Battery Regulation is being rolled out in phases. Producers now have new responsibilities. They must track products, report carbon footprints, and manage end-of-life processes. In September, the EU released its first standard.
This standard is EN 18061:2025. It focuses on safely reusing EV batteries for energy storage.
As 2025 draws to a close, Europe's battery sector has moved from planning to practice: Producers now have new duties for traceability, carbon footprint declarations, and end-of-life management.
In September, the EU released its first standard—EN 18061:2025—for safely reusing EV batteries for energy storage. Many returned electric vehicle (EV) batteries are being tested. They are checking if the digital systems in the sector are ready for real-world recycling.
For Battery Energy Storage System (BESS) operators, manufacturers, and recyclers, 2025 showed a tough reality. Battery data gaps are the biggest barrier to using second-life batteries on a larger scale. This review explores what changed, what's coming, and how to turn compliance into competitive advantage.
How Europe's Battery Landscape Shifted in 2025
1. EU Batteries Regulation Moves Into Enforcement Phase
This year marked another critical step in the EU Batteries Regulation journey. Producers must now show they can track lithium-ion batteries from sale to recycling. They need to hire a Producer Responsibility Organization (PRO) to handle collection and compliance. Also, they must make sure that carbon footprint reporting is required for new models.
These requirements are pushing investment in digital data systems and battery tracking. However, many operators still need to improve lifetime battery records. Without accurate State of Health (SoH) data, repurposing EV batteries remains a compliance risk rather than a revenue opportunity.
For BESS manufacturers and operators, the regulation brings both pressure and opportunity. Investing in real-time data now will help you enter second-life markets more quickly. This is better than competitors who still rely on manual assessments.
📄 Read more:Understanding Digital Compliance for EU Battery Rules
📥 Download the full white paper:Extended Producer Responsibility in the Age of Digital Compliance
2. Second-Life Standards Arrive—But Data Remains the Bottleneck
The EU has a new plan for handling batteries. This plan is outlined in EN 18061:2025. It focuses on safely repairing, reusing, and preparing batteries for energy storage.
The standard includes safety rules, testing needs, and paperwork for second-life battery use. This is a big win for circular battery management.
However, the practical challenge remains: most batteries entering the return stream still lack consistent SoH and usage data. Without these records, compliant repurposing is often out of reach.
The International Energy Agency (IEA) warns that waste volumes will increase after the mid-2030s. This means the EU only has a short time to create strong data systems before the problem gets worse.
The IEA's Global EV Outlook 2025 says that by 2035, EV battery retirements may reach over 1.3 million tons each year. This amount is much higher than the current storage capacity for second-life assessment.
📖 Learn more:Second-Life EV Battery Application
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3. Chemistry and Global Supply Chain Shifts Reshape the Market
Lithium Iron Phosphate (LFP) batteries are growing quickly in the EU EV market. They now make up over 10 percent of new vehicle sales. LFP has a long cycle life and good thermal stability. This makes it a good choice for energy storage systems.
However, almost all LFP cells are still produced in China. Supply chain tensions increased in fall 2025. China tightened export controls on important minerals. This puts pressure on European manufacturers and recyclers. They needed to secure local sources and diversify their battery technology strategies.
For BESS operators and recyclers, this change requires global flexibility. They need to assess, grade, and repurpose batteries from different chemistries and supply chains. LFP and Nickel Manganese Cobalt (NMC) batteries need different testing methods, pricing plans, and second-life strategies. However, many operators still treat all lithium-ion batteries the same.
According to Solar Power Europe's report, Europe's storage capacity is expected to grow by 54 GWh each year. This will create a high demand for affordable energy storage solutions.
However, the sector must first solve the battery data challenge.
🎥 Watch:Circunomics Talks: Supply Chain
4. The Return Wave Grows—And Data Gaps Widen
Fraunhofer Institute for Systems and Innovation Research (Fraunhofer ISI) analysis shows recycling capacity will reach 520 kilotons per year by 2030, but the IEA warns that end-of-life volumes will surge after the mid-2030s.
The EU has a narrow window to build robust second-life assessment and data infrastructure before the bottleneck tightens.
The first wave of EV battery returns has already arrived, exposing critical weaknesses:
- Inconsistent SoH reporting across manufacturers and regions
- Missing cycle count and usage history for batteries entering the return stream
- Lack of chemistry-specific grading protocols for LFP vs. NMC batteries
- Fragmented digital handover processes between OEMs, dealers, and recyclers
For BESS manufacturers, this creates a serious risk. Buying second-life batteries without verified data can cause performance failures. It can also lead to warranty disputes and problems with regulations.
For recyclers, this data gap means valuable batteries are being shredded instead of repurposed, destroying economic value and missing circular battery management targets.
What BESS Operators, Manufacturers, and Recyclers Should Do in 2026
1. Audit Your Battery Data Infrastructure
Ensure you can access complete lifetime records for every battery, including: storage capacity, SoH, cycle count, and usage history. If not, update procurement contracts to require digital handover with verified real-time data.
Action step: Conduct a data audit across your current battery inventory. Identify gaps and prioritize suppliers who provide traceable, chemistry-aware documentation.
2. Adapt for Chemistry Diversity
Treat LFP and NMC batteries differently. Develop chemistry-aware protocols for grading, compliance, and reuse. Battery technology is diversifying faster than assessment methods—close that gap now.
Action step: Build separate evaluation workflows for LFP and NMC chemistries. Train technical teams on chemistry-specific degradation patterns and second-life performance benchmarks.
3. Strengthen Supplier Relationships and Supply Chain Resilience
Prioritize suppliers and partners who can provide verified battery data and support second-life eligibility. In a world of supply chain disruptions and global supply chain volatility, resilient supply relationships are a competitive advantage.
Action step: Map your current supplier network. Identify single points of failure and diversify sourcing for critical materials and battery types.
4. Prepare for Global Shocks and Market Volatility
Monitor China's export policies and diversify critical material sourcing. Build global agility into your supply chain. The operators who can pivot quickly will capture market share when competitors face supply chain shifts.
Action step: Establish a supply chain risk monitoring system. Track geopolitical developments, trade policies, and material price trends in real time.
5. Leverage Standards—But Recognize Data is the Foundation
Use the EN 18061:2025 framework to help with safe and compliant second-life projects. Remember, success depends on battery data. Standards provide the rules; data provides proof.
Action step: Align your second-life assessment processes with EN 18061:2025 requirements. Ensure your data infrastructure can generate the documentation required for compliance.
Conclusion: From Compliance to Competitive Advantage in 2026
In 2025, Europe's future for second-life batteries will rely more on battery data and chemistry knowledge. It will depend less on regulations and more on global flexibility.
The EU Batteries Regulation and EN 18061:2025 have set the stage. Operators, manufacturers, and recyclers who invest now in traceable systems will shape the market in 2026. They will not just react to it.
The next phase is about turning compliance into a competitive advantage. As the EU EV market grows and more EV batteries are returned, the winners will be those who can answer three key questions:
- Have you verified SoH and usage data for every battery in your supply chain?
- Can you assess and grade LFP and NMC batteries with chemistry-specific protocols?
- Are your supplier relationships resilient enough to withstand global supply chain shocks?
If the answer to any of these is "no", 2026 is the year to close the gap.
The operators who master battery data infrastructure today will unlock the second-life markets tomorrow.
The choice is yours: lead with data or fall behind.
