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Continuing the EU’s agenda of simplification and postponement, the ‘Stop the Clock’ Batteries Due Diligence Regulation was published in the Official Journal of the EU on 30 July 2025 and entered into force on the following day. Due diligence obligations, which were supposed to come into operation on 18 August 2025 under the EU’s Batteries Regulation (2023/1542/EU), have been postponed by two years and will now apply from 18 August 2027.
The EU also plans to restrict application of the obligations to larger companies, those with a net annual turnover of more than €150m.
Batteries regulation
Published in July 2023, the Batteries Regulation was a landmark piece of legislation and a key feature of the European Green Deal. Drafted with the aim of creating a harmonised framework to govern the sustainability and safety of batteries, the Batteries Regulation legislates for batteries throughout their lifecycle, from production and performance requirements to end-of-life procedures. The EU wants to ensure that batteries have a low carbon footprint, use minimal harmful substances, need fewer raw materials from non-EU countries, and are collected, reused and recycled to a high standard within the EU.
A notable feature of the Batteries Regulation is the postponed due diligence regime. It will require “economic operators”, involved in the manufacture, production, importation and distribution of batteries placed on the EU market, to develop and apply due diligence policies to their supply chains. These policies will be expected to address the social and environmental risks associated with sourcing and processing the raw materials necessary for battery production. The Regulation will also require these due diligence policies to be assessed and verified by a third-party “notified body”, to be appointed by each Member State.
Omnibus IV: postponement
Postponement of the Batteries Regulation’s due diligence requirements by two years was proposed by the European Commission (the Commission) as part of its Omnibus IV package of simplification legislation, published on 21 May 2025 (discussed further here). It is hoped that the additional time will allow in-scope companies (and their supply chains) to better prepare for the new obligations. They will be supported by Commission guidelines which are now due to be published by 26 July 2026; the previous deadline of 18 February 2025 having been missed. According to the Commission, about half of the Member States, including Ireland, have yet to appoint a national authority to assess companies’ due diligence policies. Difficulties in the accreditation of these bodies have also been encountered, so it’s clear that extra time is needed in this regard.
Omnibus IV: simplification and wider exemption
Omnibus IV led to the designation of a new company type – the ‘small mid-cap’ (SMC). This categorisation is available to companies with fewer than 750 employees and either up to €150m in turnover or up to €129m in total assets (see the Commission Recommendation here). The Commission intends for SMCs to be entitled to some of the derogations and benefits currently available only to small and medium-sized enterprises (SMEs), including the current exemption for SMEs from due diligence obligations under the Batteries Regulation.
A further amending regulation proposes, among other things, the following amendments to the Batteries Regulation:
The extension of the exemption to companies with up to €150m turnover (increased from €40m) is striking, but not entirely surprising given the simplification measures already proposed by the Commission this year, such as to the Corporate Sustainability Reporting and Due Diligence directives under Omnibus I. The disproportionate burden that EU regulation places on smaller enterprises, and the negative impact this has on EU competitiveness, were specifically called out by Mario Draghi in his 2024 report on the future of European competitiveness. In its Questions and Answers on Omnibus IV, the Commission also seeks to reassure dissenters that “the ambition level will remain”, because the “vast majority of batteries, small and large, are placed on the EU market by large companies”.
Next steps
The proposed amending regulation is currently at the early stages of the EU’s legislative process. While the Council published its negotiating mandate on 19 June 2025, the European Parliament still has some way to go before it will have its own negotiating position. It is therefore unlikely that we’ll see this legislation finalised before mid-2026 at the earliest.
For further information on this topic, please contact Jill Shaw, Anne O’Neill or any member of ALG’s ESG & Sustainability group.
Date published: 7 October 2025
