This ambitious plan requires, among other things, a regulatory framework that provides the industry and its ecosystem with a set of guarantees for its proper development and implementation.

For this reason, in recent months, the EU Commission has been working on a Proposal for a Regulation that seeks to modernize the current regulatory framework associated with this sector, in order to update it to meet the growth and new needs of the industry. Above all, this new regulation seeks to establish new "rules of the game" that guarantee the regulation and legal security of the entire value chain of the sector.

Thus, this proposal, presented in December 2020, seeks to change the current regulatory framework through the repeal of Directive 2006/66/EC and the amendment of EU Regulation 2019/1020. In particular, it seeks to address three main objectives associated in turn with the three main groups of problems identified - and interrelated with each other - presented by the current legislation.

Firstly, the proposal intends to promote a context of incentives that reinforces the attractiveness of the EU as a location for new investments and developments; something that does not exist within the current regulatory framework.

Secondly, it seeks to boost the circular economy associated with the European battery industry, where there is currently a deficient functioning of the battery recycling markets. In this way, the aim is not only to develop this "circularity" of the market, but also to reduce dependence on third territories in terms of the supply of raw materials.

Finally, and in line with the Community context of respect for the environment, the proposed Regulation aims to minimize the environmental and social impacts associated with the battery value chain, thus filling the legal gap that is currently not addressed by EU environmental law.

Thirteen sets of measures to address these goals

In order to establish a regulatory framework that addresses these challenges and objectives, the proposal includes thirteen major groups of measures that cover, as a whole, the entire value chain of the industry and which contain different sub-measures to carry out their implementation.

These proposals are classified according to the so-called four main options; 4 "scenarios" that seek to propose alternatives on how the proposed legislation should be implemented through the 13 packages, according to the desired degree of ambition:

• Option 1: Assumption consisting of keeping the current regulatory framework unchanged, covering only the final phase of the useful life of batteries, leaving the initial stages of the value chain without legislation.
• Option 2: Considered as an "average" ambition scenario, it proposes to maintain the current legislation for the final stages of the value chain and introduce basic requirements and concepts for the initial stages.
• Option 3: Implies a "high" ambition scenario, based on option 2 but including a more transformative approach with the setting of limit values and thresholds to be met within a fixed timeframe.
• Option 4: This is the alternative with the highest level of ambition, comprising measures beyond the current regulatory framework and current business practices.

The Commission, within the proposal itself, clarifies that its preferred alternative and on which it bases the proposal is a combination of options 2 and 3, which would allow, on the basis of current legislation, the development of an evolved framework that facilitates the EU´s response to market conditions across the industry value chain and also supports Europe´s desired transition to a lower carbon economy.

Therefore, when setting out the ambition scenarios for each package of measures, the proposal focuses mainly on detailing options 2 and 3 in each case:

Caption: Green (preferred option) / Yellow (preferred option awaiting a revision clause)

Source: Proposal for a Regulation of the European Parliament and of the Council of 10/12/2020.

Based on these objectives and principles, the proposal establishes a new, more comprehensive, detailed and protective regulatory framework to provide a solid legal basis to support the battery industry. Hence the urgency of the European Commission, which seeks to have the document approved, with the necessary revisions, "by 2022 at the latest".

Right now, it is up to the European Parliament and the Council to negotiate internally in order to move forward with this new regulation. The speed with which a regulatory framework will be implemented, which will "revolutionize" this great European commitment to its economic and environmental future, will depend on the deadlines that are set.