In April 2024, the European Union (EU) published a draft delegated regulation outlining the calculation and verification methods for the carbon footprint (CFP) of electric vehicle (EV) batteries, and a draft implementing regulation specifying the format for CFP declarations. Although both are still in the draft stage, many related companies are already scrambling to prepare, with data linkage across the entire supply chain being a particularly important issue. Furthermore, since this regulation applies to all businesses selling batteries within the EU, it is not irrelevant to Japanese companies, and automakers operating electric vehicle businesses in the EU, in particular, need to prepare urgently.
This time, we will explain the parts of the CFP calculation method in the former draft delegated rules that require early understanding and action.
Functional unit
A functional unit is a quantified reference unit that represents the performance of a product system. In the "Draft Delegated Rules," the functional unit for CFP calculation is defined as the lifetime power supply of the battery, and is calculated using the following formula.
Lifetime power supply = Energy capacity × Number of charge/discharge cycles per year × Lifetime usage period
Energy capacity: The usable energy capacity of the battery at the start of use.
Annual charge/discharge cycles: Number of charge/discharge cycles per year for each vehicle model
(For example, 60 times for a kei car, and 250 times for a medium or large vehicle.)
Lifetime of use: The number of years covered by the battery's warranty.
(If the warranty period is indicated by mileage, convert the mileage to years,
(The shorter of the actual warranty period will be applied.)
Therefore, the CFP of an EV battery is calculated by dividing the GHG emissions (kg-CO2eq) over its lifecycle by the lifetime power supply (kWh), and is reported as kg-CO2eq/kWh.
System boundaries and cutoff rules
System boundaries are criteria used to determine which processes are included in the CFP calculation. Clearly defining which processes are included is a crucial element in ensuring the transparency and consistency of the calculation results. Furthermore, clearly defining cutoff rules helps to avoid excessive data burden while balancing practical efficiency and reliability.
The "Draft Delegated Regulations" include the following stages: 1) raw material procurement, 2) manufacturing, 3) distribution, and 4) disposal and recycling. Examples of the main processes for each stage are as follows:
1) Raw material procurement stage:
- From resource extraction from nature to pre-processing that takes place at the initial facility gate corresponding to the manufacturing stage before being used as a component in the product.
- Transportation of raw materials and intermediate products within the extraction and pre-treatment facilities, between facilities, and from one facility to the first facility corresponding to the manufacturing stage.
- Manufacturing of positive and negative electrode active material precursors, solvents for electrolyte salts, and piping and fluids for thermal control systems, etc.
2) Manufacturing stage:
- Manufacturing of positive electrode/negative electrode active materials, positive electrode/negative electrode, and electrolytes.
- Assembly of components and modules
- Transportation of final parts and intermediate products to their usage locations, etc.
3) Distribution stage
- Transportation of finished batteries from the manufacturing facility to market. *Storage is not included.
4) Disposal and Recycling Stage
- Collection, dismantling, heat treatment, or mechanical processing of waste batteries
- Separation and conversion into recyclable materials
- Energy recovery, etc.
Regarding the cutoff rule, materials with a mass of less than 1% can be cut off during material input. In this case, the mass of the material subject to cutoff must be added to the material with the highest CFP to fill the gap. Furthermore, the application of the cutoff must be clearly indicated in the report.
Data Collection Requirements and Quality Requirements
Because the source and quality of data have a significant impact on the CFP results, appropriate data collection and management tailored to the nature of the process are required.
The "Draft Delegation Rules" classify processes included in the CFP into three types: 1) processes for which company-specific data is mandatory, 2) processes that are not mandatory but are highly relevant, and 3) other processes, and set data requirements for each type.
| kinds | company specific Data obligations | range | Data Requirements |
| 1) Processes that require company-specific data | Required | 2) All processes included in the manufacturing and distribution stages other than those covered by this section | Collect company-specific data from suppliers using one of the following methods: collect life cycle inventory (LCI), collect company-specific datasets such as input materials, energy consumption, and recycled content, and simultaneously ensure that verification bodies and market surveillance authorities can receive the information; or collect company-specific datasets for each process, integrating the supplier's LCI from a third-party organization. |
| 2) Processes that are not mandatory but are highly relevant | Recommended | Production of positive and negative electrode active material precursors; production of electrolyte salts and precursors; production of copper, aluminum, and steel. | Depending on Technical Representativeness (TeR)*, secondary datasets can be applied. Depending on Data Quality Assessment (DQR)*, company-specific datasets can be applied. |
| 3) Other processes | Unnecessary | Processes other than those described in 1) and 2) above | A secondary dataset can be applied depending on technical representativeness (TeR)*. |
*DQR is an index used to evaluate the data quality of CFPs and is calculated based on three criteria: Technical Representativeness (TeR), Geographic Representativeness (GeR), and Temporal Representativeness (TiR). Please note that you will need to check the evaluation rank for each criterion for both company-specific data and secondary datasets.
Calculation of GHG emissions associated with electricity use
Under the "Draft Delegated Regulations," only two types of electricity can be considered: the country's average electricity consumption mix and directly connected electricity. Electricity certificates and residual mix, including certificates of origin, are not applicable.
Direct connection power applies when electricity is supplied through power generation equipment or a direct line located within the same facility. However, it cannot be used to account for the reduction effect resulting from providing surplus power to external parties when the amount of power generated by direct connection power exceeds the amount of power consumed within the system boundary. Furthermore, if the contractual document related to direct connection power is sold to a third party, the amount of power sold as part of the contractual document must be calculated based on the country's average electricity consumption mix.
summary
While the "Draft Delegated Regulations" present new standards for CFP (Carbon Fiber Processing) in EV batteries, they also highlight challenges regarding transparency and effectiveness. For example, the industry has raised concerns about the applicability of functional units, the burden on SMEs to collect data in their supply chains, and the strict requirements for calculating emissions associated with electricity use.
For Japanese automakers and their suppliers, maintaining competitiveness in the EU market requires closely monitoring future developments and urgently establishing a data sharing platform with suppliers in preparation for formal adoption.
Reference material:
european union ANNEX to the Commission Delegated Regulation supplementing Regulation (EU) 2023/1542 of the European Parliament and of the Council by establishing the methodology for the calculation and verification of the carbon footprint of electric vehicle batteries