With the growing demand for energy, batteries have become an essential component in our daily lives. India possesses a unique market for renewable energy, which has the potential to significantly reduce pollution and greenhouse gas emissions. Given the widespread electrification of transportation and the unfortunate reality that a significant portion of used batteries end up in landfills, battery recycling holds great importance. The Ministry of Environment, Forest, and Climate Change introduced the Battery Waste Management Rules, 2022 (“Rules 2022”) which has replaced the Batteries (Management and Handling) Rules, 2001 (“Rules 2001”) to channelise depleting resources towards refurbishment or recycling. These rules are applicable to all types of batteries irrespective of their shape, volume, chemistry, usage, and material composition.
The introduction of Rules 2022 represents a significant stride in the adoption of environmentally responsible practices for battery management. The report titled "Advanced Chemistry Cell Battery Reuse and Recycling Market in India" from Niti Ayog, the government's think tank, underscores the significance of recycling. It highlights the anticipated surge in demand for raw materials in India due to the government's efforts to promote domestic production of lithium cells.
1. Scope and applicability
The Rules 2001 governed the usage of lead batteries only, whereas Rules 2022 governs following batteries:
a) Automotive battery - used only for automotive starter, lighting, or ignition power;
b) Electric vehicle battery - designed to provide traction to hybrid and electric vehicles for road transport;
c) Industrial battery - designed for industrial uses, including sealed battery; unsealed battery and energy storage system battery;
d) Portable battery - sealed less than 5 kilograms, not made for industrial purposes, electric vehicle or to be used as an automotive battery;
e) Waste battery – including used and/or end of life battery, its components, or spares; or pre[1]consumer off-spec battery and its component; or expired battery or discarded battery.
2. Stakeholders
The Rules 2001 were restricted to the manufacturer, dealer, and importer of batteries. Following segment encapsulates the new and modified roles and responsibilities of stakeholders:
(a) Producers
A Producer is now defined as an entity that is involved in the following activities:
i. Manufacturing and selling batteries, including refurbished batteries, either as standalone products or as part of equipment, under its own brand;
ii. Selling batteries, including refurbished batteries, either as standalone products or as part of equipment, under its own brand, which are produced by other manufacturers or suppliers.;
iii. Importing batteries, including equipment containing batteries.
The introduction of Extended Producer Responsibility (EPR) aims to standardize the role of producers. EPR is a policy that assigns producers the responsibility to retrieve their products, recycle or refurbish batteries, and strictly prohibit battery disposal in landfills or through incineration. EPR envisages three principles, namely:
- Life cycle thinking
- Pollution prevention approach
- Polluter pays principle
Targets have been fixed for new producers introducing battery in the market in subsequent years after the publication of these Rules, as per the type of battery produced; ranging from 50% to 90%, which could be attained in the following manner:
- By obtaining the EPR certificate from other producers of the same category; or
- By bearing the complete responsibility of waste battery collection and recycling and/or refurbishment targets.
EPR – Obligation on Producers:
- Submission of annual EPR plan to the Central Pollution Control Board (“CPCB”) containing information pertaining to quantity, weight of battery along with the dry weight of battery materials;
- Developing a separate waste stream for collection of Waste Battery in schemes such as deposit refund system or buy back or any other model;
- Filing annual return pertaining to waste battery collected, recycled, or refurbished under EPR with CPCB;
- Complying with labelling requirements as per standards prescribed by the Bureau of Indian standards;
- The minimum targets to meet the usage of domestically recycled material out of total dry weight of a battery ranging 5% to 40% by 2030-31 onwards (applicable on the respective types of batteries) has been introduced;
(b) Consumers
The consumer, who is the final user of batteries, should ensure the proper disposal of waste batteries by separating them from other waste streams, particularly mixed waste and domestic waste.
It is important to ensure that waste batteries are disposed of in an environmentally friendly manner by delivering them to an organization involved in collection, refurbishment, or recycling.
(c) Refurbisher and Recycler
Both the stakeholders shall file return on quarterly basis. Recyclers must attain the mandatory target for minimum recovery of battery material that is 70% in 2024-25; 80% in 2025 -26; 90% 2026 -27 and onwards for all types of batteries along with providing certificates for waste battery processing .
3. Environmental Compensation
Drawing on the principle of the "polluter pays," environmental compensation has been introduced as a means of holding responsible parties accountable. In instances where the obligations and responsibilities outlined in the Rules 2022 are not met, the Central Pollution Control Board (CPCB) has the authority to suspend or revoke a producer's registration and impose environmental compensation.
Furthermore, in the event that an EPR obligation is not fulfilled within a specific year, it will be carried forward to the subsequent year, with a grace period of three years. If the obligation is fulfilled during this three-year period, the Environmental Compensation that was assessed will be refunded to the Producer according to the specified procedure outlined below.:
- Within one year of levying of Environmental Compensation: 75 percent return;
- Within two years: 60 percent return;
- Within three years: 40 percent return
After completion of three years if compensation is still due, then the entire compensation amount will be forfeited.
Although the Battery Waste Management Rules, 2022 impacts all industries, its effect on the technology companies and EV manufacturers particularly stands out
Impact on IT/ITeS Industry
- Entities engaged in Information Technology and enabled services would fall under the ambit of a “Consumer” under the Rules 2022 to have safe and eco[1]friendly disposal of batteries.
- However, if an entity manages the procurement of batteries or equipment embedded with battery via import from their foreign subsidiaries, their scope would be shifted from a “Consumer” to a “Producer” with additional responsibilities.
- Further clarifications are awaited from authorities for any relaxation to be given to persons other than manufacturer and supplier of batteries.
Impact on EV Industry
- The New Rules have been a welcome move to the EV Industry, as they bring a positive reinforcement of trust and emphasize on efforts towards the safety of consumers, reliability, and safety of the vehicle.
- The new regulation has a positive effect on the market to support in India's commitment to replace Petro Chemical based motors by the 'Greener Alternative'. Thus, reducing the dependency on new raw materials to in turn save natural resources.
- It also brings in scope for new industries and entrepreneurs to enter the market in manufacture, supply or collection and recycling/refurbishment of batteries.
Conclusion
The battery market in India is still in nascent stage, but rapidly growing due to technology evolution. This new regime will bring in many opportunities and risks, wherein a transparent and multi-fold governance framework will help corporates to bear these risks. Rules 2022 acts as a step in the right direction towards ensuring technological advancements with the least possible harm to the environment. The effective implementation of requirements related to registration, periodic reporting, auditing, and the creation of a committee to monitor the execution of the rules will bring highly awaited reforms that the industry needs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
