Growing concerns over the safety of air shipments of lithium batteries have prompted international authorities, the U.S. Federal Aviation Administration (“FAA”), and Congress to take action.  On January 19, 2016, the International Air Transport Association (“IATA”) issued an Addendum to the 57th Edition of the Dangerous Goods Regulations (“DGR”), further restricting shipments of lithium batteries by air.  The International Civil Aviation Organization’s (“ICAO”) is also planning changes to the lithium battery rules for its 2017-2018 Edition of the Technical Instructions for the Safe Transport of Dangerous Goods by Air (“ICAO-TI”), and is even considering an outright ban on bulk lithium ion battery shipments as cargo on passenger aircraft.

As the ICAO and IATA implement more stringent requirements, the U.S. House of Representatives is considering a bill to proactively address perceived risks posed by lithium battery shipments.  The FAA has also ramped up investigations of lithium battery shipments by air transportation and is leveling significant civil penalties for alleged violations of the Hazardous Materials Regulations for these shipments.  

Each of these developments is discussed in more detail below.  Given the escalation in regulatory and enforcement activity, companies should ensure they understand the constantly evolving requirements, upcoming deadlines for the rules, and opportunities for influencing legislative and international commission proceedings.  Companies should also be aware that even a slight deviation from the Hazardous Materials Regulations for a single shipment involving lithium batteries may lead to significant penalties.

International Developments

A.    Changes to the IATA Dangerous Goods Regulations

The 57th Edition of the DGR and Addendum incorporate recent amendments to the ICAO 2015-2016 ICAO-TI, and include several significant changes to the lithium battery packing instructions.

• “Rigid” Packaging (Effective January 1, 2016).  The updated regulations specify that “strong rigid outer packaging” must be used for batteries that are shipped alone or in or with equipment when meeting the requirements of Section II of Packing Instructions 965, 966, 967, 968, 969, and 970.  The Packing Instructions also specify acceptable materials for such packaging (e.g., fiberboard boxes, plastic drums).  

• Battery Powered Equipment (Effective January 1, 2016).  The Regulations include special packaging requirements to address the potential risk of transporting hover boards and other vehicles containing lithium batteries.  Under Packing Instruction 952, battery powered equipment and vehicles that may be handled in different positions must be secured in a strong, rigid outer packaging and “be secured by means capable of restraining the vehicle in the outer packaging to prevent any movement during transport that would change the orientation or cause the vehicle to be damaged.”  Updated Packing Instruction 952 also forbids the transport of vehicles containing “[l]ithium batteries identified by the manufacturer as being defective for safety reasons, or that have been damaged, that have the potential of producing a dangerous evolution of heat, fire or short circuit…”

• Lithium Ion Batteries Packaged Alone (Effective April 1, 2016).  Lithium ion or lithium polymer cells and batteries packaged alone (i.e., without equipment) may not exceed a state of charge of 30% of their rated design capacity (under Packing Instruction 965) as determined by the guidance and methodology in the UN Manual of Tests and Criteria, 5^th revised edition, Amendment 1, Section 38.3.2.3.  Shippers may ship lithium ion or polymer cells or batteries with a state of charge greater than 30% only if they have received approval from the State of Origin and the State of the Operator.      

• Lithium Ion and Lithium Metal Batteries Packaged Alone (Effective April 1, 2016).  The updated regulations limit the number of packages containing lithium batteries that are not shipped with equipment that may be placed in a shipment (under Section II of Packing Instructions 965 and 968).  The shipper may not place more than one package containing lithium batteries in an overpack, and the shipper may only offer one package of lithium batteries prepared for transport in any single consignment.  In addition, the shipper must now offer packages or overpacks of lithium batteries to the operator before the packages may be loaded in a freight container or unit load device.

• Lithium Ion and Lithium Metal Batteries Contained in Equipment (Effective January 1, 2017).  IATA is narrowing the labeling exemption for lithium batteries that are shipped in equipment (under Packing Instructions 967 and 970).  Under the previous version of the regulations, lithium batteries in equipment were exempt from the handling label requirements if each package included no more than four lithium cells or two lithium batteries.  As revised, the exception will only apply when there are two or fewer such packages in a consignment.  IATA is providing an extended compliance period of 12 months–until January 1, 2017–to allow for updates to shipping procedures.

B.    Changes to the 2017-2018 Edition of the ICAO-TI

The most recent working group meetings of the ICAO Dangerous Goods Panel (“DGP”) in 2015 have yielded significant changes to the rules for transporting lithium batteries.  The working group agreed on a number of changes to the ICAO-TI, which would be incorporated into the 2017-2018 Edition, effective on January 1, 2017.  These changes may be refined in future meetings of the DGP but are not expected to substantially change from their current form.  Once finalized by the ICAO, the changes would be incorporated into the forthcoming 58th Edition of the IATA DGR.

• New Lithium Battery Mark.  The current lithium battery handling label will be replaced with a new lithium battery mark for lithium batteries (under Section II of Packing Instructions 965, 966, 967, 968, 969, and 970, and Section IB of Packing Instructions 965 and 968).  The current lithium battery handling label may continue to be used until December 31, 2018.

• Marking For Batteries Contained In Equipment.  The current exemption from the labeling requirement for lithium batteries that are installed in equipment if each package contains no more than two batteries or four cells is changing (under Packing Instructions 967 and 970).  The new rule would allow this exception from labeling only where there are two or fewer packages per consignment.  The change does not affect the exception for button cells installed in equipment.  As noted above, this change has already been adopted by IATA, although it is not mandatory until January 1, 2017.   

• Documentation.  The current rule requires that shipments of lithium batteries bearing the lithium battery handling label be accompanied by a document specifying that the package contains lithium batteries, that a flammability hazard exists and special care must be taken, that special procedures are necessary in the event of damage, and a telephone number for additional information.  The new rule would eliminate the documentation requirement in Packing Instructions 965, 966, 967, 968, 969, and 970.

• Status of Single Cell Batteries.  The new rule specifies that a single cell battery must be transported in accordance with the requirements for “cells” to clear up ambiguity related to whether single cell batteries are “cells” or “batteries” for calculating quantity limits (under Packing Instructions 965, 966, 967, 968, 969, and 970). 

• Size of Package.  Packages must be large enough to affix the lithium battery mark on one side of the package without folding (under Packing Instructions 965, 966, 967, 968, 969, and 970).

• New Class 9 Label for Lithium Batteries.  Lithium batteries that do not qualify for the exceptions (under Section II of Packing Instructions 965, 966, 967, 968, 969, or 970) must be shipped as Class 9 dangerous goods and meet extensive requirements.  Among such requirements is a new Class 9 dangerous goods label for lithium batteries.

C.    ICAO Considers Ban on Bulk Lithium Ion Battery Shipments on Passenger Aircraft

Reports indicate that the ICAO’s top technical body, the Air Navigation Commission, recommended a complete ban on bulk lithium ion battery shipments as cargo on passenger aircraft during its meeting on January 27, 2016.  The recommendation is not binding and has no immediate effect.  However, ICAO will consider the recommendation to ban bulk lithium ion batteries as cargo from passenger aircraft in late February 2016.     

U.S. Developments

A.    Aviation Innovation, Reform, and Reauthorization Act of 2016

On February 3, 2016, the Chair of the House Transportation and Infrastructure Committee, Representative Bill Shuster, introduced H.R. 4441 the Aviation Innovation, Reform, and Reauthorization Act of 2016 (“H.R. 4441”), which includes a section dedicated to air transportation of lithium batteries.  Section 615 of H.R. 4441 seeks to promote training, outreach, and international cooperation in enforcement related to lithium ion batteries, and would require the Department of Transportation (“DOT”) to establish a Lithium Ion Battery Air Safety Advisory Committee (“Committee”).  The Committee would facilitate communication between manufacturers, carriers, and the Federal government, and provide advice and recommendations to DOT regarding lithium ion battery transportation safety.  H.R. 4441 would also direct DOT to implement amendments to the ICAO-TI related to bulk lithium ion battery shipments as cargo on passenger aircraft, and would prevent DOT from adopting regulations on lithium ion cells or batteries that are more stringent than the ICAO-TI.  Finally, H.R. 4441 would require DOT to conduct an evaluation of current practices for packaging lithium ion batteries and develop recommendations to improve such packaging.

B.    FAA Actions to Address Lithium Battery Shipments by Air

The FAA is also taking action to address the risks associated with lithium batteries in the United States.  FAA issued a Safety Alert for Operators on October 10, 2015, urging carriers to take additional actions to minimize the risk associated with transporting lithium batteries, and the agency has backed more stringent requirements for shipping lithium batteries by air at the international level.  Meanwhile, the FAA has investigated a series of incidents involving lithium battery shipments over the past year.  For example:  

• In November 2014, the FAA proposed a $168,000 civil penalty against MedStar Health for allegedly violating the Hazardous Materials Regulations when it offered a box containing 180 lithium-ion batteries to FedEx for shipment by air.  According to the FAA, the batteries were improperly packaged in a plastic bag that was not sufficient to prevent the batteries from short-circuiting.  FAA alleged that MedStar failed to declare the hazardous materials and did not label the package for cargo aircraft only.  MedStar also did not provide emergency response information with the shipment and failed to ensure its employees received training for shipping hazardous materials.

• In March 2015, the FAA alleged that China Express International offered a single lithium-ion battery pack for air transportation to United Airlines.  The agency is seeking civil penalties in the amount of $82,500 for the alleged violation.

• In June 2015, the FAA proposed a civil penalty of $63,000 against CTC Battery for offering an undeclared shipment of four 12.8V rechargeable lithium-ion phosphate batteries to UPS for air transportation.  FAA alleged that the shipment was not accompanied by shipping papers indicating the hazardous nature of the contents.  In addition, CTC Battery allegedly failed to provide emergency response information and did not ensure its employees received hazardous materials training.