Due Diligencefor a sustainable transition to electromobility

The Platform for electromobility advocates for a sustainable mobility approach that protects the environment and human rights. To achieve this, coherence between legislative files will be key. The following steps should be taken on the Battery Regulation and the upcoming horizontal initiative on mandatory Human Rights and Environmental Due Diligence (mHREDD), while bearing in mind the difficulties encountered in implementing similar legislation, as was seen with the Conflict Minerals Regulation (CMR).

Strengthen and mirror the Battery Regulation’s provisions on due diligence

The Platform strongly supports the introduction of binding corporate responsibility rules within the Battery Regulation for due diligence throughout the battery supply chain. As this Regulation is likely to act as a framework for regulating other complex products arising from the mobility industries, the Platform therefore invites the Commission to strengthen the due diligence requirements.

Europe’s new level of ambition for due diligence on batteries should be mirrored in any upcoming legislation that impacts other transportation industrial sectors and their supply chains. Both zero emission and traditional combustion transportations should face equivalent strict requirements. Those common or equal obligations should cover the entire supply chain of an economic operator, including its business relationships and subsidiaries. Economic operators should have clear environmental responsibilities, addressing risks such as water contamination, air pollution, biodiversity. This should also be the case for human rights, addressing risks such as child labour, forced or unpaid labour and the freedom of association of workers and so on.

Horizontal initiative on mandatory Human Rights and Environmental Due Diligence (mHREDD)

The Platform supports the overall objective of the mHREDD Directive, as well as the opportunity to boost investment crucial for the electromobility transition: productions sites, innovation as well as employee retraining, upskilling and reskilling.

However, it is important the European Commission proposes an ambitious horizontal mHREDD, to match – at minimum – the Battery Regulation on the due diligence requirements included in Art. 39 and Annex X. If the due diligence requirements in the Battery Regulation are strengthened by the co-legislators – a step we are calling for – the gap between the new battery industries and traditional ICE producers would keep growing, undermining the growth potential of the former.

The mHREDD requirements should therefore be extended to those sectors that compete with electric transport. In particular, due diligence requirements must apply equally to the fossil fuel sector. This would provide consumers and authorities with full transparency on the diverse mobility options available on the market. In addition to the excessive complexity created by double standards, an unambitious mHREDD would not deliver the level playing field between competing industries, consequently slowing down the transition to electric mobility.

Companies falling within the scope of the mHREDD should be liable for human rights and environmental harm they – or a company they control or have the ability to control – have caused or contributed to. This range of control should be clearly defined.

On the impact on prices, costs may increase due to new requirements on suppliers. They will either adapt their production accordingly or will pull out of the EU market, thus restricting the sourcing possibilities for European manufacturers to more costly suppliers. Establishing ambitious environmental and social standards via supply chain due diligence rules will, however, enable batteries and vehicles manufacturers in the EU to compete globally on elements other than price alone.

Finally, implementation of the mHREDD should be harmonised throughout EU to avoid double standards and divergence between Member States. A Regulation is necessary to create unambiguous guidance for transnational companies on the methodologies. Any uncertainties – particularly on implementation, scope, certification and auditing – should be avoided.

Word of Warnings from the implementation of Conflict Minerals Regulation

Reflecting on the experience of the implementation of CMR – which legislates on a very specific set of minerals – is essential for ensuring the effective implementation of the horizontal mHREDD and of the Battery Regulation. We urge legislators to take all steps necessary to tackle the difficulties of implementing and enforcing all EU due diligence policies in all sectors, particularly for other critical materials for the transition of electromobility.

 Considering that the basic components of the CMR are taking a significant time to implement, the Platform is concerned by the feasibility for the European Commission to enforce Art. 39 of the Batteries Regulation and upcoming mHREDD. The Platform for electromobility underlines the following challenges to ensure provisions can genuinely be enforced. New measures should:

  • Address delays in recognising industry schemes, which are at the core of the CMR, without compromising a thorough auditing process of the applying scheme.
  • Rely on concrete outcomes rather than on reporting, as is the case for the CMR.
  • Ensure responsibility falls on the user placing the minerals on the market (i.e. OEMs in the case of transport industry), rather than on their Tier 1 or 2 suppliers, in order to get closer to the end users.