EU Battery Due Diligence Guidelines: Are Carmakers Prepared?

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A brand new briefing assesses carmakers’ implementation of the EU Batteries Regulation due diligence obligations.

Because the world continues to shift to renewable vitality methods and electrical autos, that are key to reaching local weather neutrality by 2050, guaranteeing sustainable and accountable battery provide chains is important.

The EU Batteries Regulation due diligence guidelines, if applied appropriately, can be a turning level for inexperienced and moral batteries. Below these guidelines, firms might want to establish, mitigate and account for human rights, environmental and local weather change impacts in lithium, nickel, cobalt and graphite provide chains of batteries discovered on the EU market. With the foundations because of enter into power in August, and at a time of elevated pushback in opposition to sustainability necessities, now could be the time to maintain ambition excessive, and never decrease the bar.

This briefing takes a have a look at carmakers’ implementation of the EU Batteries Regulation due diligence guidelines thus far, showcasing finest apply examples and areas for enchancment. The evaluation, while not exhaustive, depends on publicly accessible information and builds on T&E’s Pedal to the Metallic research and Lead the Cost’s Leaderboard outcomes. It finds that:

• Total, progress is being made. OEMs have began rolling out provide chain insurance policies and transparency measures, making ready to satisfy the due diligence necessities. For instance, while not all automakers are assessing all the mandatory dangers, the bulk have some type of danger evaluation in place. The important thing now can be to make sure that all dangers are being assessed all through complete provide chains to ensure that a complete danger mitigation to happen.

• When taking a look at how particular person environmental dangers are mitigated, there has additionally been some progress throughout totally different actions. There was important progress in disclosing greenhouse fuel emissions, with the vast majority of carmakers disclosing whole scope 3 GHG emissions.

• Headway has additionally been made in implementing traceability methods. While not all carmakers are tracing their battery minerals all the way in which again to the mine, a majority have some type of system in place.

• However, gaps stay. While carmakers have normal insurance policies on deforestation of their provide chains, just one has a concrete, time-bound dedication. As well as, while carmakers typically disclose their very own water utilization, they don’t disclose water utilization by suppliers. Progress in these areas would help danger mitigation.

• Lastly, European automakers are rather more superior of their preparedness in comparison with Chinese language OEMs, with European firms corresponding to BMW and Mercedes, main throughout quite a few due diligence necessities, corresponding to danger identification and evaluation and provide chain traceability.

It’s due to this fact extra essential than ever for the European Fee to get implementation proper. T&E calls on the European Fee to:

• Maintain the first textual content of the battery regulation due diligence provisions and chorus from any weakening of the obligations, specializing in pure reporting simplification.
• Finalise the rules for implementation of the due diligence necessities, in line with finest apply and in keeping with current worldwide requirements, earlier than entry into power of the foundations, while guaranteeing notified our bodies throughout all Member States are in place to confirm compliance.
• If delaying the foundations is unavoidable, it ought to be a delay of not more than 1 12 months.

Set up strong and focused standards for recognising due diligence schemes, as foreseen below the Regulation. The factors should guarantee schemes can solely be recognised in the event that they reveal full alignment with the regulation.

Obtain full briefing.

Article first revealed on T&E web site.