We are in the middle of a historic shift to electric and green energy. The rise of electromobility is changing the commercial vehicle industry on all fronts, and for the first time in the industry’s history, high efficiency is meeting low emissions. With at least 30 million electric vehicles forecast to be on European roads by 2030, the demand for batteries is rapidly growing. And with the rising demand, a sustainable regulatory framework must follow. That is why the EU has agreed on a new regulation to replace the EU Directive 2006/66/EC that tackles the environmental, ethical, and social issues of increased battery production. The regulation 2023/1542 has entered into force and applies from 18 February 2024, same as set out in other provisions of the regulation.
Traceability is key
To efficiently tackle issues regarding material sourcing, manufacturing, and recycling, the ability to follow each battery from cradle to grave is crucial. From 2027 onwards, all batteries placed on the market will have to be equipped with a QR code which, when scanned, will provide information about the unique battery. For EV and selected industrial batteries, the QR code will link to a so-called battery passport, which will provide extensive information such as the battery’s origin, characteristics, usage, and health. These details will help determine the battery’s potential for reuse, repurpose, remanufacturing or even recycling, which is a great step towards a more sustainable battery industry.
Minimize environmental and social impact
Fully electric vehicles have a significantly smaller CO2 footprint than combustion engine vehicles when measured over their whole lifecycle. However, the battery industry still has an adverse impact on the environment. The new EU regulation contains more stringent requirements for producers (manufacturers and other economic operators) in respect of the environmental and social impact related to batteries. The extended producer responsibility includes minimum obligations regarding the collection and treatment of waste batteries and reporting, which producers can entrust to a producer responsibility organization.
There will also be an implementation of minimum levels of recycled content in the production of new batteries in the categories SLI, EV and industrial. Recycled materials, also known as non-virgin materials, have already been mined and extracted. Sourcing important minerals from used batteries is an efficient way of minimizing environmental impact. 8 years after entry into force of the battery regulation, so expected from 2031 onwards, batteries must contain a minimum of 16% cobalt, 85% lead, 6% lithium, and 6% nickel from non-virgin sources. These numbers will increase over time.
The provision of documents and reports serves to mitigate social and environmental impact, as well as enable information sharing and easy comparisons, to ensure the flow of green batteries in the EU market. Reports about battery performance and durability, carbon footprint, and level of recycled material are expected to be used to set benchmarks for greenhouse gas emissions and social impact. From 2025, Battery due diligence policies for raw material sourcing must be conducted by companies placing batteries on the market. Information on diligence policies will be available to the public, downstream purchasers and authorities.
Boosting the circular economy of the EU market
As the global demand for batteries is set to increase fourteen-fold by 2030, the new EU regulation is looking to boost the attractiveness of the EU as a market for investments and development. With a coherent industrial strategy that aids the future of European battery manufacturing and recycling, the EU wants to ensure a sustainable and localized battery supply to support the rising demand. Through incentives for businesses and investors, the proposal aims to stimulate the market and level the playing field through a common set of rules, with the purpose to develop circularity and reduce dependence on third-world territories.
Reman, reuse, repurpose, and recycle
The new EU regulation serves to ensure that batteries can be reused, repurposed or remanufactured once they have served in their first life, and efficiently recycled at the end of their life. The Volvo Group is already working toward using every battery that powers the Group's applications to its full potential. This includes optimizing and prolonging a battery’s first life, finding efficient repurposing options for second-life batteries, and finally ensuring that it gets recycled in the best way possible. This shift from a linear business model to a circular one is accelerated by Volvo Group’s dedicated business area Volvo Energy.
Conclusion
The demand for commercial EVs is growing rapidly, resulting in an increased need for a sustainable battery industry. The new EU regulation means an extended responsibility for producers and manufacturers and increased transparency for the end user. The Volvo Group welcomes the changes and is ready to take lead. If there is one key takeaway from the regulatory developments, it is that the green transition is happening now and needs to be embraced by all of us.
