Powering the Future 2025

Recommendations3 An array of changes is needed across the EV battery value chain. This section outlines what changes can, and must, be made to help address these concerns, in turn reducing environmental impact and capitalizing on the opportunity in a way that benefits all. This is not a comprehensive list of all changes needed to create a circular battery economy, but a prioritized set of interconnected recommendations that take a holistic approach to that end. Develop standardized, interoperable track-and-trace platforms. What is this change, and why is it needed? “Track and trace” (T&T) refers to two related approaches to increasing visibility across the value chain. “Tracking” involves following a battery from the time it is manufactured until it reaches an EOL management system (e.g. a recycling plant); this can be achieved through technology such as QR codes, radio-frequency identification and near-field communication. “Tracing” involves following battery materials from their origin (e.g. the mine) through EOL, and back into the supply chain; this requires blockchain, mass balance or other chain-of-custody techniques. Together, T&T provides the transparency needed to enable responsible decision-making and accountability at every step of the value chain. Combining elements of both tracking and tracing, a digital product passport (DPP) “establishes a digital twin of the physical battery that conveys information about all applicable sustainability and lifecycle requirements based on a comprehensive definition of a sustainable battery.”53 GBA conceptualized a DPP for batteries as the principal instrument to map, measure and manage sustainability risks and impacts related to mineral value chains in its 2030 vision report brought out in collaboration with the World Economic Forum.54 DPPs may introduce upfront costs for businesses related to data collection, integration and compliance, which may ultimately be passed on to the final consumer but can potentially drive long- term efficiencies, reduce regulatory burdens, and unlock new revenue streams through enhanced product transparency and life-cycle management. For example, a quantitative analysis of impacts of the proposed EU battery passport found that availability of composition and dismantling data could reduce costs for preprocessing and treatment by 10-20%. Use of the battery passport in vehicle recycling and export procedures could potentially reduce battery leakage (illegal exports and treatment)55 and increase the availability of active materials, fulfilling 5-20% of material demand for projected European passenger vehicle demand by 2045.56 T&T and DPP requirements are increasingly being introduced in multiple jurisdictions to bring transparency to battery value chains. For example, the European Union (EU) Battery Regulation explicitly requires use of a DPP for light-duty vehicles, industrial batteries and EVBs by 2027.57 In California, vehicle manufacturers are required to provide digital identifiers for sharing information on battery composition and battery disposal instructions.58 Given the business opportunities associated with this activity, commercial T&T solutions are proliferating. Harmonizing data governance for these platforms is vital to ensure that they are interoperable across value-chain segments and jurisdictions. Additionally, the metrics used must be rigorous and comprehensive to provide a full understanding of a battery’s lifetime environmental and social footprint. What levers can be used to facilitate this change? Collaborate to harmonize T&T metrics and approaches across regions. The US, Japan, China and other jurisdictions beyond the EU are at various stages of introducing due diligence, environmental footprint and traceability requirements for batteries. This creates an opportunity now to address challenges of traceability across global supply chains. Policy-makers across these jurisdictions can develop common methodologies for data collection and verification of the supply chain, making traceability systems interoperable, and creating harmonized data architectures. Harmonizing data governance for these solutions is critical to ensure interoperability across value chains, jurisdictions and diverse technologies. 3.1 Track-and-trace platforms Powering the Future: Overcoming Battery Supply Chain Challenges with Circularity 18