Our recommendations on due diligence initiative for a sustainable transition to electric mobility.
Due Diligence
for 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.
Platform’s feedback to the consultation Batteries – modernizing EU rules
The Platform welcomes the proposal for a Battery Regulation and strongly supports the need for modernisation of the existing batteries legislation. It must ensure harmonisation in the internal market and facilitate an accelerated shift to electrified mobility by engaging all parts of the battery supply chain. The regulation must establish proportional and well-designed provisions to enable sustainable battery production, use, and end-of-life management.
Generally, the timeline for the provisions should be well-thought through to ensure robust and harmonised application and enforcement. We need to strike a balance between the need for a quick implementation of the Regulation while ensuring a robust methodologies. Overall, the proposed measures shall promote cleaner, more competitive and more efficient battery manufacturing.
To avoid duplication or overlaps with existing legislation and requirements and limit excessive administrative burden on the nascent battery industry, the Platform sees a need to streamline and align provisions.
Read the PDF version here
While the Platform believes that the proposed requirement for carbon footprint declarations goes in a positive direction, we are concerned about the measure’s enforceability at the Member State level. Provisions should apply per battery model and manufacturing plant instead of “for each battery model and batch per manufacturing plant.” Rules on enforcement, methodology, and electricity accountability should also be clarified, to ensure:
1. Harmonised enforcement at Member State level and for imported batteries;
2. The use of representative data and supply-chain configurations to ensure comparability of declarations. E.g certification of energy use should reflect real world use of renewable energy and must not rely on purchase of green certificates (Guarantees of Origin).
3. The confidentiality of the declared primary data is respected.
The Platform strongly supports the introduction of rules for the responsible sourcing of raw materials for batteries. Similar due diligence requirements must also be applied as soon as possible to the fossil fuel sector as part of the upcoming horizontal due diligence legislation.
The Platform highlights that economic operators must have sufficient time to adapt to new data sharing requirements. The chosen method, be it battery passport or QR Code, should be streamlined with a focus on a single, innovative, and digital approach. The Commission must identify which data sets are essential to boost the data-sharing economy while ensuring confidentiality.
The Platform welcomes the Regulation’s intention to provide a regulatory framework for the transfer of liability and safety requirements for second-life EV batteries. The current provisions, however, require clarifications as regards access to BMS, conditions for the safe treatment of batteries, property rights protection, as well as ownership of data created by EVs. Moreover, the waste status of batteries is vital: the collection of waste batteries potentially suitable for repurposing should be designed in such a way that a second life business model can develop without creating a free pass for illegal waste transport. In particular, a clear-cut transfer of extended producer responsibility is pivotal to avoiding the risk of illegal export.
On end-of-life management, we welcome the recognition of batteries within a circular economy. Also, the Batteries Regulation now better differentiates between battery chemistries. However, the future regulatory framework should be aligned and consistent with EC 1907/2006 (REACH). To work towards a level playing field, we propose including a deadline for the adoption of equivalent conditions criteria for export of waste batteries to third countries. Minimum recycling conditions outside Europe must be set, including environmental and social criteria.
Platform for Electromobility reaction to the revision of the European Batteries Directive
10 December 2020
Read our full paper here:
Platform for Electromobility reaction to the revision of the European Batteries Directive_v1_Final
The Platform for Electromobility – representing 39 industrial, urban and environmental stakeholders from across Europe’s e-mobility value chain – welcomes the Commission’s long-awaited publication of their proposal for new European rules for batteries as presented today.
This comprehensive legislation will be key to ensuring batteries on the European market are both produced in a socially and environmentally sustainable manner, while at the same time, putting the EU firmly on track to meet to achieving its 2050 climate-neutrality and industrial leadership ambitions as set out by the Strategic Action Plan on Batteries. The revision of the current legislative framework has the potential to provide further regulatory support and clarity for the European battery manufacturing and recycling industries by establishing legislative measures capable of increasing the continent’s competitiveness in the booming e-mobility sector. Specifically, the the whole objective of the proposal should create the legal conditions and incentives for a domestic, competitive, high-quality battery market to emerge in Europe, with true business cases for battery end of life management and environmentally sound recycling, which can help accelerate the EU’s transition to zero emissions.
Batteries will underpin Europe’s drive to climate neutral economy and zero-emission transport. In this context, we urge policymakers to keep the following in mind as the Commission proposal is debated in the European Parliament and Council:
1. Ensure comprehensive due diligence requirements – from sourcing, to refining and manufacturing – are supported at EU level so that the battery industry can bring social and environmental value along the entire value chain;
2. Develop a robust EU carbon footprint methodology addressing all batteries chemistries and covering all key emission hotspots/phases;
3. Pave the way for an effective, net-value circular economy strategy capable of treating developing waste volumes and meeting the needs of a fast-paced, innovative industry such as e-mobility.
4. Avoid batteries are not lost once they hit the market via an improved (end-of-life) declaration system;
5. Provide a consistent regulatory framework for 2nd life options of EV batteries.
As EV sales begin to take off in Europe, the future success of the EU’s ability to remain competitive with the rest of the world will be heavily dependent on the ability to domestically develop batteries at larger scale in order to meet EV demand and help accelerate the transition to e-mobility. Only with clear rules and high standards can Europe fully reap the benefits of a home-grown battery industry, bringing economic value, jobs and long-term growth as a part of the e-mobility transition.
Jayson Dong, Chair of the Batteries Working Group in the Platform for Electromobility, added that “this piece of legislation will be key to supporting a thriving European e-mobility ecosystem. It will play a key role in delivering on the innovation, sustainability and competitiveness ambitions of the 2017 launched European Battery Alliance and working towards the EU’s Green Deal roadmap. The Platform for Electromobility looks forward to engaging with all relevant EU decisionmakers on this file and sharing our wealth of expertise to ensure the EU becomes a leader in the manufacturing of innovative and sustainable EV batteries.”
For more information about the Platform and our detailed position on the revision of the Batteries Directive, please find our paper on our website here.