WEBINAR: Due Diligence under the EU Batteries Regulation: Preparing for next year’s compliance requirements (with Circulor)

The EU Batteries Regulation is the first EU legislation which requires implementation of risked-based due diligence in its entirety. Existing legislation such as the EU Conflict Minerals Regulation requires due diligence based on so-called CAHRAs, the identification of control points, and focuses only on a very specific set of severe human rights and governance risks. The Batteries Regulation expands the scope to a much broader set of risks, including the environment, and requires important aspects such as risk prioritisation, remediation, and more through its commitment to several OECD frameworks, the UNGPs, etc. Subsequent legislation such as the CSDDD will go even further in terms of scope and supply chain focus, which is limited in the EU Batteries Regulation to battery raw materials in the upstream segment of the supply chain.

Yes, it covers batteries that are both placed on the market or put into service for the first time.

All due diligence requirements listed in Articles 49 and 50 of the Regulation need to be in place by August 2025, including third-party verification by an approved notified body. The first public report is due only by August 2026 (current state of knowledge, subject to change).

The EU Batteries Regulation does not define specific penalties in case of non-conformity with the due diligence requirements. If companies fail to achieve third-party verification (Article 51) due to non-conformities with the due diligence requirements, EU Member States will decide on the consequences. Article 84 says that Member States shall require the relevant economic operator to put an end to any non-compliances with the due diligence obligations. In cases of continued and serious non-compliances, measures may include the prohibition to make batteries concerned available on the market, or their withdrawal from it. This type of enforcement is different from other requirements in the EU Batteries Regulation which fall under the CE marketing rules.

Building a reliable chain of custody requires end-to-end traceability, which takes time. However, as we get closer to regulatory deadlines, more organizations across the value chain are working with traceability solution providers, like Circulor, who as a result have a growing network of participants providing traceability and sustainability data to our platform – currently over 52% of global cell manufacturers (by production volume) providing data. This enables efficiencies for new customers as we are likely already working with a number of your suppliers, speeding up the onboarding process. Businesses should get start implementing traceability now to ensure they meet deadlines and make meaningful progress when it comes to supply chain due diligence and risk mitigation by August 2025.

We strongly advise companies to get going on the due diligence requirements rather than waiting for notified bodies to be announced. The notified bodies will enforce the requirements, but the requirements themselves are already defined.

From our experience, working with a neutral third-party traceability provider supports economic operators to engage with their upstream suppliers while also supporting these upstream suppliers who have access to their data downstream. In addition, Circulor has an established network of battery value chain participants already on the platform and sharing data securely, which creates efficiencies for new customers. For more information, please follow this link: https://circulor.com/articles/due-diligence-under-the-eu-batteries-regulation-faqs

The role of a neutral third party as intermediary between two parties is used in different contexts such as negotiations and arbitration processes. It must meet certain characteristics (e.g. independence from involved parties, no conflict of interest, expertise) to ensure its neutrality. In cases where two or more parties have irreconcilable interests, a neutral third party functions as problem solver. In the context of supply chain transparency, it may work as an assurance mechanism to collect, store, process and verify confidential data without counterparties needing to have access to that data.

No, it is not necessary to reveal every supplier within the supply chain. This is another benefit of working with an independent, neutral traceability provider as they will know who all your suppliers are because they’re gathering data from them but that does not mean that all of the identities of suppliers need to be provided through the supply chain while still fulfilling the requirements of due diligence. For more information, follow this link: https://circulor.com/articles/due-diligence-under-the-eu-batteries-regulation-faqs

Both legislations concern due diligence. While the CSDDD is a dedicated due diligence law, the EUBR is a product-specific law in which due diligence is only one of several topics. The CSDDD is a lex generalis whereas the EUBR is a lex specialis, which means that in case of a direct conflict between the two, EUBR takes precedence over the CSDDD. Both build on the OECD Due Diligence Guidance, although CSDDD is stronger based on the cross-sectoral OECD RBC Guidance whereas the EUBR is more directly modelled after the OECD Minerals Guidance. The precise interaction between the two is difficult to foresee at this point because the development of CSDDD guidelines is only starting. By and large, the core due diligence process as in the OECD frameworks should be applicable to both, with differences such as scope of the laws, etc. being rather complementary than in direct conflict.