Back in January 2020 at the World Economic Forum, the Global Battery Alliance (GBA) launched the “Battery Passport” – a global digital platform allowing for verification of quality and for sharing the value chain data for batteries. With a view to addressing key areas of compliance with a focus on human rights and environmental impact, this global collaboration between public and private industries is a first step towards a responsible and sustainable battery value chain.
Trial phases for the Battery Passport are now due to begin, with legislation to be enacted this quarter. Francis Wedin, Managing Director of Vulcan Energy Resources expects that the law will include due diligence obligations for battery producers and manufacturers, to show the origin for the raw materials that go into lithium-ion batteries. With both the public and private spheres around the world increasingly committing to Net Zero Emissions and sustainable strategies, the growth potential for the batteries space is massive. By the end of the decade, batteries are expected to help reduce the amount of emissions in the power and transport sectors by 30%, according to the Global Battery Alliance. The batteries space is set to be a key driver for global decarbonization moving forward.
There are ambitious plans to scale up the battery supply chain and manufacture of batteries across Europe. Wood Mackenzie notes that Europe currently accounts for just 7% of global Li-ion battery manufacturing capacity, but by 2030, it is expected to reach 25% as more Asian manufacturers are investing heavily in new plants across the continent.
The Battery Passport will have clear impacts on the mining industry. As EU legislation ushers in these battery passports to ensure responsible mineral sourcing along the entire battery supply chain, we expect to see more off-take deals with miners, in addition to direct investment into mining companies/projects.
In a similar vein, Elon Musk has declared a “giant contract” is out there for whichever miner can supply the nickel needed for Tesla’s batteries – at a low cost and with minimal environmental impact. With the largest nickel projects globally in Southeast Asia, this means most nickel projects are relying on coal, fuel oil or diesel to run their operations, and therefore leaving a large carbon footprint, according to Sam Riggall, CEO of CleanTeQ Holdings. It challenges the idea of driving a green, sustainable car. With increasing scrutiny on the entire battery supply chain, environmental, and human rights, there may be a new push for miners to shift more towards carbon neutrality as a way to attract more investment from OEMs in the EV industry.
