Due diligence in the battery supply chain – what do the Battery Regulation and the Corporate Sustainability Due Diligence Directive (CS3D) require from companies? These questions were addressed in the fifth Battery Regulation webinar.
The European Union’s Battery Regulation and Corporate Sustainability Due Diligence Directive
(CS3D) impose new types of obligations on companies to ensure responsibility throughout their
supply chains. These topics were explored during the Battery Regulation webinar held on 3 June
2025, where experts shed light on the content and impact of the new regulations on business
operations. The event was organised by Recser Oy and Akkukierrätys Pb Oy, which operate as
battery producer organisations. The webinar attracted around 230 participants interested in these
timely topics.
CS3D requires companies to identify and respond to risks
Netta Skön, sustainability lawyer at Fondia Plc, presented the key requirements of the Corporate
Sustainability Due Diligence Directive (CS3D). The directive currently applies to large companies –
those with more than 1,000 employees and annual turnover exceeding €450 million – and requires
the implementation of a comprehensive due diligence (DD) process to identify, assess, prevent, or
mitigate adverse human rights and environmental impacts throughout the value chain.
Information gathering is at the heart of the directive. According to Skön, a company must
understand the risks related to its own operations and supply chain: “In the global economy, value
chains are complex, but this makes data management and understanding of impacts even more
critical.”
Battery regulation vs. CS3D: similarities and differences
Both the Battery Regulation and CS3D emphasize responsible business conduct and supply chain
transparency. They share the goal of preventing environmental and human rights risks. However,
they differ in nature: the Battery Regulation is directly applicable EU legislation, while CS3D is a
directive that requires national transposition. Additionally, the Battery Regulation specifically targets
the battery value chain, whereas CS3D applies across multiple industries.
Skön sees the overlapping regulations not as a problem but as an opportunity: “If a company
integrates its DD process effectively, it can meet the requirements of both regulations with one
system.”
Regulatory landscape changing – impacts of the Omnibus packages
EU sustainability legislation is undergoing reform through so-called Omnibus packages, which
introduce multiple changes or clarifications across regulations simultaneously. Notably, several
changes have been proposed to CS3D, and its application timeline has been postponed by two
years, now set to take effect in 2028.
The Omnibus IV package, published in late May, also proposes changes to the DD obligations
under the Battery Regulation: the entry into force may be delayed by two years, and the threshold
for applicability could be raised from companies with €40 million turnover to those with €150 million in turnover. The turnover threshold applies to the company’s entire revenue, not just the battery
business.
Johanna Routio, ministerial adviser from the Ministry of the Environment, stressed that the delay
should not be seen as a transition period: “Companies should use the additional time to prepare
and develop their processes.”
The Omnibus IV proposals can be commented on through the EU’s Have Your Say portal. The
points open for feedback concern, in particular, changes to the timeline and turnover thresholds.
What does the Battery Regulation require in practice?
Kati Suomalainen, senior specialist at the Ministry of the Environment, presented the content of
Chapter VII of the Battery Regulation, particularly Articles 49–53, as well as Article 93 of Chapter
XIV. The DD obligations focus on the sourcing, processing, and trade of raw materials and
secondary raw materials – and on managing social and environmental risks throughout the supply
chain.
Companies are required to:
- Establish an operational policy and communicate it to suppliers and the publicEnsure traceability through upstream chains
- Prepare a risk management plan and integrate it into business strategy
- Set up a grievance mechanism
- Undergo an audit conducted by a notified body
The proposed Omnibus changes are also expected to delay the publication of the Commission’s
DD implementation guidelines until July 2026.
Sandvik’s experience: getting a head start through proactivity
The webinar concluded with a company case example from Sandvik Mining and Construction Oy.
The company has proactively begun developing its due diligence process, focusing particularly on
industrial batteries. Hinrich Kress described the project as requiring a group-level solution, close
collaboration, and budgeting – with a single audit potentially costing up to €20,000.
Kress expressed concern about notified bodies becoming bottlenecks but remained optimistic
about the future: “Legislators are behind schedule, but if we can demonstrate genuine efforts to
comply, that will go a long way.”
Summary
It is time for companies to wake up to the responsibility requirements in their supply chains. Both
the EU Battery Regulation and CS3D steer business toward more transparent and sustainable
practices. Proactive preparation helps avoid last-minute rushes and potential sanctions – and can
also provide a competitive advantage in a changing business environment.