May 2024

First of All: 🎉 Happy 🇪🇺 EU Day!!!

Europe Day is held on 9 May every year to celebrate peace and unity in Europe. The date marks the anniversary of the historic "Schuman Declaration" that set out his idea for a new form of political cooperation in Europe, which would make war between Europe's nations unthinkable. Schuman's proposal is considered to be the beginning of what is now the European Union.

GRS Update: Statement on the Batt-EU-AnpG

The Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) has submitted a draft bill for the adaptation of German battery law to the EU Battery Regulation (Battery-EU Adaptation Act - Batt-EU-AnpG) to the consultation for the participation of the economic operators affected by the regulation by submitting a statement.

The draft bill submitted by the Federal Ministry of Environment, Nature Conservation, Nuclear Safety and Consumer Protection presents, for the first time, a very complex set of rules within the framework of the implementation of the EU concept of extended producer responsibility (EPR), which goes far beyond the previous national legal norms on product responsibility for batteries.

To supplement the implementation and enforcement of the EU Battery Regulation, a large number of additional new statutory and sub-legal regulations and enforcement structures are required at both European and national level, which will also have significant market and financial implications for all market participants.

Against this background, we fundamentally welcome the fact that not only is the national legal situation being adapted to the EU legal regime for batteries and their take-back and recycling, which will be directly applicable in the future, but that certain regulatory needs of the current national law are also being taken into account. In particular, various accompanying regulatory instruments are to be implemented to ensure the implementation of producer responsibility, some of which have already been considered in the past and considered useful (e.g. obligations to provide security and compensation claims).

However, whether these are effective and sufficiently enforceable depends to a large extent on their precise design and the further modalities and requirements for their implementation. In particular, we recommend involving the economic operators concerned by creating a joint body, as is already the case with the German Packaging Act (VerpackG) and the German Electrical and Electronic Equipment Act (ElektroG).

Developments at EU Level

EU Battery Regulation

While German legislation is now being adapted to the already applicable EU Battery Regulation, secondary legislation (through so-called Delegated Acts and Implementing Acts) is also being further developed in Brussels.

Determination of the format of the carbon footprint declaration for batteries

Methodology for calculating carbon footprint of batteries for electric vehicles

The carbon footprint of batteries for electric vehicles is calculated as the amount of CO2 equivalent emitted during the life cycle stages of the battery within the system boundaries, expressed in kilograms (kg) of CO2 equivalent, divided by the total amount of energy provided by the battery during the determined lifetime of the battery.

It is expressed in kg CO2 equivalent/kilowatt hour (kWh) with a resolution of 0.001 kg CO2 equivalent/kWh. The amount of CO2 equivalent emitted is determined by identifying the emissions of greenhouse gases related to the materials and energy used and, where applicable, generated during the life cycle stages of the battery within the system boundaries.

The amount of CO2 equivalents is calculated from these greenhouse gas emissions by applying the Environmental Footprint impact assessment method available in LCDN for the Climate Change impact category. All quantitative input and output data collected to quantify the carbon footprint are calculated relative to the reference flow. The reference flow is calculated as the total mass of the battery divided by the total amount of energy the battery delivers during its lifetime, measured in kg/kWh.

If over time, due to changes in the bill of materials, changes in the origin of materials, changes in processes, changes related to the use of electricity and other auxiliary materials or other changes, the amount of CO2 equivalent emitted increases by more than 10% compared to the calculated carbon footprint, this shall be considered a change in the technical characteristics of the battery relevant to the requirements of the Regulation and therefore a new carbon footprint shall be calculated and a new carbon footprint declaration shall be prepared for the new battery model.

Batteries and Critical Minerals

EU-Australia partnership on sustainable critical and strategic minerals

The EU and Australia have signed a bilateral partnership agreement to cooperate on sustainable critical and strategic minerals. This mutually beneficial partnership aims to pursue several common objectives, in particular to enable the EU to diversify the supply of materials needed for the green and digital transition.

The partnership covers the entire value chain for critical and strategic minerals, namely exploration, mining, processing, refining, recycling and mineral waste processing. In addition to jointly developing projects along the entire value chain in the EU and Australia, the partnership will also explore the potential for cooperation in countries where the EU and Australia have common interests.

This agreement will enhance cooperation between Australia and the EU in the following areas:

• Integrating sustainable commodity value chains, including networking, joint facilitation of projects (e.g. through joint ventures), creating new business models and promoting and facilitating trade and investment links to ensure the well-functioning, sustainability and resilience of these critical supply chains.
• Collaboration in research and innovation along raw material value chains, including mineral knowledge and minimizing the ecological and climate footprint.
• Working together to promote high environmental, social and governance standards and practices and improved policy coordination, driven by full consideration for working conditions and worker safety and the need for sustainable and safe production of critical minerals.

Transport and Environment (T&E) report “An Industrial Blueprint for Batteries in Europe“

Brussels-based transport environmental impact NGO T&E has published a new report examining how Europe can successfully build a sustainable battery value chain. As Europe decarbonises its economy, it faces the enormous challenge of transforming the fossil system into a carbon-free one.

Batteries and the materials they are made from are central to our efforts to make cars, trucks and buses cleaner and to expand renewable energy grids. A year ago, when T&E estimated that two-thirds of Europe's announced battery plans were at risk, the EU announced a series of measures in response to the US Inflation Reduction Act.

Key findings include:

• Europe can become self-sufficient in battery cells by 2026 and produce most of its needs for key components (cathodes) and materials such as lithium by 2030. But more than half of Europe's gigafactory plans remain at risk of being either postponed or cancelled - compared to almost two-thirds a year ago.
• Shifting the battery supply chain inland offers significant climate benefits: 37% less CO2 emissions when using the EU grid, or 133 megatons of CO2 by 2030 compared to China. If renewable energy sources are predominantly used, the reduction doubles to 62%.
• However, many of the announced projects remain uncertain and would not be possible without stronger government action, given the still young nature of this industry in Europe.
• The industrial policy plan should include maintaining investment certainty (via the 2035 clean cars objective), providing investment support at EU level and stronger ‘Made in EU’ rules for best-in-class projects.

EU Waste Shipment Regulation

New rules have come into force to ensure that the EU takes more responsibility for its waste. The new Waste Shipment Regulation sets out stricter rules for exporting waste to non-EU countries. The regulation will also improve traceability and make it easier to ship waste for recycling in the EU and beyond. It will support the circular economy and ensure that waste exported from the EU is treated in an environmentally sustainable way.

Waste exports from the EU to third countries have increased by 72% since 2004, reaching 35 million tonnes per year in 2023. 49% of waste exported from the EU goes to non-OECD countries. Under the new regulation, EU waste can only be exported to non-OECD countries if those countries notify the European Commission that they are willing to import waste and demonstrate that they are able to manage it sustainably. These new requirements will apply from 21 May 2027.

Furthermore, given the global problems related to the increasing amount of plastic waste and the challenges in its treatment, the export of plastic waste to non-OECD countries will be banned from 21 November 2026 for a period of 2.5 years, after which these countries can start accepting plastic waste in compliance with the strict rules of the Regulation.

The EU Commission will also monitor waste exports to OECD countries and take action if these exports cause environmental problems in the country of destination. In addition, all EU companies exporting waste outside the EU will have to ensure that the facilities receiving their waste undergo an independent audit confirming that these facilities manage the waste in an environmentally sound manner.

Producer Responsibility for Textiles

The EU Waste Framework Directive stipulates that EU member states must set up separate collection systems for used textiles from 2025. In this context, the European Environment Agency (EEA) has now published a briefing on the management of used textiles and waste textiles in the European circular economy.

This briefing provides an overview of the current state of textile waste generation, collection systems, treatment capacity and the different classifications for used textiles in Europe. It also identifies factors that need to be considered when implementing separate collection systems to promote the circular economy of textiles without inadvertently increasing exports, incineration or landfilling.

These are the results of the analysis:

• In 2020, an estimated 6.95 million tonnes of textile waste was generated in the EU – about 16 kg per person. Of this, 4.4 kg per person was collected separately for reuse and recycling and 11.6 kg per person ended up in mixed household waste.
• 82% of all textile waste was post-consumer waste. The rest was textile waste from production or unsold textiles.
• More than half of the EU-27 member states already have an obligation to collect textiles separately, although this mostly concerns the collection of reusable textiles.
• If sorting and recycling capacities in Europe are not expanded, there is a risk that significant amounts of collected textile waste will continue to end up in incineration plants, landfills or be exported to regions outside the EU.
• In order to set future objectives and monitor the sector's progress towards a circular economy, there is a need for harmonisation of definitions and mandatory reporting on the quantity and handling of used and waste textiles.

And beyond Brussels

International Energy Agency (IEA) Report “Global Critical Minerals Outlook 2024”

This report provides a supply and demand outlook for key minerals of the energy transition, including copper, lithium, nickel, cobalt, graphite and rare earths. Demand forecasts cover both clean energy applications and other uses and focus on the three IEA scenarios,

1. Stated Policies Scenario (STEPS)
2. Announced Pledges Scenario (APS)
3. Net Zero Emissions by 2050 Scenario (NZE)

The supply forecasts are based on a detailed review of all announced projects and show how today's geographic concentration evolves over time, for both mining and refining, and how expected supply compares to primary supply needs under climate-related scenarios.

The outlook is complemented by structured “clean energy transition risk assessments” across four key dimensions – supply risks, geopolitical risks, ability to respond to supply disruptions, and exposure to ESG and climate risks – to help policymakers identify potential vulnerabilities for each material.

Critical minerals, which are essential to a range of clean energy technologies, have moved up the policy agenda in recent years due to increasing demand, volatile price movements, supply chain bottlenecks and geopolitical concerns. The dynamic nature of the market requires greater transparency and reliable information to enable informed decisions.

The report provides a snapshot of industry developments in 2023 and early 2024 and offers medium and long-term forecasts for demand and supply of key minerals of the energy transition based on the latest technology and policy trends. It also analyses the key risks to the reliability, sustainability and diversity of supply chains for critical minerals and assesses the implications for policy and industry players.

ISO 59004:2024 “ Circular economy - Vocabulary, Principles and Guidance for Implementation ”

ISO 59004 is part of the ISO 59000 family of standards, which are specifically designed to promote the transition to a circular economy. This standard provides comprehensive guidance that is applicable to any type of organization. It includes defining key terms and concepts, outlining a vision for a circular economy, explaining core principles, and providing practical guidance on actionable steps towards sustainability.

The standard aims to help organizations contribute to the United Nations 2030 Agenda for Sustainable Development by facilitating the transition to a circular use of resources.

The linear model of the global economy - characterized by extraction, production, use and disposal - has led to significant environmental problems, including resource depletion, climate change and biodiversity loss. ISO 59004 addresses these problems by advocating for a circular economy model that focuses on the sustainable management and renewal of natural resources.

By adopting this standard, organizations can:

• Deliver more sustainable and ambitious solutions
• Improve relationships with stakeholders
• Fulfill voluntary and statutory obligations more effectively and efficiently
• Contribute to climate change mitigation and adaptation
• Increase resilience to resource scarcity and other environmental, social and economic risks

WWF Report “Bringing Batteries Production to Europe – in a Green and Responsible Way”

Until 2030, the demand for batteries for the transportation sector is expected to continue to grow exponentially both globally and in the European Union (EU). Battery production is based on so-called energy-mobility transition materials (transition materials) such as lithium, nickel, cobalt, manganese and graphite - and demand for these is also expected to increase in the coming years.

In response to these forecast developments, the EU has drafted the Critical Raw Materials Act (CRMA) and the Net-Zero Industry Act (NZIA), which are expected to come into force in early 2024. While the proposals set environmental and sustainability targets, their main objectives relate to industrial strategy and aim to ensure the supply of critical raw materials and domestic manufacturing of net-zero technologies to achieve the green and digital transformation – and thus remain competitive in a decarbonised global economy.

This analysis was carried out to examine the environmental and climate impacts of achieving the benchmarks set by CRMA and NZIA, namely of two elements: first, the target to refine 40% of raw minerals within the EU and second, increasing battery production in Europe. In addition to supporting strategic autonomy objectives, relocating parts of the battery supply chain offers the EU the opportunity to control production parameters - including social and environmental ones - within its borders and to apply its ambitious environmental and climate policies to set the highest global standards for sustainable battery production.

Overview of relevant Events

• 4 June: European Commission Textiles Ecosystem Stakeholder Event
• 5 June: BatteryPass Seminar “The Value of the EU Battery Passport”
• 11-13 June: European Commission European Sustainable Energy Week