EU’s Proposed Carbon Footprint Methodology Has Chinese EV-Battery Makers on Edge

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Workers process a new aluminum alloy case for new-energy vehicle batteries in March 2022 at a factory in Huaibei, East China’s Anhui province. Photo: VCG

New rules proposed by the European Union for calculating the carbon footprint of electric vehicle (EV) batteries have Chinese power-cell makers on edge as they face a potentially stricter regime while seeking to expand exports to the bloc.

The EU published the draft rules on April 30 for public feedback as part of its Battery Regulation. Under the regulation, companies will need to issue carbon footprint declarations for EV batteries sold in the EU starting Feb. 18, 2025. Additionally, the bloc will begin classifying the carbon footprint performance of batteries starting Feb. 18, 2026, and start introducing carbon footprint thresholds for batteries from Feb. 18, 2028.

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The EU has proposed new rules for calculating the carbon footprint of EV batteries, affecting Chinese battery makers who export to Europe.
Starting 2025, companies must issue carbon footprint declarations, with classification rules and thresholds introduced in 2026 and 2028, respectively.
Chinese battery makers face challenges due to higher grid emission factors and a lack of detailed data on upstream suppliers' carbon footprints.

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Who’s Who

Eve Energy Co. Ltd.: Eve Energy Co. Ltd. (300014.SZ) is a Chinese battery-maker concerned about the EU's new carbon footprint rules for EV batteries. The company's chairman's assistant, Xiao Zhongxiang, highlighted the pressure on Chinese battery-makers due to their reliance on fossil fuels, which results in higher grid emission factors compared to Japanese and South Korean counterparts. This makes the decarbonization of their supply chains a key focus.

Sunwoda Electronic Co. Ltd.: Sunwoda Electronic Co. Ltd. is a Chinese battery manufacturer. According to Liang Rui, the company's vice president, upstream materials account for the largest portion of the carbon footprint in power batteries. In ternary batteries, 49% of the carbon footprint is attributed to anode materials, with the remainder from cathode and lithium materials and the assembly process. The EU's proposed rules will require more data collection from upstream suppliers, posing challenges due to the current lack of a complete carbon footprint calculation system in China.

Contemporary Amperex Technology Co. Ltd.: Contemporary Amperex Technology Co. Ltd. (CATL) is the world's largest EV-battery maker. To address issues arising from the EU's proposed carbon footprint calculation rules, Meng Xiangfeng, a vice president at CATL, suggested that China and the EU should establish communication channels to discuss setting up a carbon footprint database and formulating rules for carbon footprint calculations.

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