Kumi appointed to develop the Due Diligence Guidelines for the EU Battery Regulation

Kumi has been appointed by the European Commission to help implement the due diligence provisions of the EU Battery Regulation.

There are two key elements of this project:

Developing the official Implementation Guidelines on how to address the due diligence requirements of the Regulation
Drafting the Delegated and Implementing Acts for the Commission to assess and recognise industry due diligence schemes under the Regulation.

What is the EU Battery Regulation and what does it cover?

The EU Battery Regulation 2023/1542 is part of the EU Green Deal’s twin transition (green and digital) and EU Raw Materials Strategy. It aims at making European battery supply chains more sustainable and economically more resilient. The Regulation addresses several areas throughout the entire battery life cycle, including carbon footprint, durability, recycling and recycled content, supply chain due diligence, and more. It applies to all categories of batteries such as Starting, Light and Ignition (SLI) batteries, which usually power accessories in vehicles, Light Means of Transport (LMT) batteries, which are commonly used in lighter electric vehicles such as e-bikes and e-scooters, EV batteries, industrial batteries, and portable batteries.
The Regulation came into force on August 17, 2023. Compliance with the due diligence aspects of the Regulation (Chapter VII and Annex X) becomes mandatory on August 18, 2025.

Implementation Guidelines for due diligence in the Battery Regulation

Kumi is assisting the European Commission by drafting the Guidelines for the EU Battery Regulation’s due diligence obligations (Chapter 7 and Annex X in the Regulation).

To prepare companies for compliance, the Guidelines will serve as a crucial reference document for implementing the due diligence management systems and processes in alignment with the expectations of the Regulation.

The Guidelines will explain the scope of due diligence in the Regulation that is determined by factors such as product specificities, economic operators, raw materials, supply chain stages, and risks. In addition, risk profiles for the specific risk factors listed in Annex X of the Regulation will provide companies with an easy-to-use starting point to conduct due diligence, as will the inclusion of reference sources for where companies can find further information.

Publication is planned in February 2025.

Compliance with the EU Battery Regulation and what you can do until February 2025

Compliance with the due diligence expectations of the Regulation will depend on the meaningful implementation of risk management in line with the international instruments listed in Annex X in the Regulation (e.g. Human Rights Bill, UN Guiding Principles for Business and Human Rights, OECD Due Diligence Guidance, etc). This includes important aspects such as risk-based due diligence, achieving continuous improvement of supply chain sustainability, meaningful stakeholder engagement, and others.

It is important to understand that compliance will not result from demonstrating “zero-risk” supply chains or that one’s individual operations are not part of the problem. Due diligence starts from the fact that risks and negative impact are a reality in most companies’ supply chains. Therefore, meaningful due diligence actions are key.

Kumi has provided a list of actions companies can and should undertake in preparation for the Regulation even with the pending publication of the Implementation Guidelines. Major points include:

Determine the extent to which you are in scope of the EU Battery Regulation;
Understand the international frameworks listed in Annex X of the Regulation;
Review your management systems and processes to identify the main gaps on a mid-to high-level (e.g. against the due diligence steps of the OECD Due Diligence Guidance);
Engage with your suppliers to inform them about what’s coming (even without the details), and start to seek their collaboration to improve supply chain traceability;
Keep your senior management up to date;
Seek support from business associations, research and civil society institutions, and expert advisors.

Our specialist expertise is why we are trusted to work with the European Commission and other policymakers. Our experienced team is here to support companies on their journey in preparing for the due diligence requirements within the UK Battery Regulation.

Quote from Andrew Britton, CEO of Kumi Consulting Ltd:

“Through our work on the EU Battery Regulation we have a truly unique vantage point on how the due diligence requirements of the Regulation are to be interpreted, understood and applied by companies. At Kumi, our mission is to help companies build responsible supply chains. This Regulation impacts battery supply chains globally and, when properly implemented, will help create the sustainable and responsible battery value chain that we all want to see. I am really excited that at Kumi we have this opportunity to help the industry navigate this new and complex compliance challenge.”