Producer responsibility is in a key position in the new regulation, which is more ambitious in terms of circular economy than anything before in the product sector of the EU.
Europe is going through a shift in the transport and energy sector that aims at increased use of renewable energy and the electrification of transports. The change is significant and accumulators play a key role in it. However, the green transition will not be successful if accumulators are not designed and produced to be durable and recyclable. The role of producer responsibility is to ensure that the raw materials of accumulators are re-used.
The aim of the new regulation is to ensure that the accumulator industry pays more attention to the environmental effects of accumulators throughout their life cycles as well as sustainable production from the mining of raw materials to manufacturing, recycling and re-using.
The regulation also aims to improve Europe’s self-sufficiency when it comes to raw materials. Although Europe is the world’s second-largest market of electric cars, it has a lot of catching up to do in terms of self-sufficiency related to the raw materials and supply chains of accumulators. In order to improve self-sufficiency, the sector needs clear and adequately demanding basic rules that encourage promoting the re-use of accumulators and replacing pristine raw materials with recycled raw materials. The Battery Regulation specifies that new accumulators should include recycled raw materials.
From now on, all batteries and accumulators entering the EU market must be sustainable, efficient and safe throughout their life cycles. In order to be considered sustainable, batteries and accumulators must be repairable, re-usable and easily recyclable, produced with minimal environmental impact and proven to have been manufactured from sustainably produced materials.
Pioneer in sustainable product policies
The Commission proposal for the Battery Regulation currently being processed by the EU has an effect on the entire life cycles of batteries and accumulators and, unlike a directive, it is directly applicable legislation for all Member States.
The hope is that the Battery Regulation will be a pioneer in the global green transition and that it will pave the way for other instruments concerning sustainable product policies. One of the key instruments concerning product policies of the Battery Regulation is producer responsibility, which aims to promote circular economy and obligates the manufacturers and importers of batteries and accumulators to look after the products once they are taken out of use.
In this article, we focus on why producer responsibility plays such an important part in accomplishing the goals of the green transition, what are the effects of the new regulation on producer responsibility and how the obligations of importers and distributors of accumulators will change as a result of the new regulation.
Increased significance on producer responsibility
The Battery Regulation will replace the directive from 2006, which has required Member States to obligate the producers of batteries and accumulators, i.e. the importers and manufacturers, to ensure the waste management and recycling of their products. This “producer responsibility” has proven to be an effective means for promoting the re-use and recycling of products taken out of use.
In practice, producer responsibility is organised by producer organisations, such as Recser Oy and Akkukierrätys Pb in Finland. Producer organisations not only organise the collection and recycling of batteries and accumulators and create statistics but make it possible to re-use collected accumulators and process complaints and arrange communications about the collection and recycling as well.
Since the directive of 2006 entered into force, the world and the accumulator markets have changed significantly. The variety and different types of accumulators have increased and they are needed increasingly more for energy storage and transportation. In the proposed Battery Regulation, requirements related to producer responsibility have been specified and extended from the current situation to promote the green transition. The aim is to ensure that the collection and recycling of lithium-ion accumulators that represent the latest technology would be even more efficiently and safely.
Accumulators important to the green transition are categorised into separate product groups, i.e. the accumulators used in light electric means of transport and electric cars. In the proposal, the producers of these accumulators and accumulators needed to store renewable energy are given as extensive producer responsibility as to the producers of other batteries and accumulators and new collection and recycling requirements that become incrementally stricter in a tight schedule are proposed.
Financial incentives to design sustainable products for producers
Producer responsibility brings together different parts of the value chain of batteries and accumulators—manufacturers, importers, distributors, users, waste management and re-use parties—to ensure the accomplishment of the EU’s Battery Regulation’s goals. In other words, producer responsibility can be seen as the spine of circular economy around which the entire collection and recycling system is built.
Through producer responsibility, the costs of collection and recycling after the service life of the products can be allocated in accordance with the “polluter pays” policy to the prices of products that generate these costs. Producers responsible for collection and recycling should have the primary right to collect all batteries and accumulators and make their raw materials available for re-use. This ensures that the system is efficient, instead of cherry-picking.
Regulations concerning batteries and accumulators have, thus far, missed important links, such as product design, users’ responsibility and the promotion of markets for recycled raw materials, which are now incorporated into one regulation for the first time.
This is important, as many significant effects on the environment, people and society in general are decided on already in the product design phase. Because of this, the Batteries Regulation aims primarily at the product design in which accumulators are designed to have a long service life and to be re-usable and as recyclable as possible. The “polluter pays” policy regarding the financial contributions of the producer responsibility specified in the proposed regulation provide incentive to design batteries and accumulators with longer service lives and more recycled raw materials. In practice, it is financially profitable for producers to design products that comply with the principles of circular economy.
Increasingly demanding collection and recycling goals speed up the transition to circular economy
In order to ensure the sufficiency of raw materials used in accumulators and to improve the EU’s self sufficiency, the collection and recycling rates of batteries and accumulators will be increased significantly. In addition to Member States, the rates are also proposed to be more clearly binding to the producers, i.e. each producer or producer organisation representing them must fulfil the increasingly demanding requirements.
At the moment, the requirement is to collect at least 45% of the portable batteries and accumulators released to the market during the three previous years for recycling. According to the proposed Battery Regulation, this so-called collection rate will be increased incrementally—first to 65% by 2025 and to 70% by 2030. Improving the collection rate is important, but in order for it to be entirely reliable, the calculation formula should also be changed. The current formula does not take the long service life of accumulators or batteries and accumulators to be exported and re-used in the market of another country into account.
The rapidly increasing demand for accumulators in the markets and the higher collection requirements will also lead to a higher collection rate in the next few years. The number of lithium-ion accumulators ready for recycling is expected to increase 700-fold between 2020 and 2040, which will make it easier to use recycled materials in the production of accumulators.
The regulation sets rapidly increasing, material-specific collection goals for important raw materials. Producers must comply with these goals and ensure that more than 50% of cobalt, nickel and copper will be re-used by 2030. In order to make the use of collected materials more attractive than mining pristine metals, a suggestion to add an obligation to use a minimum amount of recycled raw materials, in addition to pristine materials, into the proposed regulation has been made. The requirement applies to cobalt, lead, lithium and nickel. Accumulators are the first product group to have EU-level regulations obligating the use of recycled raw materials in order to promote circular economy.
Higher demands for distributors and consumers in the Battery Regulation
With regard to the recycling activity of end users, it is essential how easy the recycling of used batteries and accumulators is. Because of this, the proposed regulation obligates the distributors, i.e. the sellers of products, to promote circular economy together with the producers. Previously, only the distributors of portable batteries and accumulators have been bound by the collection obligation, whereas now, the Battery Regulation would extend the obligation to apply to accumulators used in industry, vehicles and electric bikes. The Batteries Regulation obligates an increasingly large group of battery and accumulator distributors to collect batteries and accumulators taken out of use.
The aim of the extended reception obligation is to make the selective collection of accumulators safer and easier than before. This is important, as the system will not work if users do not return batteries and accumulators taken out of use to be re-used. The regulation will also obligate the end users to sort the used batteries and accumulators and deliver them to the collection points provided by producers. This is a historical and highly anticipated step in legislation, as incorrectly sorted batteries and accumulators pose a major fire hazard. The goals of the regulation cannot be achieved without active end users, as more than 25% of portable batteries and accumulators taken out of use remain in storage in households. At the level of the entire EU, this corresponds to the amount of raw materials used in hundreds of thousands electric car accumulators, and the amount is continuing to grow.
The distributors of batteries and accumulators will also have an obligation to verify that the manufacturer or importer of the products to be sold has registered as a producer and that the batteries and accumulators are accompanied by the required documents. This is a welcome addition to the supervision of producer responsibility, as authorities do not have comprehensive registers of parties that bear the responsibility. Producer organisations have also expressed their interest in a requirement to comply with producer responsibility requirements in public procurements in order to reduce freeloading. Freeloading means that a company that bears a producer responsibility fails to comply with the responsibility, willingly or unwillingly, leaving the costs to be borne by other companies.
Finalisation of the Battery Regulation
The proposal has advanced to the final stage of the EU decision-making process, a trialogue between the Council, the Commission and Parliament, where a compromise can be expected as soon as this autumn. With regard to chapter VII about producer responsibility, a two-year transition period has been suggested, which means that its requirements would be applicable two years after the regulation enters into force.
The Batteries Regulation is the first concrete regulation package of the so-called EU Green Deal policy, which aims to prevent a loss of biodiversity and mitigate the impacts of climate change. A regulation that has such a significant impact on the entire life cycles of batteries and accumulators also paves the way for regulations concerning other products.
As producer organisations, we want to actively support our members and other stakeholders in complying with the new requirements in practice.
This article is the first part of the joint communications of the battery and accumulator producer organisations Recser Oy and Akkukierrätys Pb Oy concerning the EU’s Batteries Regulation. The next article is about the battery passport proposed in the regulation, the aim of which is to provide specific information about industrial and automotive accumulators, at least, and their raw materials, carbon footprint, safety and recyclers.
Read more about how the producer responsibility over batteries and accumulators, i.e. their collection and recycling, is organised at the moment: https://www.paristokierratys.fi/blog/2022/04/08/kierrossa-nain-kaytetyista-akuista-ja-paristoista-kierratetaan-uusia-akkumateriaaleja-ja-jopa-lannoitetta/
EU Commission website on the Batteries Regulation: : https://ec.europa.eu/environment/topics/waste-and-recycling/batteries-and-accumulators_en