EU’s planned battery carbon footprint index worries German manufacturers

Plans by the European Union to measure the carbon footprint of battery production based on the host country’s electricity mix are causing concerns among Germany’s automotive industry, which fears that the calculation method could upset the country’s plans to scale up national battery production capacities, newspaper Die Welt reported. The European Commission has obliged manufacturers to reveal the carbon footprint of battery production by February 2025, for which the national electricity mix will be a key yardstick, rather than the actual power sources used at a given production location.

Northvolt’s planned factory in Schleswig-Holstein, Volkswagen’s planned battery production site in Lower Saxony, and Tesla’s existing facility in Brandenburg are all, for example, located in three states with a large share of wind energy. While Germany sources more than 50 percent of its electricity from renewables, it still has a high share of coal and gas in its national power mix, meaning batteries produced in the country would be considered dirtier than, for example, batteries from France or Sweden, which both heavily rely on nuclear power and thus have a lower carbon footprint per produced kilowatt hour.

Industry associations such as the German Association of the Automotive Industry (VDA) or the Federation of German Industries (BDI) therefore have called upon economy minister Robert Habeck “to intervene quickly at the EU Commission’s highest level for the benefit of the German industry and of global climate protection” and achieve an amendment of the planned index, the newspaper said. The associations say the EU would have to consider so-called power purchase agreements, whereby companies sign up to receive electricity from a specific supplier, usually from renewable power sources. “German industry cannot effectively decarbonise its global activities and contribute to renewables expansion if the most efficient instruments to achieve this are no longer accepted,” the lobby groups said, adding that the new regulation would mean “very bad news for climate action and the reputation of German companies with regard to the public, ratings and investors.”