Due Dili­gence and Bat­tery Regulation

The Bat­tery Regu­la­ti­on lays down spe­ci­fic due dili­gence requi­re­ments for eco­no­mic operators

The Euro­pean Uni­on is pushing ahead with the imple­men­ta­ti­on of the Green Deal. The num­ber of regu­la­ti­ons desi­gned to ensu­re the sus­taina­bi­li­ty of pro­ducts and sup­p­ly chains is ste­adi­ly incre­asing. Gene­ral due dili­gence requi­re­ments for the pro­tec­tion of human and envi­ron­men­tal rights are reflec­ted in the EU Cor­po­ra­te Sus­taina­bi­li­ty Report­ing Direc­ti­ve (CSRD) and the Cor­po­ra­te Sus­taina­bi­li­ty Due Dili­gence Direc­ti­ve (CSDDD), which is curr­ent­ly pen­ding as a Euro­pean Par­lia­ment reso­lu­ti­on. Simul­ta­neous­ly, indi­vi­du­al mem­ber sta­tes are deve­lo­ping natio­nal legis­la­ti­on or have alre­a­dy done so, such as the Sup­p­ly Chain Due Dili­gence Act (LkSG) in Germany.

Howe­ver, also product-specific legal acts con­tain regu­la­ti­ons that impo­se obli­ga­ti­ons on the eco­no­mic actors con­cer­ned. Alre­a­dy under the EUDR and the EUTR, eco­no­mic ope­ra­tors are obli­ged to com­ply with spe­cial sector-specific stan­dards when asses­sing and mini­mi­sing risks within their sup­p­ly chains. Regu­la­ti­on (EU) 2023/1542 con­cer­ning bat­te­ries and was­te bat­te­ries (Bat­tery Regu­la­ti­on) , which ente­red into force on 12/07/2023 and will be gra­du­al­ly appli­ed from 18/02/2024, also con­ta­ins spe­ci­fic obli­ga­ti­ons that are at the inter­face bet­ween the pro­vi­si­ons of the EU Con­flict Mine­rals Regu­la­ti­on and the gene­ral regu­la­ti­ons of the LkSG and the CSRD.

Who is addres­sed by the due dili­gence requi­re­ments of the Bat­tery Regulation?

The addi­tio­nal requi­re­ments for cor­po­ra­te due dili­gence (Art. 47 et seq. Bat­tery Regu­la­ti­on) app­ly to eco­no­mic ope­ra­tors within the mea­ning of the Bat­tery Regu­la­ti­on (Art. 3 No. 22 Bat­tery Regu­la­ti­on) who eit­her them­sel­ves or throug­hout the group gene­ra­ted a net tur­no­ver of more than 40 mil­li­on euros in the penul­ti­ma­te busi­ness year. Eco­no­mic ope­ra­tors who reu­se or repur­po­se bat­te­ries alre­a­dy pla­ced on the mar­ket or put into ser­vice in the Euro­pean Uni­on (so-called second-life bat­te­ries) are excluded.

Due dili­gence requi­re­ments under the Bat­tery Regulation

The due dili­gence obli­ga­ti­ons under the Bat­tery Regu­la­ti­on are inten­ded to help iden­ti­fy, pre­vent and address actu­al and poten­ti­al social and envi­ron­men­tal risks asso­cia­ted with the sourcing, pro­ces­sing and tra­ding of raw mate­ri­als and secon­da­ry raw mate­ri­als requi­red for bat­tery pro­duc­tion, inclu­ding through sup­pli­ers in the chain and their sub­or­di­na­te com­pa­nies or enti­ties or contractors.

In par­ti­cu­lar, eco­no­mic ope­ra­tors addres­sed by the due dili­gence obli­ga­ti­ons of the Bat­tery Regu­la­ti­on are requi­red to deve­lop, estab­lish and main­tain a risk manage­ment sys­tem (Art. 49 Bat­tery Regulation).

As alre­a­dy pro­vi­ded for in the CSRD, affec­ted com­pa­nies must have the stra­te­gies deve­lo­ped to ful­fil the due dili­gence obli­ga­ti­ons as well as their imple­men­ta­ti­on review­ed by an inde­pen­dent noti­fied body (Art. 48 (2) Bat­tery Regu­la­ti­on). Such a requi­re­ment is not yet pro­vi­ded for in the LkSG.

In addi­ti­on, the com­pa­nies con­cer­ned are sub­ject to exten­si­ve infor­ma­ti­on obli­ga­ti­ons, for exam­p­le vis-à-vis purcha­sers (Art. 52 (2) Bat­tery Regu­la­ti­on) and the down­stream sup­p­ly chain as well as the public (inter alia Art. 49 (1) (a) Bat­tery Regulation).

What is new is that sys­te­mic ful­film­ent of due dili­gence obli­ga­ti­ons by way of sche­me deve­lo­p­ment is expli­cit­ly pro­vi­ded for (Art. 53 Bat­tery Regu­la­ti­on). The Com­mis­si­on can accre­dit govern­ments, indus­try asso­cia­ti­ons or orga­ni­sa­ti­ons as so-called “sche­me owners” if they have deve­lo­ped and over­see a sche­me that ensu­res the ful­film­ent of due dili­gence obli­ga­ti­ons in accordance with the Com­mis­si­on’s requi­re­ments. Such sche­mes are thus reco­g­nis­ed as equi­va­lent with the due dili­gence stan­dards under the Bat­tery Regulation.

Howe­ver, important ques­ti­ons remain unans­we­red and pose new chal­lenges for eco­no­mic ope­ra­tors. How do the due dili­gence requi­re­ments of the Bat­tery Regu­la­ti­on fit into natio­nal regu­la­to­ry land­scapes that have to be enac­ted on the basis of EU direc­ti­ves? Who is respon­si­ble for moni­to­ring the imple­men­ta­ti­on of due dili­gence obli­ga­ti­ons under the Bat­tery Regu­la­ti­on, espe­ci­al­ly in the light of sche­me owner solutions?


Once again, the oppor­tu­ni­ty to increase human rights and envi­ron­men­tal pro­tec­tion through coher­ent legal regu­la­ti­ons and obli­ga­ti­ons has been missed. Ins­tead, eco­no­mic actors face the next chal­lenges during the imple­men­ta­ti­on of the CSRD and the LkSG.


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