The Latest Battery Regulations Have A Global Impact, Here's What You Need To Know

There are many new and upcoming regulations in the battery industry for both the U.S. and EU. Now’s the time for battery makers to start making changes in order to keep up with compliance. The latest regulations can be broken down into several categories including carbon footprint, responsible sourcing, circularity, safety, and digital reporting.  While the EU regulations differ from those in the United States, manufacturers should prepare to be subject to both. This will keep an open door to selling and manufacturing EV batteries globally.

EU Regulations

The EU regulations, initially proposed several years ago, aim to ensure that all batteries in the EU market are more sustainable, circular, and safe from beginning of life to end of life.  For EV batteries, the requirements focus on manufacturers and responsible sourcing of components used to make them.  Here’s a quick guide for the EU’s Green Deal that began last month.

• Starting this year, batteries with specific cadmium and lead content must now be marked separately and have separate collection.  These rules are based on battery capacity.
• In 2024, battery manufacturers must comply with the supply chain due diligence on social and environmental risk.  They must also follow new rules on collection disposal.  There is also a battery carbon footprint declaration which requires third party validation of the data.
• 2025 begins the recycling efficiency program which requires that batteries must be made with at least 65% of recyclable materials.
• Batteries with a carbon footprint will require a battery passport in 2026. This means batteries with a capacity higher than 2 kWh will have an electronic record including a unique identifier and information about the battery’s characteristics. There will also be a battery classification with respect to carbon footprint and performance classes.
• January 1, 2027, unveils the carbon footprint maximum threshold policies based on calculation methodologies that are currently in development. It also begins full labeling for each connected battery with a QR code and product information, including materials.
• Finally, in 2030, material recovery rates will be increased, and recycling efficiency will be mandated at a rate of 65-70%.  Levels of recycled content increase as well.

U.S. Regulations

Currently in the U.S. many battery regulations vary from state to state. For example, only 20 states have EV battery recycling requirements and there are only 8 states where manufacturers are required to offer or fund battery recycling (call2recycle.org). Despite these variances, all states will be impacted by several federal battery regulations and initiatives that were announced and instated last year:

• In December of 2022 the EPA released a final revised risk determination, amending the December 2020 risk evaluation for n-methylpyrrolidone (NMP), the main solvent used for battery manufacturing. In this revision the EPA “finds that NMP as a whole chemical substance, presents an unreasonable risk of injury to health under its conditions of use.” The EPA also announced that it will propose a rule to regulate NMP to prevent this unreasonable risk. Such restrictive measures regarding NMP were already taken in the EU in 2020 when NMP was added to the REACH restricted substance list.
• The Inflation Reduction Act, or IRA, requires that EV manufacturers source a minimum of 40% of their critical battery materials domestically or with free trade partners by January 2024. The IRA is also providing incentives through tax credits for U.S. battery production.
• The Biden-Harris Administration in conjunction with the Department of Energy announced a $2.8 billion award designed to boost domestic manufacturing while launching the “American Battery Materials Initiative.”  This program focuses on manufacturing across 12 key states and was designed to protect our environment while ensuring a “reliable and sustainable” supply of critical minerals for EVs.  There is also an additional $135 billion investment in EV products from cars to batteries. 
• Under the Strategic EV Management Act, changes were made to the reuse and recycling of end-of-life EV batteries in federal fleets. “The bill calls for federal agencies such as the General Services Administration and the Office of Management and Budget to collaborate with the U.S. EPA, manufacturers and recyclers to create a strategic plan for reusing and recycling EV batteries.” It also calls for “guidelines for disposing electric vehicle batteries that cannot be reused or recycled.”

While most of the new U.S. regulations are designed to enhance domestic EV battery and vehicle production, they share a similar goal of sustainability with the EU guidelines. Additionally, the EPA’s announcement echoes existing policies in the EU, which placed NMP on the REACH restricted substance list in 2020. Substances added to this list are reviewed by the European Chemical Agency (ECHA) and are determined to have an unacceptable risk to human health or the environment.

One major way battery makers can address these safety and sustainability policies is by reducing their NMP use. NMP is not only a safety concern, it also makes the drying stage of electrode coating energy intensive. This is because NMP is difficult to dry due to its low vapor pressure and high boiling point. Neocarbonix at the Core technology replaces NMP with water-based solvents and is estimated to reduce energy consumption by 25%. That’s roughly 500MM Tonnes CO2 per year per gigafactory. By designing with Neocarbonix, battery makers can instantly comply with NMP restrictions and prepare for upcoming CO2 thresholds.

Although some of these regulatory controls are not instated yet, manufacturers must take them seriously.  Careful planning, changes in the acquisition of production materials, and access to those materials will all become more difficult if battery makers do not begin making changes now. Overall, staying ahead of environmental regulations is in the best interest of manufacturers and the planet.