「Product Carbon Footprint (PCF) refers to the sum of all greenhouse gas emissions in a product's life cycle, including the greenhouse gas emissions from raw material mining, manufacturing, transportation, distribution, use, and final disposal "」
--- Past, present and key points of "New Battery Law" ---
On August 17, 2023, the European Union's Regulations on Batteries and Waste Batteries (EU No. 2023/1542, hereinafter referred to as the "New Battery Law") came into force and will be enforced from February 18, 2024. The figure below shows the development process and key requirements established by the "New Battery Law".
The new law requires: from July 2024, power batteries and industrial batteries sold in the European market must declare the carbon footprint of the product; from 2026, power batteries must hold a "battery passport" to be sold in the EU market; After one month, power batteries and industrial batteries must also meet the relevant limit requirements of carbon footprint.
Therefore, if Chinese battery manufacturers want to conduct battery sales activities in the European market, they will be subject to stricter product carbon footprint disclosure requirements, as well as due diligence obligations in the supply chain management link, which will affect investment, production, and marketing in Europe. China's battery companies have brought huge technical challenges.
---Applicable objects and requirements of "New Battery Law" ---
The "New Battery Law" applies to all types of batteries within the EU (except for special uses such as military, aerospace, and nuclear energy). According to different usage scenarios, batteries can be divided into the following five categories:
The "New Battery Law" puts forward detailed requirements for the above five types of batteries from four aspects:
01 Sustainability and safety requirements --- All electric vehicle batteries, LMT batteries and rechargeable industrial batteries with a capacity greater than 2 kWh must have a "legible and indelible" carbon footprint statement and label.
02 Label information requirements --- Electric vehicle batteries, LMT batteries and rechargeable industrial batteries over 2kWh will require a "digital battery passport", which contains information on battery models, specific batteries and their uses.
03 Battery Conformity Requirements---Including presumption of compliance, common specifications, conformity assessment, EU declaration of conformity and CE marking, etc.
04 Due diligence requirements --- All economic operators (except small and medium-sized enterprises) that sell batteries in the EU market must formulate and implement due diligence policies in line with international standards to solve the procurement and processing of raw materials and auxiliary materials required for battery production. and the social and environmental risks inherent in trade.
05 Others---Green public procurement requirements, etc.
---Challenges faced by Chinese enterprises---
China accounts for six of the world's top ten battery manufacturers, and its battery production capacity will account for about 77% of global battery production capacity in 2022, and it is expected to still account for 69% in 2027 (data based on lithium-ion supply chain data and forecasts released by Bloomberg New Energy Finance) . In 2022, among the top five countries in China's lithium battery export volume, Germany and the Netherlands are both EU members. It can be said that Europe is the main market for China's lithium battery exports (according to SNE Research, China's export batteries account for 34% of the EU market share).
Source：https://www.visualcapitalist.com/chinas-dominance-in-battery-manufacturing
With the implementation of the "New Battery Law", Chinese battery manufacturers who want to sell batteries in the European market will face stricter requirements and restrictions.
01 Challenges of battery product carbon footprint accounting certification declaration
From July 2024, power batteries and industrial batteries sold in the European market must declare their product carbon footprint. This means that companies need to collect and calculate carbon emission data from upstream minerals and materials to battery production, transportation, recycling, and reuse, and conduct certification and disclosure. However, at present, there are few mature digital tools in China, and there are difficulties such as inconsistent standard databases and no international mutual recognition mechanism.
02 The minimum recovery rate of battery materials and the challenge of material recovery targets
The "New Battery Law" has relevant requirements on the recovery rate of power battery waste, recycling rate and the proportion of raw materials in recycled materials, and currently my country has not established a recognition mechanism for the use of recycled raw materials. Although the domestic battery industry chain enterprises represented by Ningde Times have cooperated with European companies to carry out battery recycling business, they are still immature.
03 Challenges of Information Disclosure in Battery Passport
From 2026, power batteries must hold a "battery passport" to be sold in the EU market. The passport should at least include battery and manufacturer information, compliance and certification, carbon footprint, supply chain due diligence, battery materials and components, cycle and resource efficiency as well as performance and durability, which will lead to an increase in the cost of Chinese batteries entering the EU market.
---Solutions for the Chinese market---
Challenges are opportunities, and the pressure brought by the "New Battery Law" has also prompted Chinese battery companies to continuously improve their technical level and increase product innovation, so as to better promote the green transformation of the industry, so as to meet my country's dual carbon targets and international climate response Enterprises' own low-carbon development needs under changing goals.
In response to the above challenges, it is imminent to accelerate the formation of a battery industry carbon footprint management system and an innovative industry carbon management model. Foresighters have a longer transition period to meet the requirements of all parties for their own products and become industry leaders.
As a comprehensive carbon-neutral digital transformation solution provider, Carbonnewture Technology can provide domestic and foreign battery companies with professional services such as dynamic monitoring and management of carbon emissions, digital management and certification of battery carbon footprints, and digital green supply chain management.
We are committed to using digital means, using technologies such as the Internet of Things, big data, artificial intelligence, and blockchain to help companies build smart carbon footprint and supply chain management platforms in a compliant, efficient, and low-cost manner to ensure corporate compliance and data security.