The European Parliament and Council have reached a provisional agreement aiming to make all batteries placed on the EU market more sustainable, circular and safe, the European Commission said Dec. 9, welcoming the decision.

The agreement builds on the EC's December 2020 proposal and addressed the social, economic and environmental matters related to all types of batteries, it said.

The new law is part of the European Green Deal and is aimed at ensuring that batteries in the EU, which are essential for reaching climate neutrality by 2050, are sustainable throughout their entire lifecycle.

The new regulation will replace the existing Batteries Directive from 2006 and will require more detailed secondary legislation to be adopted from 2024 to 2028 to be fully operational, the EC said.

The European Parliament and the Council will have to formally adopt the new regulation before it can come into force, the EC said.

"In the current energy context, the new rules establish an essential framework to foster further development of a competitive sustainable battery industry, which will support Europe's clean energy transition and independence from fuel imports," the EC said.

The rules will gradually introduce sustainability requirements on carbon footprint, recycled content and performance and durability from 2024.

From mid-2025, a more comprehensive regulatory framework on Extended Producer Responsibility will start to apply, with higher collection targets being introduced over time, the EC said.

These targets will be 63% in 2027 and 73% in 2030 for portable batteries, and 51% in 2028 and 61% in 2031 for batteries from light transport.

All collected batteries must be recycled and high levels of recovery will be mandated, in particular of valuable battery raw materials, such as copper, cobalt, lithium, nickel and lead.

"This will guarantee that valuable materials are recovered at the end of their useful life and brought back in the economy by adopting stricter targets for recycling efficiency and material recovery over time. Material recovery targets for lithium will be 50% by 2027 and 80% by 2031," the EC said.

Battery material prices have been strong. Platts, part of S&P Global Commodity Insights, assessed seaborne lithium carbonate and lithium hydroxide at $76,500/mt CIF North Asia and $82,000/mt CIF North Asia Dec. 9, up 126% and 159%, respectively, since the start of 2022.

The rules will also require companies placing batteries on the EU internal market to demonstrate that the raw materials used for manufacturing are sourced responsibly, meaning they will have to identify and mitigate any social and environmental risks associated with the mining, processing and trading of these raw materials.

According to the EC, battery demand is set to increase 14-fold by 2030, with the EU likely to account for 17% of total demand, mostly driven by transport electrification.

"Such exponential growth in demand for batteries will lead to an equivalent increase in demand for raw materials, hence the need to minimize their environmental impact," it said.