Battery manufacturers in the European Union could face tighter requirements on recycling, recovering critical materials, and tracking batteries throughout their life cycles, according to the bloc’s executive arm.

A proposed draft EU law on battery sustainability, planned for later this year, could include rules on the recovery of cobalt, nickel, and other valuable minerals from batteries and on a monitoring system to aid recycling, according to a consultation the European Commission released June 14.

The aim of the sustainability law would be to minimize the negative environmental impacts of high-performance battery cells and battery modules and packs...