A comprehensive analysis on EU batteries regulation: lifecycle decarbonization, business challenge and compliance risk

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Gong, and 6 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-3864708/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract The REGULATION (EU) 2023/1542 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 July 2023 (short as “EU Batteries Regulation”) presents both a challenge and an opportunity for battery manufacturers and operators as they must not only navigate market competition and changes but also comply with new regulatory requirements. However, this also presents an opportunity to stimulate the growth of the battery industry and foster the sustainable development of the electric vehicle sector. This paper is one of the first attempts to develop a life cycle–based analytical metric that provides a comprehensive examination of the change of policy & regulation boundary of the newly implemented regulation, and the associated impacts on environment (in term of life-cycle phase-based carbon footprints), business (both opportunities and risks), and compliance practice. This metric is created based on a comparison of the new EU battery regulation with previous ones. Utilizing this metric, we employed firsthand data from two major battery manufacturers to illustrate the aforementioned points. Finally, we provided policy recommendations and discussions on the impact of this battery regulation on both EU and emerging economies, to offer insights for the future. Earth and environmental sciences/Environmental social sciences/Sustainability Earth and environmental sciences/Environmental social sciences/Energy and society EU Batteries Regulation Life cycle-based policy analysis Carbon footprint Compliance analysis NMC LFP Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Introduction The Communication on the European Green Deal, commissioned on December 11, 2019, serves as Europe's growth strategy. Its objective is to transform European Union (EU) into a fair and prosperous society, boasting a modern, resource-efficient, and competitive economy. The goal is to achieve net zero greenhouse gas emissions by 2050 and to decouple economic growth from resource use. One of the key prerequisites to achieving climate neutrality by 2050 is a shift from fossil fuels to electromobility in vehicles. To ensure that EU's product policies contribute to global carbon emission reduction, it is crucial that products marketed and sold within the EU are sourced and manufactured sustainably. Batteries are therefore critical to support the promotion of electrical vehicles under the carbon neutrality strategy, and has been in surging demand in recent years. This makes the battery market increasingly strategic on a global scale. To ensure legal certainty for all involved operators and to prevent discrimination, trade barriers, and market distortions, also in order to minimize the environmental impacts of the batteries manufacturing and recycling, a harmonized regulatory framework is necessary. This framework should address the entire life cycle of batteries that are introduced to the market within EU 1 . Under this circumstance, EU had launched “The REGULATION (EU) 2023/1542 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 July 2023 (short as “EU Batteries Regulation”), which presents a unique mix of challenges and opportunities for battery manufacturers and operators. Based on “carbon footprint requirements,” the new regulations stipulate that electric vehicle batteries, rechargeable industrial batteries with a capacity greater than 2kWh and light means of transport batteries must meet specific carbon footprint (CF) requirements and undergo third-party verification. This requirement intensifies the pressure on battery manufacturers to reduce the carbon footprint of their products, thus posing a challenge on the battery’ manufacturers in terms of the compliance cost. In terms of “recovery rate requirements,” the EU regulations have set high recovery efficiency targets for batteries. For example, lithium-based batteries demand a 65% recycling efficiency by average weight of no later than 31 December 2025 and 70% no later than 31 December 2030. This necessitates battery manufacturers and operators to enhance their recovery technologies, which is another challenge. The legislation also includes battery passport and safety requirements, necessitating manufacturers and operators to ensure safe management throughout the battery’s lifecycle and guarantee its safe usage. This is a challenge as it demands manufacturers to ensure the safety and reliability of their batteries. These new regulatory requirements will inevitably push battery manufacturers to continuously update and upgrade their technologies and equipment, requiring substantial investment and technical support, especially for small- and medium-sized enterprises. Lastly, the implementation of the new regulations could alter “market competition” dynamics. Some small- and medium-sized enterprises may exit the market due to their inability to meet the new regulatory requirements, while larger companies might leverage their technological and scale advantages to maintain market share, intensifying market competition and posing a challenge for smaller enterprises. Consequently, while the EU batteries regulation pose challenges for battery manufacturers and operators in terms of meeting new regulatory requirements and dealing with market competition and changes, they also offer opportunities. These regulations can stimulate the evolution and growth of the battery industry and advance the sustainable development of the electric vehicle sector. Targeting to re-regulate the carbon footprint and to avoid carbon leakage, one critical change of this new regulation is the expansion of the regulatory boundaries of the life cycle phases for battery manufacturers. Therefore, in order to address the challenges and opportunities mentioned above, it is essential to incorporate them into a life cycle–based analytical framework. However, to the best of our knowledge, limited literature on this topic has been reported thus far. This paper represents one of the initial efforts to develop a life cycle–based analytical framework. It will analyze four metrics: policy changes, the carbon footprint and its variations across life cycle phases, business opportunities and risks, and compliance challenges associated with regulatory boundary changes in life cycles under the new legislation. These metrics will provide a comprehensive assessment of the impacts of the newly implemented regulation. Additionally, two comparative case studies will be conducted using firsthand data from two major Chinese battery manufacturers to illustrate the aforementioned metrics. Results and Discussion Qualitative policies analysis and discussion Policies and changes in policies Based on the established analytical framework, Figure 5 presented the change of policies regarding to the batteries regulation in life cycle phases. Directive 91/157/EEC was regarded as the first regulation on battery with focus on the recovery and disposal of batteries with toxic materials, for example, the regulation on mercury content of alkaline manganese batteries. It was argued for the limited regulation in terms of life cycle coverage and targeted measures. As an improvement, in 2006, Directive 2006/66/EC was launched with broader regulations for batteries 42 . It was regarded as progressive to introduce requirements on minimum collection rates and recycling efficiency. However, circular economy related requirements and measures were still insufficient. To further enhance the life cycle environmental performance of batteries, EU had launched the Directive 2006/66/EC 75 . It has established a set of common rules and obligations for operators, particularly through the harmonization of rules for heavy metal content and battery labelling. Additionally, it has set rules and targets for the management of all waste batteries, based on the principle of extended producer responsibility. However, harmonized product and marketing requirements, conformity assessment procedures, and EOL stage regulations are necessary to address environmental implications, promote battery recycling markets, and ensure consistency across the Union. Directive 2006/66/EC should be replaced by a regulation that drive the achievement of these objectives without hindering trade or distorting competition 1 . In December 2020, the EU Commission proposed a new regulation on batteries aimed at fostering a competitive and sustainable European battery industry. This proposal expands upon the 2006 version by broadening the scope and introducing new requirements. The legislation transitions from a directive to a regulation and explicitly incorporates lithium-ion and traction batteries. It also introduces circular economy measures such as mandatory recycled content, material-specific recycling efficiencies, specifications on second battery life, and the battery passport as a digital product passport. As seen in figure 5, the management boundary covers the whole life cycle stage of the battery from "cradle" to "cradle". Consultations and negotiations based on this proposal have been ongoing since 2020, with a provisional agreement between the European Council and Parliament being reached in December 2022 42 . In the EU battery regulation, three specific requirements are established for EV batteries. Firstly, a carbon footprint declaration is mandatory for each battery model produced at every manufacturing plant. Secondly, there must be a visibly displayed label indicating the carbon footprint and performance class of the battery model. Lastly, the life cycle carbon footprint value for each battery model at every manufacturing plant must not exceed the maximum threshold specified in the delegated act. Life-cycle-phase–based GHG emissions Based on the life cycle analysis framework, qualitatively discuss the potential change of carbon footprint under the regulation boundary change. The EU batteries regulation released in 2023 introduce significant changes to the approach toward GHG emissions across the life cycle stages of batteries. For the Production Phase, the regulations impose carbon footprint requirements on batteries. This means that manufacturers need to limit the GHG emissions produced during the manufacturing process of their batteries. For the Use Phase, the regulations promote the use of energy-efficient batteries, which could reduce GHG emissions during this phase. The “battery passport” requirement, which provides information about a battery’s environmental impact, could also encourage consumers to choose batteries with lower GHG emissions. For the EOL Phase, the regulations increase the recovery rate requirements for EV batteries, demanding a 50% recovery rate by 2026 and 73% by 2030. This could promote recycling and the reduction of GHG emissions associated with the disposal of batteries. By imposing stricter GHG emissions standards across the life cycle of batteries, the regulations could drive a significant reduction in the carbon footprint of the battery industry and could contribute to the EU’s broader goal of achieving carbon neutrality by 2050. However, it’s important to note that meeting these new standards could require significant investment in new technologies and processes. Manufacturers and operators will need to balance the need to reduce GHG emissions with the economic viability of their operations. Business opportunities and risks Based on the life cycle analysis framework, qualitatively discuss the potential change of business opportunities under the regulation boundary change. The EU batteries regulation released in 2023 bring about a variety of business opportunities and risks for those in the battery industry. Business opportunities include the following: (a) Innovation and technological advancement: The new regulations will drive innovation and technological advancement in the battery industry. Companies that can develop and implement cutting-edge technologies to meet the new requirements will have a competitive advantage. (b) Market expansion: As the regulations promote the use of batteries with lower carbon footprints, the demand for such batteries will increase, leading to potential market expansion. (c) Green economy: The regulations align with the global shift toward a green economy. Companies that can meet these requirements will be well-positioned to benefit from this trend. (d) Recovery and recycling: The increased recovery rate requirements will create opportunities for companies specializing in battery recovery and recycling. Business risks are highlighted for the following: (a) Increased costs: Complying with the new regulations could increase operational costs. These could stem from the need to invest in new technologies, third-party verification processes, and safety management systems. (b) Market competition: The regulations could intensify market competition. Larger companies with more resources might be better equipped to comply with the new rules, potentially edging out smaller competitors. (c) Regulatory compliance: There’s a risk of non-compliance with the new regulations, which could result in penalties or loss of market access. And (d) Technological obsolescence: Companies that cannot keep up with the pace of technological advancement required by the new regulations may find their products or services becoming obsolete. Therefore, while the new EU batteries regulation present significant opportunities, they also come with potential risks that companies must carefully manage. Compliance analysis in life cycle phases With an extensive scope, the EU Batteries Regulation is likely to generate a widespread impact on the global battery industry and international trade, covering not only finished products but also the entire battery life cycle and the overall supply chain network. Therefore, the EU’s aim to improve the environmental performance of batteries and the activities of all operators involved in the entire life cycle of batteries, such as producers, distributors, end users, and those directly involved in the treatment and recycling of waste batteries should be assessed with the Union’s commitments under the WTO. As a rules-based multilateral trading system, the WTO sets a wide range of disciplines in designing and implementing trade-related measures that its members should comply with. Fundamental trade obligations such as national treatment, most favored nation, and not imposing technical barriers that are more trade restrictive than necessary to fulfill a legitimate objective become relevant when members exercise their right to regulate that can potentially negatively affect international trade flows. It is worth noting that several countries, including China, Russia, and India, have already raised specific trade concerns to the WTO Committee overseeing the implementation of the Technical Barriers to Trade Agreement 41 . Their shared concerns include the possible lack of equity and science in assessing the life-cycle carbon footprint of batteries in the absence of internationally unified criteria and the likelihood of non-EU operators being subject to different data submission and calculation standards than the EU ones 41 . Evidently, a series of carbon footprint requirements mandated by the regulation will place new compliance burdens on both European and non-European manufacturers, producers, importers, and distributors of all types of batteries as long as they wish to place their products within the EU market. Nevertheless, the compliance cost that domestic and foreign producers have to bear can be different due to various reasons, some of which might be attributed to the regulator’s intention to disadvantage foreign competitors or omit the proper accounting for the costs on foreign producers in setting the level of regulation. The sheer number of WTO disputes challenging members’ regulatory measures reflects the controversy of attaining appropriate levels of regulation that are also consistent with international trade law. Therefore, it is essential that the EU’s increasing assertiveness and ambition in regulating batteries be reconcilable with its commitments under the WTO to minimize trade conflicts with its trading partners. For instance, the implementation of the life cycle carbon footprint requirements of the regulation should not place compliance costs on foreign producers beyond what is necessary to achieve a given level of regulation 76 . It presents a challenge and an opportunity for the EU to serve as a responsible and fair standard-setter in technologies that are key to decarbonization. Case study Background information of the case study In this study, two types of batteries are considered, lithium iron phosphate (LFP) battery and lithium nickel-cobalt-manganate (NMC) battery, which are the most popular battery technology and have been widely used in the Chinese EV battery market. The target battery models are chosen by considering the high technology and time representative. The NMC battery is the NMC 622 battery, named “magazine battery”, the industry’s leading model in terms of safety, and could realize the whole package of NMC battery without fire. The LFP battery is a so-called “blade battery,” which arranges individual cells into an array and inserts them into a battery pack like a “blade.” LFP battery also uses CTP (“cell to pack”) to skip the standardized modules and directly integrate the cell into the battery pack, effectively improving the space utilization and energy density of the battery pack. Both batteries are equipped with battery-electric sports utility vehicles (SUVs), with the energy efficiency of 14.6 kWh/100 km for the LFP-battery-equipped SUV and 22.1 kWh/100 km for the NMC622-battery-equipped SUV. The system boundary for the two batteries is presented in Figure 6. Analysis According to the carbon footprint accounting methodology, we calculated the carbon footprints of the two case batteries under various life cycle phases and compared the value under the regulation change of the battery regulations. The key findings of the CFB results are as follows and is illustrated in Fig. 7 . Firstly, the different life stages covered by the EU batteries regulation become more and more complete and comprehensive. The Battery Directive 91/157/EEC only covers two life cycle stages: the raw material acquisition and collection stages. Moving forward, the Battery Directive 2006/66/EC also considers the second-life and recycling stages but do not include the material processing, battery manufacturing, and use stages. Therefore, it is partially a “cradle to grave” life cycle framework. The Battery Regulation (EU) 2023/1542 is a kind of “cradle to cradle” life cycle framework because it covers all the life cycle stages, from the raw material acquisition, material processing, battery manufacturing, use to the collection, second-life, and recycling stages. It is worth noting that the carbon emissions from the second-life stages, including the repurposed, remanufactured, and the other reuse scenarios are zero, because it has not been calculated in the CFB-EV. Secondly, the absolute CFB results have been changing due to the updates on the battery regulation. The CFB for the NMC battery and LFP battery is 165.2 gCO 2 e/kWh and 163.7 gCO 2 e/kWh for the Battery Directive 91/157/EEC, respectively. The LFP battery has slightly lower CF than the NMC battery. Because the cell to pack (CTP) design helps to improve the material efficiency for the LFP battery. About the Battery Directive 2006/66/EC, the CFB for the NMC and LFP battery is 117.1 gCO 2 e/kWh and 129.7 gCO 2 e/kWh, respectively. This indicates that battery recycling has positive carbon reduction effects according to the Circular Footprint Formula (CFF). In addition, the reduction creates more benefits for the NMC battery than the LFP because of the recycling of NiSO 4 and CoSO 4 . Regarding the Battery Regulation (EU) 2023/1542, the CFB of the NMC battery and LFP battery is 180.8 gCO 2 e/kWh and 222.3 gCO 2 e/kWh, respectively. Considering the “cradle to cradle” stages, the NMC battery has lower CF than the LFP battery. Last but not least, on the proportion of CFB, even though the number of life stages covered by the updating of the battery regulation are increasing, the carbon emissions proportions of the two types of batteries went through the process of initially decreasing and then increasing. In comparison to that with the Battery Directive 91/157/EEC, the proportion of CFB decreases nearly 30% for the Battery Directive 2006/66/EC. This is due to the inclusion of the carbon emission benefit of the recycling stages, which results in the reduction of the total absolute CFB results. With the continuous improvement of regulations and the coverage of multiple life cycle stages, the proportion of CFB becomes 100% for the Battery Regulation (EU) 2023/1542. Discussion Based on the quantified CFP, we hereby addressed the following critical issues: a) The influence of policy changes on CFP Firstly, a total energy-based functional unit seams unreasonable. The setting of the functional unit means that the carbon footprint of the battery is calculated by dividing the life cycle carbon emissions from the battery pack (as the numerator) by the total energy provided by the battery over its service life (as the denominator). For batteries with the same life cycle carbon emissions, the higher the total energy, the smaller the carbon footprint result. Because the default service life for the passenger EVs is set as 160,000 km, so for the same numerator, the higher the electricity consumption of the EVs, the lower the calculated carbon footprint results will be, which is contrary to the concept of low carbon consumption. This means that the use-stage carbon emissions are not included in the numerator, but the use-stage energy consumption is included in the denominator. In addition, for the LFP battery, their carbon emissions over the life cycle of the battery pack are lower compared to the NMC battery. However, due to the lower total energy of LFP, the total energy provided during its lifespan is lower. Consequently, when allocating the carbon emissions per kilowatt hour, LFP battery ends up with higher emissions than NMC, making NMC more carbon-friendly. Therefore, choosing total energy as the functional unit for batteries favors NMC batteries while being unfriendly to LFP battery. This also reflects the EU’s need for the other countries to export more NMC batteries, indirectly importing key mineral resources such as nickel, cobalt, and lithium, thereby strengthening the EU’s guaranteed supply of critical resources. To use the same calculation scope for both the numerator and denominator, we suggest that if the energy capacity of the battery should be chosen as the denominator, the conclusion would be more reasonable. Finally, the recycling model is incomplete. The CFF method applied in the CFB-EV only reflects the emission reduction benefits of recycling without considering the carbon emission reduction benefits of cascade utilization and other recycling methods. This makes it difficult to calculate the emission reduction benefits of recycling for batteries like LFP that do not use nickel and cobalt metals. Furthermore, the Carbon Footprint of Electric Vehicle Batteries (CFB-EV) calculation of the emission reduction benefits of recycling is incomplete, as it only reflects the indirect recycling of nickel salts and cobalt salts through pyrometallurgical and hydrometallurgical processes. It does not account for the recycling of lithium, which is only landfilled. This level of recycling technology does not align with the actual situation in China and highlights the EU’s lagging recycling technology against China’s actual situation. Currently, China is already capable of directly recycling recycled resources, while the EU plans to achieve this after 2030 (EU Battery 2030+ Roadmap) 77 . b) Business opportunities and risks The Battery Regulation (EU) 2023/1542 presents the ability to regulate more carbon footprint in the supply chain while also generating both opportunities and risks for businesses. In term of opportunities, the regulation aims to promote the production and use of sustainable batteries in various sectors, such as EVs, energy storage, and consumer electronics. This could create a significant market opportunity for companies involved in battery recycling and related technologies. The regulation also encourages innovation and research in battery technologies, including the development of more efficient, durable, and environmentally friendly battery solutions. Businesses that invest in research and development can gain a competitive edge and capitalize on the growing demand for advanced battery systems. The regulation emphasizes the circular economy by setting requirements for the design, durability, and recyclability of batteries. Companies that embrace circular economy principles and establish robust recycling processes can take advantage of the emerging market for battery recycling services. Finally, adhering to the EU battery regulation standards can enhance the export potential of battery-related products to European markets. Businesses that align their operations with these standards can benefit from improved market access and increased trade opportunities. In terms of business risk, on the other hand, meeting the regulatory requirements, such as certification processes, emissions limits, and information disclosure obligations, may involve substantial costs for businesses. Small- and medium-sized enterprises (SMEs) might particularly face difficulties in adapting to these requirements. The regulation demands transparency and traceability throughout the battery value chain, which could increase complexities for businesses operating across multiple jurisdictions. Ensuring compliance across the supply chain, from raw materials to manufacturing and recycling, may require additional resources and coordination. As the battery industry expands due to the regulation, competition is likely to intensify. Existing players, as well as new entrants, will vie for market share, potentially leading to price pressures and reduced profit margins. Finally, the battery regulation is part of a dynamic regulatory landscape aiming to address environmental concerns. As standards and requirements evolve, businesses will need to ensure ongoing compliance and stay updated with the latest developments to avoid penalties or reputational damage. To address these, the emerging regulatory tools could also help to tackle such issues. For example, ESG (environmental, social, governance) becomes a more popular governmental mechanism to regulate companies’ performance in promoting low-carbon transition and achieving carbon neutrality by letting organizations disclose their sustainable risk and opportunities. Battery enterprises and manufacturers especially the listed companies need to disclose their direct and indirect carbon emissions regarding the production, delivery, selling, use, and recycling of batteries in the ESG report. Other climate-related information about batteries also needs to be reported to gain a high ESG rate, such as energy efficiency. This is because companies could attract more trust and investments from the public or investors as ESG becomes a measurement tool to assess one firm’s potentials. Throughout the information disclosure of ESG three dimensions, companies’ business practices can be environmentally friendly and improved to promote their strategies toward low-carbon development. Currently, ESG disclosure is shifted from voluntary to mandatory under the regulatory impact and policy issuing. This could promote the battery industry and regulations toward low-carbon development as well. c) Compliance analysis in life cycle phases Regulating the life cycle carbon emissions of batteries will incur compliance costs on companies across the entire battery value chain. Whether and how companies can meet the requirements set by the Batteries Regulation determines their competitive positions in the EU market. Given the ambiguities and irrationalities associated with several CFB calculation methodologies as laid out in the previous parts, it remains uncertain how potentially affected companies can comply with such requirements. Conclusion and implications Major conclusions This paper serves as one of the first attempts to develop a life cycle–based analytical metric to comprehensively analyze the policy changes, life cycle phase–based carbon footprint, business opportunities and risks associated with regulatory boundary changes in battery life cycles under this new legislation. Utilizing this metric, we employed firsthand data from two major Chinese battery manufacturers to illustrate the aforementioned points. The quantitative results highlighted that before and after the battery regulation change, the carbon footprint standard for the NMC battery and LFP battery has changed from 165.2 gCO 2 e/kWh and 163.7 gCO 2 e/kWh (under Battery Directive 91/157/EEC) to 117.1 gCO 2 e/kWh and 129.7 gCO 2 e/kWh (under the Battery Directive 2006/66/EC), and finally to 180.8 gCO 2 e/kWh and 222.3 gCO 2 e/kWh (under the Battery Regulation (EU) 2023/1542). On the one hand, the strengthened battery regulation could cover more carbon footprint, resulting in the mitigated carbon leak risk. On the other, concerns on trade-offs for business, compliance, and equity are highlighted. Policy implications For government regulatory authorities, it is recommended to promptly release national accounting methods and standards for battery carbon footprint and promote mutual recognition of international carbon emission methods. In addition, it is suggested to form industry opinions and recommendations on the relevant issues in the EU Battery Law carbon footprint accounting rules, rectify issues related to battery carbon footprint accounting and modeling, and adhere to the principles of fairness and justice to highlight the low-carbon competitive advantage of domestic battery brands. In terms of database construction, it is advisable for China to establish a Chinese life-cycle data platform, timely release carbon emission factors for basic energy sources (such as electricity) and battery-related materials, and promote international recognition of localized data. For the electric vehicle battery producers, it is necessary to plan out a low-carbon development strategy for the next three years. In 2024, carbon footprint accounting capabilities should be established, including mastering carbon footprint accounting methods, building carbon emission databases that include manufacturing facilities and upstream supply chains, establishing management and assessment systems for low-carbon suppliers, applying supply chain carbon emission data collection systems, optimizing supplier geographical locations, improving data quality, and having the accounting results undergo third-party audits. In 2025 and 2026, low-carbon data resources should be comprehensively integrated throughout the industrial chain, striving to achieve the industry’s low-carbon level in battery carbon footprint. By 2027, high-carbon products should be forced to exit the EU market, and manufacturers producing these “high-carbon” batteries need to strategically plan for other international markets without low-carbon barriers. Of course, battery carbon footprint is closely related to requirements such as the proportion of recycled metals used, battery labels and passports, recycling of waste batteries and battery materials, and due-diligence investigation of the supply chain. Bound with the requirements of the EU Battery Law and related policies, enterprises need to systematically consider and respond to these requirements, promote the construction of a greener and lower-carbon-battery industry chain, and actively embrace the trend of sustainable development in the new-energy vehicle industry. Methods A life cycle–based policy analytical framework for EU batteries regulations One scientific nature of the regulatory change in this new battery regulation is to alter the regulatory boundaries of the life cycle stages for batteries, including raw material acquisition, material processing, battery manufacturing, use, collection, second life and recycling (see Fig. 3 ). Therefore, in order to address the challenges and opportunities associated with the change of regulation boundary in life cycle phases, we have developed an analytical framework based on the life cycle phases of battery manufacturing. Figure 3 illustrates the analytical framework. Based on the life cycle phases, we analyze the various metrics for each life cycle phase: (a) policies and changes in policies, (b) life-cycle-phase–based GHGs emissions (carbon footprint under various system boundary), (c) business opportunities and risks, and (d) compliance analysis in life cycle phases. Based on the analytical framework, the policy changes, the carbon footprint and its variations across life cycle phases, business opportunities and risks, and compliance challenges associated with the regulatory boundary changes in life cycles under the new legislation will be investigated. These metrics will provide a comprehensive assessment of the impacts of the newly implemented regulation. With this framework, both qualitative and quantitative analysis with two comparative case studies will be conducted in sections 4 and 5. Methods of life cycle–based carbon footprint accounting For benchmarking, we follow the Carbon Footprint of Electric Vehicle Batteries (CFB-EV), which was developed by the European Commission (EC Recommendations 2279/2021) and the Product Environmental Footprint Categories Rules for Batteries (PEFCR), to account the battery’s carbon footprint. The CFB-EV is designed to develop the methodology for calculating and verifying the carbon footprint of batteries, as stipulated by Article 7 of the EU Battery Regulation. In the accounting, we set the functional unit as 1 kWh (kilowatt-hour) of the total energy provided by the battery over its lifespan, in kWh. The system boundary is depicted in Fig. 4 . This study primarily focuses on the battery electric passenger vehicle (BEV) as the target light-duty vehicle category. The total energy of BEV batteries is accounted by service life (in km)*discharged energy volume from the battery in the value of per unit of distance driven (in kWh/km). The physical weight (in grams) of the of battery per functional unit is set as the quantity of product to satisfy the defined function, as reference flow. Based on these, following the CFB, the system boundaries include all battery life cycle stages, from raw material acquisition, material processing, battery manufacturing, use, to end-of-life (including collection, second life, and recycling processes). In this study, the use stage is treated as the distribution process, which refers to the transport of the battery from the manufacturing site to the final assembly site. For specific processes, such as the manufacturing of equipment, installation of the finished battery, production of packaging materials, and auxiliary inputs to the manufacturing plant, have been excluded from the modeling. The cut-off rule is set as 1% (mass/mass) criterion per system component. The impact assessment has been done for the impact category “Climate change” in line with the Sixth Assessment Report (AR6) of the IPCC2021 71 . Data and software The life cycle inventories for BEV batteries were acquired from the China Automotive Life Cycle Assessment Battery Model (CALCM-Battery) 2023. China Automotive Life Cycle Assessment Model (CALCM) 72 , 7 is the Chinese local life cycle assessment model developed by the China Automotive Technology and Research Center Co., Ltd. (CATARC) that helps automakers calculate the carbon footprints of vehicle products. In 2023, CATARC collects the battery supply chain data, including the material composition and manufacturing process data of BEV batteries from the top two Chinese battery makers, covering more than 90% of BEV batteries sales in China through 2022. Based on these onsite data and based on the EU battery regulation, CATARC developed the Life Cycle Assessment Battery Model (CALCM-Battery) 2023. The background data were primarily based on the China Automotive Life Cycle Database (CALCD) 5 , 73 , 74 , the Chinese local life cycle inventory (LCI) database developed by the CATARC. CALCD is a process-based life cycle database that represents the Chinese automotive industry, including more than 20,000 unit processes, inclusive of the basic ones and product data (metals, minerals, plastics, water, chemicals, fuels, energy production, etc.) as well as life cycle data for automotive parts and vehicles. Review Perspectives from carbon footprint studies on batteries Life Cycle Assessment (LCA) Studies of Batteries and their recycling The environmental impacts of EV batteries are commonly assessed using the LCA methodology, which is widely adopted in related studies, with major focus placed on carbon emissions throughout the entire life cycle of the batteries 2 , 3 , 4 , 5 . It is notable that the existing studies have primarily concentrated on the “cradle to gate” or “cradle to grave” stage of EV batteries, examining their environmental impacts from manufacturing to use and collection stages 2 , 6 , 7 , 8 , 9 , 10 . However, there has been emerging studies conducted on the recycling and secondary utilization stages within the “grave to cradle” stage. Recently, more and more LCA studies have begun to address the larger system boundaries of specific batteries or battery-inclusive products, expanding the depth and breadth of related studies 9 . In terms of the life cycle stages, the manufacturing stage has the most significant environmental impact on the overall life cycle of the batteries 4 , 11 , 12 , 13 . Having combed more than 50 LCA-related papers, Zhao and Aichberger et al. calculated the mean greenhouse gas (GHG) emissions of the battery production stage to be 110 kgCO 2 e/kWh and the median to be 120 kgCO 2 e/kWh 4 , 14 . Studies also highlighted the complicated production processes and the diverse combinations of energy consumption present a significant challenge in accurately determining the battery’s full cycle carbon footprint 8 , 15 , 16 . For in-use stage, operating conditions, design parameters, efficiency, weight, and power carbon intensity were critical factors to minimize the emissions 3 , 17 , 18 , 19 , 20 , 21 , 22 . These results hereby enlightened the importance of green power sources and eco-design to further decarbonize the EVs 11 . Growing studies focused on the end-of-life (EOL) stage of batteries, which is critical future potential to emission mitigation by promoting circular economy strategy 2 , 16 , 23 , 24 . It is widely acknowledged that proper recycling and reuse of used batteries can have a substantial impact on reducing the life-cycle carbon emissions of EVs 13 , 22 , 25 , 26 . The recycling stage plays a crucial role in mitigating resource depletion, minimizing waste generation, and promoting the circularity of battery materials. This process primarily entails the recovery of valuable materials from lithium batteries and their reintegration into the value chain. However, developing a cost-effective and environmentally friendly recycling process remains challenging due to the diverse composition of cathode materials 2 , 25 , 27 , 28 . The step of reusing involves the secondary application of decommissioned batteries in various scenarios such as electricity supply, residential services, and renewable energy 13 , 29 , 30 . Therefore, Hua et al. have advocated the prioritization of batteries with residual value for reuse rather than immediate disposal or recycling 22 . This practice has been shown to effectively mitigate the overall environmental impact associated with batteries. Following the reuse phase, retired batteries with unsatisfactory performance can be recycled to recover valuable materials or appropriately disposed of 22 , 30 . We summarized the data on carbon footprints at different life cycle stages from the existing literature 5 , 11 , 12 , 13 , 26 , 31 , 32 , 33 , 34 , 35 , as shown in Fig. 1 . Perspectives from policy studies Governments have imposed constraints on specific raw materials used in battery production and implemented the concept of extended producer responsibility (EPR) to enforce recycling requirements for manufacturers 23 , 36 , 37 . Particularly, in recent years, geo-political context has imposed complexity to the battery supply chain. Therefore, recent studies in economic geography has shed light on governments’ efforts to explore alternative global or regional supply chains, stimulate corporate innovation, and bolster internal markets 25 , 36 , 37 , 38 , 39 , 40 . These unilateral measures could potentially conflict with the international trading system. For example, Fang scrutinized the EU’s new battery regulations, highlighting possible overly stringent and unnecessary restrictions, along with their risk of contravening the Agreement on Technical Barriers to Trade within the World Trade Organization (WTO) framework 41 . Emerging policy studies also has analyzed The EU’s battery policies focusing on product coverage, lifecycle reflection, and responses to market developments 36 , 42 , 43 . Legal and policy frameworks are crucial for transitioning to a low-carbon economy, especially during battery EOL 25 . In addition, recovering raw materials reduces environmental impact and ensures supply chain security. In regions with limited recycling markets and regulatory frameworks, proactive laws, policies, and standards help companies explore new business models and gain an advantage 6 , 27 , 44 , 45 , 46 . Emerging studies has also explored potential business models for second-life batteries (SOL) in light of new regulations. Malinauskaite et al. called for technological innovation to be incorporated into regulatory frameworks 27 , while Wrålsen et al. identified the importance of national and international regulations and policies in driving circular business models. Eleftheriadis et al. assessed the feasibility of repurposing EV batteries and highlighted key aspects related to it 43 . Some studies have questioned the achievability of recycling targets proposed in the new regulation 36 , uncovered path-dependent characteristics underlying the regulation 47 , and highlighted the role of the circular economy as a unifying factor 42 . In regional context, countries have distinct approaches in developing their battery industries and implementing related policies. For instance, China’s top-down, state-led strategy allows for swift responses to external factors and focuses on long-term economic stimulation and overseas investments to mitigate supply risks. The US, on the other hand, relies primarily on market forces but has recently recognized the significance of key raw materials and strengthened legislation in this area 39 , 40 , 45 . The UK, influenced by neoliberalism, has limited state capacity for industrial development 37 . Globally, countries are actively creating laws and policies for the circular economy 6 , and battery recycling 6 , 16 , 23 , 48 , 49 , 50 . Limited research exists comparing battery policies among countries, with most discussions supplementing technical analyses and focusing on EOL issues 51 . Current literature addresses progress in decarbonizing transportation, but there are challenges from economic, legal, and technical perspectives 40 , 45 . Economic challenges include unclear value in circular economy and regulatory cost allocation 46 , 48 . Legal challenges involve compatibility between different laws 38 . and clarification of battery ownership and EPR 43 . Technical challenges include regulation hindering innovation 45 , inadequate assessment tools 36 , 41 , and immature technology in EOL battery 25 , 27 . We have summarized the literatures about policies studies in a life cycle–based framework, as Fig. 2 illustrated. Policies review on global batteries regulations In EU, a basket of policies and regulations have been launched to support the eco-management of battery. The 2006 EU Battery Directive was the first established comprehensive battery policy in EU. In line with the EU Green Deal as well as its Strategic Action Plan for batteries, the batteries regulation has been reformed through the EU Battery Regulation and the EU taxonomy. “The EU Battery Regulation” 52 is set to require manufacturers to simplify battery’s disassembly processes and ensure batteries are removable and replaceable. Material-specific recycling targets and minimum requirements for recycled content in batteries is required as well, for encouraging the circularity of valuable materials. The EU taxonomy 53 sets economic incentives to reduce the costs of processes by promoting the eco-design for recycling. In addition, EU also launched the regulation on “Circularity requirements for vehicle design and on management of end-of-life vehicles” 54 , which highlights the promotion of circular business models, by connecting design to EOL treatment. To strengthen corporate sustainability and due diligence, EU developed the Corporate Sustainability Reporting Directive (CSRD) 55 and Corporate Sustainability Due Diligence (CSDD) 56 . The EU Eco Design for Sustainable Products Regulation (ESPR) 57 strengthens the information disclosure of product via the digital product passport, requiring businesses to report the qualities and life-cycle impact of their products in a transparent way. The Critical Raw Materials Act (CRM Act) 58 helps to ensure a secure and sustainable supply of critical raw materials for batteries, such as lithium, cobalt, and nickel. The other relative polices, including Carbon Border Adjustment Mechanism (CBAM) 59 and EU Emissions Trading System (ETS) 60 , are relative to the material processing stage. In recent years, China has implemented rigorous regulations and policies for battery management. Since 2016, China has rolled out a series of measures to establish a comprehensive policy framework for EV battery recycling. Between 2016 and 2018, Chinese policymakers focused on laying the groundwork, before shifting their attention to the convergence and full implementation of policy from 2019 onwards. These policies include the Pilot Implementation Plan for the Extension of Producer Responsibility for Automotive Products 61 , Interim Measures for the Management of Recycling and Utilization of New Energy Power Vehicle Battery 62 , Interim Provisions on the Management of Traceability of Recycling and Utilization of New Energy Vehicle Power Battery 63 , Measures for the Administration of Echelon Utilization of Power Batteries in New Energy Vehicle 64 , among others. To date, the Chinese government has developed the "four beams and eight columns" of power battery recycling management policies, encompassing top-level policy, traceability management, industry specification, pilot demonstration, and postmortem supervision. The U.S. government is also dedicated to enhancing domestic recycling to streamline EV battery supply chains and ensure material availability. The U.S. battery-related policies include the Inflation Reduction Act (IRA) 65 and the Federal Bipartisan Infrastructure Law 66 . The enactment of the IRA provides substantial tax benefits and other subsidies aimed at localizing supply chains and boosting EV adoption. In Japan, on the other hand, the main regulations pertaining to this topic include Household Appliance Recycling Act 67 , Electrical Appliance and Material Safety Law 68 , Automotive Safety Standards, Lithium-ion Battery Safety Standards 69 , and Energy Storage System (ESS) Regulations 70 . In addition, Japan has implemented various government initiatives and policies related to green technology, such as the promotion of energy-efficient appliances and EVs. While these initiatives might not be specific to batteries, they impact the usage of battery. Additionally, Japan has promoted government programs and initiatives that provide funding and support for battery research and development in the country. Declarations Acknowledgement Natural Science Foundation of Tianjin under Grant NO. 21JCZXJC00180 (to X. S.) National Natural Science Foundation, China (NSFC) under Grant No. 41701636, (to L. D). Natural Science Foundation of Shaanxi under Grant NO. 2023-JC-QN-0808; QCYRCXM-2022-127 (to L. S.) Reporting summary Further information on research design could be found in the Nature Research Reporting Summary. Data availability All data are available by request. Code availability Not applicable. Competing interests The authors declare no competing interests. References EU-Lex. Regulation (EU) 2023/1542 of the European Parliament and of the Council of 12 July 2023 concerning batteries and waste batteries, amending Directive 2008/98/EC and Regulation (EU) 2019/1020 and repealing Directive 2006/66/EC (Text with EEA relevance). http://data.europa.eu/eli/reg/2023/1542/oj (2023). Li J. J., Li L. L., Yang R. R., Jiao J. L. 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University","correspondingAuthor":false,"prefix":"","firstName":"Fengqi","middleName":"","lastName":"You","suffix":""}],"badges":[],"createdAt":"2024-01-14 23:05:07","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-3864708/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-3864708/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":81366251,"identity":"4f5d34ab-e1d5-40ad-8113-55e9e127f332","added_by":"auto","created_at":"2025-04-25 09:35:53","extension":"png","order_by":1,"title":"Figure 1","display":"","copyAsset":false,"role":"figure","size":304772,"visible":true,"origin":"","legend":"\u003cp\u003eReported battery’s carbon footprints at different life cycle stages\u003c/p\u003e","description":"","filename":"1.png","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/e57361f749342d98f61ce53e.png"},{"id":81367297,"identity":"71d01ae8-2222-4798-ae12-53e5c4523ce8","added_by":"auto","created_at":"2025-04-25 09:43:53","extension":"png","order_by":2,"title":"Figure 2","display":"","copyAsset":false,"role":"figure","size":365224,"visible":true,"origin":"","legend":"\u003cp\u003ePolicy studies at different life cycle stages\u003c/p\u003e","description":"","filename":"2.png","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/cf38427cdb478e5a692f7a86.png"},{"id":81366247,"identity":"b3e9295a-2142-4a85-bcd9-a59a14e7e9cf","added_by":"auto","created_at":"2025-04-25 09:35:53","extension":"png","order_by":3,"title":"Figure 3","display":"","copyAsset":false,"role":"figure","size":402159,"visible":true,"origin":"","legend":"\u003cp\u003eLife cycle–based analytical framework and metrics\u003c/p\u003e","description":"","filename":"3.png","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/af1aeb0a053be4b9fe2fe4a6.png"},{"id":81367298,"identity":"e89e5681-9801-47f8-ae08-d5423a3924a1","added_by":"auto","created_at":"2025-04-25 09:43:53","extension":"png","order_by":4,"title":"Figure 4","display":"","copyAsset":false,"role":"figure","size":303350,"visible":true,"origin":"","legend":"\u003cp\u003eBattery life cycle system boundaries\u003c/p\u003e","description":"","filename":"4.png","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/3bccd80961ca913f27ded125.png"},{"id":81367696,"identity":"5ca850a7-433d-48cd-ad79-fab319b1fa58","added_by":"auto","created_at":"2025-04-25 09:51:53","extension":"png","order_by":5,"title":"Figure 5","display":"","copyAsset":false,"role":"figure","size":404085,"visible":true,"origin":"","legend":"\u003cp\u003eBatteries regulation and policy analysis in life cycle phases\u003c/p\u003e","description":"","filename":"5.png","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/1d029a655a60393f7b7ddddd.png"},{"id":81366249,"identity":"2fa3eed2-6c6f-46e8-bda2-a0f3a6edfaf2","added_by":"auto","created_at":"2025-04-25 09:35:53","extension":"png","order_by":6,"title":"Figure 6","display":"","copyAsset":false,"role":"figure","size":664246,"visible":true,"origin":"","legend":"\u003cp\u003eTechnologies flowchart of the two selected batteries\u003c/p\u003e","description":"","filename":"6.png","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/cb6782bfc9b1f75b53d3feb4.png"},{"id":81367300,"identity":"30356aac-27e8-4823-a1b6-c3cae04c39d1","added_by":"auto","created_at":"2025-04-25 09:43:53","extension":"png","order_by":7,"title":"Figure 7","display":"","copyAsset":false,"role":"figure","size":194018,"visible":true,"origin":"","legend":"\u003cp\u003eCFP results in LCA framework\u003c/p\u003e","description":"","filename":"7.png","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/eb54a75751bf48bd05e934fb.png"},{"id":81368565,"identity":"d641aa10-8d6f-4b9d-b3eb-61a5867a7b11","added_by":"auto","created_at":"2025-04-25 09:59:54","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":3514757,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/42870a72-f83a-429b-8394-be2008e8ecb4.pdf"},{"id":81366245,"identity":"8cffed90-d8a8-4f7e-82b1-ab7af69b30a1","added_by":"auto","created_at":"2025-04-25 09:35:53","extension":"docx","order_by":1,"title":"","display":"","copyAsset":false,"role":"supplement","size":33908,"visible":true,"origin":"","legend":"","description":"","filename":"Appendix.docx","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/bf18cf72793b3ea38286e7b0.docx"},{"id":81366248,"identity":"56ced884-8cee-4ca0-b946-e2ad852f16dc","added_by":"auto","created_at":"2025-04-25 09:35:53","extension":"docx","order_by":2,"title":"","display":"","copyAsset":false,"role":"supplement","size":39951,"visible":true,"origin":"","legend":"","description":"","filename":"Table1.docx","url":"https://assets-eu.researchsquare.com/files/rs-3864708/v1/6e0f2ac9847acdb5446b7d3f.docx"}],"financialInterests":"There is \u003cb\u003eNO\u003c/b\u003e Competing Interest.","formattedTitle":"A comprehensive analysis on EU batteries regulation: lifecycle decarbonization, business challenge and compliance risk","fulltext":[{"header":"Introduction","content":"\u003cp\u003eThe Communication on the European Green Deal, commissioned on December 11, 2019, serves as Europe\u0026apos;s growth strategy. Its objective is to transform European Union (EU) into a fair and prosperous society, boasting a modern, resource-efficient, and competitive economy. The goal is to achieve net zero greenhouse gas emissions by 2050 and to decouple economic growth from resource use. One of the key prerequisites to achieving climate neutrality by 2050 is a shift from fossil fuels to electromobility in vehicles. To ensure that EU\u0026apos;s product policies contribute to global carbon emission reduction, it is crucial that products marketed and sold within the EU are sourced and manufactured sustainably.\u003c/p\u003e\n\u003cp\u003eBatteries are therefore critical to support the promotion of electrical vehicles under the carbon neutrality strategy, and has been in surging demand in recent years. This makes the battery market increasingly strategic on a global scale. To ensure legal certainty for all involved operators and to prevent discrimination, trade barriers, and market distortions, also in order to minimize the environmental impacts of the batteries manufacturing and recycling, a harmonized regulatory framework is necessary. This framework should address the entire life cycle of batteries that are introduced to the market within EU \u003csup\u003e1\u003c/sup\u003e.\u003c/p\u003e\n\u003cp\u003eUnder this circumstance, EU had launched \u0026ldquo;The REGULATION (EU) 2023/1542 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 July 2023 (short as \u0026ldquo;EU Batteries Regulation\u0026rdquo;), which presents a unique mix of challenges and opportunities for battery manufacturers and operators. Based on \u0026ldquo;carbon footprint requirements,\u0026rdquo; the new regulations stipulate that electric vehicle batteries, rechargeable industrial batteries with a capacity greater than 2kWh and light means of transport batteries must meet specific carbon footprint (CF) requirements and undergo third-party verification. This requirement intensifies the pressure on battery manufacturers to reduce the carbon footprint of their products, thus posing a challenge on the battery\u0026rsquo; manufacturers in terms of the compliance cost. In terms of \u0026ldquo;recovery rate requirements,\u0026rdquo; the EU regulations have set high recovery efficiency targets for batteries. For example, lithium-based batteries demand a 65% recycling efficiency by average weight of no later than 31 December 2025 and 70% no later than 31 December 2030. This necessitates battery manufacturers and operators to enhance their recovery technologies, which is another challenge. The legislation also includes battery passport and safety requirements, necessitating manufacturers and operators to ensure safe management throughout the battery\u0026rsquo;s lifecycle and guarantee its safe usage. This is a challenge as it demands manufacturers to ensure the safety and reliability of their batteries. These new regulatory requirements will inevitably push battery manufacturers to continuously update and upgrade their technologies and equipment, requiring substantial investment and technical support, especially for small- and medium-sized enterprises. Lastly, the implementation of the new regulations could alter \u0026ldquo;market competition\u0026rdquo; dynamics. Some small- and medium-sized enterprises may exit the market due to their inability to meet the new regulatory requirements, while larger companies might leverage their technological and scale advantages to maintain market share, intensifying market competition and posing a challenge for smaller enterprises. Consequently, while the EU batteries regulation pose challenges for battery manufacturers and operators in terms of meeting new regulatory requirements and dealing with market competition and changes, they also offer opportunities. These regulations can stimulate the evolution and growth of the battery industry and advance the sustainable development of the electric vehicle sector.\u003c/p\u003e\n\u003cp\u003eTargeting to re-regulate the carbon footprint and to avoid carbon leakage, one critical change of this new regulation is the expansion of the regulatory boundaries of the life cycle phases for battery manufacturers. Therefore, in order to address the challenges and opportunities mentioned above, it is essential to incorporate them into a life cycle\u0026ndash;based analytical framework. However, to the best of our knowledge, limited literature on this topic has been reported thus far. This paper represents one of the initial efforts to develop a life cycle\u0026ndash;based analytical framework. It will analyze four metrics: policy changes, the carbon footprint and its variations across life cycle phases, business opportunities and risks, and compliance challenges associated with regulatory boundary changes in life cycles under the new legislation. These metrics will provide a comprehensive assessment of the impacts of the newly implemented regulation. Additionally, two comparative case studies will be conducted using firsthand data from two major Chinese battery manufacturers to illustrate the aforementioned metrics.\u003c/p\u003e\n"},{"header":"Results and Discussion","content":"\u003cp\u003e\u003cstrong\u003eQualitative policies analysis and discussion\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cem\u003ePolicies and changes in policies\u003c/em\u003e\u003c/p\u003e\n\u003cp\u003eBased on the established analytical framework, Figure 5 presented the change of policies regarding to the batteries regulation in life cycle phases. Directive 91/157/EEC was regarded as the first regulation on battery with focus on the recovery and disposal of batteries with toxic materials, for example, the regulation on mercury content of alkaline manganese batteries. It was argued for the limited regulation in terms of life cycle coverage and targeted measures. As an improvement, in 2006, Directive 2006/66/EC was launched with broader regulations for batteries\u003csup\u003e42\u003c/sup\u003e. It was regarded as progressive to introduce requirements on minimum collection rates and recycling efficiency. However, circular economy related requirements and measures were still insufficient. To further enhance the life cycle environmental performance of batteries, \u0026nbsp;EU had launched the Directive 2006/66/EC \u003csup\u003e75\u003c/sup\u003e. It has established a set of common rules and obligations for operators, particularly through the harmonization of rules for heavy metal content and battery labelling. Additionally, it has set rules and targets for the management of all waste batteries, based on the principle of extended producer responsibility. However, harmonized product and marketing requirements, conformity assessment procedures, and EOL stage regulations are necessary to address environmental implications, promote battery recycling markets, and ensure consistency across the Union. Directive 2006/66/EC should be replaced by a regulation that drive the achievement of these objectives without hindering trade or distorting competition\u0026nbsp;\u003csup\u003e1\u003c/sup\u003e.\u003c/p\u003e\n\u003cp\u003eIn December 2020, the EU Commission proposed a new regulation on batteries aimed at fostering a competitive and sustainable European battery industry. This proposal expands upon the 2006 version by broadening the scope and introducing new requirements. The legislation transitions from a directive to a regulation and explicitly incorporates lithium-ion and traction batteries. It also introduces circular economy measures such as mandatory recycled content, material-specific recycling efficiencies, specifications on second battery life, and the battery passport as a digital product passport. As seen in figure 5, the management boundary covers the whole life cycle stage of the battery from \u0026quot;cradle\u0026quot; to \u0026quot;cradle\u0026quot;. Consultations and negotiations based on this proposal have been ongoing since 2020, with a provisional agreement between the European Council and Parliament being reached in December 2022 \u003csup\u003e42\u003c/sup\u003e. In the EU battery regulation, three specific requirements are established for EV batteries. Firstly, a carbon footprint declaration is mandatory for each battery model produced at every manufacturing plant. Secondly, there must be a visibly displayed label indicating the carbon footprint and performance class of the battery model. Lastly, the life cycle carbon footprint value for each battery model at every manufacturing plant must not exceed the maximum threshold specified in the delegated act.\u003c/p\u003e\u003cp\u003e\u003cem\u003eLife-cycle-phase\u0026ndash;based GHG emissions\u003c/em\u003e\u003c/p\u003e\n\u003cp\u003eBased\u0026nbsp;on the life cycle analysis framework, qualitatively discuss the potential change of carbon footprint under the regulation boundary change.\u003c/p\u003e\n\u003cp\u003eThe EU batteries regulation released in 2023 introduce significant changes to the approach toward GHG emissions across the life cycle stages of batteries. For the Production Phase, the regulations impose carbon footprint requirements on batteries. This means that manufacturers need to limit the GHG emissions produced during the manufacturing process of their batteries. For the Use Phase, the regulations promote the use of energy-efficient batteries, which could reduce GHG emissions during this phase. The \u0026ldquo;battery passport\u0026rdquo; requirement, which provides information about a battery\u0026rsquo;s environmental impact, could also encourage consumers to choose batteries with lower GHG emissions. For the EOL Phase, the regulations increase the recovery rate requirements for EV batteries, demanding a 50% recovery rate by 2026 and 73% by 2030. This could promote recycling and the reduction of GHG emissions associated with the disposal of batteries.\u003c/p\u003e\n\u003cp\u003eBy imposing stricter GHG emissions standards across the life cycle of batteries, the regulations could drive a significant reduction in the carbon footprint of the battery industry and could contribute to the EU\u0026rsquo;s broader goal of achieving carbon neutrality by 2050. However, it\u0026rsquo;s important to note that meeting these new standards could require significant investment in new technologies and processes. Manufacturers and operators will need to balance the need to reduce GHG emissions with the economic viability of their operations.\u003c/p\u003e\n\u003cp\u003e\u003cem\u003eBusiness opportunities and risks\u003c/em\u003e\u003c/p\u003e\n\u003cp\u003eBased\u0026nbsp;on the life cycle analysis framework, qualitatively discuss the potential change of business opportunities under the regulation boundary change.\u003c/p\u003e\n\u003cp\u003eThe\u0026nbsp;EU batteries regulation released in 2023 bring about a variety of business opportunities and risks for those in the battery industry.\u003c/p\u003e\n\u003cp\u003eBusiness opportunities include the following: (a) Innovation and technological advancement: The new regulations will drive innovation and technological advancement in the battery industry. Companies that can develop and implement cutting-edge technologies to meet the new requirements will have a competitive advantage. (b) Market expansion: As the regulations promote the use of batteries with lower carbon footprints, the demand for such batteries will increase, leading to potential market expansion. (c) Green economy: The regulations align with the global shift toward a green economy. Companies that can meet these requirements will be well-positioned to benefit from this trend. (d) Recovery and recycling: The increased recovery rate requirements will create opportunities for companies specializing in battery recovery and recycling.\u003c/p\u003e\n\u003cp\u003eBusiness risks are highlighted for the following: (a) Increased costs: Complying with the new regulations could increase operational costs. These could stem from the need to invest in new technologies, third-party verification processes, and safety management systems. (b) Market competition: The regulations could intensify market competition. Larger companies with more resources might be better equipped to comply with the new rules, potentially edging out smaller competitors. (c) Regulatory compliance: There\u0026rsquo;s a risk of non-compliance with the new regulations, which could result in penalties or loss of market access. And (d) Technological obsolescence: Companies that cannot keep up with the pace of technological advancement required by the new regulations may find their products or services becoming obsolete.\u003c/p\u003e\n\u003cp\u003eTherefore, while the new EU batteries regulation present significant opportunities, they also come with potential risks that companies must carefully manage.\u003c/p\u003e\n\u003cp\u003e\u003cem\u003eCompliance analysis in life cycle phases\u003c/em\u003e\u003c/p\u003e\n\u003cp\u003eWith\u0026nbsp;an extensive scope, the EU Batteries Regulation is likely to generate a widespread impact on the global battery industry and international trade, covering not only finished products but also the entire battery life cycle and the overall supply chain network. Therefore, the EU\u0026rsquo;s aim to improve the environmental performance of batteries and the activities of all operators involved in the entire life cycle of batteries, such as producers, distributors, end users, and those directly involved in the treatment and recycling of waste batteries should be assessed with the Union\u0026rsquo;s commitments under the WTO. As a rules-based multilateral trading system, the WTO sets a wide range of disciplines in designing and implementing trade-related measures that its members should comply with. Fundamental trade obligations such as national treatment, most favored nation, and not imposing technical barriers that are more trade restrictive than necessary to fulfill a legitimate objective become relevant when members exercise their right to regulate that can potentially negatively affect international trade flows.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIt is worth noting that several countries, including China, Russia, and India, have already raised specific trade concerns to the WTO Committee overseeing the implementation of the Technical Barriers to Trade Agreement \u003csup\u003e41\u003c/sup\u003e. Their shared concerns include the possible lack of equity and science in assessing the life-cycle carbon footprint of batteries in the absence of internationally unified criteria and the likelihood of non-EU operators being subject to different data submission and calculation standards than the EU ones \u003csup\u003e41\u003c/sup\u003e. Evidently, a series of carbon footprint requirements mandated by the regulation will place new compliance burdens on both European and non-European manufacturers, producers, importers, and distributors of all types of batteries as long as they wish to place their products within the EU market. Nevertheless, the compliance cost that domestic and foreign producers have to bear can be different due to various reasons, some of which might be attributed to the regulator\u0026rsquo;s intention to disadvantage foreign competitors or omit the proper accounting for the costs on foreign producers in setting the level of regulation. The sheer number of WTO disputes challenging members\u0026rsquo; regulatory measures reflects the controversy of attaining appropriate levels of regulation that are also consistent with international trade law.\u003c/p\u003e\n\u003cp\u003eTherefore, it is essential that the EU\u0026rsquo;s increasing assertiveness and ambition in regulating batteries be reconcilable with its commitments under the WTO to minimize trade conflicts with its trading partners. For instance, the implementation of the life cycle carbon footprint requirements of the regulation should not place compliance costs on foreign producers beyond what is necessary to achieve a given level of regulation \u003csup\u003e76\u003c/sup\u003e. It presents a challenge and an opportunity for the EU to serve as a responsible and fair standard-setter in technologies that are key to decarbonization.\u0026nbsp;\u003c/p\u003e"},{"header":"Case study","content":"\u003cp\u003e\u003cem\u003eBackground information of the case study\u003c/em\u003e\u003c/p\u003e\n\u003cp\u003eIn this study, two types of batteries are considered, lithium iron phosphate (LFP) battery and lithium nickel-cobalt-manganate (NMC) battery, which are the most popular battery technology and have been widely used in the Chinese EV battery market. The target battery models are chosen by considering the high technology and time representative. The NMC battery is the NMC 622 battery, named \u0026ldquo;magazine battery\u0026rdquo;, the industry\u0026rsquo;s leading model in terms of safety, and could realize the whole package of NMC battery without fire. The LFP battery is a so-called \u0026ldquo;blade battery,\u0026rdquo; which arranges individual cells into an array and inserts them into a battery pack like a \u0026ldquo;blade.\u0026rdquo; LFP battery also uses CTP (\u0026ldquo;cell to pack\u0026rdquo;) to skip the standardized modules and directly integrate the cell into the battery pack, effectively improving the space utilization and energy density of the battery pack. Both batteries are equipped with battery-electric sports utility vehicles (SUVs), with the energy efficiency of 14.6 kWh/100 km for the LFP-battery-equipped SUV and 22.1 kWh/100 km for the NMC622-battery-equipped SUV. The system boundary for the two batteries is presented in Figure 6.\u003c/p\u003e\u003ch3\u003eAnalysis\u003c/h3\u003e\n\u003cp\u003eAccording to the carbon footprint accounting methodology, we calculated the carbon footprints of the two case batteries under various life cycle phases and compared the value under the regulation change of the battery regulations. The key findings of the CFB results are as follows and is illustrated in Fig.\u0026nbsp;\u003cspan refid=\"Fig3\" class=\"InternalRef\"\u003e7\u003c/span\u003e.\u003c/p\u003e \u003cp\u003eFirstly, the different life stages covered by the EU batteries regulation become more and more complete and comprehensive. The Battery Directive 91/157/EEC only covers two life cycle stages: the raw material acquisition and collection stages. Moving forward, the Battery Directive 2006/66/EC also considers the second-life and recycling stages but do not include the material processing, battery manufacturing, and use stages. Therefore, it is partially a “cradle to grave” life cycle framework. The Battery Regulation (EU) 2023/1542 is a kind of “cradle to cradle” life cycle framework because it covers all the life cycle stages, from the raw material acquisition, material processing, battery manufacturing, use to the collection, second-life, and recycling stages. It is worth noting that the carbon emissions from the second-life stages, including the repurposed, remanufactured, and the other reuse scenarios are zero, because it has not been calculated in the CFB-EV.\u003c/p\u003e \u003cp\u003eSecondly, the absolute CFB results have been changing due to the updates on the battery regulation. The CFB for the NMC battery and LFP battery is 165.2 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh and 163.7 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh for the Battery Directive 91/157/EEC, respectively. The LFP battery has slightly lower CF than the NMC battery. Because the cell to pack (CTP) design helps to improve the material efficiency for the LFP battery. About the Battery Directive 2006/66/EC, the CFB for the NMC and LFP battery is 117.1 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh and 129.7 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh, respectively. This indicates that battery recycling has positive carbon reduction effects according to the Circular Footprint Formula (CFF). In addition, the reduction creates more benefits for the NMC battery than the LFP because of the recycling of NiSO\u003csub\u003e4\u003c/sub\u003e and CoSO\u003csub\u003e4\u003c/sub\u003e. Regarding the Battery Regulation (EU) 2023/1542, the CFB of the NMC battery and LFP battery is 180.8 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh and 222.3 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh, respectively. Considering the “cradle to cradle” stages, the NMC battery has lower CF than the LFP battery.\u003c/p\u003e \u003cp\u003eLast but not least, on the proportion of CFB, even though the number of life stages covered by the updating of the battery regulation are increasing, the carbon emissions proportions of the two types of batteries went through the process of initially decreasing and then increasing. In comparison to that with the Battery Directive 91/157/EEC, the proportion of CFB decreases nearly 30% for the Battery Directive 2006/66/EC. This is due to the inclusion of the carbon emission benefit of the recycling stages, which results in the reduction of the total absolute CFB results. With the continuous improvement of regulations and the coverage of multiple life cycle stages, the proportion of CFB becomes 100% for the Battery Regulation (EU) 2023/1542.\u003c/p\u003e "},{"header":"Discussion","content":"\u003cp\u003eBased on the quantified CFP, we hereby addressed the following critical issues:\u003c/p\u003e\n\u003cp\u003ea)\u0026nbsp; \u0026nbsp;\u0026nbsp;The influence of policy changes on CFP\u003c/p\u003e\n\u003cp\u003eFirstly, a total energy-based functional unit seams unreasonable. The setting of the functional unit means that the carbon footprint of the battery is calculated by dividing the life cycle carbon emissions from the battery pack (as the numerator) by the total energy provided by the battery over its service life (as the denominator). For batteries with the same life cycle carbon emissions, the higher the total energy, the smaller the carbon footprint result. Because the default service life for the passenger EVs is set as 160,000 km, so for the same numerator, the higher the electricity consumption of the EVs, the lower the calculated carbon footprint results will be, which is contrary to the concept of low carbon consumption. This means that the use-stage carbon emissions are not included in the numerator, but the use-stage energy consumption is included in the denominator.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIn addition, for the LFP battery, their carbon emissions over the life cycle of the battery pack are lower compared to the NMC battery. However, due to the lower total energy of LFP, the total energy provided during its lifespan is lower. Consequently, when allocating the carbon emissions per kilowatt hour, LFP battery ends up with higher emissions than NMC, making NMC more carbon-friendly. Therefore, choosing total energy as the functional unit for batteries favors NMC batteries while being unfriendly to LFP battery. This also reflects the EU\u0026rsquo;s need for the other countries to export more NMC batteries, indirectly importing key mineral resources such as nickel, cobalt, and lithium, thereby strengthening the EU\u0026rsquo;s guaranteed supply of critical resources. To use the same calculation scope for both the numerator and denominator, we suggest that if the energy capacity of the battery should be chosen as the denominator, the conclusion would be more reasonable.\u003c/p\u003e\n\u003cp\u003eFinally, the recycling model is incomplete. The CFF method applied in the CFB-EV only reflects the emission reduction benefits of recycling without considering the carbon emission reduction benefits of cascade utilization and other recycling methods. This makes it difficult to calculate the emission reduction benefits of recycling for batteries like LFP that do not use nickel and cobalt metals. Furthermore, the Carbon Footprint of Electric Vehicle Batteries (CFB-EV) calculation of the emission reduction benefits of recycling is incomplete, as it only reflects the indirect recycling of nickel salts and cobalt salts through pyrometallurgical and hydrometallurgical processes. It does not account for the recycling of lithium, which is only landfilled. This level of recycling technology does not align with the actual situation in China and highlights the EU\u0026rsquo;s lagging recycling technology against China\u0026rsquo;s actual situation. Currently, China is already capable of directly recycling recycled resources, while the EU plans to achieve this after 2030 (EU Battery 2030+ Roadmap) \u003csup\u003e77\u003c/sup\u003e.\u003c/p\u003e\n\u003cp\u003eb)\u0026nbsp; \u0026nbsp;\u0026nbsp;Business opportunities and risks\u003c/p\u003e\n\u003cp\u003eThe Battery Regulation (EU) 2023/1542 presents the ability to regulate more carbon footprint in the supply chain while also generating both opportunities and risks for businesses. In term of opportunities, the regulation aims to promote the production and use of sustainable batteries in various sectors, such as EVs, energy storage, and consumer electronics. This could create a significant market opportunity for companies involved in battery recycling and related technologies. The regulation also encourages innovation and research in battery technologies, including the development of more efficient, durable, and environmentally friendly battery solutions. Businesses that invest in research and development can gain a competitive edge and capitalize on the growing demand for advanced battery systems. The regulation emphasizes the circular economy by setting requirements for the design, durability, and recyclability of batteries. Companies that embrace circular economy principles and establish robust recycling processes can take advantage of the emerging market for battery recycling services. Finally, adhering to the EU battery regulation standards can enhance the export potential of battery-related products to European markets. Businesses that align their operations with these standards can benefit from improved market access and increased trade opportunities.\u003c/p\u003e\n\u003cp\u003eIn terms of business risk, on the other hand, meeting the regulatory requirements, such as certification processes, emissions limits, and information disclosure obligations, may involve substantial costs for businesses. Small- and medium-sized enterprises (SMEs) might particularly face difficulties in adapting to these requirements. The regulation demands transparency and traceability throughout the battery value chain, which could increase complexities for businesses operating across multiple jurisdictions. Ensuring compliance across the supply chain, from raw materials to manufacturing and recycling, may require additional resources and coordination. As the battery industry expands due to the regulation, competition is likely to intensify. Existing players, as well as new entrants, will vie for market share, potentially leading to price pressures and reduced profit margins. Finally, the battery regulation is part of a dynamic regulatory landscape aiming to address environmental concerns. As standards and requirements evolve, businesses will need to ensure ongoing compliance and stay updated with the latest developments to avoid penalties or reputational damage.\u003c/p\u003e\n\u003cp\u003eTo address these, the emerging regulatory tools could also help to tackle such issues. For example, ESG (environmental, social, governance) becomes a more popular governmental mechanism to regulate companies\u0026rsquo; performance in promoting low-carbon transition and achieving carbon neutrality by letting organizations disclose their sustainable risk and opportunities. Battery enterprises and manufacturers especially the listed companies need to disclose their direct and indirect carbon emissions regarding the production, delivery, selling, use, and recycling of batteries in the ESG report. Other climate-related information about batteries also needs to be reported to gain a high ESG rate, such as energy efficiency. This is because companies could attract more trust and investments from the public or investors as ESG becomes a measurement tool to assess one firm\u0026rsquo;s potentials. Throughout the information disclosure of ESG three dimensions, companies\u0026rsquo; business practices can be environmentally friendly and improved to promote their strategies toward low-carbon development. Currently, ESG disclosure is shifted from voluntary to mandatory under the regulatory impact and policy issuing. This could promote the battery industry and regulations toward low-carbon development as well.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003ec)\u0026nbsp; \u0026nbsp;\u0026nbsp;Compliance analysis in life cycle phases\u003c/p\u003e\n\u003cp\u003eRegulating the life cycle carbon emissions of batteries will incur compliance costs on companies across the entire battery value chain. Whether and how companies can meet the requirements set by the Batteries Regulation determines their competitive positions in the EU market. Given the ambiguities and irrationalities associated with several CFB calculation methodologies as laid out in the previous parts, it remains uncertain how potentially affected companies can comply with such requirements.\u0026nbsp;\u003c/p\u003e"},{"header":"Conclusion and implications","content":"\u003cdiv id=\"Sec5\" class=\"Section2\"\u003e \u003ch2\u003eMajor conclusions\u003c/h2\u003e \u003cp\u003eThis paper serves as one of the first attempts to develop a life cycle\u0026ndash;based analytical metric to comprehensively analyze the policy changes, life cycle phase\u0026ndash;based carbon footprint, business opportunities and risks associated with regulatory boundary changes in battery life cycles under this new legislation. Utilizing this metric, we employed firsthand data from two major Chinese battery manufacturers to illustrate the aforementioned points. The quantitative results highlighted that before and after the battery regulation change, the carbon footprint standard for the NMC battery and LFP battery has changed from 165.2 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh and 163.7 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh (under Battery Directive 91/157/EEC) to 117.1 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh and 129.7 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh (under the Battery Directive 2006/66/EC), and finally to 180.8 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh and 222.3 gCO\u003csub\u003e2\u003c/sub\u003ee/kWh (under the Battery Regulation (EU) 2023/1542).\u003c/p\u003e \u003cp\u003eOn the one hand, the strengthened battery regulation could cover more carbon footprint, resulting in the mitigated carbon leak risk. On the other, concerns on trade-offs for business, compliance, and equity are highlighted.\u003c/p\u003e \u003c/div\u003e\n\u003ch3\u003ePolicy implications\u003c/h3\u003e\n\u003cp\u003eFor government regulatory authorities, it is recommended to promptly release national accounting methods and standards for battery carbon footprint and promote mutual recognition of international carbon emission methods. In addition, it is suggested to form industry opinions and recommendations on the relevant issues in the EU Battery Law carbon footprint accounting rules, rectify issues related to battery carbon footprint accounting and modeling, and adhere to the principles of fairness and justice to highlight the low-carbon competitive advantage of domestic battery brands. In terms of database construction, it is advisable for China to establish a Chinese life-cycle data platform, timely release carbon emission factors for basic energy sources (such as electricity) and battery-related materials, and promote international recognition of localized data.\u003c/p\u003e \u003cp\u003eFor the electric vehicle battery producers, it is necessary to plan out a low-carbon development strategy for the next three years. In 2024, carbon footprint accounting capabilities should be established, including mastering carbon footprint accounting methods, building carbon emission databases that include manufacturing facilities and upstream supply chains, establishing management and assessment systems for low-carbon suppliers, applying supply chain carbon emission data collection systems, optimizing supplier geographical locations, improving data quality, and having the accounting results undergo third-party audits. In 2025 and 2026, low-carbon data resources should be comprehensively integrated throughout the industrial chain, striving to achieve the industry\u0026rsquo;s low-carbon level in battery carbon footprint. By 2027, high-carbon products should be forced to exit the EU market, and manufacturers producing these \u0026ldquo;high-carbon\u0026rdquo; batteries need to strategically plan for other international markets without low-carbon barriers.\u003c/p\u003e \u003cp\u003eOf course, battery carbon footprint is closely related to requirements such as the proportion of recycled metals used, battery labels and passports, recycling of waste batteries and battery materials, and due-diligence investigation of the supply chain. Bound with the requirements of the EU Battery Law and related policies, enterprises need to systematically consider and respond to these requirements, promote the construction of a greener and lower-carbon-battery industry chain, and actively embrace the trend of sustainable development in the new-energy vehicle industry.\u003c/p\u003e"},{"header":"Methods","content":"\u003cdiv id=\"Sec8\" class=\"Section2\"\u003e \u003ch2\u003eA life cycle\u0026ndash;based policy analytical framework for EU batteries regulations\u003c/h2\u003e \u003cp\u003eOne scientific nature of the regulatory change in this new battery regulation is to alter the regulatory boundaries of the life cycle stages for batteries, including raw material acquisition, material processing, battery manufacturing, use, collection, second life and recycling (see Fig.\u0026nbsp;\u003cspan refid=\"Fig4\" class=\"InternalRef\"\u003e3\u003c/span\u003e). Therefore, in order to address the challenges and opportunities associated with the change of regulation boundary in life cycle phases, we have developed an analytical framework based on the life cycle phases of battery manufacturing. Figure\u0026nbsp;\u003cspan refid=\"Fig4\" class=\"InternalRef\"\u003e3\u003c/span\u003e illustrates the analytical framework.\u003c/p\u003e \u003cp\u003eBased on the life cycle phases, we analyze the various metrics for each life cycle phase: (a) policies and changes in policies, (b) life-cycle-phase\u0026ndash;based GHGs emissions (carbon footprint under various system boundary), (c) business opportunities and risks, and (d) compliance analysis in life cycle phases.\u003c/p\u003e \u003cp\u003eBased on the analytical framework, the policy changes, the carbon footprint and its variations across life cycle phases, business opportunities and risks, and compliance challenges associated with the regulatory boundary changes in life cycles under the new legislation will be investigated. These metrics will provide a comprehensive assessment of the impacts of the newly implemented regulation. With this framework, both qualitative and quantitative analysis with two comparative case studies will be conducted in sections 4 and 5.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003c/div\u003e\n\u003ch3\u003eMethods of life cycle–based carbon footprint accounting\u003c/h3\u003e\n\u003cp\u003eFor benchmarking, we follow the Carbon Footprint of Electric Vehicle Batteries (CFB-EV), which was developed by the European Commission (EC Recommendations 2279/2021) and the Product Environmental Footprint Categories Rules for Batteries (PEFCR), to account the battery\u0026rsquo;s carbon footprint. The CFB-EV is designed to develop the methodology for calculating and verifying the carbon footprint of batteries, as stipulated by Article 7 of the EU Battery Regulation.\u003c/p\u003e \u003cp\u003eIn the accounting, we set the functional unit as 1 kWh (kilowatt-hour) of the total energy provided by the battery over its lifespan, in kWh. The system boundary is depicted in Fig.\u0026nbsp;\u003cspan refid=\"Fig5\" class=\"InternalRef\"\u003e4\u003c/span\u003e. This study primarily focuses on the battery electric passenger vehicle (BEV) as the target light-duty vehicle category. The total energy of BEV batteries is accounted by service life (in km)*discharged energy volume from the battery in the value of per unit of distance driven (in kWh/km). The physical weight (in grams) of the of battery per functional unit is set as the quantity of product to satisfy the defined function, as reference flow. Based on these, following the CFB, the system boundaries include all battery life cycle stages, from raw material acquisition, material processing, battery manufacturing, use, to end-of-life (including collection, second life, and recycling processes).\u003c/p\u003e \u003cp\u003eIn this study, the use stage is treated as the distribution process, which refers to the transport of the battery from the manufacturing site to the final assembly site. For specific processes, such as the manufacturing of equipment, installation of the finished battery, production of packaging materials, and auxiliary inputs to the manufacturing plant, have been excluded from the modeling. The cut-off rule is set as 1% (mass/mass) criterion per system component. The impact assessment has been done for the impact category \u0026ldquo;Climate change\u0026rdquo; in line with the Sixth Assessment Report (AR6) of the IPCC2021 \u003csup\u003e71\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e\n\u003ch3\u003eData and software\u003c/h3\u003e\n\u003cp\u003eThe life cycle inventories for BEV batteries were acquired from the China Automotive Life Cycle Assessment Battery Model (CALCM-Battery) 2023. China Automotive Life Cycle Assessment Model (CALCM) \u003csup\u003e\u003cspan citationid=\"CR72\" class=\"CitationRef\"\u003e72\u003c/span\u003e,\u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e7\u003c/span\u003e\u003c/sup\u003e is the Chinese local life cycle assessment model developed by the China Automotive Technology and Research Center Co., Ltd. (CATARC) that helps automakers calculate the carbon footprints of vehicle products. In 2023, CATARC collects the battery supply chain data, including the material composition and manufacturing process data of BEV batteries from the top two Chinese battery makers, covering more than 90% of BEV batteries sales in China through 2022. Based on these onsite data and based on the EU battery regulation, CATARC developed the Life Cycle Assessment Battery Model (CALCM-Battery) 2023.\u003c/p\u003e \u003cp\u003eThe background data were primarily based on the China Automotive Life Cycle Database (CALCD) \u003csup\u003e\u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e5\u003c/span\u003e, \u003cspan citationid=\"CR73\" class=\"CitationRef\"\u003e73\u003c/span\u003e, \u003cspan citationid=\"CR74\" class=\"CitationRef\"\u003e74\u003c/span\u003e\u003c/sup\u003e, the Chinese local life cycle inventory (LCI) database developed by the CATARC. CALCD is a process-based life cycle database that represents the Chinese automotive industry, including more than 20,000 unit processes, inclusive of the basic ones and product data (metals, minerals, plastics, water, chemicals, fuels, energy production, etc.) as well as life cycle data for automotive parts and vehicles.\u003c/p\u003e \u003cdiv id=\"Sec11\" class=\"Section2\"\u003e \u003ch2\u003eReview\u003c/h2\u003e \u003cdiv id=\"Sec12\" class=\"Section3\"\u003e \u003ch2\u003ePerspectives from carbon footprint studies on batteries\u003c/h2\u003e \u003cdiv id=\"Sec13\" class=\"Section4\"\u003e \u003ch2\u003eLife Cycle Assessment (LCA) Studies of Batteries and their recycling\u003c/h2\u003e \u003cp\u003eThe environmental impacts of EV batteries are commonly assessed using the LCA methodology, which is widely adopted in related studies, with major focus placed on carbon emissions throughout the entire life cycle of the batteries \u003csup\u003e\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e, \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e, \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e4\u003c/span\u003e, \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e5\u003c/span\u003e\u003c/sup\u003e. It is notable that the existing studies have primarily concentrated on the \u0026ldquo;cradle to gate\u0026rdquo; or \u0026ldquo;cradle to grave\u0026rdquo; stage of EV batteries, examining their environmental impacts from manufacturing to use and collection stages \u003csup\u003e\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e, \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e6\u003c/span\u003e, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e7\u003c/span\u003e, \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e8\u003c/span\u003e, \u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e9\u003c/span\u003e, \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e10\u003c/span\u003e\u003c/sup\u003e. However, there has been emerging studies conducted on the recycling and secondary utilization stages within the \u0026ldquo;grave to cradle\u0026rdquo; stage. Recently, more and more LCA studies have begun to address the larger system boundaries of specific batteries or battery-inclusive products, expanding the depth and breadth of related studies \u003csup\u003e\u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e9\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eIn terms of the life cycle stages, the manufacturing stage has the most significant environmental impact on the overall life cycle of the batteries \u003csup\u003e\u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e4\u003c/span\u003e, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e11\u003c/span\u003e, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e12\u003c/span\u003e, \u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e13\u003c/span\u003e\u003c/sup\u003e. Having combed more than 50 LCA-related papers, Zhao and Aichberger et al. calculated the mean greenhouse gas (GHG) emissions of the battery production stage to be 110 kgCO\u003csub\u003e2\u003c/sub\u003e e/kWh and the median to be 120 kgCO\u003csub\u003e2\u003c/sub\u003e e/kWh \u003csup\u003e\u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e4\u003c/span\u003e, \u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e14\u003c/span\u003e\u003c/sup\u003e. Studies also highlighted the complicated production processes and the diverse combinations of energy consumption present a significant challenge in accurately determining the battery\u0026rsquo;s full cycle carbon footprint \u003csup\u003e\u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e8\u003c/span\u003e, \u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e15\u003c/span\u003e, \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e16\u003c/span\u003e\u003c/sup\u003e. For in-use stage, operating conditions, design parameters, efficiency, weight, and power carbon intensity were critical factors to minimize the emissions \u003csup\u003e\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e, \u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e17\u003c/span\u003e, \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e18\u003c/span\u003e, \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e19\u003c/span\u003e, \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e20\u003c/span\u003e, \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e21\u003c/span\u003e, \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e22\u003c/span\u003e\u003c/sup\u003e. These results hereby enlightened the importance of green power sources and eco-design to further decarbonize the EVs \u003csup\u003e\u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e11\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eGrowing studies focused on the end-of-life (EOL) stage of batteries, which is critical future potential to emission mitigation by promoting circular economy strategy \u003csup\u003e\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e, \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e16\u003c/span\u003e, \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e23\u003c/span\u003e, \u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e24\u003c/span\u003e\u003c/sup\u003e. It is widely acknowledged that proper recycling and reuse of used batteries can have a substantial impact on reducing the life-cycle carbon emissions of EVs \u003csup\u003e\u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e13\u003c/span\u003e, \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e22\u003c/span\u003e, \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e25\u003c/span\u003e, \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e26\u003c/span\u003e\u003c/sup\u003e. The recycling stage plays a crucial role in mitigating resource depletion, minimizing waste generation, and promoting the circularity of battery materials. This process primarily entails the recovery of valuable materials from lithium batteries and their reintegration into the value chain. However, developing a cost-effective and environmentally friendly recycling process remains challenging due to the diverse composition of cathode materials \u003csup\u003e\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e, \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e25\u003c/span\u003e, \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e27\u003c/span\u003e, \u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e28\u003c/span\u003e\u003c/sup\u003e. The step of reusing involves the secondary application of decommissioned batteries in various scenarios such as electricity supply, residential services, and renewable energy \u003csup\u003e\u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e13\u003c/span\u003e, \u003cspan citationid=\"CR29\" class=\"CitationRef\"\u003e29\u003c/span\u003e, \u003cspan citationid=\"CR30\" class=\"CitationRef\"\u003e30\u003c/span\u003e\u003c/sup\u003e. Therefore, Hua et al. have advocated the prioritization of batteries with residual value for reuse rather than immediate disposal or recycling \u003csup\u003e\u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e22\u003c/span\u003e\u003c/sup\u003e. This practice has been shown to effectively mitigate the overall environmental impact associated with batteries. Following the reuse phase, retired batteries with unsatisfactory performance can be recycled to recover valuable materials or appropriately disposed of \u003csup\u003e\u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e22\u003c/span\u003e, \u003cspan citationid=\"CR30\" class=\"CitationRef\"\u003e30\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eWe summarized the data on carbon footprints at different life cycle stages from the existing literature \u003csup\u003e\u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e5\u003c/span\u003e, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e11\u003c/span\u003e, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e12\u003c/span\u003e, \u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e13\u003c/span\u003e, \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e26\u003c/span\u003e, \u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e31\u003c/span\u003e, \u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e32\u003c/span\u003e, \u003cspan citationid=\"CR33\" class=\"CitationRef\"\u003e33\u003c/span\u003e, \u003cspan citationid=\"CR34\" class=\"CitationRef\"\u003e34\u003c/span\u003e, \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e35\u003c/span\u003e\u003c/sup\u003e, as shown in Fig.\u0026nbsp;\u003cspan refid=\"Fig6\" class=\"InternalRef\"\u003e1\u003c/span\u003e.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003c/div\u003e \u003c/div\u003e \u003c/div\u003e \u003cdiv id=\"Sec14\" class=\"Section2\"\u003e \u003ch2\u003ePerspectives from policy studies\u003c/h2\u003e \u003cp\u003eGovernments have imposed constraints on specific raw materials used in battery production and implemented the concept of extended producer responsibility (EPR) to enforce recycling requirements for manufacturers \u003csup\u003e\u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e23\u003c/span\u003e, \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e36\u003c/span\u003e, \u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e37\u003c/span\u003e\u003c/sup\u003e. Particularly, in recent years, geo-political context has imposed complexity to the battery supply chain. Therefore, recent studies in economic geography has shed light on governments\u0026rsquo; efforts to explore alternative global or regional supply chains, stimulate corporate innovation, and bolster internal markets \u003csup\u003e\u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e25\u003c/span\u003e, \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e36\u003c/span\u003e, \u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e37\u003c/span\u003e, \u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e38\u003c/span\u003e, \u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e39\u003c/span\u003e, \u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e40\u003c/span\u003e\u003c/sup\u003e. These unilateral measures could potentially conflict with the international trading system. For example, Fang scrutinized the EU\u0026rsquo;s new battery regulations, highlighting possible overly stringent and unnecessary restrictions, along with their risk of contravening the Agreement on Technical Barriers to Trade within the World Trade Organization (WTO) framework \u003csup\u003e\u003cspan citationid=\"CR41\" class=\"CitationRef\"\u003e41\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eEmerging policy studies also has analyzed The EU\u0026rsquo;s battery policies focusing on product coverage, lifecycle reflection, and responses to market developments \u003csup\u003e\u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e36\u003c/span\u003e, \u003cspan citationid=\"CR42\" class=\"CitationRef\"\u003e42\u003c/span\u003e, \u003cspan citationid=\"CR43\" class=\"CitationRef\"\u003e43\u003c/span\u003e\u003c/sup\u003e. Legal and policy frameworks are crucial for transitioning to a low-carbon economy, especially during battery EOL \u003csup\u003e\u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e25\u003c/span\u003e\u003c/sup\u003e. In addition, recovering raw materials reduces environmental impact and ensures supply chain security. In regions with limited recycling markets and regulatory frameworks, proactive laws, policies, and standards help companies explore new business models and gain an advantage \u003csup\u003e\u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e6\u003c/span\u003e, \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e27\u003c/span\u003e, \u003cspan citationid=\"CR44\" class=\"CitationRef\"\u003e44\u003c/span\u003e, \u003cspan citationid=\"CR45\" class=\"CitationRef\"\u003e45\u003c/span\u003e, \u003cspan citationid=\"CR46\" class=\"CitationRef\"\u003e46\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eEmerging studies has also explored potential business models for second-life batteries (SOL) in light of new regulations. Malinauskaite et al. called for technological innovation to be incorporated into regulatory frameworks \u003csup\u003e\u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e27\u003c/span\u003e\u003c/sup\u003e, while Wr\u0026aring;lsen et al. identified the importance of national and international regulations and policies in driving circular business models. Eleftheriadis et al. assessed the feasibility of repurposing EV batteries and highlighted key aspects related to it \u003csup\u003e\u003cspan citationid=\"CR43\" class=\"CitationRef\"\u003e43\u003c/span\u003e\u003c/sup\u003e. Some studies have questioned the achievability of recycling targets proposed in the new regulation \u003csup\u003e\u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e36\u003c/span\u003e\u003c/sup\u003e, uncovered path-dependent characteristics underlying the regulation \u003csup\u003e\u003cspan citationid=\"CR47\" class=\"CitationRef\"\u003e47\u003c/span\u003e\u003c/sup\u003e, and highlighted the role of the circular economy as a unifying factor \u003csup\u003e\u003cspan citationid=\"CR42\" class=\"CitationRef\"\u003e42\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eIn regional context, countries have distinct approaches in developing their battery industries and implementing related policies. For instance, China\u0026rsquo;s top-down, state-led strategy allows for swift responses to external factors and focuses on long-term economic stimulation and overseas investments to mitigate supply risks. The US, on the other hand, relies primarily on market forces but has recently recognized the significance of key raw materials and strengthened legislation in this area \u003csup\u003e\u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e39\u003c/span\u003e, \u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e40\u003c/span\u003e, \u003cspan citationid=\"CR45\" class=\"CitationRef\"\u003e45\u003c/span\u003e\u003c/sup\u003e. The UK, influenced by neoliberalism, has limited state capacity for industrial development \u003csup\u003e\u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e37\u003c/span\u003e\u003c/sup\u003e. Globally, countries are actively creating laws and policies for the circular economy \u003csup\u003e\u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e6\u003c/span\u003e\u003c/sup\u003e, and battery recycling \u003csup\u003e\u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e6\u003c/span\u003e, \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e16\u003c/span\u003e, \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e23\u003c/span\u003e, \u003cspan citationid=\"CR48\" class=\"CitationRef\"\u003e48\u003c/span\u003e, \u003cspan citationid=\"CR49\" class=\"CitationRef\"\u003e49\u003c/span\u003e, \u003cspan citationid=\"CR50\" class=\"CitationRef\"\u003e50\u003c/span\u003e\u003c/sup\u003e. Limited research exists comparing battery policies among countries, with most discussions supplementing technical analyses and focusing on EOL issues \u003csup\u003e\u003cspan citationid=\"CR51\" class=\"CitationRef\"\u003e51\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eCurrent literature addresses progress in decarbonizing transportation, but there are challenges from economic, legal, and technical perspectives \u003csup\u003e\u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e40\u003c/span\u003e, \u003cspan citationid=\"CR45\" class=\"CitationRef\"\u003e45\u003c/span\u003e\u003c/sup\u003e. Economic challenges include unclear value in circular economy and regulatory cost allocation \u003csup\u003e\u003cspan citationid=\"CR46\" class=\"CitationRef\"\u003e46\u003c/span\u003e, \u003cspan citationid=\"CR48\" class=\"CitationRef\"\u003e48\u003c/span\u003e\u003c/sup\u003e. Legal challenges involve compatibility between different laws \u003csup\u003e\u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e38\u003c/span\u003e\u003c/sup\u003e. and clarification of battery ownership and EPR \u003csup\u003e\u003cspan citationid=\"CR43\" class=\"CitationRef\"\u003e43\u003c/span\u003e\u003c/sup\u003e. Technical challenges include regulation hindering innovation \u003csup\u003e\u003cspan citationid=\"CR45\" class=\"CitationRef\"\u003e45\u003c/span\u003e\u003c/sup\u003e, inadequate assessment tools \u003csup\u003e\u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e36\u003c/span\u003e, \u003cspan citationid=\"CR41\" class=\"CitationRef\"\u003e41\u003c/span\u003e\u003c/sup\u003e, and immature technology in EOL battery \u003csup\u003e\u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e25\u003c/span\u003e, \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e27\u003c/span\u003e\u003c/sup\u003e.\u003c/p\u003e \u003cp\u003eWe have summarized the literatures about policies studies in a life cycle\u0026ndash;based framework, as Fig.\u0026nbsp;\u003cspan refid=\"Fig7\" class=\"InternalRef\"\u003e2\u003c/span\u003e illustrated.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec15\" class=\"Section2\"\u003e \u003ch2\u003ePolicies review on global batteries regulations\u003c/h2\u003e \u003cp\u003eIn EU, a basket of policies and regulations have been launched to support the eco-management of battery. The 2006 EU Battery Directive was the first established comprehensive battery policy in EU. In line with the EU Green Deal as well as its Strategic Action Plan for batteries, the batteries regulation has been reformed through the EU Battery Regulation and the EU taxonomy. \u0026ldquo;The EU Battery Regulation\u0026rdquo; \u003csup\u003e\u003cspan citationid=\"CR52\" class=\"CitationRef\"\u003e52\u003c/span\u003e\u003c/sup\u003e is set to require manufacturers to simplify battery\u0026rsquo;s disassembly processes and ensure batteries are removable and replaceable. Material-specific recycling targets and minimum requirements for recycled content in batteries is required as well, for encouraging the circularity of valuable materials. The EU taxonomy \u003csup\u003e\u003cspan citationid=\"CR53\" class=\"CitationRef\"\u003e53\u003c/span\u003e\u003c/sup\u003e sets economic incentives to reduce the costs of processes by promoting the eco-design for recycling. In addition, EU also launched the regulation on \u0026ldquo;Circularity requirements for vehicle design and on management of end-of-life vehicles\u0026rdquo; \u003csup\u003e\u003cspan citationid=\"CR54\" class=\"CitationRef\"\u003e54\u003c/span\u003e\u003c/sup\u003e, which highlights the promotion of circular business models, by connecting design to EOL treatment. To strengthen corporate sustainability and due diligence, EU developed the Corporate Sustainability Reporting Directive (CSRD) \u003csup\u003e\u003cspan citationid=\"CR55\" class=\"CitationRef\"\u003e55\u003c/span\u003e\u003c/sup\u003e and Corporate Sustainability Due Diligence (CSDD) \u003csup\u003e\u003cspan citationid=\"CR56\" class=\"CitationRef\"\u003e56\u003c/span\u003e\u003c/sup\u003e. The EU Eco Design for Sustainable Products Regulation (ESPR) \u003csup\u003e\u003cspan citationid=\"CR57\" class=\"CitationRef\"\u003e57\u003c/span\u003e\u003c/sup\u003e strengthens the information disclosure of product via the digital product passport, requiring businesses to report the qualities and life-cycle impact of their products in a transparent way. The Critical Raw Materials Act (CRM Act) \u003csup\u003e\u003cspan citationid=\"CR58\" class=\"CitationRef\"\u003e58\u003c/span\u003e\u003c/sup\u003e helps to ensure a secure and sustainable supply of critical raw materials for batteries, such as lithium, cobalt, and nickel. The other relative polices, including Carbon Border Adjustment Mechanism (CBAM) \u003csup\u003e\u003cspan citationid=\"CR59\" class=\"CitationRef\"\u003e59\u003c/span\u003e\u003c/sup\u003e and EU Emissions Trading System (ETS) \u003csup\u003e\u003cspan citationid=\"CR60\" class=\"CitationRef\"\u003e60\u003c/span\u003e\u003c/sup\u003e, are relative to the material processing stage.\u003c/p\u003e \u003cp\u003eIn recent years, China has implemented rigorous regulations and policies for battery management. Since 2016, China has rolled out a series of measures to establish a comprehensive policy framework for EV battery recycling. Between 2016 and 2018, Chinese policymakers focused on laying the groundwork, before shifting their attention to the convergence and full implementation of policy from 2019 onwards. These policies include the Pilot Implementation Plan for the Extension of Producer Responsibility for Automotive Products \u003csup\u003e\u003cspan citationid=\"CR61\" class=\"CitationRef\"\u003e61\u003c/span\u003e\u003c/sup\u003e, Interim Measures for the Management of Recycling and Utilization of New Energy Power Vehicle Battery \u003csup\u003e\u003cspan citationid=\"CR62\" class=\"CitationRef\"\u003e62\u003c/span\u003e\u003c/sup\u003e, Interim Provisions on the Management of Traceability of Recycling and Utilization of New Energy Vehicle Power Battery \u003csup\u003e\u003cspan citationid=\"CR63\" class=\"CitationRef\"\u003e63\u003c/span\u003e\u003c/sup\u003e, Measures for the Administration of Echelon Utilization of Power Batteries in New Energy Vehicle \u003csup\u003e\u003cspan citationid=\"CR64\" class=\"CitationRef\"\u003e64\u003c/span\u003e\u003c/sup\u003e, among others. To date, the Chinese government has developed the \"four beams and eight columns\" of power battery recycling management policies, encompassing top-level policy, traceability management, industry specification, pilot demonstration, and postmortem supervision.\u003c/p\u003e \u003cp\u003eThe U.S. government is also dedicated to enhancing domestic recycling to streamline EV battery supply chains and ensure material availability. The U.S. battery-related policies include the Inflation Reduction Act (IRA) \u003csup\u003e\u003cspan citationid=\"CR65\" class=\"CitationRef\"\u003e65\u003c/span\u003e\u003c/sup\u003e and the Federal Bipartisan Infrastructure Law \u003csup\u003e\u003cspan citationid=\"CR66\" class=\"CitationRef\"\u003e66\u003c/span\u003e\u003c/sup\u003e. The enactment of the IRA provides substantial tax benefits and other subsidies aimed at localizing supply chains and boosting EV adoption.\u003c/p\u003e \u003cp\u003eIn Japan, on the other hand, the main regulations pertaining to this topic include Household Appliance Recycling Act \u003csup\u003e\u003cspan citationid=\"CR67\" class=\"CitationRef\"\u003e67\u003c/span\u003e\u003c/sup\u003e, Electrical Appliance and Material Safety Law \u003csup\u003e\u003cspan citationid=\"CR68\" class=\"CitationRef\"\u003e68\u003c/span\u003e\u003c/sup\u003e, Automotive Safety Standards, Lithium-ion Battery Safety Standards \u003csup\u003e\u003cspan citationid=\"CR69\" class=\"CitationRef\"\u003e69\u003c/span\u003e\u003c/sup\u003e, and Energy Storage System (ESS) Regulations \u003csup\u003e\u003cspan citationid=\"CR70\" class=\"CitationRef\"\u003e70\u003c/span\u003e\u003c/sup\u003e. In addition, Japan has implemented various government initiatives and policies related to green technology, such as the promotion of energy-efficient appliances and EVs. While these initiatives might not be specific to batteries, they impact the usage of battery. Additionally, Japan has promoted government programs and initiatives that provide funding and support for battery research and development in the country.\u003c/p\u003e "},{"header":"Declarations","content":"\u003cp\u003eAcknowledgement\u003c/p\u003e\n\u003cp\u003eNatural Science Foundation of Tianjin under Grant NO. 21JCZXJC00180 (to X. S.)\u003c/p\u003e\n\u003cp\u003eNational Natural Science Foundation, China (NSFC) under Grant No. 41701636, (to L. D).\u003c/p\u003e\n\u003cp\u003eNatural Science Foundation of Shaanxi under Grant NO. 2023-JC-QN-0808; QCYRCXM-2022-127 (to L. S.)\u003c/p\u003e\n\u003cp\u003eReporting summary\u003c/p\u003e\n\u003cp\u003eFurther information on research design could be found in the Nature Research Reporting Summary.\u003c/p\u003e\n\u003cp\u003eData availability\u003c/p\u003e\n\u003cp\u003eAll data are available by request.\u003c/p\u003e\n\u003cp\u003eCode availability\u003c/p\u003e\n\u003cp\u003eNot applicable.\u003c/p\u003e\n\u003cp\u003eCompeting interests\u003c/p\u003e\n\u003cp\u003eThe authors declare no competing interests.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\n\u003cli\u003eEU-Lex. Regulation (EU) 2023/1542 of the European Parliament and of the Council of 12 July 2023 concerning batteries and waste batteries, amending Directive 2008/98/EC and Regulation (EU) 2019/1020 and repealing Directive 2006/66/EC (Text with EEA relevance). http://data.europa.eu/eli/reg/2023/1542/oj (2023).\u003c/li\u003e\n\u003cli\u003eLi J. J., Li L. L., Yang R. R., Jiao J. L. 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However, this also presents an opportunity to stimulate the growth of the battery industry and foster the sustainable development of the electric vehicle sector. This paper is one of the first attempts to develop a life cycle\u0026ndash;based analytical metric that provides a comprehensive examination of the change of policy \u0026amp; regulation boundary of the newly implemented regulation, and the associated impacts on environment (in term of life-cycle phase-based carbon footprints), business (both opportunities and risks), and compliance practice. This metric is created based on a comparison of the new EU battery regulation with previous ones. Utilizing this metric, we employed firsthand data from two major battery manufacturers to illustrate the aforementioned points. Finally, we provided policy recommendations and discussions on the impact of this battery regulation on both EU and emerging economies, to offer insights for the future.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e","manuscriptTitle":"A comprehensive analysis on EU batteries regulation: lifecycle decarbonization, business challenge and compliance risk","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-04-25 09:35:49","doi":"10.21203/rs.3.rs-3864708/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"d0941514-a394-4276-be1b-e45875ad6dcf","owner":[],"postedDate":"April 25th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[{"id":28151522,"name":"Earth and environmental sciences/Environmental social sciences/Sustainability"},{"id":28151523,"name":"Earth and environmental sciences/Environmental social sciences/Energy and society"}],"tags":[],"updatedAt":"2025-04-25T09:35:49+00:00","versionOfRecord":[],"versionCreatedAt":"2025-04-25 09:35:49","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-3864708","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-3864708","identity":"rs-3864708","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}