A Guide to Building Sustainable Global Battery Value Chains

sustainable battery value chains

Due to increased demand for batteries and electric vehicles (EVs), the sustainable global battery value chains industry is undergoing a transformation.

As per the recent forecasts, more than 18% of all car sales could be electric this year, up from 13% in 2022 and more than double their 9% penetration in 2021.

After worldwide sales passed 10 million last year, EVs may account for almost one in every five cars sold in 2023.

This is a welcome shift towards clean transportation and confirms the growing public support for e-mobility, but also highlights the urgent need for more sustainable, transparent, and robust battery supply chains.

We must understand the importance of responsibly sourcing key minerals that will power the mass EV transition, as well as ensuring their responsible use throughout the value chain, as an industry and a society.

The Global Battery Alliance’s (GBA) battery passport can and must play a role in shaping the future of sustainable batteries.

Sustainable Battery value chains are complex

Several countries and multiple stakeholders are involved in battery value chains, which are intricate webs of interdependency.

In the process of mining and refining raw materials, manufacturing cell components and cells, making battery packs, and assembling electric vehicles, the materials used in each battery often travel thousands of miles – from Australia to China to the US – before being used in the vehicle. Once the vehicle’s lifecycle is over, the battery and materials can be used again.

According to a McKinsey and GBA report – an alliance bringing together more than 140 companies, financial institutions, NGOs, governments, and academics – aiming to develop and ensure a sustainable global battery value chain – the lithium-ion battery chain could grow by over 30% each year by 2030, reaching a value of over $400 billion by then.

As a result, the complexity of battery value chains poses challenges that must be addressed.

A number of critical raw minerals still play a significant role in the battery market, such as cobalt, copper and lithium. Demand for cobalt and copper is expected to remain strong, especially for medium and premium class vehicles.

The demand for cobalt-based battery chemistries is typically driven up by the high performance quality. However, cobalt’s production is often associated with issues such as child labour – particularly in the Democratic Republic of Congo (DRC), which supplies 70% of the world’s cobalt and almost all battery-grade cobalt, employing 40,000 children in its artisanal mines.

Battery materials sourced responsibly

Contemporary Amperex Technology Co. (ERG) and Eurasian Resources Group (ERG) supply and manufacture battery materials. In the production of batteries and their component materials, CATL is acutely aware of the need for responsible sourcing and manufacturing, and for ensuring higher socio-environmental standards.

This is one area where ERG’s Metalkol production facility in the DRC is making significant progress. By reprocessing copper and cobalt from historical tailings waste, the facility produces a significantly lower carbon footprint than most others and has a ground-breaking production process. Besides reducing carbon emissions, this approach addresses the consequences of historical mining operations in the region as well.

In the same vein, CATL developed CREDIT, the first audit toolkit in the industry for lithium-ion battery supply chains, based on multiple frameworks and the current situation. Through CREDIT, enterprises across the supply chain can calculate indexes about their sustainability performance, thereby exploring paths towards sustainability through big data-based comprehensive evaluation.

The environmental, social, and governance (ESG) compliance and material provenance of batteries must also be tracked robustly to establish sustainable battery value chains.

As a result, the battery passport can play a crucial role for the GBA. In the passport, comprehensive information about the mineral provenance, manufacturing history, and sustainability performance of a battery is contained. According to the GBA’s rulebooks, this includes factors such as the battery’s carbon footprint, child labour, and human rights performance.

At the World Economic Forum’s Annual Meeting in January, GBA unveiled the world’s first battery passport pilots, which include data from Tesla, Audi, and their value chain partners, such as CATL.

As a result of the passport, manufacturers, regulators, and consumers will be able to verify that batteries meet environmental, social and economic criteria. In order to create a future where sustainability is at the core of the industry, the battery passport can leverage digital technology and multi-stakeholder collaboration.

Since early 2027, the European Union has already made a battery passport a mandatory requirement, acknowledging the importance of passports. China and the United States, for example, are also recognizing the importance of battery passports and transparency.

Success requires multi-stakeholder consensus

For battery passports to be implemented successfully and sustainable value chains to be established, all stakeholders must collaborate. As a result, the GBA includes stakeholders from government, academia, civil society, and all phases of the industry.

Through multi-stakeholder consensus building processes, the GBA systematically integrates expectations from all stakeholders as they relate to key sustainability performance indicators for batteries, building on regulatory requirements and existing standards while bridging the gap to the GBA’s vision of sustainable, responsible and circular battery value chains.

In 2022, the GBA published and piloted initial indicators related to battery carbon footprint, child labor, and human rights performance.

As part of its unique convening power, the GBA is actively advocating for globally harmonized sustainability indicators in order to achieve comparable benchmarks and foster more sustainable value chains globally.

In the first place, governments can play an important role in encouraging responsible sourcing and sustainable practices. They can provide financial support, create favorable policy frameworks, and enforce compliance with environmental and social standards.

In addition, industry players must commit to transparent supply chains, reduce their carbon footprint, and prioritize the well-being of workers and communities.

It is imperative for companies to ensure responsible mineral production and sourcing, invest in technologies that increase energy efficiency and ecology in the creation of batteries, and encourage recycling and reusing them. This should be a prerequisite of working together. By doing so, industry leaders can demonstrate what needs to be done and aid in transforming the battery sector.

In addition to advocating for responsible sourcing and sustainability standards, civil society organizations can enhance transparency and accountability by raising awareness of the environmental and social impacts of battery production.

Collaboration is essential to battery sustainability

In order to achieve widespread recognition of the complex problems posed by ensuring sustainability in supply chains, the World Economic Forum’s Annual Meeting of the New Champions provides a cross-sector, cross-organization, cross-geography collaborative forum. It is also a place where true solutions can be found to these problems.

It is up to industry leaders and consumers to influence market demand for sustainable batteries by making informed choices and by demanding them. Academic and research institutions can also make a contribution by developing innovative solutions and technologies that improve the value chain.

Through collaboration, battery material production, sourcing, recycling, and manufacturing processes will be revolutionized. The projected growth of the battery industry presents an opportunity and a responsibility to shape a future where environmental, social, and governance considerations are prioritized.

We must prioritize responsible production sourcing, transparent supply chains, and tools such as battery passports if we are to have batteries that not only power our vehicles but also contribute to a greener and fairer society.

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Editorial Director
I'm Shruti Mishra, Editorial Director @Newsblare Media, growing up in the bustling city of New Delhi, I was always fascinated by the power of words. This love for words and storytelling led me to pursue a career in journalism. In this position, I oversee the editorial team and plan out content strategies for our digital news platform. I am constantly seeking new ways to engage readers with thought-provoking and impactful stories.

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