European Commission proposes delays and amendments to Batteries Regulation

On 21 May 2025, the European Commission presented its fourth Omnibus package (“Omnibus IV”), as part of a wider effort to simplify EU sustainability rules and reduce regulatory burdens on companies.[1] Omnibus IV introduces targeted amendments to eight legislative acts including, amongst others, the Batteries Regulation 2023 (the “Regulation”). The amendments to the Regulation reduce the compliance burden on a new category of small mid-cap enterprises, and delay the implementation of the due diligence obligations that were scheduled to apply from August 2025.

Batteries Regulation 2023

The Regulation was published in the Official Journal of the European Union on 28 July 2023, entered into force on 17 August 2023 and has applied since 18 February 2024, although many of its requirements are being phased in gradually.[2]

The Regulation aims to modernise the regulatory framework for batteries and reduce associated adverse environmental and human rights impacts, despite the increasing global demand for batteries. It covers the entire battery life-cycle (including manufacture, distribution and end-of-life management), and applies to all types of batteries that are placed on the EU market.

In its current form, the Regulation introduces a variety of requirements, including: 

1. Due diligence obligations on larger companies to develop and implement policies aligned with international standards (such as the UN Guiding Principles) to address the social and environmental risks inherent in sourcing and processing the raw materials necessary for battery production.
2. Clear labelling that: (1) details the battery’s capacity, performance, durability and chemical composition, and (2) demonstrates compliance with applicable health, safety and environmental protection standards.
3. A declaration of the carbon footprint of certain types of batteries, indicating the levels of key materials (such as recycled cobalt, lead, lithium and nickel) used in the battery production process. 

Omnibus IV proposals

Omnibus IV proposes two significant amendments to the Regulation: (1) delaying the implementation of due diligence obligations to 2027; and (2) extending the benefit of mitigating measures currently available for small and medium sized enterprises (“SMEs”) to certain small mid-cap enterprises (“SMCs”) as well.  

Due Diligence Obligations Delay

Omnibus IV delays the due diligence obligations under the Regulation by two years, from August 2025 to August 2027. In addition, it requires the Commission to publish its due diligence guidelines one year before the obligations take effect, on 26 July 2026. This is to give businesses sufficient time to apply the Commission’s guidance and ensure a smoother implementation of the new rules.

The Regulation requires that companies’ due diligence policies are verified by a notified body, but at the time of the Omnibus IV proposal, only half of Member States had appointed a notifying authority.[3] Meanwhile, the European co-operation for Accreditation had not been able to determine a standard for the accreditation of notified bodies for battery due diligence. The delays proposed by Omnibus IV are designed to allow more time to resolve such issues.

As well as delaying the due diligence obligations, Omnibus IV also proposes to reduce the frequency with which in-scope companies are required to review and report publicly on their due diligence policies, from annually to triennially.

Small-mid cap enterprises (“SMC”)

Under the European Commission’s current approach to categorisation, once an SME grows beyond 249 employees, it is considered a large enterprise, causing a sharp increase generally in compliance obligations. The European Commission has described this compliance “cliff-edge” as a barrier to SME growth and competitiveness. The proposed new SMC category includes companies with fewer than 750 employees and either up to €150 million in global turnover or up to €129 million in total assets. Nearly 38,000 companies in the EU will be considered SMCs. Omnibus IV proposes to amend several pieces of legislation in which supportive measures for SMEs already exist, extending those measures to SMCs to reduce the administrative burden for these companies.

Under the original Regulation, only companies having a net annual turnover of less than €40 million benefitted from exemptions. Omnibus IV proposes to extend these exemptions to companies with a net turnover of less than €150 million, mirroring the SMC category turnover threshold.[4] While the number of companies affected by this extension is estimated to be small (since the vast majority of batteries are placed on the EU market by larger enterprises), the annual savings for individual companies are estimated at around €40,000 per company.[5]

Further Simplification

These proposals form part of the Commission’s broader effort to target rules that create unnecessary or disproportionate burdens on companies. Focussed on a need to boost Europe’s competitiveness, the Commission hopes to deliver at least a 25% reduction on administrative burdens, and at least 35% for SMEs, by the end of this mandate. This wider simplification effort will take place across various regulatory measures, with the Commission having already targeted sustainability reporting and the Common Agricultural Policy. 

The next Omnibus package will focus on defence and reaching investment goals, aimed at allowing innovative companies to flourish,[6] to be followed by an Omnibus for the Chemical Industry and a Digital package. 

Next Steps

On 19 June, the Council agreed its negotiating position on the Omnibus IV proposals.[7] As part of the EU’s ordinary legislative process, the European Parliament will now work to agree its position in due course. If a common text can be agreed, it will be formally adopted by the Council and European Parliament and published in the EU’s Official Journal.

In the meantime, the European Commission has launched a feedback period for its battery due diligence proposals. Feedback can be submitted here until 31 July 2025.
 

[1]Omnibus IV - European Commission

[2]Regulation (EU) 2023/1542 of the European Parliament – EUR-Lex

[3]Explanatory Memorandum to the Proposal for amending Regulation (EU) 2023/1542 – EU Commission

[4] Note that the employee and balance sheet thresholds are not applied here, since the original exemption in the Regulation was based only on turnover.

[5]Questions and answers on simplification omnibus IV – EU Commission Press Corner

[6]Commission proposes simplification measures to save EU businesses a further €400 million per year – EU Commission Press Corner

[7]Simplification: Council agrees position to ‘stop-the-clock’ on due diligence rules for batteries - Consilium