Background and Challenges of the Act

On August 17, 2023, the EU Batteries and Waste Batteries Directive (hereinafter referred to as the “Directive”) officially came into effect. The Directive stipulates that from February 18, 2025, power batteries sold in the EU market must provide a carbon footprint statement. This requirement poses a new challenge and “threshold” for China’s power battery exports. In addition, China’s advantages in photovoltaics, wind power, etc.New EnergyThe industry also faces the impact of similar European carbon emissions barriers.

Shu Yinbiao, an academician of the Chinese Academy of Engineering and president of the Chinese Society of Electrical Engineering, pointed out that due to differences in carbon emission accounting boundaries, Chinese energy storage companies are temporarily unable to complete the report as required. my country's carbon market mainly identifies carbon footprints within the boundaries of corporate legal entities, while the EU requires reporting of carbon emission data for front-end raw materials, which requires detailed data for all links in the supply chain. At present, my country's data support system and basic database are not yet perfect, resulting in the carbon emissions of battery products being overestimated in the EU database.

Data discrepancies and technical confidentiality

Since the export of battery products requires mandatory disclosure of carbon emission information throughout the production process, this may lead to the leakage of corporate technical secrets. Industry experts suggest accelerating the construction of a carbon footprint accounting standard system for new energy storage products, establishing a basic carbon footprint database, strengthening bilateral and multilateral international energy cooperation, establishing a carbon footprint testing and certification agency and a qualification recognition mechanism with major trading partners, and promoting international mutual recognition of the green value of electricity.

Senior experts in carbon emission research pointed out that carbon footprint accounting is an urgent, unfamiliar and uncertain task. Enterprises need to quickly improve their understanding of the rules, understand the content and methods of accounting, and lead the supply chain to implement it. Domestic power battery manufacturers generally report that the pressure of carbon footprint reporting is high, the time requirements are tight, the supply chain data foundation is weak, and the carbon footprint shown by the trial calculation results is too high, which are the main challenges.

Multiple response measures

In order to cope with the new requirements of the EU Regulation, Chinese companies and the government are taking a variety of measures:

1. Standard formulation and database construction: The China Photovoltaic Products Import and Export Chamber of Commerce took the lead in organizing a number of upstream and downstream photovoltaic product companies to cooperate with the Ministry of Commerce to formulate the "Quantitative Requirements for Low-Carbon Products - Export Photovoltaic Modules" industry standard to meet the carbon footprint requirements of photovoltaic products in major exporting countries.
2. Technology cooperation and innovation：Local governments and enterprises strengthen technical cooperation to promote process transformation and upgrading. During the 17th International Solar Photovoltaic and Smart Energy (Shanghai) Conference, Shanghai Cathay Biotechnology Co., Ltd. and Fuyang Transportation Energy Investment Co., Ltd. announced a strategic cooperation to jointly build the world's first bio-based thermoplastic composite photovoltaic frame application demonstration project to achieve new material substitution for photovoltaic aluminum frames.
3. Green transformation and policy support: Fuyang Economic and Technological Development Zone and Fuyang Hefei Modern Industrial Park are creating a green electricity industry demonstration park to promote 100% green electricity supply in the production process and reduce the carbon footprint of silicon wafers through process upgrades.

Domestic and international market structure

In fact, the main markets for my country's new energy products are not Europe and the United States. Data shows that 90% of my country's wind power products are sold in the domestic market, 60% of photovoltaic products are sold in the domestic market, and 87% of electric vehicles are sold in the domestic market. At present, wind power products have basically withdrawn from the US market, and the European market accounts for less than 10%.

Zhang Na, associate professor at the School of Economics and Management of Beijing Jiaotong University and researcher at the Sustainable Transportation Innovation Center, pointed out that the carbon footprint requirements of Europe and the United States for China's new energy industry are actually a fear of the rapid development and dumping of China's new energy technology and products. The West's emphasis on carbon footprint is actually intended to suppress the development of China's new energy industry.

The role of the global response to climate change

From the perspective of the global response to climate change and the promotion of energy transformation, the demand for new energy technologies and products is growing rapidly, and there is no question of overcapacity. Chinas new energy products have significant technological and cost advantages in the global market, and Europe and the United States are making a big fuss about dumping in the European and American markets despite the fact that the fundamental purpose is to inhibit the development of Chinas new energy industry.

The United States frequently put forward Chinas new energy overcapacity, that Chinas export strategy on the global supply chain to form a threat. In this regard, Zhang Na said, Chinas new energy products in the global market has a significant competitive advantage, Europe and the United States inhibitory measures is actually the rapid development of Chinas industrial concerns.