Securing the Future: South Korea Races to Regulate EV Batteries and Match EU Standards

Introduction

Over the past year, South Korean legislators have advanced several proposals to establish an integrated regulatory framework for the management, safety, and reuse of electric vehicle (EV) batteries. Their goal is to position the country, the world’s seventh-largest vehicle producer, to secure industrial competitiveness and supply chains, especially vis-a-vis China, through efficient Environmental Sustainability Governance (ESG) regulations and recycling standards within a developing circular economy. Meeting global sustainability standards, such as the European Union (EU) Battery Regulation and its EU Battery Passport provisions, is a vital prerequisite in continuing to expand vehicle exports in its second-largest market amid the export fallout from the US 15% tariffs. 

What is the EU Battery Passport?

Under the  EU Battery Regulation (Regulation (EU) 2023/1542), the EU Battery Passport is proposed as a new mandatory digital record system. It introduces requirements for sustainability, safety, labelling, processing, and recycling for all batteries in the European market. This aims to promote a circular economy and enhance sustainability and transparency across the battery value chain.

The Passport will contain comprehensive information about the entire lifecycle of certain batteries, from raw material mining to reuse and disposal. This system will apply to Light Means of Transport (LMT) batteries (such as for e-bikes and e-scooters), EV batteries, and industrial batteries with a capacity over 2 kWh. It will include a digital certificate, accessible via a QR code on the battery or its packaging, recording essential data. This data covers details on due diligence for raw materials and responsible sourcing, carbon footprint of the manufacturing process, battery composition and recycled content, performance and expected lifespan, and finally, information for safe use, disassembly, and recycling or end-of-life processing.

The Passport will become mandatory in February 2027 for all batteries placed within the EU market, impacting EV imports and sales.

What is the impact on South Korea?

Korea is the world’s second-largest battery producer, holding around a 20% share in 2024, behind China (producer of three-quarters of global sales) and ahead of Japan (7%). Korean battery manufacturers face strong competition as Chinese battery makers gain ground in the EU market. China relies on cheaper technology, less expensive lithium iron phosphate (LFP) batteries, larger factory scale, and state backing, while South Korea produces more expensive premium nickel batteries for high-end EVs and is heavily dependent on China for raw materials. The EU Passport would create additional challenges for the Korean battery sector due to its inadequate carbon tracking system and lagging certification, recycling, and reuse processes.

What have Korean legislators proposed?

The introduced legislative initiatives amendments primarily fall into two categories: proposals amending and fine-tuning existing laws, such as the Automobile Management Act, focusing on vehicle components, and bills establishing a fundamental framework governing the entire battery supply chain.

Both the ruling Democratic Party of Korea (DPK) and the opposition People’s Power Party (PPP) have submitted law-amending initiatives. They seek to introduce a mandatory performance evaluation for EV batteries once removed from vehicles. This system would classify batteries for remanufacture, reuse in other applications, or recycling, necessitating new regulatory requirements for automakers. DPK’s Bill No. 2212740 would define 'used' and 'remanufactured' batteries, task the Korea Transportation Safety Authority with setting standards, and assign performance evaluation responsibility based on the separation scenario. 

In parallel, legislative efforts are underway to establish a broader policy framework across industries. DPK’s Bill No. 2208111 and PPP’s Bill No. 2210540, both under examination, aim to regulate used battery management across the industrial supply chain. The PPP’s proposal would create a Used Battery Policy Committee within the Ministry of Economy and Finance to deliberate on policy and transaction issues. It would also mandate registration with the Minister of Trade, Industry, and Energy (MOTIE) for distributors and reuse operators. The proposal would also establish a recycling certification system to verify the recycled material content ratio in manufactured or imported batteries, requiring pre-separation performance and safety evaluation. The DPK’s industry-fostering bill would require businesses handling used batteries to prioritise remanufacturing or reuse, establish a public trading system for transparent transactions, and propose tax reductions and special provisions to incentivise sector investment and growth.

Together with other proposals, legislators seek to boost eco-vehicle adoption, stabilise supply chains, and holistically strengthen domestic manufacturing. They aim to regulate battery safety standards, durability, and charging compatibility to address public concern over EV battery fires, a major obstacle to EV adoption; stabilise the supply chain during intensifying global competition for energy and resources via tax incentives for national strategic technologies, zero tariffs for processed resources by Korean companies abroad, and financial aid for manufacturing upgrades and R&D, and designate key battery materials (like lithium and nickel) as core minerals subject to state regulation on national resource security.

Conclusion

Despite a political culture of strong antagonism in South Korea, there is a general consensus across the political spectrum to support key industries like battery and automotive manufacturing. As such, more similar bills on this matter are expected in the future, and they are likely to be incorporated into larger comprehensive proposals following committee reports. Complex realities, including increased competition from China, trade and supply chain disruptions, and the need to secure the EU market while expanding in Asia at a time of US exports decline, will compel legislators to enact new laws that will both overhaul and fine-tune the battery sector. By accelerating the development of its ESG and circular economy capabilities, the Korean battery industry stands a better chance of maintaining its competitive edge against lower-cost Chinese rivals.

Sources

China charges ahead as South Korea’s battery giants lose their spark

South Korea’s Battery Industry Faces Challenges

Sustainability for Survival: Strategies for Korean Batterymakers in the European Market