The new Action Plan builds on two main pillars. The first one focuses on making products more sustainable while the other aims at realising “less waste, more value”. Also, it includes seven sectoral plans targeting “key product value chains”. In this insight, we will take a closer look at one of them, the battery value chain.
First, the Action Plan foresees an overhaul of the regulatory framework for batteries. Set for October 2020, a new legislative proposal regulating batteries will build on the ongoing evaluation of the Batteries Directive and the recent work of the Batteries Alliance.
In a nutshell, the Commission intends to:
For the Commission, batteries are a pivotal lever towards greener mobility. That’s why the Action Plan also foresees a revision of the End of Life Vehicles (ELV) Directive as part of its plan for the batteries sector. The ELV Directive aims at making the dismantling and recycling of end-of-life vehicles more environmentally friendly, mainly by phasing out the use of heavy metals. When it comes to batteries, the ELV Directive regulates their use until they are dismantled from the vehicle. The revision might introduce mandatory recycled content for vehicle components, such as batteries, and set new benchmarks in terms of making recycling more energy efficient. To ensure coherence, the new requirements to be included in the revised ELV Directive are likely to be aligned with the ones introduced in the new legislative proposal for batteries.
A step-by-step approach, which allows keeping the balance between environmental and economic benefits, would be a safe way towards a prosperous European circular economy.
As a result of the economic consequences of the COVID-19 pandemic, the latter might accelerate the shift towards more circularity. In February and March 2020, the closure of Chinese factories created bottlenecks in the supply of vital battery components. The pandemic and the resulting collapse in exports from China thus revealed how dependent on China our European batteries value chain is. In the eyes of many, it has strengthened the case for manufacturing domestically such strategic components of greener mobility. During an online Bruegel event on 20 March 2020 about industrial policy, Commissioner Thierry Breton reflected on the dependency of European industrial value chains. In his view, the COVID-19 crisis had potentially uncovered an excess in economic interdependence. “There will be a before and an after [the coronavirus pandemic]”, Breton said, explaining that we might enter a post-globalisation era.
Launched in 2017, the European Battery Alliance has been trying to address this excess in interdependence by promoting a domestic battery ecosystem. The circular economy action plan could contribute to supporting such an independent ecosystem by reducing the dependence on primary raw material imports thanks to greater recycling efficiency of battery components. As such, the new circular economy measures could hasten the transition to a post-globalisation era and serve as a blueprint for European industry.
Nevertheless, it should not become a burden by setting strict requirements that could hinder technological development and fair competition. Instead, it should provide enough flexibility for the strategic and burgeoning European battery industry to adapt. A step-by-step approach, which allows keeping the balance between environmental and economic benefits, would be a safe way towards a prosperous European circular economy.
With the Circular Economy Action Plan, the Von der Leyen Commission has shown what the European Green Deal will change. A look at actions set out for one of the seven sectors discussed in the Action Plan, the batteries sector, shows that this time the Commission means business. Rather than opting for symbolic actions, the Commission tackles core issues, such as recycling efficiency, for example. With this plan, the Commission offers a steady way forward toward a more circular economy.
Having a robust yet flexible plan toward a circular economy is especially important for the battery sector. Indeed, under the current COVID-19 crisis, bottlenecks of batteries components were among the first signs alerting on the dangers of excessive dependency. As such, it is in this type of import-dependent sector that the Circular Economy Action Plan 2.0. might prove the most useful to ensure the security of supply. By boosting the recycling and reuse of materials, the circular economy not only contributes to the protection of the environment but also makes our economies less dependent on foreign influence.
Yet, the European Union will need to strike the right balance between its emission reduction goals and the sector’s competitiveness. The Circular Economy Action Plan can reach such an outcome if enough flexibility is provided at each step on the way to a more circular battery sector.