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June 3, 2022updated 02 Jun 2022 4:48pm

How battery passports could bring transparency to the EV supply chain

A new consortium is developing digital passports to eliminate carbon-intensive materials from the EV battery supply chain.

By Greg Noone

The future is filled with electric vehicles, according to the latest projections. The IEA predicts that 300 million EVs will be traversing the world’s highways by 2030. The UK government estimates that nearly half a million EVs are already humming up and down British roads, boosted by a healthy market for second-hand vehicles.

Maintaining that momentum, however, requires batteries – and lots of them. This has raised the hackles of environmentalists, who balk at the carbon-intensive, environmentally destructive practices of some mining companies that supply the nickel, cobalt and lithium essential for battery production.

Batteries themselves “account for half of all the inherited emissions from the supply chain,” explains Douglas Johnson-Poensgen, CEO of supply chain traceability firm Circulor.

“There’s something like 60 kilos of nickel in an EV battery, and turning rock into battery-grade nickel is enormously energy intensive,” he explains. “If you’re doing that with coal-fired electricity, then clearly you have a problem.”

To address batteries’ environmental impact, the EU is preparing new regulations that will require that 70% of a battery’s weight consists of recycled materials. Manufacturers will also need to provide information about the environmental impact of each battery’s materials and how they can be recycled.

In response, last month the German government created a new consortium to develop the world’s first ‘battery passport.’ Its goal is to develop a system that collates key information about individual EV batteries as they move along the supply chain, explains Johnson-Poensgen, from material extraction to manufacture, then on to use, reuse or recycling.

Circulor’s role is to build the digital architecture at the core of the battery passport. That’s no easy task, Johnson-Poensgen says, given the complexity of the EV battery supply chain. “It's not like tracking a strawberry, which is a strawberry in the field and still a strawberry when it lands on plate."

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Instead, a piece of metal used in an EV battery undergoes a metamorphosis as it passes through the hands of miners, refiners, and car manufacturers. It’s a process that, if a battery passport is be workable, requires close monitoring and consultation with each and every stakeholder in the supply chain.

EV battery passports: selling sustainability

Major car companies, for their part, seem open to such transparency in their operations. With more and more firms like General Motors, Audi and Citroen pivoting to electric vehicles in response to increased demand, battery passports have the potential to be valuable marketing assets.

"Sustainability can be a driver of top-line growth,” Johnson-Poensgen argues, having worked closely with Volvo on its battery passport project.

Extending such passports to the entire EV supply chain, Johnson-Poensgen concedes, will be a much larger undertaking – but one that promises a useful tool for driving down the emissions of the growing electric car industry, as provenance becomes a more potent selling point for batteries.

It’s also useful from a geopolitical standpoint. “Both Europe and North America have a strategic over-reliance on East Asia for critical raw materials, particularly to underpin the energy transition,” says Johnson-Poensgen. Keeping more of these materials in the EU after they’ve been extracted means that the pace of its energy transition will depend less on the goodwill of China.

Battery passports aim to provide transparency in the supply chain that allows buyers and investors to avoid polluting materials providers. (Image by SolStock / iStock)

Battery passports cannot by themselves guarantee that manufacturers won't use lithium from mines with harmful extraction methods, Johnson-Poensgen concedes. But the transparency they allow creates “a very, very large stick with which to beat people” who do, he says.

The system will also allow financial organisations to boost their own ESG credentials by funding sustainable mining operations and manufacturing plants. It is this, Johnson-Poensgen believes, that will make it possible for the consortium to conceive a working battery passport concept by the 2026 deadline.

More and more metals companies, he notes, are interested in differentiating their product from others on sustainability grounds. “That’s my gut too, particularly as there’s a growing demand for green steel and green nickel,” says Johnson-Poensgen.

Indeed, the consortium’s work may have significant impact well beyond the EV supply chain. “The battery passport is the first of what we expect to be a raft of product passports,” says Johnson-Poensgen, not least for plastics.

Last year, Circulor collaborated with French oil and energy giant Total to prove the provenance of recycled plastic. “There's no technological barrier,” says Johnson-Poensgen. Other passports, in short, may be coming to a product near you.

Read more: Blockchain may yet prove its worth in the circular economy

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