Supply Chain Due Diligence for Batteries

What Does Supply Chain Due Diligence Mean?

Supply chain due diligence refers to the obligation for economic operators to systematically identify, assess, and mitigate risks in their supply chains. In the context of battery production, this primarily concerns risks related to human rights, working conditions, environmental standards, and conflict minerals.

The relevance for the battery industry is particularly high because key raw materials such as cobalt, lithium, and nickel frequently originate from regions where human rights violations, child labor, or significant environmental damage have been documented. Around 70 percent of globally mined cobalt comes from the Democratic Republic of Congo (DRC), a region where severe abuses, particularly in artisanal small-scale mining, are well-known.

Due diligence is not a new concept. It builds on established frameworks, particularly the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals and the EU Conflict Minerals Regulation (EU 2017/821). The EU Battery Regulation now applies these principles specifically to the battery market and links them to the digital battery passport.

Who is actually covered?

Not everyone. Article 47 exempts economic operators whose net turnover in the last financial year but one was below 40 million euros and who do not belong to a group exceeding that figure on a consolidated basis. If you are below it, this chapter's due diligence obligations do not apply to you. Check that first, before building a management system you do not need.

The cut-off date is 18 August 2027. Originally 18 August 2025 was foreseen; Regulation (EU) 2025/1561 pushed the start back by two years.

Legal Framework

The legal basis for supply chain due diligence in the battery sector comprises several complementary regulatory frameworks:

EU Battery Regulation Art. 48 to 52: These articles define the specific due diligence obligations for economic operators placing batteries on the EU market. They reference the OECD Due Diligence Guidance; Annex X of the regulation lists the raw materials covered and the categories of social and environmental risk, not the OECD standards themselves. The obligations fall on manufacturers, importers, and authorized representatives, but only take effect on 18 August 2027: Regulation (EU) 2025/1561 of 18 July 2025 replaced the original date of 18 August 2025 in Article 48(1) with 18 August 2027.
OECD Due Diligence Guidance: The reference framework on which the EU Battery Regulation requirements are based. It defines a five-step process for due diligence (see next section) and is internationally recognized as the standard.
EU Corporate Sustainability Due Diligence Directive (CSDDD): The European supply chain directive supplements the battery-specific requirements with broader corporate due diligence obligations. Large companies will have to examine their entire value chain for human rights and environmental risks. Formally it is Directive (EU) 2024/1760 of 13 June 2024 on corporate sustainability due diligence; Its deadlines have since moved: Omnibus Directive (EU) 2026/470, published on 26 February 2026 and in force since 18 March 2026, gives member states until 26 July 2028 to transpose it, with application from 26 July 2029 and the Article 16 reporting duties only for financial years starting on or after 1 January 2030.
German Supply Chain Due Diligence Act (LkSG): The German supply chain law has applied since 1 January 2023 to companies with at least 3,000 employees and since 1 January 2024 to those with at least 1,000. It also requires systematic risk analysis and preventive measures across the supply chain. It overlaps substantively with the EU Battery Regulation requirements.

For battery manufacturers, this interplay creates a clear obligation to act: you must systematically analyze your raw material supply chains, document risks, and implement countermeasures. The results feed into the battery passport. The EU Battery Regulation sets binding deadlines for this: the battery due diligence obligations under Article 48 apply from 18 August 2027, postponed by two years by Regulation (EU) 2025/1561.

Which Raw Materials Are Affected?

Contrary to what is often assumed, the due diligence obligations do not apply to all raw materials. Annex X of the EU Battery Regulation names exactly four: cobalt, natural graphite, lithium and nickel, plus chemical compounds based on them that are needed to produce the active materials. These four:

Cobalt: By far the most critical raw material. The primary producing country is the Democratic Republic of Congo, where child labor, unsafe working conditions, and health hazards are documented in artisanal mining. Approximately 15 to 20 percent of Congolese cobalt production originates from artisanal mining.
Lithium: Extraction in the so-called lithium triangle (Chile, Argentina, Bolivia) is associated with high water consumption in already arid regions and conflicts with indigenous communities. In Australia, lithium is extracted through hard-rock mining, which carries different environmental impacts.
Nickel: Particularly in Indonesia, the world's largest nickel producer, deforestation of rainforest for new mining areas and high emissions from processing (HPAL process) have been documented.
Natural graphite: China dominates global graphite production. Reports of inadequate working conditions and environmental pollution from dust emissions and water contamination are recurring.
Manganese: Mined primarily in South Africa and Gabon, where environmental impacts and health risks for mine workers exist.
Others: Copper for electrical conductors, rare earth elements in certain battery applications, and aluminum for casings and current collectors are also subject to due diligence obligations.

The Five Steps of Due Diligence

The OECD Due Diligence Guidance defines a five-step process that the EU Battery Regulation adopts as a binding framework:

Step 1: Establish management systems

Establish an internal due diligence policy that clearly describes how your company implements supply chain due diligence obligations. Assign responsibilities, ideally at management or board level. Integrate due diligence requirements into existing procurement and supplier management processes and ensure sufficient resources (personnel, budget, tools) are available.

Step 2: Identify risks

Map your supply chain as far as possible, from your direct suppliers (Tier 1) through their upstream suppliers (Tier 2) to raw material sources. Identify high-risk areas, suppliers, and materials. Use publicly available risk lists, industry initiatives, and supplier-specific assessments for this purpose. Document identified risks systematically.

Step 3: Mitigate risks

Develop concrete strategies to mitigate identified risks. This may include incorporating due diligence clauses in supplier contracts, conducting supplier audits, participating in industry initiatives, or, in extreme cases, switching to alternative suppliers. Document all measures taken and their effectiveness.

Step 4: Verification by a notified body

Article 48(2) does not call for verification by any third party of your choosing, but for regular verification by a notified body. Notified bodies are the conformity assessment bodies designated by the member states; which ones are designated for batteries is listed in the European Commission's NANDO database. An audit by a freely chosen provider does not discharge the obligation. The audit typically includes assessment of your management systems, spot checks of supplier relationships, and verification of documented measures. The results of the independent audit are documented in the battery passport.

Step 5: Reporting

Publish the results of your due diligence in an annual report. This report must be publicly accessible and cover identified risks, measures taken, and results of independent verification. The reporting obligation creates transparency for regulatory authorities, business partners, and the public.

Step 6: Set up a grievance mechanism

Many overlook this step even though Article 49(1)(f) explicitly requires it: a grievance mechanism including an early-warning risk-awareness system and a remediation mechanism. You do not have to carry it alone. The Regulation expressly allows cooperative arrangements with other economic operators or organizations, as well as engaging an external expert or body. What matters is that affected people in the sourcing regions can actually reach the channel.

What happens when you find a risk

The five steps do not end with the finding. Article 50(1)(b) requires a strategy to prevent, mitigate or otherwise address adverse impacts, and names four stages: reporting the assessment to the designated members of senior management, measures towards the suppliers best able to stop the risk, a risk management plan with monitoring and reporting, and additional assessments when circumstances change.

The step many overlook sits in paragraph 2: you may mitigate risks while continuing trade OR while temporarily suspending it. Before settling on a mitigation strategy you consult the suppliers and affected stakeholders, expressly including local and national authorities and affected communities on the ground. Switching supplier is therefore not the first answer but the end of a documented ladder.

Documentation in the Battery Passport

Supply chain due diligence is anchored as Category 4 in DIN SPEC 99100 (Section 6.4). In the digital battery passport, the due diligence results are stored in a structured format, as an integral part of the complete dataset for each individual battery.

The key data fields include:

Due diligence policy reference: Link or reference to the company's internal due diligence policy.
Third-party audit results: Summary of independent audit findings, including audit date, auditing institution, and key observations.
Identified risk areas: Documentation of supply chain areas classified as high-risk, specifying affected raw materials and sourcing regions.
Measures taken: Overview of risk mitigation measures, from contractual agreements to supplier audits.

The connection between physical supply chain documentation and the digital battery passport is central: the due diligence data in the battery passport references the underlying reports and audits without duplicating their entire content. This creates a traceable path from the raw material source to the finished product.

Practical Implementation

Implementing due diligence obligations requires a systematic approach. The following steps have proven effective in practice:

Start supply chain mapping: Begin with a complete inventory of your Tier 1 suppliers and identify critical Tier 2 suppliers, particularly for cobalt, lithium, nickel, and graphite. In many companies, this mapping already partially exists as part of existing supplier management.
Use standardized questionnaires: Rely on industry-standard questionnaires for supplier assessment, such as templates from the Responsible Minerals Initiative (RMI) or the Global Battery Alliance (GBA). Standardized formats facilitate evaluation and comparability.
Join industry initiatives: Individual companies can rarely trace the supply chain all the way back to the raw material source on their own. Industry initiatives such as the Responsible Minerals Initiative, the Initiative for Responsible Mining Assurance (IRMA), or the Global Battery Alliance offer collaborative approaches, shared audits, and pooled data.
Document with software support: Systematic capture, management, and documentation of due diligence data is significantly easier with specialized software. DPP Hero maps the due diligence requirements as Step 4 of the 7-step editor, with structured input fields for policies, audit results, and risk areas according to DIN SPEC 99100.
Continuously improve: Due diligence is not a one-time exercise but an ongoing process. Update your risk analyses regularly, respond to changed supply chain conditions, and document progress.

Who the duty does not reach, and how long records must stay

Before you build a policy, read Article 47. The whole chapter does not apply to economic operators with a net turnover below 40 million euros in the financial year before last, provided they are not part of a group exceeding that figure on a consolidated basis. Group membership counts.

A second exemption covers the second-life market: the chapter likewise does not apply to operators placing on the market batteries prepared for re-use, repurposed or remanufactured, where those batteries were already on the market or put into service before those operations. Refurbish used storage and pass it on, and you need no separate due diligence policy for that same battery; the duty sat with the first placing on the market.

Those it does reach, it reaches for a long time. Article 48(3) requires the documentation to be kept for ten years (10 years), counted from the placing on the market of the last battery covered by that policy. That includes the notified body's verification report and its approval. Start in 2027, ship your last model in 2035, and the file stays until 2045.

Two due diligence regimes, two thresholds: which one reaches you?

The first question is never “what must I do” but “does this apply to me”. The two rulebooks answer differently, and the gap is wide.

Battery-specific due diligence under Articles 48 to 52 reaches you as soon as you place batteries on the market. Article 47 exempts only economic operators with a net turnover below 40 million euros in the financial year before last, and only where they are not part of a group exceeding that figure on a consolidated basis.

General EU due diligence under the CSDDD reaches far fewer companies since amending Directive (EU) 2026/470 raised the thresholds: from 1,000 to 5,000 employees and from 450 million to 1.5 billion euros in worldwide net turnover. The staggered waves are gone; the obligations apply uniformly from 26 July 2029, and the Commission is to issue guidelines by 26 July 2027.

Which gives the sentence that matters to most readers: a mid-sized battery maker with 60 million euros in turnover does not fall under the CSDDD, but very much under battery-specific due diligence. Watch only the headlines about the supply chain directive and you miss the duty that actually reaches you.

Which supplier data you actually need

The Regulation does not merely say you should know your supply chain. Article 49(1)(d) requires a “system of controls and transparency regarding the supply chain, including a chain of custody or traceability system, that allows the identification of upstream actors in the supply chain”. So it is not only about your direct supplier.

Paragraph 2 lists what that system must rest on. For every raw material concerned you need:

the description of the raw material including its trade name and type,
the name and address of the supplier who delivered it,
the country of origin and the market transactions from extraction through to your immediate supplier,
the quantities in the battery placed on the market, expressed as a percentage or by weight,
the reports of the independent verification of suppliers by a notified body under Article 50(3),
and, where such reports are missing and the raw material comes from a conflict-affected or high-risk area, additional information following the recommendations for upstream actors.

Two points here are readily overlooked. First, point (e) requires the policy to be incorporated into contracts and agreements with suppliers; an internal guideline alone will not do. Second, point (f) requires a grievance mechanism with an early-warning risk system and remediation, which you may also run jointly with other economic operators.

FAQ

Do I have to trace all suppliers back to the mine?

The EU Battery Regulation requires you to trace your supply chain as far as possible and reasonable, not just your direct suppliers (Tier 1), but also their upstream suppliers. Complete traceability to the individual mine is often not feasible in practice, particularly for raw materials traded through intermediaries and smelters. What matters is that you have established a reasonable and documented process and actively address known risks. Participation in recognized industry initiatives can serve as evidence of due diligence.

What happens if a supplier does not cooperate?

If a supplier fails to provide sufficient information about their due diligence practices despite repeated requests, you must escalate the risk. This may initially involve intensified communication and specific deadlines. If the supplier remains uncooperative, you should classify this as an elevated risk and note it accordingly in your documentation. In extreme cases, a supplier change may become necessary. Document all steps, the traceability of your approach is critical for regulatory authorities and auditors.

How often must due diligence be performed?

Due diligence is an ongoing process, not a one-time project. The risk analysis must be updated at least annually, and results must be published in an annual public report. In addition, event-driven reviews should occur, for example when changing suppliers, when new risks become known, or when significant changes occur in the supply chain. The independent third-party audit must be repeated at regular intervals in accordance with the EU Battery Regulation requirements.