Lithium ion batteries are included in CCC certification management! These companies may be affected!

       Announcement No. 10 of 2023 by the State Administration for Market Regulation (hereinafter referred to as the "Announcement") decides to implement CCC certification management for lithium-ion batteries, battery packs, and mobile power supplies from August 1, 2023.

       Why choose to include lithium-ion batteries in CCC certification management at this time? What does the implementation of mandatory certification mean for the battery industry?

       Duan Zhiqiang, the director of Wanchuang Investment Bank Research Institute, said in an interview with the International Finance News, "In order to fulfill its original WTO commitments, the Chinese government has been implementing the CCC mandatory product certification system since 2002. Now it has only been extended to the lithium battery industry. This is not only to align with international standards, but also a normative regulatory measure taken to protect user safety in the industry

       Duan Zhiqiang pointed out that this CCC certification is not only applicable to domestic related industry chain enterprises, but also to foreign lithium battery companies entering the local market, which is equivalent to setting a regulatory threshold. Whether it is power batteries, consumer batteries or energy storage batteries, they must follow the certification rules. With the development of the new energy industry, products equipped with lithium-ion batteries have also flooded into China, such as imported new energy vehicles and high-end electronic products. From the perspective of industry development, there must be a standardized guidance and orderly management to prevent safety accidents and safeguard the legitimate rights and interests of consumers.

New measures for implementing industrial policies

       According to the announcement, starting from August 1, 2024, products that have not obtained CCC certification and are marked with certification marks are not allowed to leave the factory, sell, import or use them in other business activities.

Duan Zhiqiang explained that CCC certification "actually provides a lever for the implementation of industrial policies, which can guide the industry towards efficient and high-quality standards through specific normative requirements, and encourage the application of advanced technologies

       Which companies in the lithium battery industry are most affected by CCC certification? Duan Zhiqiang pointed out that due to the high market share and social influence of large enterprises, their certification speed will also be faster. However, for small companies, new companies, and foreign enterprises with relatively low product circulation rates, the certification cycle may be longer. When facing the challenge of adjusting production in a timely manner to meet new standards, large enterprises with complete industrial chains will also have an advantage. Currently, the concentration of the domestic lithium battery market is relatively high. After the introduction of CCC certification, there is a trend towards further centralization.

       After the formal implementation of CCC regulations, foreign enterprises must also obtain CCC certification if they want to enter the Chinese market. One of the requirements for CCC certification is to comply with national security, and there are many dimensions to measure national security standards. The certification materials include information about process suppliers. Assuming that some suppliers come from countries and regions that are not conducive to national security, they may not meet some of the conditions for CCC certification Duan Zhiqiang added.

       Correspondingly, when Chinese battery products are exported to foreign markets, they also face different mandatory certification systems in various countries. For battery products exported to the UK, the first step is to obtain CE certification, which is issued by a designated EU agency and is a necessary certificate for entering the EU market. Lithium battery products exported to the United States require FCC certification.

       The full name of CCC certification is China Compulsory Certification, which is a market access system implemented by China in accordance with the principles of marketization and internationalization for products related to personal health, safety, and environmental protection. As of now, the CCC certification system covers 96 types of products in 16 major categories, including consumer industrial products related to daily life of the general public such as household electronic appliances, automobiles, toys, etc.

New requirements in the low-carbon era

       China has about 70% of the world's battery production capacity and is also one of the major battery exporting countries. According to SNE Research data, the market share of power batteries produced in China in the European Union has increased from 14.9% in 2020 to 34% in 2023. In order to enhance its advantage in global competition, the European Union has been supporting the development of the new energy vehicle industry through a series of legislation in recent years, and countries such as the United States and Japan will also introduce policies and systems on carbon trade.

       On July 10th, the European Council officially passed the "New Battery Law", marking the EU's comprehensive regulation of the battery market. This regulation is regarded by the industry as a "green trade barrier" for new batteries entering the EU market in the future, raising the threshold for all other battery products, including Chinese battery products, to enter the EU market.

       The focus of the new regulations is on "low-carbon". The new regulations require the provision of a carbon footprint statement for the entire lifecycle of batteries, setting minimum recycling rates and material recycling targets in the battery manufacturing process, and introducing battery digital passports to promote information disclosure and raw material traceability.

       Under this regulation, the cost of Chinese battery companies going abroad to Europe will significantly increase, and low-carbon will become one of the core competitiveness of the lithium battery industry chain. According to the data, Chinese battery companies such as CATL, EVE Energy, and Farview Power have accelerated the layout of battery carbon footprint management strategies. In this context, CCC certification's guidance on green recycling regulations is also beneficial for Chinese companies to prepare for going global and maintain competitiveness and initiative in the international market.

The policy foundation for the maturity of lithium batteries

       Lithium batteries have entered a stage of rapid development and gradual maturity in China. China has a complete and mature lithium battery production industry chain, with absolute advantages in global production capacity and market share. It is also at the forefront of the world in the application and promotion of new technologies.

       Upstream of the industrial chain, Chinese companies invest around the world and obtain stable and inexpensive mineral raw material supplies with low production costs; In terms of battery interviews, we already have certain research and development skills. Downstream, China is the world's largest electric vehicle market, with a huge demand side under the active guidance of policies.

       China is a major producer and exporter of lithium batteries. According to statistics, the shipment of lithium-ion batteries in China will reach 750GWh in 2022, accounting for 69.0% of the total global shipment of lithium-ion batteries. Among the top ten battery manufacturers globally, six are Chinese companies. According to data released by the Ministry of Industry and Information Technology, the production of lithium-ion batteries in China will increase by over 130% year-on-year in 2022, with the industry's total output value exceeding 1.2 trillion yuan.

       According to different application fields, lithium-ion batteries are mainly divided into three categories: consumer, power, and energy storage. The supply of consumer batteries for mobile phones and computers has entered a mature stage, and power batteries have been dominant in the past decade with the development of new energy vehicles; With the gradual promotion of clean energy substitution plans in various countries, energy storage batteries are showing a high-speed growth trend and have great market growth potential.

       Therefore, CCC certification is not only a regulation for the current hot power battery market, but also lays a policy foundation for the future of energy storage batteries.

       Duan Zhiqiang pointed out, "For other countries in the world, China is not only a mature battery industry powerhouse, but also has a huge consumer market. It is necessary to refer to Chinese standards when developing new energy technologies and formulating its own industry norms. Therefore, CCC certification is also more conducive to China's industrial output

Reporter: Wang Liying  Intern: Xu Qingyang