In Part 4 of our ‘Battery Shorts’ series, we look at the new supply chain diligence requirements for companies under the European Union (EU) Batteries Regulation.
These requirements were originally due to apply from 18 August 2025, but the European Commission extended this date by two years, to 18 August 2027.
If you are wondering whether the Batteries Regulation applies to your products, please see Part 1 of our series.
Who is in scope?
The battery due diligence obligations apply to manufacturers or importers placing batteries on the EU market, where their net turnover (or the net turnover of their group) is at least 40 million euros in the financial year preceding the last financial year. There is currently a European Commission proposal to increase this turnover threshold to 150 million euros. This proposal is part of a larger package of reforms and is currently still under negotiation.
The obligations apply to economic operators responsible for placing both stand-alone batteries and batteries that are incorporated into products on the EU market. This means that manufacturers and importers will be responsible for compliance with these requirements where they place batteries on the EU market, even where their batteries were originally sourced from a third party outside the EU.
What are the new requirements?
From 18 August 2027, companies in scope must implement a comprehensive battery due diligence system covering the following pillars:
1. Battery due diligence policy (DDP)
Businesses must adopt a corporate battery DDP addressing the sourcing of cobalt, lithium, nickel, natural graphite and related compounds. The policy must identify social and environmental risks and align with international standards. The battery DDP must also be verified by a notified body, and compliance must be audited annually.
2. Update supplier contracts
Supplier contracts must incorporate both the company’s battery DDP and its risk management measures. In practice, this means that most businesses will need to take steps to amend their existing contracts now, so the new measures are incorporated for the compliance deadline.
3. Traceability system
Companies are also required to establish a system of controls and transparency over their supply chain, including a chain of custody or traceability system which identifies upstream actors in the battery supply chain. In practice, this can take some time to put in place, given many companies’ limited visibility over their supply chains beyond their direct suppliers.
The traceability system must be supported by documentation that provides at least the following information:
- A description of the raw material, including its trade name and type.
- The name and address of the supplier that supplied the raw material to the economic operator that places the batteries on the market.
- The country of origin of the raw material and the market transactions from the raw material’s extraction to the immediate supplier to the economic operator placing the battery on the market.
- The quantity of the raw material present in the battery, expressed in percentage or weight.
- Third-party verification reports issued by a notified body, or if these are not available and the raw material originates from a conflict-affected and high-risk area, additional information as set out in the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
For many businesses, this will require greater scrutiny over their supply chains, particularly for those purchasing batteries from third parties before incorporating them into products.
4. Oversight responsibility with top management level
Businesses must establish a risk management system that assigns responsibility for overseeing the battery DDP to the company’s ‘top management level’. The company must also report the findings of its risk assessment to the top management level. Generally, we see companies setting this up by establishing a committee that includes senior management.
5. Due diligence and risk management
Businesses must conduct a risk assessment to establish whether there are any adverse impacts in their battery supply chain associated with the risk categories listed in Annex X (which includes environmental impacts, human rights and community life, including that of Indigenous people).
Following this assessment, businesses are required to develop a risk management plan which includes a strategy to address the identified risks – including mitigation, supplier engagement and escalation – with the findings being reported to top level management. Companies are expected to keep this plan under review, and it should be adapted when any new risks are identified.
6. Grievance mechanism
There is also a requirement for the company’s due diligence system to integrate grievance and remediation mechanisms aligned with the United Nations’ Guiding Principles on Business and Human Rights.
7. Annual Closure
Annually, businesses must publish a report on a free-to-access website which must include data and information on steps taken to comply with the due diligence requirements, any significant adverse impacts in identified risk categories and how these have been addressed. The report must also include a summary of the third-party audit carried out regarding the business’ compliance with its battery DDP.
The first report will likely need to be published by 18 August 2028.
8. Record-keeping and audits
Documentation, including audit and verification reports, must be retained for 10 years after the last battery covered by the battery DDP is placed on the market.
Compliance with all the requirements mentioned in this blog post must be audited periodicallyby a notified body.
How can companies get support with compliance?
Businesses can join a recognised scheme to support their compliance programs but will remain individually liable for compliance. This means that while schemes can support compliance, ultimately it will be up to each company to make sure they have a compliant policy and process, do the audit on time and keep the necessary documentation. At the time of writing this post, no due diligence schemes have been recognised by the European Commission. Once a scheme has been recognised, it will be recorded in a public register maintained by the European Commission.
The European Commission is required to adopt guidelines to support the due diligence obligations by 27 July 2026.
What should my business do next?
The Batteries Regulation applies in addition to other EU due diligence laws, such as the Conflict Minerals Regulation, Critical Raw Materials Act and the upcoming Corporate Sustainability Due Diligence Directive (CSDDD). Businesses are advised to approach their EU supply chain diligence compliance holistically, since it may be possible to leverage compliance with other due diligence laws that also apply to them.
Concretely, we recommend that companies:
- Review existing supply chain policies and update for EU Batteries Regulation compliance or create a new battery DDP.
- Review and update contracts with battery suppliers to integrate the battery DDP and risk management processes.
- Update governance processes and assign oversight responsibility to top management.
- Put in place a traceability system for the battery supply chain.
- Start doing due diligence on the company’s battery supply chains to assess environmental and/or human rights risks, and document processes.
- Engage a notified body for the audit once they are designated by the European Commission.
Stay tuned for Part 5 of our ‘Battery Shorts’ series, which will cover the new removability and replaceability requirements in the Batteries Regulation.
