Z,
The US Department of Transportation Pipeline and Hazardous Materials Safety Administration determined that certain types of batteries are prone to becoming incendiary devices when heated(and generally an aircraft's cargo area is freezing rather than boiling while at altitude) so they banned them. The logic is that should a random piece of metal come in contact with a battery's terminals, + & -simultaneously it can spark. That spark can cause a fire,and a fire in flight is dangerous.
The US DOT's PHMSA, which has no authority over the aviation industry (the DOT does, but not the PHMSA), based its study on quite literally random occurances (I don't find them random, other people in the DOT and FAA found them to be 'random') that had nothing to do with batteries themselves. In fact, the only known in-flight battery fires on airliners in the past decade have been caused by batteries that were not placed on the restricted list by the DOT PHMSA's findings.
There was a fire on board a UPS DC-8 at PHL that involved li-ion batteries, a whole pallet of them, however that was air freight which has different rules. The batteries did not start the fire, the crew flew the plane nearly 50 miles while on fire!!! They landed perfectly and safely. The fire spread due to a deployment error of the PHL Crash/Rescue crews by not puncturing the skin of the aircraft and injecting the foam directly into the aircraft.I forget the details now, but it was determined to be an error in the actions by the crash/rescue crews. ............... but that fire is mentioned heavily in the report.
.......so your question was what now?