Three years on: how much has the EU Batteries Regulation changed the BESS market?

Perhaps the most consistent industry criticism has not been the Regulation’s ambition but the difficulty of implementing it while significant elements of the supporting framework remain under development. Secondary legislation, technical standards and practical guidance continue to evolve, creating uncertainty for manufacturers, developers and investors attempting to prepare for future obligations. The postponement of the due-diligence requirements until 2027 arguably illustrates the practical challenge of translating the Regulation’s policy objectives into an operational compliance framework.

The Regulation’s biggest impact on BESS may be invisible

EU battery storage installations grew by 45% to 27.1 GWh in 2025, but that growth has largely been attributed to improving market conditions, permitting, revenue opportunities and grid flexibility needs rather than the Batteries Regulation itself. 

The most important change so far may not be found inside battery cells at all. Across the industry, a shift towards what could be described as “data-first battery design” is underway. Battery manufacturers increasingly need to design products with compliance information in mind from the outset, capturing performance data, durability metrics, safety evidence, material provenance, state-of-health information and future battery passport requirements throughout the development process. 

For BESS manufacturers, this means data architecture is increasingly becoming as important as hardware architecture.

The Regulation already requires stationary battery systems to make state-of-health and expected lifetime information available through battery management systems (BMS), with read-only access for owners and authorised third parties subject to the applicable implementation provisions. While the long-term commercial benefits remain difficult to quantify, these requirements could ultimately support predictive maintenance, repowering decisions and second-life applications. 

Compliance is therefore becoming a design consideration rather than a post-development exercise.

CE marking has already changed market access

For all the discussion around future obligations, one of the most significant changes has already happened.

Since August 2024, batteries placed on the EU market have required CE marking and an EU Declaration of Conformity. As a result, market access now depends on demonstrating compliance with the Regulation. 

For BESS suppliers, this has meant identifying who is legally responsible for placing the battery on the market, assembling technical files, performing conformity assessments and generating the supporting documentation necessary to maintain compliance.

In practice, implementation has not always been straightforward.

Developers, OEMs, system integrators and importers have often needed to revisit contractual arrangements to determine who qualifies as the manufacturer, supplier or importer for regulatory purposes. Those distinctions matter because they directly affect liability and compliance obligations. Technical documentation requirements have also proved more complex than some organisations initially anticipated, often requiring multiple rounds of revision. The result has been increased legal scrutiny of supply agreements, EPC contracts, operations and maintenance arrangements and repowering projects. 

For developers and investors, the practical challenge is no longer understanding whether these requirements will apply, but ensuring that data, contractual responsibilities and compliance obligations are allocated appropriately before projects are deployed.

Procurement teams are asking different questions

While the implementation of Regulation (EU) 2025/1561 postponed the battery supply-chain due-diligence obligations by two years because verification bodies, guidance and compliance schemes were not ready, there has nevertheless been an observable impact in the growing importance of supplier due diligence.

Historically, Environment, Social and Governance considerations could sometimes be treated as a procurement checklist exercise. However, practitioners increasingly report deeper scrutiny of factories, lifecycle data, traceability systems and reporting capabilities. Developers and investors are beginning to ask whether suppliers can produce auditable compliance information and maintain it throughout an asset’s lifetime. 

This has created a competitive advantage for suppliers able to provide robust compliance, traceability and lifecycle data. TÜV Rheinland launched a dedicated BESS supply-chain traceability service in February 2026, covering materials, production data, transactions, transport, audits and batch testing. This is direct evidence of a new compliance-services market serving operators, developers and investors.

Battery passports move from theory to deployment

Due to apply from February 2027, the battery passport becomes mandatory for industrial batteries >2 kWh (including most BESS batteries). The passport will require extensive information covering performance, sustainability, durability, repair, reuse and recycling to be maintained in a decentralised digital system. 

In preparation, numerous digital product passport and battery passport pilot programmes have emerged globally, with some large Asian manufacturers moving quickly to prepare for future battery-passport requirements: organisations including Shenzhen Precise Testing Technology and Minespider have established partnerships aimed at helping manufacturers generate EU-compliant battery passport information. Companies such as Technovative Solutions Ltd. (TVS), which already support sustainability and circularity data management, also appear well-positioned as the market develops.

The Regulation does not currently appear to be favouring European manufacturers over international competitors. Instead, early evidence suggests a sorting effect between suppliers that can provide robust traceability and lifecycle data and those that cannot. 

The likely consequence is not simply greater transparency. Battery passports may increasingly influence procurement, financing and due-diligence decisions, particularly where investors and lenders seek greater confidence in lifecycle and traceability information. For project developers, the future question may be less about whether battery passport data exists and more about whether lenders, insurers and investors trust the underlying information.

Circularity’s biggest moment may still lie ahead

The Regulation’s influence also extends beyond commissioning and into end-of-life planning. For BESS projects, the most immediate operational consequence of the Regulation may not be battery passports at all, but the introduction of producer responsibility obligations that require long-term planning for collection, treatment and recycling

Since August 2025, Extended Producer Responsibility (EPR) obligations have required producers to finance and organise battery collection, treatment and recycling. For BESS projects, this has created important questions around who should bear long-term responsibility for assets once they reach end of life. 

As a result, developers and suppliers are increasingly negotiating recycling obligations, decommissioning provisions, take-back arrangements and protections against future supplier insolvency.

Circularity is also creating opportunities for specialist operators focused on second-life applications. Connected Energy, which has deployed second-life BESS installations across Europe in partnership with a range of EV and battery OEMs, is one notable example. Another is the partnership between SINTEF and ECO STOR. Rather than sending EV batteries directly for recycling when they reach the end of their automotive life, those batteries are repurposed into stationary energy storage systems, helping unlock the remaining value within the asset. This is particularly relevant in the context of the EUBR, which places increasing emphasis on lifecycle information, state-of-health data, traceability and end-of-life management. 

While the Regulation does not necessarily make second-life deployment easier, greater availability of battery health and performance data could improve confidence in repurposing decisions and support the growth of commercially viable second-life business models. At the same time, some challenges remain. As highlighted by industry practitioners, a company repurposing a battery and placing it back on the market will generally assume manufacturer responsibilities under the Regulation and may need to reassess conformity and safety requirements. Access to reliable historical operating data therefore becomes critical, further reinforcing the broader industry trend towards data-rich battery management and lifecycle traceability.

The Regulation is pushing conversations around recycling much earlier into project development, a trend which aligns with wider geopolitical developments. The United States has moved to retain critical battery materials and black mass domestically, while the EU is expected to classify waste lithium-ion batteries and black mass as hazardous waste from December 2026, restricting exports to non-OECD countries. Together with the EU Critical Raw Materials Act, these developments suggest that battery waste, black mass and other recoverable critical minerals are increasingly treated as strategic domestic resources, not simply as waste streams.

For BESS operators, recycling is becoming part of long-term resource security planning as much as environmental compliance. 

Three years in, the verdict is clear

Three years after entering into force, the Regulation remains primarily a market-access and compliance framework. 

There is currently little evidence that it has altered deployment rates, significantly affected project economics or driven major changes in battery chemistry selection. Decisions around LFP, NMC and other chemistries continue to be driven primarily by cost, safety, performance and supply-chain resilience. Recycled-content thresholds remain years away, with the first mandatory requirements not expected until 2031. 

However, as battery passports, due-diligence obligations and circularity requirements begin to take effect, companies that have treated regulatory preparedness as a strategic capability rather than a regulatory burden may find themselves at a significant advantage. The winners may not necessarily be those with the lowest-cost batteries, but those that can demonstrate where their batteries came from, how they have performed and where they will go next.

For the BESS industry, the first three years have been about compliance. The next three years may increasingly be about competitive advantage, as battery passports, due-diligence obligations and lifecycle reporting become embedded within procurement and financing decisions.

The Regulation’s biggest impact may therefore still lie ahead. For now, perhaps the most accurate assessment is that the EUBR has laid the foundations for transformation rather than completed it. The industry’s challenge over the next three years will be turning those foundations into practical, scalable and commercially viable solutions.