In a move ostensibly aimed at the carbon footprint of electricity, the EU actually wants to localize battery manufacturing and reshape the global battery supply chain.
Recently, the European Commission formally announced the power battery carbon footprint calculation rules “draft”, the draft provides: that the carbon footprint calculation of electricity consumption, should be calculated according to the national average electricity consumption portfolio standard. However, there is an exception, the carbon footprint of Directly Connected Electricity (Directly connected electricity between the battery production facility and the power source) can be measured according to the actual value.
It means that under the framework of the new battery law, power battery companies cannot reduce the carbon footprint of their electricity consumption by purchasing energy attribute certificates such as green certificates or by signing a PPA (Power Purchase Agreement) to purchase green electricity.
China has never released data on the carbon footprint of the national average electricity consumption mix. It should be noted that China’s grid CO2 emission factor and the carbon footprint of the national average electricity consumption mix are two different concepts, as the former only takes into account the carbon emissions during the electricity production process, while the latter calculates the carbon emissions of the whole life cycle of electricity, including the transportation of fuels, the production of equipment, and the transmission and distribution of electricity.
“For China, this undoubtedly means that the EU market is not closed. It’s just that products need to be manufactured locally. Chinese companies should still be able to open factories in the EU. In that sense, it’s not exactly protectionist.” Vigiles, a senior fellow at the Peterson Institute for International Economics in the United States, said in a media interview.
Another way to phrase building a local supply chain is to get rid of dependence on the Chinese supply chain. After all, batteries include not only power batteries (which can also be used for vehicle-grid interaction or retired as storage batteries), but also storage batteries that are more closely related to energy security and the grid, and the EU is concerned that a single source of battery imports will make for increased supply chain risk, price volatility, and weaker control over policy and market dynamics.
As previously reported by Reuters, a document prepared for EU leaders said the EU could become dependent on Chinese lithium-ion batteries and fuel cells by 2030. This could be similar to Europe’s previous reliance on Russian energy.
It is clear that in the process of responding to the EU battery law, it is particularly crucial to strengthen mutual recognition with EU rules. Through such mutual recognition, it will not only ensure more efficient compliance and enforcement of regulations, but also help promote international cooperation and technology exchange, and accelerate the development and application of clean energy technologies. Therefore, it is crucial to continue to deepen the dialog and cooperation with the EU on battery regulations.