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The hidden costs of an electrified transportation revolution include a variety of supply chain concerns.

January 5, 2022

4 Min Read
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Franziska Grammes

Electric vehicles (EVs) are seen as key in the transition to a low-carbon economy. They might not have tailpipe emissions, but the extraction and production of the raw materials in their batteries, for example, can yield just as much carbon. The hidden costs of the green transportation revolution are still not fully considered in the adoption of electric vehicles - nor the recycling of the battery components.

How can new technologies and battery passports help?

With EV sales expected to increase, global battery demand could rise over fivefold between 2020 and 2025, according to S&P Global Market Intelligence data. EVs require about six times more minerals than cars with internal combustion engines.  That means EV manufacturers will need an increasing amount of the world's lithium, cobalt, nickel, and other metals to produce their batteries. People working in these global supply chains often suffer serious labor rights abuses. Furthermore, the raw materials have to be transported across the globe, causing a significant amount of emissions. Eight supply chains produce 50 percent of the world’s emissions - according to a current report from the World Economic Forum (WEF). That means we cannot achieve our global climate targets without transforming our supply chains. But how can we make supply chains more ethical and green? How can we move from carbon-intensive supply chains to those achieving net-zero?

Related:Will a Circular Economy Approach to Batteries Result in Better and Cleaner EVs?

How can we make supply-chain decarbonization happen?

To reduce CO2 emissions from companies operating internationally, meaningful data collected along the entire supply chain is critical. Technologies like blockchain, machine learning, or artificial intelligence are disrupting the industry on a global level right now. Circulor, a global technology company headquartered in the UK, provides one of the most complete and mature solutions to this pressing global problem. “Unlike other traceability solutions, we track the actual material as it flows through the supply chain, not just the transactions between participants. This means, we are able to aggregate emissions at each supply chain step, creating accurate and insightful information about the embedded CO2,” Circulor CEO and Founder Douglas Johnson-Poensgen explained.

Britishvolt, a lithium-ion battery producer based in the UK, is working with Circulor to track its supply chains and emissions from the building materials of its factory to end-of-life disposal and/or reuse of battery materials. This 20+-year project is the first of its kind in tracking not only the supply chains for the batteries but the construction and maintenance of the facility as well as the related economic development impact on the local area. [EC1] [FG2] However, new technologies can not only help to make supply chains more sustainable but also more ethical.

Related:Examining the Role of Electric Vehicles in China’s Airpocalypse

Is the Circular Economy the answer to achieving net-zero?

Achieving true net-zero also relies on a fully functioning circular economy. According to a report by the International Energy Agency, the shift to electric mobility could create 12 Million tonnes of battery waste between now and 2030. To make electromobility sustainable, compliance with social and ecological standards in the extraction of important raw materials must play just as important a role as their recycling. When we combine traceability and circularity, we can achieve climate goals. We need to shift from just producing more sustainably and then throwing away. We need to extend the life of products like batteries, then recovery and reuse by designing waste out of systems.

The Ellen MacArthur Foundation estimated, in a recent paper, that 45 percent of the emissions needed for net-zero can be reduced through the pursuit of circularity. In other words,: when we combine traceability and circularity, we can achieve climate goals. Traceability enables a whole new level of business decision-making and product innovation, as it enables collaboration and provides visibility of exact material volumes of materials coming to market.

Tracking the environmental and human rights impact of EV batteries

The more recent EU proposals for the introduction of a “battery passport” will further drive the focus on decarbonization, circularity, and the need for provenance data. This passport is included in the EU Battery Regulation, which will take effect in January 2024.  It requires, for every EV battery bigger than 2kWh, to have an individual digital file of its contents and environmental footprint. CO2 emissions, for example, must be listed here down to the gram.

The battery passport can be seen as a comprehensive digital passport that provides reliable information and data on every life stage of the battery. The digital tool promises to track the management of social and environmental risks in an EV battery’s life. And producers should prepare for it now. Circulor's Battery Passport Management System is a solution for companies to prepare for the future requirements of legislators and consumers. Those that manage to quickly demonstrate verified sustainable practices here will soon have a clear advantage, Circulor’s Johnson-Poensgen has stated.

Franziska Grammes  is a Berlin-based communication and brand strategy consultant with a focus on Greentech-Companies. She believes in the power of collaboration and innovation to solve the climate and nature crises.

 

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