Tech Talk | How battery passports could unlock value in Europe

Battery passports have the potential to be a valuable tool for businesses and consumers in Europe, the Battery Pass consortium has reported.

Battery passports are coming in Europe and globally.

Under the EU’s Battery regulation, which entered into force on 17 August 2023, from 1 February 2027 all electric vehicle (EV) and industrial batteries over 2kWh sold in the market, regardless of where they originate, will require a battery passport.

The aim is to introduce sustainability and circularity to the whole battery lifecycle, from manufacture to final disassembly and recycling.

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This has resulted in a number of initiatives at both regional and global levels to develop and implement such passports, which in essence are digital records – or a form of digital twins – comprised of a range of information on the characteristics and performance of the batteries, along with a unique identifier.

Battery passport value assessment

In a new update of its Value Assessment, the EU Battery Pass initiative, focussed on the implementation of a battery passport, has identified a number of direct use cases that can enable battery passports as contributing to value creation and value retention for businesses and consumers.

These include improved environmental, social and governance (ESG) data communication and informed purchasing decisions due to direct visibility to supply chain information, and simplified residual value assessment, with up to 10% reduction of technical testing costs for independent operators.

Others are streamlined servicing of batteries and easier trade of waste batteries along with more efficient recycling, with estimated up to 20% reduction of pre-processing and subsequent treatment costs.

However, there are several current challenges to implementation, which companies need to start addressing so that the value opportunity is not significantly reduced.

For example, the majority of the required implementation tasks translate to fixed costs, while around half of the total implementation effort comes from data management tasks highlighting the importance of automation.

To fully capture the value offered by battery passports, businesses are recommended to be proactive in establishing their operational readiness for implementation.

They need to decide whether they are a compliance necessity or a strategic opportunity with which competitive advantage can be secured through identifying business opportunities within the battery passport framework.

They also need to decide which parts of the battery passport to build in-house or outsource and how to integrate the passport into processes such as enterprise resource planning to maximise the impact.

These steps will, however, apply differently to the two types of companies, the consortium notes, i.e. the economic operators that are responsible for the battery passport and the providers that will contribute to data sharing along the value chains.

These businesses should ideally align their preparation across the value chain and in addition, both types should consider evaluating traceability systems to demonstrate the efficient upstream data exchange and reporting use case.

Policy enablers

To maximise the value, policy actions also are needed, including resolving remaining regulatory uncertainties, such as the standardisation of data attributes and specification of how up-to-date dynamic data must be acquired and recorded.

Additional use cases also can be enabled, for example facilitating data aggregation across passports to provide market insights, industry benchmarks and information for policy design, and integrating battery passports into deregistration and export processes to increase secondary material availability.

This could potentially fulfil up to 20% of the projected primary European material demand by 2045, the Battery Pass consortium suggests.

In its conclusions the consortium points to the societal value that can result from battery passports.

These are improvement to the green economy, strengthening the ability to reach climate neutrality by 2050 with increased value chain awareness of sustainability and enabled circular economy practices and ensuring a just transition, with job creation in green industries, more responsible supply chains and less pollution.

And these potential impacts should outweigh the challenges that implementation may present.

In addition, the battery passport should multiply its impact by serving as a blueprint for other digital product passports in value chains of other industries.

Battery passport pilots

Meanwhile, the Global Battery Alliance has reported the completion of pilots with real-world sustainability data gathering.

Building on a 2023 battery passport proof-of-concept and drawing on assessment of the provenance and flow of seven materials – lithium, graphite, aluminium, cobalt, copper, nickel and iron phosphate – seven rulebooks were developed covering greenhouse gas emissions, environmental and human rights due diligence, forced labour, child labour, biodiversity, indigenous peoples’ rights and circular design.

These rulebooks define baseline expectations and leading practices with the aim to help guide companies in addressing risks and sustainability impacts within their supply chains.

Over time the Alliance’s battery passports are intended to yield comparable data across over 20 ESG categories in a trusted format.

Jonathan Spencer Jones

Specialist writer
Smart Energy International

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