December 2022

Battery regulation

In December 2022, the Commission, Parliament and Council reached agreement on the new European battery regulation. This text provides a framework for the entire battery life cycle, and sets out circular economy and environmental reporting requirements for the development of a sustainable European industry.

Since the beginning of the discussions, the Institut Mobilités en Transition has been committed to the rapid introduction of a standardized methodology for accounting for the carbon footprint of batteries, and in particular their absolute value. This is a decisive value, which will serve as a basis for labelling, conditioning incentive measures, defining thresholds and, more generally, steering public policies. The JRC (the European Commission’s research center) has been tasked with defining this carbon footprint calculation methodology, which will be adopted by delegated act in early 2024.

Following the JRC’s proposal, the Institut Mobilités en Transition mobilized to highlight certain risks, and even inconsistencies, in the proposed formula, which call into question the relevance of the regulation.

1) Regarding the carbon footprint of the battery, the rules should encourage actual use and direct investment in low-carbon energy production to reduce the production footprint. Not all solutions for supplying production sites (guarantee of origin, PPA, on-site renewable energy production) are equivalent in terms of environmental value and impact. The current draft would allow companies to base their green energy claims on the purchase of guarantees of origin, a system that does not take into account real-time energy supply, nor the actual energy flows between consumption and production, and therefore cannot demonstrate cleaner battery production in the real world. There is therefore a risk that manufacturers will artificially reduce their carbon footprint through renewable energy certificates with no temporal or geographical link to production. Only direct use or connection should be valued in the calculation, and only if a link can be established and proven.

2) By dividing the battery’s carbon footprint by the vehicle’s energy consumption, the current proposal favors the least efficient models. For example, the same battery could have a better indicator in an SUV than in a small A or B segment vehicle. This inconsistency is unacceptable in terms of communication.

3) Finally, with regard to battery durability, the current text leaves open the possibility of extending the standard life if an OEM can prove and guarantee longer durability. This variable must not be exploited excessively to minimize the carbon footprint of batteries in relation to their actual automotive life.
In view of these crucial issues, the Institut Mobilités en Transition has formulated several recommendations to account for the battery’s carbon footprint in absolute terms, in addition to its value per unit of energy delivered by the vehicle over its life cycle, and to take into account (at least partially) the level of carbon intensity of electricity in the country where the battery manufacturing stage is located.

For further information, please contact Jean-Philippe Hermine.