How a circular economy can build a sustainable supply chain for batteries

The need for urgent and more intensive actions against climate change is broadly accepted and batteries are set to play a key role in reducing carbon emissions. Batteries are the major near-term driver to decarbonise road transportation and support the transition to a renewable power system. This will play a key role in reducing emissions enough to keep the average global temperature rise below 2°C, which is the global agreement adopted at the Paris summit of the UN Framework Convention on Climate Change.

The World Economic Forum identified 10 actions to develop a circular battery value chain, accelerate sustainable business and technology development, and improve responsibility in the value chain. One of these actions is “to ensure consistent performance and transparency based on established sustainability norms and principles along the value chain to improve the social, environmental and economic performance of batteries.” In order to achieve this, there must be some sort of end-to-end traceability system in place.

Circulor, which provides Traceability-as-a-Service for the parts of the supply chain into which we have little visibility, has pioneered a technology platform using distributed ledger technology (blockchain) to create an immutable chain of custody record for materials or battery components. The system provides materials with a unique digital identity and then tracks the flow of this material, even as it changes state through processing and manufacture.

Challenges in establishing provenance of batteries

Consumers are increasingly aware that the choices they make have consequences for the environment and the planet. As a result, many are demanding increased assurances that the products they buy have been wholly sourced ethically and sustainably produced. Most manufacturers also want to meet these expectations and are making serious efforts to demonstrate that they behave responsibly and understand their supply chains well, but without knowing the provenance of goods or materials, it is very difficult to ensure social and environmental standards are effectively applied across complex and global commodity supply chains.

The raw material and recycling supply chains are complicated:

  1. They involve a complex web of highly diverse actors.
  2. The raw materials, by their nature, are very difficult to tag reliably.
  3. The material transforms on its journey from source to end use or re-use by a manufacturer, so that a new identity needs to be added after each transformation that inherits the provenance of the material and destroys the old identity (i.e. inherited dynamic identity).

The reuse case for batteries

In the recycling supply chains much e-waste including batteries is shipped to developing countries for recovery of valuable materials (e.g. aluminium, copper and cobalt). Some electronic waste is shipped as “working equipment” only to end up as waste upon arrival. When e-waste is discarded into open dumps or burn pits rather than being recycled, there are serious impacts to ground water, soil, air quality and the health of those in the surrounding communities.

Recycling is key to avoiding these issues and extending the circular lifecycle for reuse. Materials found in e-waste can be reused to reduce the need to mine virgin materials. This is driving an urgent need for solutions that are also able to track materials, their location and their reuse in new supply chains.

There are a number of potential reuse cases for batteries. Retired EV lithium-ion batteries (LIBs) can be refurbished and reused in energy storage systems. It is possible to reuse the batteries at the end of their automotive lifecycle for stationary energy storage, such as utility-scale grid, building and telecommunication tower storage. Compared to use in EVs, stationary energy storage demands lower current density from the battery. Therefore, batteries retaining 80-85% of the original capacity are collected, which fulfils the central principle of the circular economy: “refurbish, reuse, recycle.”

The Battery Passport

Circulor’s system creates an indisputable chain of custody record for materials or battery components in the supply chain, using IoT and tags to create digital twins, and machine learning to identify anomalies, combat fraud and identify supply chain weaknesses to enable targeted due diligence and compliance activity. One of the firm’s research initiatives is the development of new technical functionality to create a Dynamic Battery Information Management System. Linked to this is the development of an interoperability framework, enabling battery data to be managed and tracked across multiple manufacturing systems.

The system will provide information on the sustainability, origin, materials chemistry, chain of custody and state of health of the battery, and is set to become a key enabler in creating sustainable and circular battery value chains, which will track key battery materials and evaluate environmental and social performance through the lifecycle. This data will form a "Battery Passport," a circular economy product, with individual and unique battery credentials, providing manufacturers, suppliers, recyclers and end consumers with an immutable record of the battery's history. Over time the increased recycling of batteries within the UK and Europe will reduce over-reliance on strategically important but resource-constrained materials like lithium and cobalt.


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