Thought Leadership

EU's EV battery carbon footprint: changes and challenges

The shift to a generalized national average for electricity consumption in carbon footprint calculations will favor less fossil-intensive countries, putting South Korean and Japanese manufacturers at an advantage over Chinese manufacturers, second only to local European manufacturers.

Read our special insight from Duo Fu, Head of Battery Research at Rystad Energy.

“New EU regulation increases transparency across the EU and poses challenges for manufacturers in regions with higher carbon-intensity power grids, like China.”

Duo Fu, Head of Batteries at Rystad Energy

The European Union has proposed a methodology for calculating and verifying the carbon footprint of electric vehicle (EV) batteries. This proposal marks a significant advancement in regulatory standards aimed at reducing the environmental impact of EVs. The supplement to Regulation (EU) 2023/1542 tightens guidelines for carbon footprint assessments and aligns with the EU's broader goals of sustainability and reduced greenhouse gas emissions. EU's stringent carbon footprint regulations challenge global manufacturers to adopt cleaner energy practices and enhance recycling efforts, fostering a localized, lower-carbon production ecosystem.

In addition, the EU release its Rules for the Calculation of the Carbon Footprint of Electric Vehicle Batteries, and both regulations have been subject to public consultation (until 28 May), with a 60-day WTO/TBT notification thereafter. The proposals are expected to take effect around 18 August 2024, and could be implemented from August 2025.

The EU’s new proposal for calculating the carbon footprint of EV batteries represents a robust effort to standardize and potentially simplify the measurement of environmental impacts in the battery supply chain. While the focus on direct electricity connections and national averages in power consumption modelling could help standardize calculations, it also raises concerns about the flexibility needed to accurately reflect the varied global energy landscapes. As the EU continues to lead in environmental regulatory frameworks, the success of this regulation will largely depend on its adaptability and the inclusive consideration of global stakeholders in the rapidly evolving EV market.

It also cannot be ruled out that the EU aims to break the leading advantage of Asian battery companies and intends to build a localized and complete battery manufacturing system inside the EU, reshaping the global battery industry chain.

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