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1. Scope This Annex provides essential elements on how to calculate the carbon footprint. The methodology for calculation and verification of the carbon footprint to be provided for by means of the delegated act adopted pursuant to Article 7 shall build on the essential elements included in this Annex, be in compliance with the latest version of the Commission Product Environmental Footprint (PEF) method and relevant Product Environmental Footprint Category Rules (PEFCRs) and reflect the international agreements and technical/scientific progress in the area of life cycle assessment. The calculation of the life cycle carbon footprint shall be based on the bill of materials, the energy and the auxiliary materials used in a specific manufacturing plant to produce a specific battery model. In particular, the electronic components, for example battery management units and safety units, and the cathode materials shall be accurately identified, as they can become the main contributor for the battery carbon footprint.

2. Definitions For the purposes of this Annex, the following definitions apply:

(a) ‘activity data’ means the information associated with processes while modelling Life Cycle Inventories (LCI), whereby the aggregated LCI results of the process chains that represent the activities of a process are each multiplied by the corresponding activity data and then combined to derive the carbon footprint associated with that process;

(b) ‘bill of materials’ means a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components and parts, and the quantities of each, needed to manufacture the battery;

(c) ‘company-specific data’ means data that are directly measured or collected from one or multiple facilities (site-specific data) that are representative of the activities of the company, such data are also known as ‘primary data’;

(d) ‘functional unit’ means the qualitative and quantitative aspects of the functions, services, or both, provided by the battery;

(e) ‘life cycle’ means the consecutive and interlinked stages of a product system, from raw material acquisition or generation from natural resources to final disposal (ISO 14040:2006 or an equivalent standard);

(f) ‘life cycle inventory (LCI)’ means the combined set of exchanges of elementary, waste and product flows in an LCI dataset;

(g) ‘life cycle inventory (LCI) dataset’ means a document or file with life cycle information on a specified product or other reference, such as the site or process, covering descriptive metadata and quantitative life cycle inventory, which could include a unit process dataset, partially aggregated or an aggregated dataset;

(h) ‘reference flow’ means the measure of the outputs from processes in a given product system required to fulfil the function expressed by the functional unit (based on ISO 14040:2006 or an equivalent standard);

(i) ‘secondary data’ means data that are not directly collected or measured from a specific process within the supply-chain of the company or estimated by that company, but that are sourced from a third party LCI database or other sources; such data include industry average data, for example from published production data, government statistics, and industry associations, as well as literature studies, engineering studies and patents, and can also be based on financial data, and contain proxy data and other generic data; and also include primary data that go through a horizontal aggregation step;

(j) ‘system boundary’ means the aspects included or excluded from the life cycle stages. Additionally, the harmonised rules for the calculation of the carbon footprint of batteries shall include any further definition necessary for their interpretation.

3. Functional unit and reference flow The functional unit is defined as one kWh (kilowatt-hour) of the total energy provided by the battery system over the battery’s service life, measured in kWh. The total energy is obtained from the number of cycles multiplied by the amount of delivered energy over each cycle.

The reference flow is the weight of battery needed to fulfil a specific function and shall be measured in kg of battery per kWh of the total energy delivered by the battery over its service life. All quantitative input and output data collected by the manufacturer to quantify the carbon footprint shall be calculated in relation to the reference flow. By way of exception to the first paragraph, for back-up batteries that have as their primary function to ensure continuity of a power source, the functional unit is defined as the ability to provide one kWmin (kilowatt-minute) of backup power capability at any moment over the lifetime of the battery. Accordingly, the reference flow for back-up batteries is the weight of battery needed to fulfil the defined function and shall be measured in kg of battery per kWmin of backup power capability divided by the service life of the battery in years. All quantitative input and output data collected by manufacturers of back-up batteries to quantify the carbon footprint shall be calculated in relation to that reference flow.

In exceptional cases, such as for batteries for hybrid non -plug-in vehicles, the methodology may define a different functional unit.

4. System boundary The following life cycle stages and the processes involved therein shall be included in the system boundary: The following processes involved in the life cycle stages shall be excluded from the system boundary:

— manufacturing of equipment for the assembly and recycling of batteries, as carbon footprint impacts have been calculated as negligible in the PEFCRs for high specific energy rechargeable batteries for mobile applications;

— the battery assembly process using the original equipment manufacturer (OEM) system components; this process corresponds for the most part to mechanical assembly and it is included inside the OEM equipment or vehicle assembly line; the consumption of energy and material for this specific process is negligible when compared to the manufacturing process of OEM components.

The use phase shall be excluded from the life cycle carbon footprint calculations, as it is not under the direct influence of manufacturers except where it is demonstrated that choices made by battery manufacturers at the design stage can make a non-negligible contribution to that impact.

5. Use of company-specific and secondary datasets Due to the high number of battery components and the complexity of manufacturing processes, the economic operator shall limit, where justified, the use of company specific data to process and component analysis of the battery-specific parts. In particular, all activity data related to the battery’s anode, cathode, electrolyte, separator and cell-casing shall refer to a specific battery model produced in a specific production plant. Accordingly, no default activity data shall be used. The battery-specific activity data shall be used in combination with the relevant PEF-compliant secondary datasets. As the carbon footprint declaration is specific to a battery model produced in a defined production site, sampling of data collected from different plants producing the same battery model shall not be allowed.

Where there is a change in the bill of materials or energy mix used to produce a battery model, the carbon footprint for that battery model shall be recalculated. The harmonised rules to be provided for via a delegated act as referred to in Article 7(1) shall include detailed modelling of the following life cycle stages:

— raw material acquisition and pre-processing,

— production,

— distribution,

— own electricity production,

— end of life.

6. Carbon footprint impact assessment The carbon footprint of the battery shall be calculated using the ‘climate change’ life cycle impact assessment method recommended in the 2019 Joint Research Centre report entitled ‘Suggestions for updating the Product Environmental Footprint (PEF) method’. The results shall be provided as characterised results without normalisation and weighting. The list of characterization factors to be used is available at the European Platform on Life Cycle Assessment (LCA).

7. Offsets Offsets are calculated relative to a baseline that represents a hypothetical scenario for what emissions would have been in the absence of the mitigation project that generates the offsets.

Offsets shall not be included in the carbon footprint declaration, but may be reported separately as additional environmental information and used for communication purposes.

8. Carbon footprint performance classes Depending on the distribution of the values in the carbon footprint declarations of batteries placed on the market, a meaningful number of classes of performance shall be identified, with category A being the best class with the lowest carbon footprint life cycle impact, to enable market differentiation of the battery categories referred to in Article 7(1). The setting of the threshold for each class of performance, as well as the width of that class, shall be based on the distribution of performances of the battery categories referred to in Article 7(1) placed on the market in the previous three years, the expected technological improvements, and other technical factors.

9. Maximum carbon thresholds

Based on the information collected through the carbon footprint declarations and the relative distribution of the carbon footprint performance classes of battery models placed on the market, and taking into account the scientific and technical progress in the field, the Commission shall set maximum life cycle carbon footprint thresholds for the battery categories referred to in Article 7(1), after having carried out a dedicated impact assessment to determine the values for the thresholds. In setting maximum life cycle carbon footprint thresholds referred to in the first subparagraph, the Commission shall take into account the relative distribution of the carbon footprint values for batteries on the market, the extent of progress in reducing the carbon footprint of batteries placed on the market and the actual and potential contribution of those life cycle carbon footprint thresholds to the Union’s objectives on sustainable mobility and climate neutrality by 2050.