministry of Economy, Trade and Industry and activity with the Japan Automobile Manufacturers Association, he was also involved in a wide range of activities, including the formulation of company-wide BEV plans. He joined Zeroboard in July 2022. He is responsible for the development of decarbonization solutions for automobiles, logistics, Retail, etc., as well as various business strategies and overseas expansion.