How a ‘Battery Passport’ can improve supply chain transparency for critical minerals
To mark World EV Day, Benedikt Sobotka, co-chair of the Global Battery Alliance, looks at how the transport market can begin to overcome the challenges of critical minerals to drive electric vehicle adoption at a greater scale.
29th September marks World EV Day, a global day dedicated to accelerating the adoption of electric vehicles and the transition to sustainable transport. With transport currently responsible for a staggering 37% of global CO2 emissions from end-use sectors, reducing our reliance on polluting vehicles will be a major contributor to the fight against climate change.
The good news is that the shift to e-mobility is already underway, with EV sales having doubled from 2020- 2021 to a new record of 6.6 million. Demand for batteries, which underpin electrification and comprise around 30-40% of an EV’s value, is increasing exponentially, along with materials such as cobalt, lithium and copper.
However, sustainably producing these materials and scaling up the EV battery value chain is no mean feat. As one of the world’s largest producers of battery metals, Eurasian Resources Group is acutely aware of the ESG issues that are often still associated with the production of a battery. Social risks, such as child labour, unsafe working conditions and violation of indigenous rights, are compounded by environmental risks, including high CO2 emissions, water use and biodiversity loss.
For example, around 70% of global mined cobalt is produced in the Democratic Republic of the Congo, which is one of the world’s poorest countries and home to many vulnerable mining communities. Most of this metal is subsequently refined in China – and while China is making headway on its plans to be carbon-neutral by 2060, refining and smelting operations are still typically powered by carbon-intensive, traditional energy generation methods. Another key material used in EV batteries is lithium, which requires approximately 500,000 gallons of water to produce one tonne of the metal, depleting already scarce water supplies around mining operations and threatening local communities.
Transitioning to e-mobility to tackle climate change will be counter-productive if it only exacerbates other environmental and social issues. To ensure this is not the case, and to make the shift to EVs viable from an ESG perspective, innovation and collaboration between all players across the value chain are key.
Focussed on achieving transparency in the supply chain, a battery passport is a solution that has emerged from exactly this kind of cooperation. The Global Battery Alliance (GBA) is a multi-stakeholder organisation with 100+ members, ranging from international mining companies, software developers and auto manufacturers to governments, NGOs and academics. It is currently developing its own Battery Passport, which aims to bring transparency to what is a relatively opaque supply chain by collecting, exchanging, collating and reporting data among all lifecycle stakeholders.
The Passport will provide end-users with key information about a battery’s material provenance, chemical make-up, manufacturing history and ESG performance, including tracking its carbon footprint and companies’ efforts towards eliminating child labour in battery supply chains. By tracing the battery across its entire lifecycle, it can also support resource efficiency, life extension, and recycling for li-ion EV batteries, of which less than 5% are currently recycled.
The concept has already been endorsed in the 2021 G7 Leaders’ Meeting, the draft EU Battery Regulation and the Canadian and US administrations. Based on the data recorded in the Battery Passport, the GBA will be able to benchmark sustainability performance across key social, environmental and governance indicators and issue a quality seal for batteries, similar to the Fairtrade mark on food labels, the energy efficiency rating for white appliances, or the Responsible Jewellery Council certification.
The urgent need for greater transparency and assurance in the battery supply chain is made apparent by the recent appearance of similar passport and tracing products, all contributing towards this goal. Re|Source is one such solution being piloted by industry actors including Eurasian Resources Group, Tesla, Glencore and others. The platform uses blockchain technology to trace responsibly produced battery materials in real operating conditions, from the mine to the electric vehicle. The GBA’s Battery Passport provides the reporting framework for such technological solutions, establishing itself as the global authority on sustainable, responsible and circular battery value chains. For example, the GBA recently partnered with a German consortium to launch the Battery Pass, an initiative for securely sharing data across the value chain for sustainable batteries in Europe.
The rapid expansion of the EV market will clearly place the EV battery supply chain under significant pressure, which will only be compounded by logistical and geopolitical challenges. If you push a supply chain too hard and scale up production too quickly, ESG compliance problems are more likely to arise which need to be dealt with.
While this is widely recognised, it is an issue that has not yet been fully addressed. A passport for batteries not only holds companies and organisations accountable for their own ESG footprint, but it also brings transparency and unity to a complex and varied supply chain. In doing so, a passport provides a platform for collaboration and improvement to ensure the long-term, sustainable future of the electric vehicle market.
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