With a mission to improve the authentication and sustainable management of batteries for electric vehicles, OPTEL’s Battery Traceability Solution has become a game-changer for stakeholders in the entire automotive industry looking to implement a worldwide battery passport system in the near future.

This blog series looks into the origins behind the importance of battery traceability and how a global battery passport aims to resolve the many ESG challenges mining companies, mineral processors, battery makers, and EV manufacturers face.

This is the second article in our series. To read the first article, click here. 


Blog Battery Traceability


An estimated 31.1 million EVs are expected to be sold by 2030—a critical year for the Paris Agreement, which aims to reduce greenhouse gas (GHG) emissions by 30% and limit global warming to under 2 degrees Celsius. According to the International Renewable Energy Agency (IRENA), at least $2 trillion in investments will be required to achieve the Paris Agreement’s objectives within the next few years.

Electromobility—and more specifically electrical vehicles (EVs)—are viewed as a viable energy-transition pathway to curb GHGs and meet climate goals, as per a report by the Massachusetts Institute of Technology, among others. Thanks to major technology developments in the automotive industry and increasing adoption by consumers, EVs are becoming more and more mainstream.

A boom in demand for EVs has inevitably led to rising demand for products across the entire value chain, including mining companies, cell/module/battery producers, OEMs, recyclers, and remanufacturers. Smart Energy International points to rising stocks of EV manufacturers, like Tesla, battery manufacturers, such as Samsung SDI and CATL, miners, including Freeport McRoran, and charging companies, namely Fastnet and Switchback.

Blog Battery Traceability


Despite EVs growing popularity as more sustainable transportation solutions, issues remain regarding the environmental and societal impact of their production, particularly with respect to their batteries.

Based on recent analyses by the World Economic Forum, there is still “significant room to improve the climate and broader sustainability benefits of EV batteries across their lifecycle.”

As we highlighted in our previous article, the manufacturing of EV batteries generates a high GHG footprint and is linked to a myriad of environmental and social challenges, including pollution, ecosystem degradation, human rights abuses, and more.

From a recycling standpoint, EV batteries are not being repurposed to maximize their use as renewable energy sources when they are idle, which is 95% of the time. Research firm McKinsey also underscores the missed opportunities of extending EV batteries’ useful life through secondary applications; in part, the potential for new applications is impeded by a lack of a streamlined, circular EV market as well as battery-specific information that must be shared between OEMs decommissioning EV batteries and companies that can revalorize them.

Blog Battery Traceability


Thanks to the emergence of preliminary regulations from countries around the world, public pressure, and the development of the Global Battery Alliance’s guiding principles for a more sustainable battery value chain, a defining and widespread rollout of a market-wide battery passport platform is promising to address the EV battery sector’s ESG challenges head-on—and throughout the complete value chain.

The premise of the battery passport, or digital ID, is that it will include relevant information about each EV battery, including ESG ratings and adherence to standards, production history, origin of materials, maintenance and repair history, and current performance levels to advance battery life and enable recycling.

The battery passport aims to be a transparent and tamper-proof mechanism to mitigate the adverse societal and environmental impact caused by the production of EV batteries, no matter at what stage of the manufacturing process. Fostering data integrity and providing a standardized framework for all stakeholders, the battery passport would an effective tool to not only govern production but also audit companies and benchmark their ESG performance against their peers.

The ESG advantages of an EV digital passport for stakeholders (mining companies, refiners and active material producers, cell/module/battery manufacturers, EV OEMs, and recovery/recycling companies) are numerous. Here are just a few examples:

  • End-to-end and real-time supply chain and channel visibility
  • Certification of a proof of origin as well as the ESG and safety of materials/components
  • Standardized authentication to demonstrate the achievement of sustainability goals
  • Reduction or even the elimination of fraud and counterfeiting
  • Improved operational intelligence
  • Monitoring of inventory levels based on health scores and lifecycle stage
  • Information for accurate lifecycle assessments for the right handling, recycling, repurposing, and disposal methods
  • Improved brand equity and customer loyalty

Many supporters of the battery passport also point out that, in addition to ESG performance, product improvements can be achieved thanks to accessing to EV battery passports. Technology, design and cost improvements for EV batteries will undoubtedly evolve as R&D teams analyze passport data.

Industry analysts indicate that companies, faced with the cold hard facts gleaned from their battery passports, maybe incited to work with local suppliers for the sourcing of minerals, materials, and other supply chain operations; accountability and transparency will lead to local and just value creation, supporting both communities and surrounding ecosystems.

Outside the value chain—but equally important—government institutions, NGOs, auditors, and even consumers would benefit from complete transparency, guiding them in the creation of better policies and regulations that could elevate ESG initiatives even further.

Furthermore, EV battery passports will likely be used to set standards to award contracts and prove compliance for bidders. For example, during a 2021 meeting hosted by the Association of Mining and Exploration Companies (AMEC), analysts went so far as to say that “ESG issues are not only non-negotiable, they will impact off-take and related financing options.” As Roskill principal analyst Allan Pedersen put it: “It is my firm belief that ESG is not going to be an order winner for you or for anyone, it’s going to be an order qualifier,” he said. “You will not be invited to sit at the negotiation table if this is not part of your company DNA, and that you can demonstrate it.

The digital battery passport is a critical lever to help develop a better value chain for both EV batteries and electrified vehicles as a whole. Stakeholders need to operate in conformance with internationally agreed-upon principles, with full public disclosure, and work collectively to act more sustainably. And new technological platforms, like the EV battery passport, will undoubtedly help them achieve their ESG goals.

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