Marta Paricio Montesinos^1,2, Liliana Lizarazo-Rodriguez^1,3,4

1. ^{Brussels School of Governance (Vrije Universiteit Brussel)}

2. ^{PhD researcher of the FWO funded project 1145226N Loose Threads in the EU’s Regulation of Mineral Value Chains in CAHRAs: A Case Study on Corporate Heightened Sustainability Due Diligence}

3. ^{PI of the ERC project Curiae Virides, Grant agreement 949690}

4. ^{Deputy Director Global Network for Human Rights and the Environment}

Introduction

Adopted in 2023, the European Union (EU) Batteries Regulation represented one of the most comprehensive efforts in the world to regulate the full lifecycle of batteries, from the extraction of raw materials to reuse and recycling. It introduced new requirements for battery producers and economic operators, including sustainability, transparency,reporting and due diligence obligations. The latter apply toeconomic operators placing on the market or putting into service batteries containing cobalt, natural graphite, lithium or nickel.

The Batteries Regulation is an important instrument that translates the objectives of the Green Deal into binding requirements for a crucial good, batteries. Two important objectives of the Green Deal are addressed by the BatteriesRegulation: the energy transition, even beyond European borders, and the zero-pollution ambition. From a broader sustainability perspective, this sector-specific regulation, that is directly applicable in all member-states, seeks to implement the United Nations Guiding Principles (UNGPs) across the value chains of these four critical minerals for the transition. The purpose is for Europe to obtain access to these minerals but in a responsible manner, by requiring corporate sustainability due diligence (CSDD) in these value chains. This is even more significant when one considers that these minerals were also included in the Critical Raw Materials Act,which although it requires certain large companies to carry out an audit of their raw-material supply chain, it does not require CSDD to assess the impacts of their extraction and processing. This entails a concern from a policy coherence perspective, but it is positive that Omnibus IV did not remove the duty to conduct CSDD. 

Furthermore, and in line with the EU Taxonomy Regulation, the Batteries Regulation takes the recycling of batteries very seriously. This is essential given the hazardous character of batteries components, whose disposal requires strict processes. The EU Batteries Regulation engages with the circular economy and waste management, so that both objectives are reached. Firstly, it aligns with the EU’s sustainability objectives established by the Taxonomy. Secondly, it contributes to the competitiveness strategy by increasing the availability of these minerals in Europe through recycling, rather than extraction. While this recycling is not sufficient to meet the needs of the entire market, it is important for waste management and for reducing the need for mining.

There is a third important aspect of the Batteries Regulation, which is the requirement of the digital product passports (DPP) that consist of a structured electronic record accessible via a QR-code data carrier, which in some cases isimplemented by blockchain systems without this being a legal requirement. The goal is to ensure transparency regarding companies’ responsible behaviour. These aspects connect to the Ecodesign Regulation, that enhances traceability throughout the value chain and, in a way, complements the due diligence obligations by using digitalisation to overcomethe challenges of gathering and sharing data from the extraction until the consumption of these products. 

However, two years after its adoption, the Commission proposed several amendments through its Omnibus simplification packages. In a nutshell, an Omnibus proposalseeks to amend multiple existing EU legal acts at the same time, usually across the same policy area, and, in this case, with the aim to reduce administrative burdens and improve competitiveness. From a sustainability perspective, it is remarkable that the mechanisms adopted to align with the UNGPs, which enable the accountability of member states and companies for their environmental and human rights impacts, are qualified as an administrative burden. In particular, Omnibus IV and Omnibus VIII seek to simplify the Batteries Regulation.

The Omnibus IV

The Omnibus IV, led by DG Internal Market, Industry, Entrepreneurship and SMEs of the European Commission,affects the Batteries Regulation in three ways. Firstly, it aims at extending the existing exemption from CSDD in the batteries sector for small and medium-sized enterprises (SMEs) to small mid-cap enterprises (SMCs). Secondly, it aims at reducing the frequency with which companies must review and publicly disclose their due diligence policies, from once a year to once every three years. Finally, it postpones the application of the CSDD requirements by two years. As of September 2026, only the postponement of the CSDD application has been formally adopted.

The Omnibus IV changes echo the Commission’s efforts under the Omnibus I package to amend the Corporate Sustainability Due Diligence Directive (CS3D). While these changes are presented as necessary to support the growth of medium-sized enterprises and give companies more time to prepare for the new obligations, the implications for the CSDD in the batteries sector deserve a closer look.

The exempted SMCs and public disclosure every three years

The first major change concerns SMCs, a new category introduced by the Commission for companies that have outgrown the definition of SMEs but are not yet large companies. SMCs include companies with fewer than 1,000 employees, annual turnover below €200 million or a balance sheet total below €172 million. The purpose of introducingthis category is to support growing companies and to avoid a sudden increase in regulatory burdens as they expand.

Omnibus IV would extend to SMCs the exemption from CSDD in the batteries sector that already applies to SMEs. The Commission estimates that the exemption could save around EUR 40,000 per company each year and argues that the overall ambition of the Batteries Regulation remains intact because most batteries placed on the EU market are supplied by large companies.

Yet, this approach might differ from the international understanding of due diligence. The UNGPs and the OECD Guidelines for Multinational Enterprises on ResponsibleBusiness Conduct, do not exempt smaller companies from the responsibility to respect human rights. Instead, they recognizethat due diligence should be proportionate to the company’s characteristics and to the severity of the risks involved. A smaller company may therefore need a less complex due diligence process than a large multinational, but it does not lose its responsibility altogether. This matters even more in mining and mineral supply chains, which are a high-risk sector because the extraction and processing of these critical raw materials can involve serious human rights and environmental risks.

In addition, the new position of the Commission presents due diligence and sustainability requirements as obstacles to the growth and competitiveness of companies. However, the purpose of due diligence is to integrate the identification and management of human rights and environmental risks into a company’s operations and decision-making. Moreover, companies in sensitive sectors require a heightenedresponsible behaviour. In this sense, companies should not abandon their responsibilities regarding human rights and environmental protection on the grounds that these responsibilities hinder their expansion and competitiveness.

The proposal would also reduce the frequency of companyreviews and public disclosures of due diligence policies, from once a year to once every three years. While this may reduce the administrative burden on companies, it also reduces transparency and accountability. Public disclosure and communication allow rightsholders and stakeholders to understand how companies identify and address risks and to hold them accountable. Moreover, due diligence is an ongoing and dynamic process: companies are expected to respond to changing risks as their operations and operating contexts evolve. Regular review and disclosure therefore help ensure that due diligence remains responsive to these changes and unexpected challenges. Doing this only once every three years risks turning due diligence into a one-off exercise.

Postponing battery due diligence for 2 years

The other major change relates to when companies must comply with the duty to implement CSDD in the batteries sector. Omnibus IV postponed their application by two years,with an implementing date starting in 2027. The Commission justifies the postponement on several grounds. Companies need more time to understand their battery supply chains; many member states have not yet designated the authorities responsible for assessing and monitoring third-party verification bodies; and due diligence schemes for battery raw materials still need to be recognized.

The Commission also refers to the need for coherence with the CS3D. The Batteries Regulation itself requires the Commission to assess whether its due diligence provisions need to be amended considering new sector-agnostic CS3D. The Commission considers that delaying the application of the battery rules would increase coherence between both frameworks and would give companies more time to prepare. However, the Commission does not identify which elements of the two regimes may be incompatible or require such a delay. In fact, both are grounded in the UNGPs and OECD guidelines model of due diligence. This highlights the importance of inquiring into the policy coherence among EU’s due diligence regimes. Coherence is key not only to give companies a clear understanding of their obligations, but also to assessing how these legislations complement each other. This enables companies that lead value chains to adopt a responsible conduct that translates into taking up their responsibilities on human rights and environmental protection.

The Omnibus VIII

The Omnibus VIII, led by DG Environment, aims to simplify environmental obligations, but also contains positive changes in terms of corporate accountability. For the Batteries Regulation, various proposals for amendment are important. Firstly, it seeks to clarify the definition of ‘producer’, which will now cover all producers. This means that the extended producer responsibility (EPR) will apply regardless of the sales channels. 

Secondly, Omnibus VIII replaces the concept of hazardous substance by the one of ‘substance of very high concern’, which ties in with the definitions set out in the Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH Regulation) and the Regulation (EC) on Classification, Labelling and Packaging of Substances and Mixtures (CLP). This proposed amendment enhances coherence and integration of EU law applicable to the sector. 

Thirdly, a less positive amendment, Omnibus VIII removed the requirement for the Commission to review and publish, every four years, a report based on data from member states on battery waste management. This proposal would reduce the accountability of member states for their duties to supervise how companies in the sector manage their highly hazardous waste. 

What next? 

On 9 June 2026, the Council Presidency and the European Parliament reached a provisional agreement on several aspects of Omnibus IV, including the introduction of the SMC category that is expected to be exempted from CSDD for the battery minerals. The agreement must now be formally endorsed by the Council and the European Parliament. While the new exemption, the reduction in the frequency of public disclosure of due diligence policies, and the postponement of due diligence obligations may raise some concerns, one thing is clear: CSDD remains an important part of the Batteries Regulation. At the same time, the Commission is now developing the CS3D guidance and opened a public consultation. This can be an opportunity to clarify how different due diligence regimes can work together. In the context of a growing demand for critical minerals, this should be an opportunity to strengthen, rather than further weaken, responsible business conduct, especially in the high-riskmining sector. 

The fact that Omnibus IV and VIII proposals have not substantially altered the Batteries Regulation obligations regarding recycling, the circular economy and EPR, nor the implementation of DPPs, means that even though, in terms of CSDD, expectations regarding more responsible behaviour have been lowered, these components are also an essential step towards managing waste that seriously affects ecosystems and their inhabitants.

Likewise, aligning the Batteries Regulation with the definitions and scope of REACH and CLP is positive. However, removing member states’ obligations to report on waste management in this sector does represent a step backwards. Finally, although the implementation of DPPs ischallenging, it can offer significant accountability options through more reliable systems compared to the current mechanisms used by companies in terms of traceability and transparency.