Battery manufacturers selling into the EU will have to prove the recycled cobalt, lithium, nickel and lead content of their products through a plant-level mass balance system, under methodology rules the European Commission is expected to adopt by August 2026. The rules apply to any company placing covered batteries on the EU market, regardless of where they are manufactured - putting UK producers and other non-EU exporters firmly in scope.

The EU Batteries Regulation (EU) 2023/1542 sets mandatory recycled content thresholds from August 2031: at least 16 per cent recycled cobalt, 6 per cent recycled lithium, 6 per cent recycled nickel and 85 per cent recycled lead, measured by mass in active materials. By 2036 those figures rise to 26 per cent for cobalt, 12 per cent for lithium and 15 per cent for nickel.

The scope covers industrial batteries above 2 kWh, EV batteries and starting, lighting and ignition (SLI) batteries - the lead-acid type found in conventional vehicles. Light means of transport batteries, such as those in e-bikes and e-scooters, join the scope from 2033.

How verification will work

No test can determine whether the cobalt or lithium in a finished battery was recycled or mined fresh. These metals pass through multiple processing stages - refining, precursor production, cathode manufacturing - where primary and recycled material is routinely blended. Physically separating recycled from virgin content at individual batch level is not feasible in continuous metals refining.

The proposed solution is mass balance accounting at the level of each production facility. Each manufacturing plant will be required to track all recycled and primary material inputs against outputs over accounting periods of up to 12 months, with adjustments for process losses. Recycled content will then be allocated proportionally across everything the plant produces during that period. The approach is already standard practice in the precious metals sector.

The methodology framework has been developed by the European Commission's Joint Research Centre, with a delegated act due for adoption by August 2026 setting out the detailed rules.

The trade-off

Mass balance means a specific battery's declared recycled content may not correspond to the recycled material physically in it. A plant using 20 per cent recycled cobalt across its total inputs can label all its output as containing 20 per cent recycled cobalt - even though some individual cells may contain more and others less.

Environmental groups have argued this gap could produce unrealistic claims, with some industry stakeholders arguing against this that metal accounting already works this way and there is no meaningful distinction between tracking recycled content on paper and tracking it physically. The Commission rejected book and claim systems - which decouple physical material flows from certification credits entirely - as going too far, but accepted that some separation between physical and declared content is unavoidable at industrial scale.

The system requires traceability across the full supply chain, with data shared “one step up, one step down” between immediate trading partners. Every company in the supply chain must record transaction data for each accounting period, and records missing recycled content documentation default to zero, with the material treated as entirely primary. Digital calculation tools willbe mandatory, with records to be stored for at least 10 years, and notified bodies verifying the system by checking for double-counting and correct credit allocation.

UK and non-EU producers

Because the targets apply to all batteries placed on the EU market, UK manufacturers exporting to Europe will need to comply with the mass balance methodology and meet the recycled content thresholds on the same timeline as EU-based competitors.

That has direct implications for the UK’s emerging battery manufacturing sector. The Agratas gigafactory under construction at the Gravity Smart Campus in Somerset - backed by a £380 million government grant and due to produce 40 GWh of cells per year - will supply EV batteries primarily for European markets. AESC’s expanding facility in Sunderland, which produces cells for Nissan, will also face the same requirement.

The UK does not yet have an equivalent domestic framework. DEFRA is expected to consult on reformed battery regulations soon, and the consultation is likely to draw on the EU regulation given that Northern Ireland is already directly affected through the Windsor Framework.

For non-EU producers more broadly, the practical challenge is establishing mass balance systems that satisfy EU notified bodies across supply chains spanning multiple countries. Industry stakeholders have described the administrative burden as manageable - one respondent called metal accounting “relatively straightforward and already a common practice in industry, thus not adding administrative burdens compared to the current situation” - but that assessment assumes existing metal accounting infrastructure that not all producers will have.

The Commission must adopt the delegated act by August 2026. Manufacturers then have until August 2031 to meet the first targets - less than five years from the point the detailed rules are finalised to build traceability systems across global supply chains.