Sustainable Batteries

By Mathilde Missoffe, Vojtěch Holík, Anna Emilie Wehrle

Batteries are a means to store electricity. In the battery one or multiple cells convert chemical energy into electrical energy which can be used to power things from remote controls to cars. Batteries are expected to be a crucial element in the decarbonisation of Europe. In the following, we will have a look at sustainable batteries, especially in the European context. We will have a look at three very simple and easy questions: Why batteries? What are the challenges for sustainable batteries? And where are we (going) in the EU?

Why batteries? 

Currently, it can be assumed that there are two sectors in which batteries will play an important role: the transport and the power sector.

The decarbonisation of the power sector through an ever-increasing share of electricity from renewable energy sources (RES) brings about many challenges: “potential imbalances in supply and demand, changes in transmission flow patterns, and the potential for greater system instability” (Bettoli et al. 2021). Batteries can play a role in increasing grid stability through partial grid defection, which allows households to store electricity produced through solar energy on their premises for later use, especially in the evening, instead of feeding it into the grid and later using electricity from the grid. Further, more and more large-scale batteries participate in capacity market auctions. As prices are lowering, the role of batteries broadens from balancing grid frequency to “replacing conventional power generators for reliability, providing power-quality services, and supporting renewables integration.”(Frankel and Wagner 2017). The costs per kWh for battery packs also continue to decrease significantly. The cost per kWh went down from $1000 per kWh in 2010 to $230 in 2016 (Frankel and Wagner 2017). 

Batteries are equally very important when it comes to decarbonising the transport sector. In this sector, which is considered to be a rather challenging one to decarbonise, replacing the indispensable part of individual cars by electric vehicles is one of the most promising perspectives. However, when it comes to electric vehicles, batteries are “the key challenge regarding its cost, range, safety, and life expectancy” (Dominković et al. 2018, p. 1824). As the challenges of decarbonisation are highly complex, integrated and cross-sectorial solutions are indispensable. Batteries can play an important role for decentralisation, grid balancing, flexibility of demand, and even further through “smart EVs” that feed back into the grid when they are not used, and demand is high. 

It is thus understandable that the EU wants to promote the sustainability of batteries in the European market and make the EU one of the leading actors in the battery industry. However, the sustainability of batteries come with substantial challenges, which we will have a look at now. 

What are the challenges for sustainable batteries? 

Before proceeding to the answer of our second question, it is necessary to specify what we mean by sustainable batteries. According to the definition given by the European Commission, sustainable batteries are such batteries that are

1. produced with the lowest possible environmental impact, 
2. using materials that have been obtained in full respect of social and ecological standards, 
3. long lasting and safe and 
4. that can be repaired or reused and repurposed.” (European Commission 2020)

As of today, there are many problems on the track to sustainability of batteries. First, the collection of waste batteries is sub-optimal and the levels of recycling insufficient. As of today, more than 1.9 million tons of waste batteries are generated annually in the EU and approximately 50% of those are recycled. The collection rates are especially small for batteries used in electric and electronic equipment, less than 20% of these batteries are removed from the devices due to lack of information or difficulties of removal. Some types of batteries already have a high recycling efficiency: more than 90% for lead-acid batteries and more than 70% for nickel-cadmium batteries. 

The recyclability rates of most metals however remain relatively low: only 12 % of aluminium, 22 % of cobalt, 8 % of manganese, and 16 % of nickel used within the EU is recycled. Furthermore, almost no lithium is recovered in the EU because it is deemed not cost-effective compared with primary supplies. Where lithium is recovered, its quality is mostly insufficient to be used in batteries. Instead, it is used in other sectors such as ceramics, glass, and alloys. The cost of the recycling process is due to some specific requirements (fire hazard), necessity of further investment and innovations in the sector, and the role of economies of scale and the capital intensity of the recycling industry. 

Secondly, the production itself of batteries raises many environmental, social and strategic problems. According to a study for the World Economic Forum, the carbon footprint of battery production is expected to grow 8 times to reach 182 megatons CO2 emissions in 2030. The footprint is driven mostly by the production of active materials and the cell production. In this information, there are hidden many uncertainties as the carbon footprint depends on the mix of energy that is used in the production. The battery production furthermore requires mining of metals which entails intensive land-use and possible pollution of soil and water. Mining of cobalt is problematic due to human rights violations documented in the major and impossible to substitute supplier, Democratic Republic of Congo. Lithium supplies might prove problematic since large proportions of the supplies come from China which finds itself in a geopolitical rivalry with the EU and the USA. Since the demand for these metals is expected to increase, the issues here presented will only become more pressing without an EU action.

Thirdly, the framework of incentives on the recycling market in the EU is of an insufficient quality. We can observe information asymmetry on the market: the information about collection schemes or about the durability and performance of batteries are not complete and well distributed among the population. This means that the competition for batteries is driven only by the price with neither the producers nor the consumers having an incentive to opt for a more ecological behaviour. The regulations on secondary batteries are not harmonized between the MS which creates unnecessary uncertainties and market fragmentation. 

Where are we (going) in the EU?

The European Commission has been working on a Proposal for a Regulation that seeks to modernize the current regulatory framework of batteries in the EU. The new regulation will replace the current batteries directive of 2006, which is, until now, the only piece of EU legislation entirely dedicated to batteries. The evaluation report of the directive was published in April 2019. It concluded that the directive has achieved improvement in terms of  the environment, promoting recycling, and the internal market for batteries and recycled materials. However, limits both within the regulation and its application limit the Directive’s effects. 

In October 2017, the European Commission created the European Battery Alliance to improve EU action in a sector that is key to its ecological and digital transition. In May 2018, a Strategic Action Plan on Batteries was adopted by the EC with the ambition to “make Europe a global leader in sustainable battery production and use, in the context of the circular economy”. 

The Proposal for a Regulation on Batteries and waste batteries, presented by the European Commission in December 2020, is one of the key EU initiatives to implement the European Green Deal. It will enable the EU to move rapidly to a low-carbon, circular economy and support clean mobility. The New Batteries Regulation Proposal is also part of the New Industrial Strategy, as batteries are essential to foster a strong European decarbonized industry.

The main changes implied by the EU Commission Proposal is the transition from a directive to regulation, and the introduction of new requirements for social responsibility and environmental sustainability.

Most importantly, the major change implied by the new proposal of the EC is that it is a regulation – in contrary to the 2006 directive – and is therefore a binding legislative act. The proposal introduces ambitious social and environmental requirements and proposal has three objectives:

1. Establishing a set of common rules to ensure a level playing field and strengthen the functioning of the internal market, 
2. Promoting the circular economy, and
3. Reducing environmental and social impacts throughout all stages of the battery life cycle.  

The main innovations envisaged by the Commission proposal include: a ‘battery passport’, responsibly sourced materials requirements, material recovery targets, collection rate targets, labelling and information requirements, and a carbon footprint declaration. 

However, the regulation is currently still being discussed in the trilogue between the Parliament, the Commission, and the Council. The general approach adopted by the European Council on 17 March 2022 varies considerably in terms of ambition from the position adopted by the Parliament based on a report by the ENVI Committee from 10 February 2022. 

The Parliament most importantly advocates for the inclusion of ‘light means of transport’ like e-bikes and e-scooters in the regulation. Also, the Parliament calls for the phase out of single-use batteries by 2027, while the Commission proposed 2030 and the Council 2031. Their positions on recycling targets in terms of recycling efficiency quotas and recovered materials quotas vary considerably in terms of the proposed timeframes, where the Council hopes to delay the entry into force of the quotas by two years compared to the Commission and the Parliament. 

The reception of this regulation proposal was quite positive, most actors agree that the policy is ambitious and relevant. The Atlantic Council for instance considers that this policy could be a model for US legislation. According to Rapporteur Simona Bonafè (S&D, IT) “For the first time in European legislation, the Battery Regulation lays down a holistic set of rules to govern an entire product life cycle, from the design phase to end-of-life.” She emphasises that the proposal is an essential step towards a circular economy for batteries (European Parliament 2022).

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