viewInfinity Lithium Corporation Ltd

Europe to 'modernise' battery legislation as demand climbs

The European Commission wants to modernise EU legislation on batteries as it takes the next step towards meeting the European Green Deal.

Infinity Lithium Corporation Ltd - Europe to 'modernise' battery legislation as demand climbs
Europe is on a path to be the first climate-neutral continent in the world by 2050

Battery legislation in Europe is due for its first update since 2006 as demand for clean, green technologies, which make heavy use of batteries, increases rapidly.

The European Commission, which is the governing body of the European Union, called earlier this month to modernise EU battery legislation.

It is the first action taken in the European Commission’s Circular Economy Action Plan, announced in March.

European Green Deal

This action plan is a key plank in the European Green Deal, which sets Europe on a path to be the first climate-neutral continent in the world by 2050.

The EC said, moving forward, any batteries marketed or sold in the EU should be “sustainable, high-performing and safe all along their entire life cycle”.

“This means batteries that are produced with the lowest possible environmental impact, using materials obtained in full respect of human rights as well as social and ecological standards, and they should be long-lasting, safe, and able to be repurposed, re-manufactured or recycled at the end of their life,” it says.

Battery demand

Batteries are used in many emerging clean and green technologies, such as solar and wind power and electric vehicles.

Demand for batteries is set to increase 14-fold by 2030, largely driven by electric transport, a market set to reach an eye-watering US$803 billion by 2027.

This, in turn, increases the demand for the raw materials, including lithium, nickel, cobalt, manganese, copper, tin and graphite.

Nickel has hit recently hit 15-month highs thanks to the increasing demand, while the copper price has been predicted to hit US$10,000 by 2022.

How modernised legislation will work

The EC has proposed mandatory requirements for all batteries, meaning industrial, automotive, EV and portable batteries would need to meet the standards.

This comes amid concerns at the environmental impact of newly-produced batteries, as while the batteries themselves offer significant improvements over traditional power sources, the raw materials still need to be mined from the ground below.

The EC said batteries would need to be responsibly sourced, limit use of hazardous substances and meet minimum quotas for performance, durability, recyclability, labelling, use of recycled materials and carbon footprint.

This legal certainty, the EC said, would “unlock large-scale investments and boost the production capacity for innovative and sustainable batteries in Europe and beyond”.

Executive vice president for the European Green Deal, Frans Timmermans, said increasing reliance on batteries should not come at a cost to the environment.

“The new batteries regulation will help reduce the environmental and social impact of all batteries throughout their life cycle, and this proposal allows the EU to scale up the use and production of batteries in a safe, circular and healthy way,” he said.

“Step in right direction”

Consultancy IDTechEX said the proposal was a step in the right direction.

“It is clear the industry should aim to maximise the environmental benefits and minimise any impact from Li-ion batteries, wherever they are used,” it said.

“There is an opportunity to do this at the early stages of an industry forecast for substantial growth, and there is evidence that this is now beginning to happen.”

Opportunity for INF

ASX-listed lithium hopeful Infinity Lithium Corporation Ltd (ASX:INF) welcomed the news, pointing to an 18-fold increase in lithium demand by 2030 and a 60-fold increase by 2050.

“The EC and key European policymakers continue to promote the rapid adoption of green, ethically-sourced electrified transport,” said managing director Ryan Parkin.

“Our San Jose Lithium Hydroxide Project is perfectly positioned to take advantage of the EV revolution already underway.”

Infinity is currently doing feasibility study test-work at the Spanish project, which is expected to “fulfil a critical role in the EU’s lithium-ion battery supply chain”.

Its executive chairman Adrian Byass recently trumpeted the company’s early test-work results, which delivered on both an economic and sustainability front.

Most recently, test-work outcomes improved open circuit flotation lithium recoveries, increasing the potential for substantial lithium oxide recoveries in closed circuit test-work.

Infinity has also recently hired lithium expert David Maree to its Technical Advisory Committee.

Other ASX-listed companies set to benefit directly from Europe’s moves through their European-based battery metals projects are Euro Manganese Inc (ASX:EMN) (CVE:EMN) (OTCMKTS:EROMF), European Lithium Ltd (ASX:EUR) (FRA:PF8) (VIE:ELI), Alicanto Minerals Ltd (ASX:AQI) and Elementos Limited (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM).

- Daniel Paproth

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