Impact of the EU Battery Regulation

In the October 2023 EU Battery Regulation Impact Report ①, we focused on the trends in electric vehicle sales in Europe and an overview of what the EU Battery Regulation is. This time, we will delve into the Contents for calculating carbon footprints (CFP) required by the EU Battery Regulation, the supply chain (SC) data collaboration required for this, the Ouranos Ecosystem as a means of achieving this, and overseas supply chain data sharing platforms such as Gaia-X and Catena-X.

For companies working to reduce the environmental impact of their products and Service
Zeroboard CFP
LCA-based carbon footprint (CFP) calculation solutions. Support from our experts is also available.
View Details

CFP required by EU Battery Regulation

For now, the necessary requirements are based on the original text of the EU Battery Regulation, the "Final draft of Rules for the calculation of the Carbon Footprint of Electric Vehicle Batteries (CFB-EV) " from the Joint Research Centre (JRC), a research institute of the European Commission, and the Products Environmental Footprint Category Rules for High Specific Energy Rechargeable Batteries for Mobile Applications, Version 1.1 (February 2020). However, for further details, we will need to wait for the Delegated Act on CFP calculation methods, which is scheduled to be adopted by February 2024. Therefore, here we would like to deepen our discussion on "primary data," which is the key to CFP calculation.

First, let's review the outline of the EU Battery Regulation, which were also covered in the first article.

• 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, it will also be necessary to indicate the CFP performance class.
• 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.

Source: Create by Zeroboard based on EU Battery Regulation

In addition to the above, calculation of CFP to comply with EU Battery Regulation must, in principle, use "primary data." Primary data is data collected by the calculation business operator at its own responsibility, and common data such as carbon dioxide Emission intensity from IDEA or Industry output tables and literature data cannot, in principle, be used in CFP calculation. Therefore, calculation business operators must collect data for calculating CFP from businesses upstream in the SC, combine this data with information on their own production process, and perform cradle-to-gate calculation.

For companies working to reduce the environmental impact of their products and Service
Zeroboard CFP
LCA-based carbon footprint (CFP) calculation solutions. Support from our experts is also available.
View Details

Battery supply chain and required primary data

A storage battery is Manufacturing by assembling a positive electrode, a negative electrode, a separator, an electrolyte, a battery cell case, etc.

Source: Rules for the calculation of the Carbon Footprint of Electric Vehicle Batteries (CFBEV) *1

According to the JRC report mentioned above, in order to calculate CFP, it is necessary to add up the CO2 emission amount from the Manufacturing process of each component and material, and it is expected that companies Manufacturing the components listed below will be required to obtain primary data on CO2 emission amount.

Source: Rules for the calculation of the Carbon Footprint of Electric Vehicle Batteries (CFBEV) *1

In addition, taking into account the Contents of EU Battery Regulation etc., the primary data linkage required in the battery supply chain is as shown in the diagram below, and it is anticipated that a wide range of businesses will be involved.

Source: April 21, 2023, based on the Ministry of Industry , Trade and Industry's carbon footprint data on storage batteries *2 , Create by Zeroboard based on EU Battery Regulation and the Contents of the JRC report

So how do we link primary data?

For companies working to reduce the environmental impact of their products and Service
Zeroboard CFP
LCA-based carbon footprint (CFP) calculation solutions. Support from our experts is also available.
View Details

A system that bears the name of God

The EU Battery Regulation requires data sharing across SCs, identifies areas where CFP reductions are possible, and identifies Issue from a human rights due diligence perspective. The Regulation is designed to address these issues, extending beyond visualization to include action. Even when attempting to obtain primary data for CFP calculations, Article 39 of the EU EU Battery Regulation EU Battery Regulation states, "Obligations of suppliers of battery cells and battery modules." "Suppliers of battery cells and battery modules must provide the information and documentation necessary to comply with the requirements of this Regulation." (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R1542) However, disclosing all CFP data would also expose the company's production process to its customers, making it highly desirable to avoid doing so. Furthermore, from the perspective of the companies requesting information, SCs themselves have become increasingly complex in recent years, making it nearly impossible for downstream companies to grasp all of the information from their upstream SCs. On the other hand, data-driven SC management is becoming increasingly important in terms of natural disasters, geopolitical risks, and the use of SC data in business.

In light of this situation, Japan is currently building the "Ouranos Ecosystem," with the aim of linking SC data in response to EU Battery Regulation as the first use case. This initiative aims to realize the digital transformation of cyber and physical worlds, as well as the digital transformation of financial and commercial flows and logistics and people flows, and one of its agendas is the creation of a supply chain data linkage platform. The Ministry of Economy, Trade and Industry's website states, "By strengthening and optimizing the entire global supply chain, we will work to resolve social Issue such as carbon neutrality, economic security, waste reduction, and traceability, while at the same time realizing a society in which various stakeholders, including small and medium-sized enterprises and venture companies, are active and Industry development takes place."

Source: Ministry of Economy, Industry website *3

The diagram below shows how the Uranos Ecosystem is structured and functions in compliance with EU Battery Regulation.

Source: Zeroboard for batteries website *4

The Uranus Ecosystem does not refer to a single system, but rather a series of initiatives that include the application layer. In CFP, companies use applications to perform CFP calculations using information from their own ERP, BoM, various internal systems, etc., and place that information in the data linkage system layer. Downstream companies that need the information then extract it from here as primary data and perform their own CFP calculations. By repeating this process, it becomes possible to perform CFP calculations required to comply with EU Battery Regulation by connecting the supply chain with primary data. In this series of processes, information providers can Settings the scope of disclosure themselves, and a mechanism is in place to ensure confidentiality.

In Japan, the three main organizations involved in the EU Battery Regulation- the Japan Automobile Manufacturers Association (JAMA), the Japan Auto Parts Industries Association (JAPIA), and the Battery Supply Chain Council (BASC) - plan to use the Ouranos Ecosystem to link SC data to calculate CFP for batteries and address human rights and environmental due diligence, but we are often asked: What is the movement toward linking supply chain data overseas? Well-known examples include Gaia-X and Catena-X in Europe, and it is interesting to note that in Greek mythology, Gaia (the god of the earth) and Ouranos (the god of the sky) were a married couple.

For companies working to reduce the environmental impact of their products and Service
Zeroboard CFP
LCA-based carbon footprint (CFP) calculation solutions. Support from our experts is also available.
View Details

Global movement towards SC data integration

Globally, there are various efforts to share supply chain data. In some cases, such as in the United States, mega platformers such as GAFAM promote data collaboration between companies, with limited involvement of the government in data collection and use. On the other hand, in China, where huge domestic demand and low costs have led to a platform strategy in which the government controls and protects private companies (BAT, TMD, etc.). In Europe, the government has Settings themes focused on social Issue for the huge European economic zone, formulated rules (de jure standards) that are favorable to companies in the region, and promoted data distribution within the region while setting up entry barriers from outside the region based on data sovereignty. There are Catena-X, which covers the automotive industry, Manufacturing-X and Smart Connected Supplier Network for the Manufacturing industry, but it is Gaia-X that embodies the above European ideas and is the basis of various initiatives. The objective stated on the Gaia-X website is "Our goal is to establish an ecosystem, where by data is shared and made available in a trustworthy environment." Each of these ecosystems is introduced as follows, and it is thought that the concept is similar to the Uranus Ecosystem.

Source: Gaia-X website *5

Catena-X also aims to build a data-driven and reliable global automotive value chain that spans from automotive OEMs to Tier-1, Tier-2, and Tier-n.

Source: Catena-X Seminar held in 2022 *6

There is a possibility that various SC data sharing platforms will be established in various countries and regions in the future, and it is expected that these will interconnect. However, the timeline for the integration of ecosystems between countries has not yet been determined. In order to comply with the EU Battery Regulation that will be required from February 18, 2025, most companies will calculate CFP in-house and then link this information to the Uranos Ecosystem, connecting the supply chain.

In the next issue, we will also delve deeper into the third-party verification required to comply with EU Battery Regulation, as well as primary data.

For companies working to reduce the environmental impact of their products and Service
Zeroboard CFP
LCA-based carbon footprint (CFP) calculation solutions. Support from our experts is also available.
View Details

throughout the supply chain
GHG emission amount calculation/visualization,
For centralized management of environmental items
Zeroboard

For detailed information and Contact us about the entire Service ,
Please check here.

• Resources
• Contact us