EUROPEAN COMMISSION Brussels, 10.12.2020 COM(2020) 798 final 2020/0353(COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning batteries and waste batteries, repealing Directive 2006/66/EC and amending Regulation (EU) No 2019/1020 (Text with EEA relevance) {SEC(2020) 420 final} - {SWD(2020) 334 final} - {SWD(2020) 335 final}



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL •Reasons for and objectives of the proposal Battery development and production are strategic imperatives for Europe in the context of the clean energy transition. It is also a key component of Europe’s automotive sector. In the EU, transport is responsible for roughly a quarter of greenhouse-gas (GHG) emissions and is the main cause of air pollution in cities. More widespread uptake of electric vehicles will reduce GHG emissions and noxious emissions from road transport. In the EU, a strong increase in the electrification of passenger cars, vans, buses – and, to a lesser extent, trucks – is expected to take place between 2020 and 2030. This is mainly being driven by EU legislation setting CO2 emission standards for vehicle manufacturers, but also by EU legislation setting Member State minimum targets for public procurement of clean vehicles. The electrification of some residential services, like energy storage or heating, will follow on from this and help to further reduce emissions. According to estimates from the World Economic Forum, there is a need to scale up global battery production by a factor of 19 to accelerate the transition to a low-carbon economy. This initiative aims to modernise the EU's legislative framework for batteries. It is an integral part of the EU's Green Deal, the EU's new growth strategy, which aims to transform the EU into a modern, resource-efficient and competitive economy where: (i) there are no net emissions of GHGs by 2050; (ii) economic growth is decoupled from resource use; and (iii) no person and no place is left behind. It builds on commitments and reports adopted by the European Commission, including the strategic action plan on batteries, the new circular economy action plan, the new industrial strategy for Europe and the sustainable and smart mobility strategy, which aims at delivering a 90% reduction in transport-related GHG emissions by 2050. In addition to the Commission’s work, both the Council and the Parliament have called for action to support the transition to electro-mobility, carbon-neutral energy storage, and a sustainable battery value chain. The European Investment Bank also announced that it expects to increase its backing of battery-related projects to more than EUR 1 billion of financing in 2020. This initiative addresses three groups of highly interlinked problems related to batteries. ·The first group relates to the lack of framework conditions providing incentives to invest in production capacity for sustainable batteries. These problems are linked to the inefficient functioning of the single market and to the lack of a sufficiently level playing field due to diverging regulatory frameworks within the internal market. The underlying causes of this include uneven implementation of the Batteries Directive and the lack of reliable and comparable information across the EU. ·The second group of problems relates to sub-optimal functioning of recycling markets and insufficiently closed material loops, which limit the EU's potential to mitigate the supply risk for raw materials. There are a number of shortcomings in the current regulatory framework. These shortcomings include a lack of clear and sufficiently harmonised rules, and provisions in the Batteries Directive that don't take into account recent technological and market developments. They reduce the profitability of recycling activities and hold back investment in new technologies and in additional capacity to recycle the batteries of the future. ·The third group of problems relates to social and environmental risks that are currently not covered by EU environmental law. These problems include: (i) a lack of transparency on sourcing raw materials; (ii) hazardous substances; and (iii) the untapped potential for offsetting the environmental impacts of battery life cycles. At the root of these issues are market failures and information failures. Both of these failures are related to the functioning of the single market. In addition, they are exacerbated by a third driver, the complexity of battery value chains. The proposal’s objectives are threefold: 1) strengthening the functioning of the internal market (including products, processes, waste batteries and recyclates), by ensuring a level playing field through a common set of rules; 2) promoting a circular economy; and 3) reducing environmental and social impacts throughout all stages of the battery life cycle. These three objectives are strongly interlinked. •Consistency with existing policy provisions in the policy area The current regulatory framework covers only the end-of-life stage of batteries through the Batteries Directive. There are currently no legal provisions in the EU that cover other aspects of the production and use phases of batteries, such as electrochemical performance and durability, GHG emissions, or responsible sourcing. In line with the ‘one-in-one-out’ principle, the proposed Regulation should replace the current Batteries Directive. The proposal is fully in line with the EU’s existing environmental and waste legislation. It complements this legislation, including: Directive 2000/53/EC of the European Parliament and of the Council of 18 September 2000 on end-of life vehicles; Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste; Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012 on waste electrical and electronic equipment (WEEE); Directive 2011/65/EU on the restriction of the use of hazardous substances in electrical and electronic equipment; Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control); and Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). This proposal introduces progressive requirements to minimise the carbon footprint over the life cycle of batteries. In this context, efforts to decrease the carbon footprint in the manufacturing process will indirectly lead to the promotion of renewable energy generation.

•Consistency with other EU policies The initiative is consistent with the EU’s international obligations in the area of trade policy, in particular because it ensures non-discrimination between products produced in the EU and imported products. The initiative fully subscribes to the innovation principle, and the related enabling actions under the EU’s research and innovation funding under Horizon 2020. The proposal also aims to ensure simple and streamlined monitoring and reporting obligations, thus limiting the administrative burden on Member States, in line with the EU’s better-regulation approach and the fitness check on reporting and monitoring. 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY •Legal basis The proposal is based on Article 114 of the Treaty on the Functioning of the European Union (TFEU), which must be used for measures that aim to establish or ensure the functioning of the single market. This is a switch from the current legal basis as the Batteries Directive 2006/66/EC was based on Article 175 TEC (now Article 191 TFEU) and on Article 95 TEC (now Article 114 TFEU) for the identified product-related provisions. The proposal tackles a number of key problems related to the single market. These include: (i) an uneven playing field for batteries placed on the market since applicable rules are subject to interpretation; (ii) barriers to the functioning of recycling markets; (iii) uneven implementation of the Batteries Directive; (iv) the pressing need for large-scale investment to respond to the changing market; (v) the need for economies of scale; and (vi) the need for a stable and fully harmonised regulatory framework. At the same time, there are also a number of environmental problems related to the production, use, and end-of-life management of batteries. The environmental problems that are not directly covered by the EU’s environmental acquis, and which thus require a regulatory intervention, can all be linked to the functioning of the single market. One such problem is the adverse impacts on the environment of hazardous substances contained in batteries when they are not properly disposed of, a problem that can be solved by the proper collection and recycling of portable batteries. One of the reasons why collection levels of portable batteries are low is that setting up collection systems has a cost, and the single market does not implement the polluter-pays principle in an adequate and harmonised manner. Sub-optimal levels of collection are also problematic from a business-profitability point of view. This is because recycling technologies are capital intensive and thus require significant economies of scale, in some cases beyond EU national markets. Another problem is the failure to lower the total environmental impact of batteries by increasing the circularity of the battery value chain. Here, the main cause of the problem is once again a market failure. There is no alignment of incentives (and information) between different actors across the value chain. And in the market for second-life electric-vehicle batteries, there is no legal certainty on the waste status of used batteries and also inadequate information to predict battery behaviour. The proposal’s objective is thus to ensure the implementation of common rules for economic actors in the single market and to avoid the distortion of competition. The measures will lead to further harmonisation of: (i) product requirements for batteries placed on the Union market; and (ii) the level of waste management services provided by businesses. The proposal will also set requirements for ensuring a well-functioning market for secondary raw materials while preventing and reducing the environmental impacts from the production and use of batteries (as well as their treatment – including recycling – at the battery’s end of life). This will promote a circular battery industry across Europe, and avoid fragmentation from possibly diverging national approaches. The manufacture and use of batteries, the underlying value chain, and the handling of end-of-life batteries are cross-cutting issues that affect many policy areas. Therefore, in addition to pursuing internal market objectives, the proposal will also contribute to objectives related to the environment, transport, climate action, energy and international trade. The impact analysis of the proposed measures demonstrates that in most cases the internal market objectives are predominant and that the environmental benefits are complementary. Therefore, it is appropriate to use Article 114 TFEU as a sole legal basis. •Subsidiarity (for non-exclusive competence) There is clear added value in setting common requirements at EU level that cover the full lifecycle of batteries. It is essential to ensure that manufacturers, importers and economic operators more broadly are subject to harmonised requirements that must be met when (i) placing a battery on the Union market and (ii) supplying information to customers across the single market. Recyclers must also be able to operate with uniform requirements that apply to all recycling businesses in the same way across the EU. In the absence of an intervention at EU level setting harmonised rules, intervention at national level would lead to a divergence in the requirements for economic operators. The development of a sustainable battery value chain is capital intensive and requires economies of scale that go beyond what national economies can provide. Achieving this requires a harmonised and well-functioning single market across all Member States where all economic operators of the battery value chain are subject to the same rules. In addition, common rules are required for the transition to a circular economy, which will contribute to fostering innovative and sustainable European business models, products and materials. These objectives cannot be set by the Member States acting in isolation: the scale of the action required means that this is better achieved at Union level. Uniform EU action is therefore justified and necessary. •Proportionality The proposed measures do not go beyond what is necessary for providing the regulatory certainty required to incentivise large-scale investment in the circular economy while ensuring a high level of protection of human health and the environment. Overall, the proposed policy option is a gradual change compared to the existing regulatory and institutional framework (i.e. the current Batteries Directive). For the earlier stages in the value chain for which there is currently no EU legislation, the proposed changes are mostly at the level of information and basic requirements for batteries to be placed on the EU market. For some of the proposed policy options, the impact assessment found that a step-wise approach would best uphold the principle of proportionality. The proposal therefore includes a gradual increase in ambition and requirements in a number of areas. For example, this is the case for the provision on performance and durability requirements for rechargeable industrial batteries. This provision includes information obligations as a first step; it will not require the setting of relevant minimum values until more information becomes available. •Choice of instrument

The evaluation of the Batteries Directive and the analysis preceding the impact assessment showed that the harmonisation is better achieved by means of a Regulation, as opposed to a Directive under the previously more limited approach. Diverging national measures on waste collection and waste recovery have led to an incoherent regulatory framework for economic operators and producers. These existing barriers in the form of diverging national regulatory frameworks can only be removed by more detailed, harmonised rules on the organisation of collection and recovery processes and related responsibilities. These detailed and harmonised rules should include requirements that apply directly to businesses. A Regulation will set direct requirements for all operators, thus providing the necessary legal certainty and enforcement possibility of a fully integrated market across the EU. A Regulation also ensures that the obligations are implemented at the same time and in the same way in all 27 Member States. The instrument will also set out a number of mandates for the Commission to develop implementing measures. These implementing measures will allow the Commission to elaborate further on the regulation if necessary, allowing for more timely setting of common rules. The Regulation will also reduce uncertainties over timelines during the transposition process typically associated with a Directive in an area where time and legal certainty are critically important due to forecasted increases in market size and changes in market dynamics more generally. 3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS •Ex-post evaluations/fitness checks of existing legislation In April 2019, the Commission published an evaluation of the Batteries Directive, in line with the Commission’s better-regulation guidelines and taking into account the specifications of Article 23 of the Batteries Directive. The key findings of the evaluation are summarised in Annex 6 of the impact assessment, and fed into the analysis (in particular the section on the problem definition). This policy proposal includes measures that address areas identified in the evaluation of the Batteries Directive where the lack of harmonisation or insufficiently detailed provisions lead to fragmented outcomes in the single market. These are distorting the level playing field as they do not provide clarity and cost-efficiency (e.g. producer-responsibility organisations). The proposal also includes a number of measures that ensure the regulatory environment is up to date and fit for purpose to deal with technological novelties such as batteries for electric-vehicles, e-bikes and e-scooters, or the possibility for a ‘second life’ of industrial batteries. •Stakeholder consultations In line with the better regulation guidelines, several consultation activities took place. A brief description of these consultation activities is set out in the bullet points below. ·As part of the preparation of a regulatory initiative on sustainability requirements for batteries, a first consultation round was organised by DG GROW between June and November 2019. It consisted of an open public consultation for which 180 contributions were received, and three public stakeholder meetings on the findings of two feasibility studies. ·Following a political decision that a single legal instrument would replace the Batteries Directive and incorporate the sustainability requirements for rechargeable batteries on which DG GROW had been working since mid-2018, a second round of consultation activities was undertaken between February and May 2020. This second round included: –targeted interviews with representatives of the battery value chain, consumers, and environmental associations; –a survey of businesses (manufacturers, waste managers and recyclers); –a survey of representatives of research and innovation projects (funded under the Horizon 2020 and LIFE programmes); –sectoral meetings with stakeholders; –a meeting with the Member States Expert Group. ·The inception impact assessment on the proposed regulation was published on 28 May 2020, and the period to provide feedback ended on 9 July 2020. In total, 103 responses were received, largely supporting positions set out by stakeholders earlier in the process (for example during the targeted stakeholder consultations). Overall, the consultation activities showed that there is a general acknowledgement among the public that there is a need for a regulatory initiative that covers the entire battery value chain in an integrated manner. Stakeholders who participated in the public consultations generally acknowledged that technological, economic and social changes justify the creation of a new regulatory framework for batteries. Stakeholders also agreed that there should be better harmonisation of existing rules and an EU framework covering the entire battery life cycle. They said that this framework should comprise common and more stringent sustainability rules for batteries, components, waste batteries and recyclates, in order to establish clear and common rules to guarantee the functioning of the EU single market. The main needs expressed by representatives from industry were for: (i) a stable regulatory framework that ensures investment certainty; (ii) a level playing field that enables the sustainable production of batteries; and (iii) the efficient functioning of recycling markets to increase the availability of quality secondary raw materials. The main concerns expressed by representatives from civil society were on the need for sustainable sourcing and for applying the principles of the circular economy to the battery value chain. The detailed conclusions from the stakeholder consultations are included in Annex 2 and Annex 9 of the impact assessment.

•Collection and use of expertise To support the analysis of the different options, the Commission awarded several support contracts to external experts, including for: ·a study assessing the feasibility of measures addressing shortcomings in the current EU batteries framework; ·a study addressing specific topics (second life, restrictions, deposit and refund schemes, etc.); ·a preparatory study on the ecodesign and energy labelling of rechargeable electrochemical batteries with internal storage; ·a follow-up feasibility study on sustainable batteries; ·an impact assessment on the ecodesign and energy labelling of rechargeable electrochemical batteries with internal storage. These experts worked in close cooperation with the Commission throughout the different phases of the study. As well as these support studies, additional expertise was identified through literature research and through the stakeholder consultation responses. •Impact assessment The proposal is based on an impact assessment. After addressing the Regulatory Scrutiny Board’s comments issued in its negative opinion of 24 June 2020, the impact assessment received a positive opinion with reservations on 18 September 2020. In its final opinion, the Board asked for further details mainly on the baseline and on the composition of the policy options. The impact assessment includes 13 measures to address the problems related to: (i) the lack of framework conditions to provide incentives for investments in production capacity for sustainable batteries; (ii) the sub-optimal functioning of recycling markets; and (iii) the social and environmental risks that are currently not covered by the EU’s environmental acquis. These 13 measures are based on: (i) the analysis from the evaluation of the Batteries Directive; (ii) the public consultations for this initiative; (iii) the various support studies; and (iv) political commitments such as the Green Deal. They reflect the fact that responses are needed along a complex value chain. Within each of the 13 broad policy measures, several sub-measures were considered. These sub-measures are in many cases alternative to each other (e.g. for Measure 3, collection-rate targets for portable batteries can be either 65% or 75%, but not both). In other cases, the sub-measures are designed so that they can be cumulative and/or complementary (e.g. for Measure 13, a battery ‘passport’ for industrial batteries works in addition to information obligations). All of these sub-measures are analysed in proportionate detail in Annex 9 of the impact assessment, with a consideration of their impacts compared to the business-as-usual scenario. To facilitate the analysis, the sub-measures are grouped into four main policy options, which are compared against a business-as-usual scenario. These four options are set out below. ·Option 1, business-as-usual, is an option that keeps the Batteries Directive, which mostly covers the end-of-life stage of batteries, unchanged. For the earlier stages in the value chain, there is currently no EU legislation in place and so this will remain unchanged. Further details on this option are given in Section 5 on the baseline and in Annex 9. ·Option 2, the medium level of ambition option, is an option which builds on the Batteries Directive, but gradually strengthens and increases the level of ambition. For the earlier stages in the value chain for which there is currently no EU legislation, the proposed change is to bring in information and basic requirements as a condition for batteries to be placed on the EU market. ·Option 3, the high level of ambition option, is an approach that is a bit more disruptive, but still within the limits of what is technically feasible. It entails for example setting limit values and thresholds to be complied with within a set deadline. ·Option 4¸ the very high level of ambition option, includes measures that would go significantly beyond the current regulatory framework and current business practices. Table 1 presents an overview of the different sub-measures included in the policy options, with the preferred option based on the impact assessment highlighted in green. The Commission’s preferred option is a combination of Option 2 and Option 3. The combination chosen provides a balanced approach in terms of effectiveness (achievement of the objectives) and efficiency (cost-effectiveness). The preferred option will facilitate the EU’s response to the fast-changing market conditions and ambitiously support a switch towards a more low-carbon economy, without risking excessive costs or disruption.

Table 1: Preferred option Measures Option 2 - medium level of ambition Option 3 - high level of ambition Option 4 – very high level of ambition 1. Classification and definition New category for EV batteries Weight limit of 5 kg to differentiate portable from industrial batteries New calculation methodology for collection rates of portable batteries based on batteries available for collection / 2. Second-life of industrial batteries At the end of the first life, used batteries are considered waste (except for reuse). Repurposing is considered a waste treatment operation. Repurposed (second life) batteries are considered as new products which have to comply with the product requirements when they are placed on the market At the end of the first life, used batteries are not waste. Repurposed (second life) batteries are considered as new products which have to comply with the product requirements when they are placed on the market. Mandatory second life readiness 3. Collection rate for portable batteries 65% collection target in 2025 70% collection target in 2030 75% collection target in 2025 4. Collection rate for automotive and industrial batteries New reporting system for automotive, EV and industrial batteries Collection target for batteries powering light transport vehicles. Explicit collection target for industrial, EV and automotive batteries 5. Recycling efficiencies and recovery of materials Lithium-ion batteries and Co, Ni, Li, Cu: Recycling efficiency lithium-ion batteries: 65% by 2025 Material recovery rates for Co, Ni, Li, Cu: resp. 90%, 90%, 35% and 90% in 2025 Lead-acid batteries and lead: Recycling efficiency lead-acid batteries: 75% by 2025 Material recovery for lead: 90% in 2025 Lithium-ion batteries and Co, Ni, Li, Cu: Recycling efficiency lithium-ion batteries: 70% by 2030 Material recovery rates for Co, Ni, Li, Cu: resp. 95%, 95%, 70% and 95% in 2030 Lead-acid batteries and lead: Recycling efficiency lead-acid batteries: 80% by 2030 Material recovery for lead: 95% by 2030 / 6. Carbon footprint for industrial and EV batteries Mandatory carbon footprint declaration Carbon footprint performance classes and maximum carbon thresholds for batteries as a condition for placement on the market / 7. Performance and durability of rechargeable industrial and EV batteries Information requirements on performance and durability Minimum performance and durability requirements for industrial batteries as a condition for placement on the market / 8. Non-rechargeable portable batteries Technical parameters for performance and durability of portable primary batteries Phase out of portable primary batteries of general use Total phase out of primary batteries 9. Recycled content in industrial, EV and automotive batteries Mandatory declaration of levels of recycled content, in 2025 Mandatory levels of recycled content, in 2030 and 2035 / 10. Extended producer responsibility Clear specifications for extended producer responsibility obligations for industrial batteries Minimum standards for PROs / / 11. Design requirements for portable batteries Strengthened obligation on removability New obligation on replaceability Requirement on interoperability 12. Provision of information Provision of basic information (as labels, technical documentation or online) Provision of more specific information to end-users and economic operators (with selective access) Setting up an electronic information exchange system for batteries and a passport scheme (for industrial and electric vehicle batteries only) / 13. Supply-chain due diligence for raw materials in industrial and EV batteries Voluntary supply-chain due diligence Mandatory supply chain due diligence / Legend: green = preferred option; light green = preferred option pending a revision clause. The objective of Measure 1 on classification and definition is to clarify the current provisions on battery categories and to update them in line with the latest technological developments (Option 2). The administrative changes to some provisions in the current Batteries Directive would improve the effectiveness of several other provisions, without generating any significant economic costs or administrative burden. Stakeholders have said that they fully accept this measure. The possibility to set a new methodology for the collection rates based on "available for collection" (Option 3) is proposed to be re-assessed through a review clause. For Measure 2 on second-life industrial and electric vehicle batteries, the estimated economic and environmental benefits for Options 2 and 3 would be equivalent (assuming equal levels of market penetration), recognising that there are trade-offs between promoting the development of second-life batteries on the one hand, and recycling on the other. The administrative costs of Option 3 – under which used batteries would not necessarily be considered as waste at the end of their first life (and would only be considered waste when the battery holder decides to discard the battery) – are significantly lower than those for Option 2. Option 3 was considered the preferred option in the impact assessment on the grounds that it would best encourage the development of a market for second-life batteries and was supported by stakeholders. Option 2 – under which batteries become waste – would give rise to extra costs for permits needed to deal with hazardous waste, which was an issue of particular concern to stakeholders. This option could therefore limit the development of the second-life market for batteries as the costs are higher. The Commission concluded that a combination of Option 2 and Option 3, whereby specific end of waste criteria including a state of health check are set that batteries have to fulfil in order to be sent to repurposing or remanufacturing, will provide the most appropriate way forward. This approach, supported by extended producer responsibility requirements, is aimed to encourage the repurposing and remanufacturing of batteries while ensuring that waste batteries undergo proper treatment in line with EU waste legislation and international agreements. For Measure 3 on a collection rate target for portable batteries, the preferred option is Option 2 a 65% collection target in 2025 and Option 3, a 70% target in 2030. These options are estimated to cost around EUR 1.09 and EUR 1.43 per capita per year respectively, to be financed through the mechanism of Extended Producer Responsibility. The reason for increasing the collection targets significantly compared to the baseline is twofold. First because the environmental benefits increase in a non-linear way due to the increased collection of lithium-ion batteries. Second because evidence shows that there are economies of scale and efficiency gains to be made. As a generally accepted principle, stakeholders accept higher collection targets as long as they are realistic and they have enough time to meet the targets. This is considered not to be the case for Option 4, a collection target of 75% by 2025. The preferred option for Measure 4 is Option 2, a new reporting system for automotive and industrial batteries. This measure is not expected to give rise to any significant economic costs or administrative burden but they would result in increased collection rates. Option 3, a specific collection target for batteries used in means of light transport, is expected to lead to significant increase in collection rates. However, due to the need to first developed the "available for collection" methodology, this Option is proposed to be re-assessed through a review clause. The preferred option for Measure 5 on recycling efficiencies and material recovery is Option 2, increasing the targets for lead-acid batteries and Option 3, bringing in new targets for lithium-ion batteries, cobalt, nickel, lithium and copper. Option 2 sets targets for 2025 based on what is currently technically feasible, while Option 3 sets targets for 2030 based on what will be technically feasible in the future. Due to the high degree of uncertainty on a number of variables, quantifying the economic and environmental impact of these options has proven difficult. Modelling estimates indicate that, even under the most conservative assumptions, it would have a positive impact. For Measure 6 on the carbon footprint of EV batteries, the preferred option is Option 2, a mandatory declaration, complemented, over time, with Option 3, setting carbon footprint performance classes and maximum threshold values as a condition for the placement of batteries on the EU market. The upfront introduction of Option 3 would be more effective than Option 2, but more time is needed to complete the information and methodological framework needed. However, Option 2 will enable the gradual introduction of the measures foreseen in Option 3. Such measures aim to contribute to the Union’s objective of reaching climate neutrality by 2050 and fight against climate change, as stated in the new Circular Economy Action Plan, for a cleaner and more competitive Europe. The delegated act establishing the values of the carbon thresholds will be supported by a dedicated impact assessment. For Measure 7 on the performance and durability of rechargeable industrial and electric-vehicle batteries, the preferred option is Option 2, bringing in information requirements in the short term. This would help harmonise the calculation and availability of performance and durability characteristics of batteries and hence enable consumers and businesses to take informed decisions. Once the necessary information is available and the standardisation work has been completed, it will be possible to introduce minimum performance requirements (Option 3) at a later stage. The Commission concluded this option is more effective in the long term to help the market switch to better-performing batteries, and so trigger a shift to a lower environmental impact. For Measure 8 on non-rechargeable portable batteries, the preferred option is Option 2, setting electrochemical performance and durability parameters to minimise the inefficient use of resources and energy. These parameters will also be taken up by the labelling requirements that are covered by Measure 12 to inform consumers’ batteries' performance. With regards to Options 3 and 4 the conclusion is that there is currently not sufficient evidence available to demonstrate the effectiveness and feasibility of a partial or complete phase out of non-rechargeable batteries. Producers and recyclers of non-rechargeable batteries are opposed to these two more ambitious options. The preferred option for Measure 9 is both Option 2, bringing in a mandatory declaration of recycled content, in the short term, and Option 3, setting mandatory targets for recycled content for lithium, cobalt, nickel and lead in 2030 and 2035. The two options are complementary and would contribute to providing a predictable legal framework that would encourage market players to invest in recycling technologies that would otherwise not be developed because they are not cost-competitive with the production of primary raw materials. For Measure 10 on extended producer responsibility and producer responsibility organisations, no high ambition option was proposed since it mostly involves fine-tuning existing provisions under the Batteries Directive. The proposed measure would level the playing field for EPR schemes for EV and industrial batteries that are currently classified as industrial batteries and for PROs for portable batteries. The economic costs of this measure are expected to be negligible and largely offset by the environmental benefits of increased collection rates. For Measure 11 on design requirements for portable batteries the preferred option is a strengthened obligation of battery removability (Option 2) and a new obligation of battery replaceability (Option 3). The economic costs of these options are negligible, while they will generate environmental benefits and resource savings. It does this by facilitating the reuse, repair and recycling of batteries and the appliances in which they are integrated. For Measure 12 on the provision of reliable information, a combination of both Option 2 and Option 3 is preferred. Option 2, bringing in a printed and an online labelling system providing basic and more tailored information is preferred because it would help provide better information to consumers and end users and stimulate a market shift towards more environmentally sound batteries. The principle of Option 3, an electronic exchange system and battery passport, as proposed by the Global Batteries Alliance, is accepted by several global organisations. The electronic exchange system will have a one-off administrative cost for setting it up, but will lead to administrative simplification and lower implementation costs in the long term. The battery passport should furthermore enable second life operators to take informed business decisions and allow recyclers to better plan their operations and improve their recycling efficiencies. For Measure 13 on due diligence for raw materials, the preferred option is Option 3, a mandatory approach. There is a fair degree of consensus among stakeholders that this option would be more effective in addressing the social and environmental risks related to raw material extraction, processing and trading of certain raw materials for battery manufacturing purposes. This option should be considered in the light of the ongoing work on a proposal for cross‑sectorial legislation on sustainable corporate governance which the Commission plans to present in 2021. Annex 3 of the Impact Assessment provides a summary overview of the costs and benefits, and in particular their quantification. •Regulatory fitness and simplification The proposed measures have a negligible impact in terms of administrative burden.

This policy proposal makes maximum use of the potential of digitalisation to reduce administrative costs. For example, Measure 12 proposes to set up an electronic information exchange for batteries that will hold information about every portable and industrial battery model placed on the market. Under Measure 12, a battery passport would also be produced for each individual industrial and electric-vehicle battery placed on the market. The development of both the information exchange and passport system will entail considerable costs to both the Commission and businesses. However, it will provide Member State authorities and the Commission with a powerful tool for enforcing the obligations in the proposed regulation, as well as a market-intelligence tool for revising and refining obligations in the future. •Fundamental rights The proposal does not have consequences for the protection of fundamental rights. 4.BUDGETARY IMPLICATIONS The proposal implies the use of staff and money to purchase data and services. Some of the staff requirements are expected to be met under the existing allocations for the Commission, the Joint Research Centre (JRC) and the European Chemicals Agency (ECHA). Commission staff resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG. These employees will be joined by an additional allocation of staff to be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints. The proposal includes several articles detailing further workstreams that will need to be carried out to complement the Regulation and that would need to be adopted through implementing/delegated acts in a time horizon of 3-8 years. These will cover: verification of compliance with sustainability requirements; the conformity checking system; and waste-management; information; and labelling. A detailed list of these planned actions is provided below: ·follow standardisation work in CEN/CENELEC; ·develop common specifications on: (i) performance and durability for non-rechargeable portable batteries; (ii) performance and durability for rechargeable industrial batteries; and (iii) for safety for stationary battery energy storage systems. ·support the development of harmonised calculation rules for: (i) the carbon footprint declaration (including the revision of the product environmental footprint category rules (PEFCR) for electric vehicle batteries and rechargeable industrial batteries); and (ii) the calculation of carbon footprint performance classes for electric vehicle batteries and rechargeable industrial batteries; ·support the development of harmonised calculation rules for: (i) recycled content in electric vehicle batteries and rechargeable industrial batteries; (ii) recycling efficiencies, (iii) recovered materials, and (iv) waste classification; ·draw up guidance on the removability and replaceability of portable batteries; ·set up an electronic information exchange system for submitting information related to electric vehicle batteries and rechargeable industrial batteries; ·develop green public procurement criteria on batteries; ·amend the list of waste in Commission Decision 2000/532/EC; ·conduct a risk assessment on – and manage the risk of – substances used in batteries; ·amend reporting obligations. The JRC will play a key role in supporting the Commission with some of the technical work required. Around EUR 6.2 million will finance the necessary studies and an administrative agreement with the JRC to support the Commission in a number of workstreams set out in the bullet points below. ·Developing common specifications on: (i) performance and durability for general use portable batteries; (ii) performance and durability for rechargeable industrial and electric-vehicle batteries and (iii) for safety for stationary battery energy storage systems. ·Drawing up harmonised rules for: (i) separate collection of portable batteries; (ii) declaring carbon footprints; (iii) calculating the carbon footprint, recycled content and recycling efficiencies and (iv) the calculation of carbon footprint performance classes of electric vehicle batteries and rechargeable industrial batteries. ·Analysing green public procurement criteria (including consultation of public procurement stakeholders and legal checks on the proposed public procurement rules).

·Supporting the guidance on removability and replaceability of portable batteries; ·Supporting the development of targeted amendments of the European List of Waste entries relevant to batteries; ·Supporting the phase out of non-rechargeable portable batteries of general use; ·Supporting the requirements on labelling; ·Developing the GPP criteria. The ECHA will also support the Commission in managing battery substances and their regulatory restriction as part of the existing REACH activities. This requires a total of two, new full-time-equivalent (FTE) temporary-agent staff (AD 5-7) at the ECHA (average cost EUR 144 000/year over 7 years and beyond). In addition, one FTE contract agent (CA FG III, average cost EUR 69 000/year over 3 years) will be necessary to increase the knowledge base, and facilitate an informed priority setting and work plan. This work plan should be based on a study to build the ECHA’s current knowledge on how the battery industry manages its hazardous chemicals to identify relevant substances for regulatory risk management in the future. It is estimated that the study will cost EUR 400 000 (over 3 years) to outsource part of the research needs. DG GROW has estimated that the development of the proposed electronic information exchange system for battery information will cost around 10 million €. A feasibility study, to be launched in 2021, will also assess what is the best architecture for the proposed electronic information exchange system and what services it should deliver. The European Commission will be responsible for negotiating the Regulation, its general implementation, and the adoption of all the implementing/delegated acts envisaged by the Regulation. This will require following: (i) the work carried out in the JRC and the ECHA; and (ii) the normal decision-making processes including stakeholder consultation and comitology procedures. The current financial simulations are based on 2 FTE AD posts only to carry out the managerial tasks, i.e. (i) the negotiation and general implementation of the Regulation; and (ii) the different preparatory work and drafting of secondary legislation according to the deadlines proposed in the Batteries Regulation. The technical tasks can be performed by 1 FTE seconded national expert (given the expected timeline) and contractual agents. Of the 2 AD posts, 1 has been redeployed within DG ENV. The staff costs in the Commission amount to a total cost of EUR 3 075 000 based on the latest update of the cost of COM staff as reported on the DG BUDG website: https://myintracomm.ec.europa.eu/budgweb/en/pre/legalbasis/Pages/pre-040-020_preparation.aspx . It should be noted that the information provided in the legislative financial statement is compatible with the post-2020 MFF proposal. Some additional resources will be needed in the period 2021-2029 to progress with work to: (i) develop standards and common specifications on the performance and durability of batteries; (ii) develop harmonised calculation rules for the separate collection of portable batteries, the declaration of carbon footprint, the calculation of carbon footprint performance classes, and the calculation of recycled content and recycling efficiencies; (iii) draft guidance on the removability and replaceability of portable batteries; (iv) decide on the formats and develop the systems to receive the submissions linked with the electronic information exchange; and (v) develop green public procurement criteria. Resources for studies and administrative arrangements in this context will be covered by the LIFE programme for a total amount of around 4.7 million euro as well as 10.7 million under the Operation and development of the internal market of goods and services. The budget of the proposal is presented in current prices except for the ECHA component of the budget which indexed the salaries at 2% growth per year. Additional resources will be required for the ECHA to increase the subsidy it receives. The legislative financial statement attached to this proposal sets out the implications for budgetary, human and administrative resources. 5.OTHER ELEMENTS •Implementation plans and monitoring, evaluation and reporting arrangements The aim of the proposed change to the classification of batteries is to update the existing rules to ensure they cover all batteries, including possible new battery types. Monitoring arrangements would need to ensure that the new measures are implemented and enforced as intended. Setting a new collection rate target for portable batteries requires monitoring the collection rate in Member States. This was set up for the current target of 45% and involved Eurostat collecting information from Member States on a yearly basis. Setting a new target would therefore not entail additional reporting obligations. Creating a reporting system for automotive and industrial batteries requires collecting information that is already generated at national level. Moreover, for automotive and electric-vehicle batteries, the reporting system could be built on top of the system set up by the End-of-life Vehicles Directive. The recycling efficiency target for lithium batteries is set at 65% starting in 2025. Eurostat has collected data on recycling efficiencies for lead, cadmium and other batteries on a yearly basis since 2014. It would therefore be a minor addition to include the recycling efficiency of lithium to the established data collection procedure. The obligation to report the carbon footprint associated with the overall life cycle (excluding the use phase) of batteries placed on the market requires developing an IT tool that allows manufacturers to enter the information directly. The Commission intends to offer a web-based tool and free access to the libraries of secondary datasets to facilitate the process of calculating carbon footprint, based on the adopted rules. The data submitted could be used to set benchmarks of GHG emissions, to assess whether bringing in classes of GHG intensity performance would be useful to improve the carbon footprint and environmental performance of batteries and to assess the need for additional incentives and/or market conditionality measures. Similarly, the obligation to provide information on performance and durability should form part of the technical documentation. Depending on the type of battery, this information should also be made available online in a battery database and/or in the battery passport.

The obligation for producers to provide information on the amount of recycled content would follow a harmonised methodology. For removability, the current obligations should be strengthened, and new provisions are proposed for replaceability. Provisions on the carbon footprint and recycled content declarations, and on the due diligence policy for the responsible sourcing of raw materials would require third-party verification, in principle, via notified bodies. National market authorities would be responsible for checking the validity of the information provided to fulfil all the obligations in the Regulation. •Explanatory documents (for directives) As the legal instrument is a Regulation which is directly applicable in the Member States, there is no need for an explanatory document. •Detailed explanation of the specific provisions of the proposal Chapter I of the Regulation contains General provisions. Article 1 lays down that the Regulation establishes requirements on sustainability, safety and labelling to allow the placing on the market and putting into service of batteries, as well as requirements for the collection, treatment and recycling of waste batteries. The Regulation shall apply to all types of batteries and lists the four categories of batteries, namely portable batteries, automotive batteries, electric vehicle batteries and industrial batteries. Article 2 contains definitions. Article 3 lays down the principle of free movement on the single market for batteries which comply with the requirements of the Regulation. Article 4 summarises which provisions lay down and contain precisions on the sustainability, safety and labelling requirements and accordingly refers Chapters II and III. For the remainder, batteries shall not present a risk to human health, to safety, to property or to the environment. Article 5 concerns the requirement for the Member States to designate one or more competent authorities to deal with the end-of-life phase of batteries. Chapter II of the Regulation lays down sustainability and safety requirements. Article 6, together with Annex I, lays down restrictions on the use of hazardous substances in batteries, in particular mercury and cadmium. Article 7, together with Annex II, lays down rules on the carbon footprint of electric vehicle batteries and rechargeable industrial batteries. The requirements are staged in such a manner that there first is an information requirement in the form of a carbon footprint declaration. Thereafter, the batteries shall be subject to classification into carbon footprint performance classes. Ultimately, and informed by the results of a dedicated impact assessment, the batteries will need to comply with maximum life cycle carbon footprint thresholds. The timeline for the three requirements is 1 July 2024 for the carbon footprint declaration, 1 January 2026 for the performance classes and 1 July 2027 for the maximum life cycle carbon footprint thresholds. Article 8 requires that, as of 1 January 2027, the technical documentation for industrial and electric-vehicle batteries with internal storage that contain cobalt, lead, lithium or nickel in active materials shall contain information about the amount of the above materials that have been recovered are present in each battery model and batch per manufacturing plant. As of 1 January 2030, those batteries shall contain the following minimum share of recovered cobalt, lead, lithium or nickel from waste of the cobalt, lead, lithium or nickel present in active materials in those batteries: 12% cobalt; 85% lead, 4% lithium and 4% nickel. As of 1 January 2035, the minimum share of recovered cobalt, lithium or nickel shall increase to 20% cobalt, 10% lithium and 12% nickel. For lead the minimum share shall stay at 85%. Where justified and appropriate due to the availability of cobalt, lead, lithium or nickel recovered from waste, or the lack thereof, the Commission shall be empowered to adopt a delegated act to amend the targets .. Article 9, together with Annex III, requires that, as of 1 January 2026, portable batteries of general use can only be placed on the market if the electrochemical performance and durability parameters are fulfilled. The Commission shall be empowered to adopt delegated acts to lay down the minimum requirements for those parameters and to amend them in view of technical and scientific progress. By 31 December 2030, the Commission shall assess the feasibility of measures to phase out the use of non-rechargeable portable batteries of general use and, to that end, submit a report to the European Parliament and to the Council and consider taking the appropriate measures, including the adoption of legislative proposals. Article 10, together with Annex IV, lays down an information requirement on the electrochemical performance and durability parameters for rechargeable industrial batteries and electric vehicle batteries with internal storage. From 1 January 2026, rechargeable industrial batteries shall meet the minimum values which the Commission shall be empowered to adopt by delegated act. Article 11 requires that manufacturers shall design appliances, in which portable batteries are incorporated, in such a way that waste batteries can be readily removed and replaced by the end-user or by independent operators.

Article 12, together with Annex V, requires that stationary battery energy storage systems are safe during their normal operation and use, including evidence that they have been successfully tested for the safety parameters laid down in Annex V, for which state-of-the-art testing methodologies should be used. The Commission shall be empowered to amend, by delegated act, the safety requirements to be taken into account to test battery safety which are set out in Annex V. Chapter III of the Regulation lays down labelling and information requirements. Article 13 and Annex VI require that, as of 1 January 2027, batteries shall be labelled, in a visible, legible and indelible manner, to provide information necessary for the identification of batteries and of their main characteristics. Various labels on the battery or the battery packaging shall also inform about lifetime, charging capacity, requirement on separate collection, presence of hazardous substances and safety risks. The QR code to be printed or engraved on the battery shall, depending on the type of battery, give access to the information that is relevant for the battery in question. The Commission shall be empowered to, by implementing act, establish harmonised specifications for certain labelling requirements. Article 14 requires that rechargeable industrial batteries and electric vehicle batteries shall contain a battery management system that stores the information and data needed to determine the state of health and expected lifetime of batteries in accordance with the parameters laid down in Annex VII. Access to the data on those parameters in the battery management system shall be provided to the legal or natural person who has legally purchased the battery or any third party acting on their behalf at any time for evaluating the residual value of the battery, facilitating the reuse, repurposing or remanufacturing of the battery and for making the battery available to independent aggregators operating virtual power plants in electricity grids. Chapter IV contains rules on the conformity assessment of batteries and is mostly made up of standard provisions. It is useful to mention Article 17 and Article 18. Article 17 concerns the conformity assessment procedures and lays down two different assessment procedures depending on the product requirement to be assessed. Annex VIII describes in detail the applicable procedures. The Commission may, on the basis of a delegated act, amend the conformity assessment procedures to both add verifications steps to the procedure and to change assessment module, on the basis of developments on the battery market or in the battery value chain. Article 18 concerns the EU declaration of conformity which states that conformity with the sustainability, safety and labelling requirements of the Regulation have been demonstrated. Annex IX to the Regulation sets out in detail the model structure for the EU declaration of conformity. Chapter V concerns notification of conformity assessment bodies and is mostly made of standard provisions. Some of the provisions are modified in order to strengthen the notified bodies’ independence. For this purpose it is useful to mention Article 23, Article 25, Article 27, Article 28 and Article 33. Article 23 lays down requirements relating to notifying authorities. Notifying authorities shall be objective and impartial in their activity and shall safeguard the confidentiality of the information they obtain. They should nonetheless be able to exchange information on notified bodies with national authorities, the notifying authorities of other Member States and the Commission to ensure such consistency in the conformity assessment. Article 25 contains requirements related to notified bodies. It should be possible for the notified body and the staff it employs, to maintain independence from economic operators in the battery value chain and from other companies, in particular from battery manufacturers, the battery manufacturers’ trade partners, shareholding investors on the battery manufacturers’ plants and from other notified bodies and the notified bodies’ business associations and parent companies and subsidiaries. Article 27 deals with subsidiaries of and subcontracting by notified bodies. While it is accepted that notified bodies subcontract parts of their activities linked to the assessment of conformity or have recourse to a subsidiary, it should be ascertained that certain activities and decision-making processes are exclusively carried out by the individual notified body which carries out the conformity assessment. Article 28 concerns the application for notification. In accordance with Article 25, the notified body should be able to document its independence and provide it to the notifying authority. Article 33 relates to the operational obligations of notified bodies. In case of a negative certification decision, the economic operator should be allowed to complement the documentation on the battery prior to the conformity assessment body’s second and final decision on the certification. Chapter VI lays down the obligations of economic operators. The provisions are standard but it is worth mentioning Article 39. Article 39, together with Annex X, requires that due diligence policies shall be established for rechargeable industrial batteries and electric vehicles batteries placed on the single market. The Commission is empowered to review the list of substances and risk categories concerned by this obligation. Chapter VII contains obligations relating to the end-of-life management of batteries. It appears relevant to refer specifically to the provisions on registration, extended producer responsibility, collection, treatment and recycling including recycling efficiencies, end of life information, repurposing of batteries and reporting. The rules contained in this Chapter replace the corresponding rules in Directive 2006/66/EC which is repealed with effect from 1 July 2023. Article 46 requires the Member States establish a Register which shall serve to monitor compliance of producers with the requirements on end-of-life management of batteries. The Register shall be managed by the competent authority in a Member State. Producers are obliged to register and the registration shall be granted upon application which shall contain all the information listed in the Article. Article 47 establishes extended producer responsibility for batteries that are supplied in a Member State for the first time. It entails a requirement for producers of batteries to ensure the attainment of the waste management obligations. For meeting their obligations, producers may also organise collectively, in a producer responsibility organisation. This responsibility includes notably the obligations to finance and to organise the separate collection and treatment of waste batteries, report to the competent authority, promote the separate collection of batteries and provide information including end-of-life aspects of batteries. Article 48 lays down that producers, individually or through a producer responsibility organisation shall ensure the collection of all waste portable batteries, regardless of their nature, brand or origin. For that purpose they shall establish, free of charge for the end-user, a network of collection points in cooperation with other operators involved, including distributors, waste electrical equipment and end-of life vehicle facilities, public authorities and voluntary collection points. Producers are furthermore obliged to provide for the necessary practical arrangements for collection and transport of waste batteries from those collection point to ensure that the waste portable batteries are subsequently subject to treatment and recycling. Producers of waste portable batteries are obliged to reach the collection targets laid down in the Article. The collection arrangements are subject to authorisation by the competent authority who has to verify that producers comply with the obligations regarding the collection of waste portable batteries, including ensuring that the targets are met. Article 49 requires producers of automotive batteries, industrial batteries and electric vehicle batteries, individually or through a producer responsibility organisation to organise the collection of all waste automotive batteries, industrial batteries and electric vehicle batteries. The collection shall be free of charge and without an obligation on the end-user to buy a new battery. The producer shall take back waste automotive batteries, industrial batteries and electric vehicle batteries from end-users or from accessible collection points in cooperation with distributors of these types of batteries, waste electrical and electronic equipment and end-of-life vehicle treatment and recycling facilities, public authorities and third parties carrying out waste management on their behalf.

Article 55 sets out the collection rates to be obtained by Member States of waste portable batteries, excluding currently waste batteries from light means of transport. The collection rates shall gradually increase so to ensure that by end 2025 65% of waste portable batteries are collected and by end 2030 70% of such batteries are collected. Article 56, sets forth requirements to be met by treatment facilities for all collected waste batteries to undergo proper treatment and recycling. Where treatment installations and processes are covered by Directive 2010/75/EU on industrial emissions, that Directive will apply. In any case, treatment shall be carried out providing for best available techniques and the requirements further specified in Annex XII part A. In view of the waste hierarchy as established by Article 4 of Directive 2008/98/EC, batteries shall not be landfilled or incinerated. Article 57 concerns recycling efficiencies and material recovery targets and lays down that all waste batteries collected shall enter a recycling operation. The recycling processes shall achieve minimum recycling efficiencies, laid down in Annex XII, which will increase over time. These requirements are set out with regard to lead-acid batteries, nickel-cadmium batteries, lithium-based batteries and other batteries. Article 59 contains requirements related to the operations of repurposing and remanufacturing for a second life of industrial and electric-vehicle batteries. It contains requirements to facilitate such operation, including for producers of the respective batteries to provide access to the battery management system to determine the state of health of a battery to repurposing operators. It also sets out obligations for persons carrying out the repurposing or remanufacturing of batteries to ensure that the examination, performance testing, packing and shipment of batteries and their components is carried out following adequate quality control and safety instructions. The persons carrying out repurposing or remanufacturing operations of batteries shall ensure that the repurposed or remanufactured battery complies with this Regulation and other relevant legislation and technical requirements for its specific purpose of use when placed on the market. However, where it is demonstrated that a battery subject to repurposing or remanufacturing was placed on the market before certain requirements concerning carbon footprint, recycled content, performance and durability as well as supply chain due diligence (included in Articles 7, 8, 10 and 39 of the Regulation), the obligations under those provisions shall not apply to that battery when repurposed or remanufactured. In order to document that a battery is no longer waste the operator carrying out the relevant operation shall demonstrate the following upon request by a competent authority: 1) evidence of state of health evaluation or testing, 2) certainty of further use (by means of an invoice or sale contract), and 3) appropriate protection against damage during transport, loading and unloading. This information shall be made available to end users and third parties acting on their behalf, on equal terms and conditions, as part of the technical documentation accompanying the repurposed battery when placed on the market or put into service. Article 60 contains requirements for the provision of information regarding waste batteries. This includes obligations to producers, or their producer responsibility organisations, to end users and distributors regarding their contribution to the end of life treatment. The Article also sets up obligations to provide for information relevant to safety during collection and storage of waste batteries to distributors and operators involved in the collection and waste treatment, as well as providing to those operators information to facilitate removal of waste batteries and subsequent treatment. Article 61 concerns reporting from the respective operators involved in the waste management to the competent authority on the waste management of batteries. This includes notably requirements for producers, or producer responsibility organisations on their behalf, to report the amount of batteries placed on the market, of waste batteries collected and delivered for treatment and recycling, and for recycling operators to report on waste batteries entering recycling, the recycling efficiencies and levels of recovered materials from waste batteries and the amount of batteries that has been treated and recycled. Article 62 concerns reporting from the Member States to the Commission. Member States shall report to the Commission, for each calendar year per battery type and their chemistry, the amount of batteries supplied for the first time for distribution or use within the territory of a Member State, the amount of waste batteries collected in accordance and the data concerning the levels of recycling achieved and whether the recycling efficiencies and levels of material recovery set out in the Regulation have been met. The Commission shall by implementing acts lay down the format for the reporting. Chapter VIII concerns the electronic exchange of information. Article 64 concerns the electronic exchange system which the Commission, by 1 January 2026, shall set up. The system shall contain the information and data on rechargeable industrial and electric vehicle batteries with internal storage, as laid down in Annex XIII. That information and data shall be sortable and searchable, respecting open standards for third party use. The relevant economic operators shall be able to feed the system with information in a machine-readable format. The Commission shall publish through the system certain information mentioned in Article 62 and shall, by implementing act, lay down details concerning the architecture of the system, the format in which the information is to be submitted and the rules for accessing, sharing, managing, exploring, publishing and reusing the information and data in the system. Article 65 concerns the battery passport and requires that, by 1 January 2026, industrial batteries and electric-vehicle batteries shall have an electronic record for each individual battery they place on the market. The records shall be unique for each battery, to be identified through a unique identifier. The battery passport shall be linked to the information about the basic characteristics of each battery type and model stored in the data sources of the system established according to Article 64 and shall be accessible online. Chapter IX sets out the standard provisions on market surveillance. Article 69 enables market surveillance authorities to require economic operators to take corrective actions on the basis of findings that either the battery is not compliant or the economic operator infringes an obligation which follows from the rules on single market or sustainability, safety, labelling and due diligence. Chapter X concerns green public procurement, procedure for introducing new and amending existing restrictions on hazardous substances and Commission recognition of supply chain due diligence schemes. Article 70 concerns green public procurement and requires that contracting authorities and contracting entities, when procuring batteries or products containing batteries, consider the environmental impacts of batteries over their life-cycle with a view to ensure that such impacts are kept to a minimum. To this effect, the contracting authorities and contracting entities are asked to include technical specifications and award criteria based on Articles 7 to 10 to ensure that a product is chosen among products with significantly lower environmental impacts over their lifecycle. The Commission may by delegated acts establish minimum mandatory green public procurement criteria. Article 71 contains the procedure for amending the restrictions on hazardous substances, further to Article 6 and Annex I. Article 72 concerns supply chain due diligence schemes and the Commission’s recognition thereof. Governments, industry associations and groupings of interested organisations having that have developed and oversee due diligence schemes may apply to the Commission to have their supply chain due diligence schemes that are developed and overseen by them recognised by the Commission. Where the Commission determines that the supply chain due diligence scheme, when effectively implemented by economic operator enables that economic operator to comply with the requirement to set up a due diligence policy, it shall adopt an implementing act granting that scheme a recognition of equivalence with the requirements set out in this Regulation. Chapter XI sets out delegated powers and committee procedure. Chapter XII sets out an amendment to Regulation (EU) 2109/1020. Chapter XIII sets out the final provisions. 2020/0353 (COD)

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning batteries and waste batteries, repealing Directive 2006/66/EC and amending Regulation (EU) No 2019/1020 (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Economic and Social Committee, Having regard to the opinion of the Committee of the Regions, Acting in accordance with the ordinary legislative procedure, Whereas: (1)The European Green Deal is Europe’s growth strategy that aims to transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use. A shift from the use of fossil fuels in vehicles to electromobility is one of the prerequisites for reaching the climate neutrality goal in 2050. In order for the Union’s product policies to contribute to lowering carbon emissions on a global level, it needs to be ensured that products marketed and sold in the Union are sourced and manufactured in a sustainable manner. (2)Batteries are thus an important source of energy and one of the key enablers for sustainable development, green mobility, clean energy and climate neutrality. It is expected that the demand for batteries will grow rapidly in the coming years, notably for electric road transport vehicles using batteries for traction, making this market an increasingly strategic one at the global level. Significant scientific and technical progress in the field of battery technology will continue. In view of the strategic importance of batteries, and to provide legal certainty to all operators involved and to avoid discrimination, barriers to trade and distortions on the market for batteries, it is necessary to set out rules on sustainability parameters, performance, safety, collection, recycling and second life of batteries as well as on information about batteries. It is necessary to create a harmonised regulatory framework for dealing with the entire life cycle of batteries that are placed on the market in the Union. (3)Directive 2006/66/EC of the European Parliament and of the Council has brought about an improvement in the environmental performance of batteries and established some common rules and obligations for economic operators, in particular through harmonised rules for the heavy metal content and labelling of batteries and rules and targets for the management of all waste batteries, based on extended producer responsibility. (4)The Commission’s reports on the implementation, impact and evaluation of Directive 2006/66/EC highlighted not only the achievements but also the limitations of that Directive, in particular against a fundamentally changed context characterised by the strategic importance of batteries and their increased use. (5)The Commission’s Strategic Action Plan on Batteries sets out measures to support efforts to build a battery value chain in Europe, embracing raw materials extraction, sustainable sourcing and processing, sustainable battery materials, cell manufacturing as well as re-use and recycling of batteries (6)In the European Green Deal, the Commission confirmed its commitment to implement the Strategic Action Plan on Batteries and stated that it would propose legislation to ensure a safe, circular and sustainable battery value chain for all batteries, including to supply the growing market of electric vehicles. (7)The Council in its conclusions of 4 October 2019 on ‘More circularity – Transition to a sustainable society’ called, inter alia, for coherent policies supporting the development of technologies that improve the sustainability and circularity of batteries to accompany the transition to electro-mobility. Furthermore, the Council called for an urgent revision of Directive 2006/66/EC, which should include all relevant batteries and materials and which should consider, in particular, specific requirements for lithium and cobalt as well as a mechanism allowing the adaptation of that Directive to future changes in battery technologies. (8)The new Circular Economy Action Plan adopted on 11 March 2020 states that the proposal for a new regulatory framework for batteries will consider rules on recycled content and measures to improve the collection and recycling rates of all batteries, in order to ensure the recovery of valuable materials and to provide guidance to consumers and will address the possible phasing out of non-rechargeable batteries where alternatives exist. Furthermore, it is stated that sustainability and transparency requirements will be considered, taking into account the carbon footprint of battery manufacturing, the ethical sourcing of raw materials and the security of supply in order to facilitate reuse, repurposing and recycling of batteries.

(9)Addressing the entire life cycle of all batteries placed on the Union market requires the setting up of harmonised product and marketing requirements, including conformity assessment procedures, as well as requirements to fully address the end-of-life stage of batteries. Requirements concerning the end-of-life stage are necessary to address the environmental implications of the batteries and, in particular, to support the creation of recycling markets for batteries and markets for secondary raw materials from batteries in order to close the materials loops. In order to reach the envisaged objectives to address the whole life cycle of a battery in one legal instrument while avoiding barriers to trade and a distortion of competition and safeguarding the integrity of the internal market, the rules setting out the requirements for batteries should be of uniform application for all operators across the Union, and not give room for divergent implementation by Member States. Directive 2006/66/EC should therefore be replaced by a Regulation. (10)This Regulation should apply to all types of batteries and accumulators placed on the market or put into service within the Union, whether on their own or incorporated into appliances or otherwise supplied with electrical and electronic appliances and vehicles. This Regulation should apply regardless of whether a battery is specifically designed for a product or is of general use and regardless of whether it is incorporated into a product or is supplied together with or separately from a product in which it is to be used. (11)Products placed on the market as battery packs, which are batteries or groups of cells that are connected and/or encapsulated within an outer casing so as to form a complete unit ready for use that the end-user is not intended to split up or open and which conform to the definition of batteries, should be subject to requirements applicable to batteries. Products placed on the market as battery modules, which conform to the definition of battery pack, should be subject to requirements applicable to battery packs. (12)Within the Regulation’s wide scope, it is appropriate to distinguish between different categories of batteries in accordance with their design and use, independent of the battery chemistry. The classification into portable batteries, on one hand, and industrial batteries and automotive batteries on the other hand under Directive 2006/66/EC should be further developed to better reflect new developments in the use of batteries. Batteries that are used for traction in electric vehicles and which under Directive 2006/66/EC fall in the category of industrial batteries, constitute a large and growing part of the market due to the quick growth of electric road transport vehicles. It is therefore appropriate to classify those batteries that are used for traction in road vehicles as a new category of electric vehicle batteries. Batteries used for traction in other transport vehicles including rail, waterborne and aviation transport, continue to fall under the category of industrial batteries under this Regulation. The industrial battery type encompasses a broad group of batteries, intended to be used for industrial activities, communication infrastructure, agricultural activities or generation and distribution of electric energy. In addition to this non exhaustive list of examples, any battery that is neither a portable battery nor an automotive battery nor an electric vehicle battery should be considered an industrial battery. Batteries used for energy storage in private or domestic environments. are considered industrial batteries for the purposes of this Regulation.Furthermore, in order to ensure that all batteries used in light means of transport, such as ebikes and scooters, are classified as portable batteries, it is necessary to clarify the definition of portable batteries and to introduce a weight limit for such batteries. (13)Batteries should be designed and manufactured so as to optimise their performance, durability and safety and to minimise their environmental footprint. It is appropriate to lay down specific sustainability requirements for rechargeable industrial batteries and electric vehicle batteries with internal storage with a capacity above 2 kWh as such batteries represent the market segment which is expected to increase most in the coming years. (14)In order to ensure that obligations arising from this Regulation are carried out and to monitor and verify compliance of producers and producer responsibility organisations with the requirements of this Regulation, it is necessary that Member States designate one or more competent authorities. (15)The use of hazardous substances in batteries should be restricted in order to protect human health and the environment and to reduce the presence of such substances in waste. Thus, in addition to the restrictions set out in Annex XVII of Regulation (EC) No 1907/2006 of the European Parliament and of the Council, it is appropriate to set out restrictions for mercury and cadmium in certain types of batteries. Batteries used in vehicles which benefit from an exemption under Annex II to Directive 2000/53/EC of the European Parliament and of the Council should be excluded from the prohibition to contain cadmium. (16)In order to ensure that hazardous substances that pose an unacceptable risk to human health or to the environment when used in batteries, can be duly addressed, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of amending restrictions on hazardous substances in batteries. (17)The procedure for adopting new and amending current restrictions on hazardous substances in batteries should be fully streamlined with Regulation (EC) No 1907/2006. To ensure effective decision-making, coordination and management of the related technical, scientific and administrative aspects of this Regulation, the European Chemicals Agency set up under Regulation (EC) No 1907/2006 (‘the Agency’) should carry out specified tasks with regard to the evaluation of risks from substances in the manufacture and use of batteries, as well as those that may occur after their end-of-life as well as the evaluation of the socio-economic elements and the analysis of alternatives, in accordance with relevant guidance by the Agency. Consequently, the Committees for Risk Assessment and Socio-economic Analysis of the Agency should facilitate the carrying out of certain tasks conferred on the Agency by this Regulation. (18)The expected massive deployment of batteries in sectors like mobility and energy storage should reduce carbons emissions, but to maximise this potential it is necessary that their overall life cycle has a low carbon footprint. According to the Product Environmental Footprint Category Rules for High Specific Energy Rechargeable Batteries for Mobile Applications, climate change is the second highest related impact category for batteries after the use of minerals and metals. The technical documentation for rechargeable industrial batteries and electric vehicle batteries with internal storage and a capacity above 2 kWh placed on the Union market should therefore be accompanied by a carbon footprint declaration,, which should be specific, if necessary, per manufacturing batch. Batteries are manufactured in batches, made in specific amounts within certain timeframes Harmonising the technical rules for calculating the carbon footprint for all rechargeable industrial batteries and electric vehicle batteries with internal storage with a capacity above 2 kWh placed on the Union market is a prerequisite for introducing a requirement for the technical documentation of the batteries to include a carbon footprint declaration and subsequently establishing carbon footprint performance classes that will allow identifying the batteries with overall lower carbon footprints. Information and clear labelling requirements on batteries’ carbon footprint is not expected in itself to lead to the behavioural change necessary to ensure that the Union’s objective to decarbonise the mobility and energy storage sectors is achieved, in line with the internationally agreed objectives on climate change. Therefore, maximum carbon thresholds will be introduced, further to a dedicated impact assessment to determine those values. In proposing the level of the maximum carbon footprint threshold, the Commission will, inter alia, take into account the relative distribution of the carbon footprint values in batteries on the market, the extent of progress in the reduction of carbon footprint of batteries placed on the Union market and the effective and potential contribution of this measure to the Union’s objectives on sustainable mobility and climate neutrality by 2050. In order to bring about transparency on the batteries’ carbon footprint , and shift the Union market towards lower carbon batteries, regardless of where they are produced, a gradual and cumulative increase in the carbon footprint requirements is justified. As a result of these requirements, the avoided carbon emissions in batteries’ life cycle, will contribute to the Union’s objective of reaching climate neutrality by 2050. This may also enable other policies at Union and national level, such as incentives or green public procurement criteria, fostering the production of batteries with lower environmental impacts. (19)Certain substances contained in batteries, such as cobalt, lead, lithium or nickel, are acquired from scarce resources which are not easily available in the Union, and some are considered critical raw materials by the Commission. This is an area where Europe needs to enhance its strategic autonomy and increase its resilience in preparation for potential disruptions in supply due to health or other crises. Enhancing circularity and resource efficiency with increased recycling and recovery of those raw materials, will contribute to reaching that goal. (20)The increased use of recovered materials would support the development of the circular economy and allow a more resource-efficient use of materials, while reducing Union dependency on materials from third countries. For batteries, this is particularly relevant for cobalt, lead, lithium and nickel. Therefore, it is necessary to promote the recovery of such materials from waste, establishing a requirement on the level of recycled content in batteries using cobalt, lead, lithium and nickel in active materials. This Regulation sets mandatory recycled content targets for cobalt, lead, lithium and nickel and which should be met by 2030. For cobalt, lithium and nickel increased targets are established by 2035. All targets, should take into account the availability of waste, from which such materials can be recovered, the technical feasibility of the involved recovery and manufacture processes as well as the time needed by the economic operators to adapt their supply and manufacturing processes. Therefore, before such mandatory targets become applicable, the requirement related to recycled content should be limited to disclosure of information on recycled content. (21)In order to take into account the risk of supply of cobalt, lead, lithium and nickel and to assess their availability, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of amending the targets for the minimum share of recycled cobalt, lead, lithium or nickel present in active materials in batteries. (22)In order to ensure uniform conditions for the implementation of the rules on calculating and verifying, per battery model and batch per manufacturing plant, the amount of cobalt, lead, lithium or nickel recovered from waste present in active materials in batteries and the information requirements for technical documentation, implementing powers should be conferred on the Commission. (23)Batteries placed on the Union market should be durable and highly performant. It is therefore necessary to set out performance and durability parameters for portable batteries of general use as well as for rechargeable industrial batteries and electric vehicle batteries. For electric vehicle batteries, the informal UNECE Working Group on Electric Vehicles and the Environment is developing in-vehicle durability requirements, so this Regulation is refraining from setting additional durability requirements. On the other hand, in the area of batteries for energy storage, existing measurement methods to test battery performance and durability are not considered sufficiently precise and representative to enable introducing minimum requirements. The introduction of minimum requirements related to performance and durability of these batteries should be accompanied by available adequate harmonised standards or common specifications. (24)In order to reduce the life cycle environmental impact batteries, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of amending the performance and durability parameters and establishing minimum values for those parameters for portable batteries of general use and for rechargeable industrial batteries. (25)Some non-rechargeable batteries of general use may imply an inefficient use of resources and energy. Objective requirements regarding the performance and durability of such batteries should be established in order to ensure that fewer low performing non-rechargeable portable batteries of general use are placed on the market, in particular, where, based on a life cycle assessment, the alternative use of rechargeable batteries would result in overall environmental benefits. (26)In order to ensure that portable batteries incorporated into appliances are subject to proper separate collection, treatment and high quality recycling once they have become waste, provisions to ensure their removability and replaceability in such appliances are necessary. Used batteries should also be replaceable so as to prolong the expected lifetime of the appliances they are part of. The general provisions of this Regulation may be complemented with requirements set up for particular products powered by batteries under implementing measures under Directive 2009/125/EC of the European Parliament and of the Council. Where other Union legislation lays down more specific requirements, for safety reasons, regarding the removal of batteries from products (e.g. toys), those specific rules should apply. (27)Reliable batteries are fundamental for the operation and safety of many products, appliances and services. Therefore, batteries should be designed and manufactured to ensure their safe operation and use. This aspect is particularly relevant for stationary battery energy storage systems, which are currently not covered by other Union legislation. Parameters to be considered in safety tests should therefore be laid down for those energy storage systems. (28)In order to provide end users with transparent, reliable and clear information about batteries and their main characteristics, and waste batteries, to enable the end users to make informed decisions when buying and discarding batteries and to enable waste operators to appropriately treat waste batteries, batteries should be labelled. Batteries should be labelled with all the necessary information concerning their main characteristics, including their capacity and content of certain hazardous substances. To ensure the availability of information over time, that information should also be made available by means of QR codes.

(29)Information about the performance of batteries is essential to ensure that end-users as consumers are well and timely informed and in particular that they have a common basis to compare different batteries before making their purchase. Therefore, portable batteries of general use and automotive batteries should be marked with a label containing the information on their minimum average duration when used in specific applications. Additionally, it is important to guide the end-user to discard waste batteries in an appropriate way. (30)Rechargeable industrial batteries and electric-vehicle batteries with internal storage with a capacity above 2 kWh should contain a battery management system that stores data so that the state of health and expected lifetime of batteries may be determined at any time by the end-user or any other third party acting on his behalf. In order to repurpose or remanufacture a battery, access to the battery management system should be provided to the person that has purchased the battery or any third party acting on its behalf at any time for evaluating the residual value of the battery, facilitating the reuse, repurposing or remanufacturing of the battery and for making the battery available to independent aggregators, as defined in Directive (EU) 201/944 of the European Parliament and of the Council, which operate virtual power plants in electricity grids. This requirement should apply in addition to Union law on type of approval of vehicles, including technical specifications that may originate from the work of the informal UNECE Working Group on Electric Vehicles and the Environment on data access in electric vehicles. (31)A number of product-specific requirements under this Regulation, including on performance, durability, repurposing and safety, should be measured by using reliable, accurate and reproducible methods that take into account the generally recognised state-of-the-art measurements and calculation methodologies. In order to ensure that there are no barriers to trade on the internal market, standards should be harmonised at Union level. Such methods and standards should, to the extent possible, take into account the real-life usage of batteries, reflect the average range of consumer behaviour and be robust in order to deter intentional and unintentional circumvention. Once a reference to such a standard has been adopted in accordance with Regulation (EU) No 1025/2012 of the European Parliament and of the Council and published in the Official Journal of the European Union, presumption of conformity shall be established with those product-specific requirements adopted on the basis of this Regulation, provided that the outcome of such methods demonstrate that the minimum values established for those substantive requirements are attained. In the absence of published standards at the time of the application of product-specific requirements, the Commission should adopt common specifications through implementing acts and the compliance with such specifications should also give rise to the presumption of conformity. In cases where the common specifications are, at a later stage, found to have shortcomings, the Commission should by implementing act amend or repeal the common specifications in question. (32)To ensure effective access to information for market surveillance purposes, to adapt to new technologies and to ensure resilience in case of global crises, such as the Covid-19 pandemic, it should be possible to give information regarding conformity with all Union acts applicable to batteries online in the form of a single EU declaration of conformity. (33)Regulation (EC) No 765/2008 of the European Parliament and of the Council lays down rules on the accreditation of conformity assessment bodies, provides a framework for the market surveillance of products and for controls on products from third countries, and lays down the general principles of the CE marking. That Regulation should be applicable to batteries covered by this Regulation in order to ensure that products benefiting from the free movement of goods within the Union fulfil requirements providing a high level of protection of public interests such as human health, safety and the environment. (34)In order to enable economic operators to demonstrate and the competent authorities to verify that batteries made available on the market comply with the requirements of this Regulation, it is necessary to provide for conformity assessment procedures. Decision No 768/2008/EC of the European Parliament and of the Council establishes modules for conformity assessment procedures, ranging from the least stringent to the most stringent depending on the level of risk involved and the level of safety required. According to Article 4 of that Decision, where conformity assessment is required, the procedures to be used for that assessment are to be chosen from among those modules. (35)The chosen modules do not however reflect certain specific aspects of batteries and thus, it is necessary to adapt the modules chosen for the conformity assessment procedure. In order to take account of the novelty and complexity of the sustainability, safety and labelling requirements set out in this Regulation and for the purpose of ensuring the conformity of batteries placed on the market with the legal requirements, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of amending the conformity assessment procedures by adding verifications steps or changing assessment module, on the basis of developments on the battery market or in the battery value chain. (36)The CE marking on a battery indicates the conformity of that battery with this Regulation. General principles governing the CE marking and its relationship to other markings are set out in Regulation (EC) No 765/2008. Those principles should apply to the CE marking on batteries. In order to ensure that the battery is stored, used and discarded in a manner which is safe from the point of view of protecting human health and the environment, specific rules governing the affixing of the CE marking in the case of batteries should be laid down. (37)The conformity assessment procedures set out in this Regulation require the intervention of conformity assessment bodies. In order to ensure a uniform implementation of the provisions in this Regulation, those bodies should be notified by the M