Battery Passports Are Generating “Data & Material Mines” to Achieve a Cleaner and Resilient global Supply Chain

Japan and Europe are collaborating to establish a system to share data and mutual certification of supplier and extraction of lithium, nickel, and cobalt—critical for EV batteries by 2025 to level up and compete with China’s battery material suppliers. Presently, Japan’s industrial data platform, Ouranos, hosts 50 companies, including Toyota Motor, Nissan Motor, and Honda Motor, while Europe’s public-private data platform Catena-X with manufacturers that include BMW Group, Volvo, and Mercedes-Benz Group functions independently. By 2025, the two platforms will link together with the goal of sharing material information and tracking to create closed material loops across the EV supply chain.

Issues around carbon footprint, unsustainable­­ sourcing critical raw materials (lithium, nickel, and cobalt), and the use of hazardous substances during battery production, as well as recycling and new opportunities for second-life batteries are themes dominating the production and supply chain of EV batteries. Today, most EV batteries in Europe and the United Kingdom are crushed into a material called “black mass” and exported and sold to Southeast Asia for further material extraction. By 2025, European regulation will emerge to restrict black mass export and keep critical battery resources within the region as the European Union (EU) is using EV batteries as a tool to combat climate change. The setup of EV gigafactories over the next decade will address the local and global requirements for manufacturing, assembly, and recycling.

Battery recycling creates a unique opportunity by future-proofing a finite raw supply chain, which is infinitely recyclable, ultimately reducing the cost due to forward manufacturing, in addition to making batteries more environmentally friendly. Volkswagen (VW), Mercedes-Benz, and Swedish battery maker Northvolt are making strategic investments in battery recycling research to accelerate results and become economically viable. The technology to recycle materials is costly, as the volume of EVs and economies of scale come into play—valuable materials can be recycled, while adhering to minimum recycled material regulations by 2031 on cobalt, nickel, and lithium. The collaboration between Japan and Europe will explore channels to exchange technical knowledge, streamline regulatory compliance while lowering administrative burden on battery and car manufacturers, and reduce environment impact and carbon emissions during EV battery lifecycles.

The Global EV battery industry is heading toward an inflection point with stringent environmental, material, and battery disclosures by 2026/2027. The Battery Passport (BP) is a digital twin of the battery, which stores data about the battery with a QR code, serial number, and supporting unique verification documents to demonstrate the circular flow of resources from raw mineral extraction to material production, manufacturing, operation, and recycling. According to global technology intelligence firm ABI Research, more than 89.8 million battery passports will be created available by 2030 with the EU leading the initiative with all Battery Electric Vehicles (BEVs) sold owning a BP by 2027.

Original Equipment Manufacturers (OEMs) are piloting BP projects and collaborating through CIRPASS and the Global Battery Alliance to forge tactical partnerships and identifying the following benefits:

• Data transparency across the supply chain, identifying hotspots to improve operational efficiency and increase profitability.
• Recycling critical materials and second-life use cases are creating new business opportunities and revenue streams, while facilitating the circular economy transition.
• Strategic partnerships are forming within the ecosystem between raw material suppliers, manufacturers, software application providers, maintenance vendors, and recyclers for long-term value creation with the common goal of extending battery life and supply chain transparency throughout the value chain.
• Lastly, strengthening brand reputation, sustainability commitment, and customer trust will help to retain a competitive advantage.

The BPs are aiming to streamline data management, drive manufacturer and supplier commitment to make batteries safer and more efficient to produce, and creating safer work environments. Furthermore, the benefit to the consumer is a battery built to the highest quality, which protects the environment and the local community. Circulor, Circularise, Dassault Systèmes, Minespider, PSQR, and Siemens are examples of solution providers creating pilot BPs that function as a global one-stop data repository and verification tool for battery quality and responsible manufacturing. More information can be found in ABI Research’s Digital Product Passports: Tech-Driven Sustainability and Traceability for EV Batteries, Construction Materials, and Pilot Use Cases report (AN-5868), MD-DPVCM-23, and PT-3089.