EU Council Enacts Legislation Pausing Obligations for Batteries Compliance Standards

EU Council Enacts Legislation Pausing Obligations for Batteries Compliance Standards

EU Council Delays Battery Due Diligence Obligations by Two Years

The European Union (EU) Council has adopted a new law that delays the application of due diligence obligations for batteries by two years. This move is part of the 'Omnibus IV' package, a legislative simplification and modernization effort aimed at reducing regulatory burdens, improving clarity, and accelerating digital transformation across various EU product regulations.

The Omnibus IV package, which is yet to be published in the EU's Official Journal and enter into force, includes significant changes to the due diligence rules for batteries. The key purpose of this package is to simplify and delay the implementation of these rules, while maintaining the core sustainability and human rights objectives.

The new law delays the enforcement date of the due diligence obligations under the Sustainable Batteries Regulation 2023 from 18 August 2025 to 18 August 2027. This means that battery producers will have an additional two years to comply with the new environmental due diligence rules. The related due diligence guidelines publication was also postponed by one year, now expected by 26 July 2026.

The due diligence policy required under the Batteries Regulation covers specific raw materials used in batteries, such as cobalt, natural graphite, lithium, nickel, and their chemical compounds. It addresses social and environmental risks in the battery supply chain and is to be verified by an independent third-party notified body.

Under the current rules, small and medium-sized enterprises (SMEs) are exempt from these due diligence obligations. Omnibus IV proposes creating a new company category called "small mid-cap companies (SMCs)", generally defined as companies with net turnover under €150 million, which would also be excluded from due diligence requirements. This change aims to ease compliance burdens for these growing businesses.

The package also suggests changing the frequency of policy review and reporting for companies subject to due diligence from annual to once every three years.

Overall, the due diligence is designed as a proactive, ongoing process requiring companies to identify, mitigate, and report on risks in their battery raw material supply chains, promoting sustainable and responsible sourcing.

This move by the EU Council is part of broader efforts to harmonize and streamline EU sustainability regulations and facilitate compliance across different company sizes. The Budapest declaration of November 2024 called for a simplification revolution, aiming for a clear, simple, and smart regulatory framework for businesses, particularly SMEs.

It is important to note that the new law does not repeat the obligation for battery producers to put in place due diligence policies, have them verified, and periodically audited by a third-party verification body. The postponement will also offer more time for the setting up of these third-party verification bodies.

In conclusion, the Omnibus IV package’s purpose regarding batteries is to simplify and delay the implementation of due diligence rules, introduce exemptions for a new category of mid-sized companies, and support digital and administrative efficiency while maintaining the core sustainability and human rights objectives of the Sustainable Batteries Regulation.

Science and technology will play crucial roles in the implementation and verification of the due diligence policies for batteries under the Omnibus IV package. The need for independent third-party verification bodies is expected to stimulate advancements in environmental science, particularly in the area of assessing and mitigating social and environmental risks in battery supply chains, fostering sustainable and responsible sourcing.

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