Late 2024: Regulatory Momentum
Late 2024 witnessed a wave of new regulations aimed at strengthening due diligence in battery mineral supply chains. In Europe, lawmakers finalized the Corporate Sustainability Due Diligence Directive (CSDDD), which entered into force in July 2024 . This directive compels large EU and foreign companies operating in the EU to identify and address human rights and environmental risks across their global operations and supply networks . It builds on national precedents (France’s Duty of Vigilance, Germany’s Supply Chain Act) and marks a new level of ambition in mandating corporate accountability for upstream impacts. Another landmark was the EU’s Critical Raw Materials Act (CRMA), adopted in late 2023 and effective May 2024, which not only sets targets to mine 10%, refine 40%, and recycle 25% of Europe’s critical minerals by 2030 , but also integrates responsible sourcing criteria. The CRMA designates 47 “Strategic Projects” – including new lithium, nickel, cobalt mines and several battery recycling plants – to receive fast-track support . By recognizing projects with strong environmental and social standards, Europe is tying supply security to sustainability. Importantly, the EU Battery Regulation 2023/1542 was adopted in 2023 and began its rollout: it will require battery producers (with €40M+ turnover) to implement OECD-aligned due diligence for sourcing of cobalt, lithium, nickel, and graphite by August 2025 . Detailed Commission guidelines on these due diligence obligations were expected by early 2025, though as of late 2024 companies were still awaiting them . In the meantime, firms began preparing internal compliance systems given the tight timeline. Collectively, these policy moves signal unprecedented regulatory pressure on the battery industry to ensure ethical and sustainable mineral sourcing.
Other regions mirrored this momentum. China – the dominant player in battery materials – tightened export controls on critical minerals, citing national security. In October 2023 Beijing announced that high-grade graphite (used in battery anodes) would require export permits from Dec 2023 . This move, along with earlier curbs on rare earths, pressed battery manufacturers to diversify sourcing and recycle more material to mitigate geopolitical risk. South Korea emerged as a leader in battery transparency, passing an amendment to its Automobile Management Act to require a unique ID and government registration for every EV battery from February 2025 . Automakers in Korea must disclose each battery’s manufacturer and key material composition, and undergo government safety certification – a system aiming to improve traceability and consumer trust. In the United States, while no single “battery due diligence law” exists, the Inflation Reduction Act indirectly drives responsible sourcing: from 2024, EVs must exclude battery components from “foreign entities of concern” (e.g. China), and by 2025 must also exclude critical minerals from such entities to qualify for tax credits . The U.S. Treasury’s guidance explicitly requires automakers to conduct supply chain tracing and due diligence to verify mineral origins . Thus, through trade incentives, the U.S. is pushing companies to map and scrutinize their battery material supply chains, complementing the more overt regulations in Europe.
Sources: European Commission; Reuters; SLR Consulting; RCS Vine; Global Battery Alliance; Responsible Minerals Initiative; London Metal Exchange; International Energy Agency; CATL news release; Korea MOLIT; U.S. Dept. of Treasury; Mining.com.
