Scheme-related strategies help address regulatory cost concerns of battery manufacturers


By: Saranya Vasudevan -- Lead Analyst

05 October, 2017

Scheme-related strategies help address regulatory cost concerns of battery manufacturers

Abstract/Business Case

Batteries and accumulators play a pivotal role right from day-to-day appliances to electric vehicles and industrial machinery. On the flip side, their disposal post-usage has created a series of environmental concerns due to the toxic nature of their chemical composition. To mitigate the risks surrounding the same, the European Union has laid down the Batteries Directive which establishes rules and targets for collection, recycling and treatment of waste batteries and accumulators.

Battery producers hence have the responsibility to collect and treat (in case of portable batteries), and take back (in case of automotive / industrial batteries) the batteries they have placed on the market (POM). This process has to be done through battery recycling schemes of respective EU member states and involves a significant cost to the battery producers.


Battery producers will have to register with battery recycling schemes in countries where their batteries are sold, in order to meet their collection targets.

The white paper will cover major recycling schemes of countries in the EU, comparison of typical processes and costs involved, and how they impact the battery manufacturer.  


From a business strategy standpoint, it is observed that battery producers face difficulties in terms of wide difference in fee structure in different countries and managing the collection across different recycling schemes in these countries.

Battery producers are recommended to opt for recycling scheme providers with presence in multiple countries (this is currently followed by major battery producers) or initiate strategic alliances with scheme providers/recyclers in different countries to avail cost benefit.

Need for the batteries directive – an introduction

As the disposal of batteries and accumulators after their useful life term was not channelized, it led to hazardous waste accumulation in the municipal waste stream. In 2006, the European Parliament and the EU Council adopted the Batteries Directive (2006/66/EC) to counter this issue.

The directive set collection and recycling targets and responsibilities for producers for batteries and accumulators. Under achievement of targets attracted fines and they varied by country / scheme. Based on the developments in the market, the directive is amended as and when required. The last ammendment was done in 2013, with changes to the limit of cadmium and mercury content in batteries for exemption from the directive.

Battery collection models

Producers of batteries and accumulators have the financial responsibility to support the collection and recycling activities in the markets where they place their products. Waste battery collection schemes are set up in each of the member states where the producers / importers will have to register. Schemes can be based on one of the four models as listed below:

Success of the schemes primarily depend on the level of consumer awareness on waste battery disposal and in enabling disposal by setting up collection points. Collection points can vary by schemes or there could be a collective system for all schemes in a country. Collection points are typically located in public places. Given below is the common collection points and their average share of total battery collection:

Collection Points

Retail Shops

Municipal Collection Points




Average Share of Collection

30% - 32%

35% - 38%

12% – 15%

17% -20%

Up to 2%

Source: European Portable Battery Association

Awareness creation fund is part of financial obligation for the producer in most schemes. The producers may have to pay it as part of the fees or as a percentage (can range from 3 percent to 25 percent depending on the country and scheme regulations) of nation wide campaign at frequent intervals.

 Battery classification and collection target overview

The batteries directive’s classification of batteries is based on the application, material, size and weight. The batteries are broadly classified as portable, automotive and industrial batteries. 

By weight, automotive batteries are estimated to account for about 60 percent, industrial 25 percent and portable batteries 15 percent of the total weight of batteries placed on the market. However, portable batteries account for almost 95 percent in terms of the number of units, whereas automotive and industrial batteries together account for only 5 percent of the number of units. Hence, the directive aims at handling the portable batteries as the primary objective with collection and recycling targets, whereas the automotive and industrial have only take-back obligation.

The mandatory collection and recyling target, as per the amendment in 2013, is 45 percent for all member countries in the EU. Most of the countries have had trouble in meeting the targets because of issues in computing the collection volume due to discrepancies in battery classification, weights, etc.

Collection rates of major member states are as follows:

Collection Rate Range (2014-16)

Member Countries

> 45%

Austria, Belgium, Bulgaria, Finland, Netherlands, Norway, Germany, Hungary, Luxembourg, Slovakia, Sweden, Switzerland

31% to 44%

Czech Republic, Denmark, France,  Ireland, Italy, Lithuania, Malta, Poland, Portugal, Spain, UK

< 30%

Croatia, Cyprus, Estonia, Latvia, Romania, Slovenia

Source: European Portable Battery Association

Battery collection schemes market share

The member country can opt to work on a single model as defined in the previous section or can work on a combination of models, which will benefit the producers. Each country has a single scheme or a set of schemes who compete against each other. These schemes compete against each other based on the fees charged and the collection network / rate achievement of member companies.

Based on the volume of batteries placed on the market by its member companies, the market share of the schemes / service providers are provided. Given below are the market share of schemes of major countries in the EU:

Key Member State

Schemes – Market Share*


ERA – 56%, ERP – 21%, UFH – 15%, Interseroh – 8%


BEBAT – 100%


Ecobattery – 67%, Others (6) – 33%


AFIS – 100%

Czech Republic

ECOBAT – 93%, REMA Battery – 7%


Elretur – 70%, Others (ERP & RENE AG) – 30%




Recser, ERP


Corepile – 66%, Screlec – 34%


GRS – 80%, CCR Rebat – 16%, ERP – 4%


Re'Lem Non-profit Kft – 76%, Re-bat Non-profit Kft and CCR Rebat – 24%


WEEE Ireland – 72%, ERP – 28%






Rebatt AS, Elretur (B2C EEE), Renas (B2B EEE), ERP Norway, Elsirk, Eurovironment


REBA – 31%, CCR Rebat, BioSystem, Auraeka – 69%


Ecopilhas, AMB3e, ERP




SEWA (Slovak Electronic Waste Agency), Asekol, Natur Elektro


Ecopilas – 75%, ERP – 25%
































Source:  Supplier Interaction, Beroe Analysis

Note* - The market share provided above is an indicative range for the period 2014-16, based on secondary sources. Hence the actual market share for 2016-17 may vary depending on the results of membership status during the year.

Costs involved in battery directive compliance for battery producers

As discussed in earlier sections, the financial responsibility of battery producers is either a fixed charge towards a governmental organization (as tax) or a charge paid on the volume / value of batteries Placed On Market (POM). Typical charges can be classified as fixed charges (paid irrespective of company size, sales volume, etc.) and variable charges (based on POM volume).

Given below are the typical charges / costs involved and the industry average fee by cost segment:

Fixed Charges

Registration Fee

NIL / EUR 100 - 800

These charges are generally paid to the country’s government or to environmental agencies such as EA and SEPA

Environmental and Administrative Contribution

NIL / 0.075 per battery (excl. VAT) / 700 EUR per year

Battery Evidence Fee


Cost of procuring battery recycling evidence notes needed to meet producer’s obligation

Scope for Negotiation

Since these charges are levied by governments or government based agencies, producers typically do not have a scope to negotiate over the rates

Variable Charges

Annual Membership Fee or Contribution

NIL / EUR 400 to 600 per year / 45% of POM value

  • The terms, annual membership fee, contribution fee and collection fee are used interchangeably by the schemes. Some schemes might separate the payment into membership fee and collection charges
  • Collection fee is decided based on the POM values of the producer in that country

Collection / Recycling Charges or POM Contribution Fee

EUR 0.07 to 0.20 per battery / EUR 120 to 500 ton per year

Scope for Negotiation

Scope for negotiation depends on the POM volume / value and number of schemes available in the country

Source:  Supplier Interaction, Beroe Analysis

Case Analysis

  1. Cost for battery compliance for Producer A with a POM volume of 10,000 units of portable batteries in Germany from a sample scheme shall be calculated as follows:
  1. Registration Fee – 770 EUR Plus VAT (assuming a standard VAT % of Germany at 19%) - 916 EUR
  2. Annual Membership Fee – 684 EUR Plus VAT (19%) – 814 EUR
  3. Collection and Recycling Cost - If the POM volume is < 5 Tons, collection fee is 113 EUR/ Ton (£ 100/Ton) and for volumes > 5 Tons, the collection fee would be 108 EUR / Ton (£ 95/Ton). The cost for producer in this case would be 1,080,000 EUR
  4. The total cost incurred by the producer for sales made only in Germany is 1,081,730 EUR plus the mandatory awareness campaign spend

      2. Cost for battery compliance for Producer B with a POM volume of 10,000 units of portable batteries in UK from a sample scheme shall be calculated as follows:

  1. Annual Membership Fee – 1,382 EUR ( POM > 100 Tons = £1,195 per annum)
  2. Environmental & Administrative Contribution - 684 EUR
  3. Collection and Recycling Cost – 1134 EUR (£ 1000/Ton) of 45 percent of the total POM volume. The Collection cost in this case would be 5,013,000 EUR (1,134*45 percent of 10,000)
  4. The total cost incurred by the producer for sales made only in UK is 5,105,066 EUR plus the mandatory awareness campaign spend

The above calculation provides an indicative value of the potential cost for a minimal POM volume for two countries. For major players in the portable battery segment, the total cost is likely to run into a significant value considering their larger volumes, thereby creating the need for a strategic approach towards the same.

Road ahead

Of the major battery types, portable batteries are given the most attention by the European Council and the Environmental Agency.

Germany, France, UK, Spain and Italy are the EU markets for portable batteries. However, most of them are struggling to meet the collection target of 45 percent.

Portable battery manufacturers need to work towards improving the collection rates as well as the cost benefit scenario in the long run.

Conclusion and recommendation

Penalties for not meeting the targets and the cost incurred as part of the producers responsibility towards battery compliance are key concerns for major portable battery producers, considering their huge volumes across major European markets. As the battery market grows, the producers may need strategies to optimize the spend for battery compliance. These strategies and industry best practices can potentially help them achieve their goals.

1.      Partnering with industry majors and setting up schemes

Major manufacturers of electronics items or batteries such as P&G, Panasonic, Kodak, Fujicell, and Energizer collaborate with an industrial association in a country to register a battery compliance scheme. For instance, ERP was formed with Braun, Electrolux, HP and Sony as the founding members.

This activity is expected to provide combined negotiation/ cost benefits to the battery producers.

2.      Opting for a battery compliance scheme which has registerations in multiple countries or enabling such a multi-country alliance

There are battery compliance schemes spread across countries such as ERP and CCR Rebat. Registering with such schemes would support optimization of costs across countries.

Major battery producers can facilitate a strategic alliance between schemes in different countries, thereby creating an option of sharing resources (recycling facilities, collection points, etc.) and  better scope for negotiation.

3.      Battery producers offering recycling services

Most of the battery compliance schemes do not have their own recycling facility, however, there are battery producers who own a subsidiary with a recycling facility. According to industry sources, such battery producers have an option of offering their recycling services. There is better scope of negotiating with them on the variable cost.

The above explained actions are expected to support optimization of cost and provide  higher negotiating power to the battery producers to mitigate the risk of increasing cost responsibilities as part of the battery compliance schemes in the EU.


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