Blockchain can help drive ethical electric cars

Electric vehicles (EVs) are being hailed as the greenest cars available, and by 2030 they will account for around 32 percent of the total market share for new car sales, according to a report.

Deloitte estimates that number will grow from 2.5 million in 2020 to 11.2 million in 2025 to 31.1 million by 2030. But due to their reliance on batteries, the growing popularity of electric cars means more minerals are needed to make them.

Without knowing the provenance of goods or minerals, it is difficult for car manufacturers to ensure that materials used in the production process comply with social and environmental standards, which are becoming increasingly important to a growing number of environmentally conscious consumers.

To bring transparency across supply chains, a UK startup called Circulor is using blockchain – a shared, immutable ledger to record transactions, track assets and build trust – to track everything from the raw materials in batteries to the carbon dioxide emitted during the construction of cars . Here’s how it’s driving change.

The International Energy Agency says an electric car requires six times more minerals than a conventional car, with lithium and cobalt commonly found in Li-ion batteries.

“Lithium raises concerns about water use and pollution in places like the Atacama Desert,” said Doug Johnson-Poensgen, CEO and founder of Circulor. According to research from Arizona State University, sustainability concerns from lithium mining include threats to local hydrodynamics, pressure on the already limited water, exacerbating social tensions between mining companies and local communities. “Smaller producers are entering the market with a proposal to produce lithium in a more sustainable way in places like Germany,” explains Johnson-Poensgen.

“This is the climate year. Change and improvement must happen all the time now, and we cannot afford to wait. I am proud to say that we reduced greenhouse gas emissions per car sold by 6 per cent.’

Additional fears about the materials used in electric cars include the impact of mining nickel or manganese, carbon emissions from battery manufacturers and labor practices for mining cobalt, a small and toxic material used in most lithium-ion batteries that is often linked to unethical supply. chains.

Circulor’s software solution allows concerns (such as unethical mining) to be identified and addressed. “Unlike other traceability solutions, we track the actual material as it flows through the supply chain, not just the transactions between participants. This means we are able to follow the material at every step of the supply chain, creating accurate and insightful information about its provenance or embedded CO2, explains Johnson-Poensgen.

To enable this, sacks or barrels of a raw material are marked with a QR code that can be scanned, so that a digital twin can be created. This process allows the high-tech tool to track the physical flow of the raw material as it changes state from mine to production and throughout the production process, offering transparency that was previously nearly impossible.

No extra paperwork is involved, and the use of blockchain adds an extra layer of validity and security to the tool, because it creates immutable records of transactions that occur within a supply chain, so the origin and journey of a material cannot be tampered with and changed.

Circulor is partnering with Polestar, an electric performance car brand, to create a carbon-neutral car by 2030. The automaker is using Circulor’s blockchain technology to trace the cobalt for Polestar 2 batteries, and to track mica from material source to finished product. Using the technology has enabled Polestar to publish data on full vehicle emissions, from cradle to grave. The brand’s “Product Sustainability Declaration” discloses carbon footprints and tracked materials and makes data available on its website and showrooms.

“[Sustainability] goals set 10 or 20 years in the future can feel fluffy. This is where proper reporting comes in – making us accountable for the steps taken each year towards this goal, says Thomas Ingenlath, CEO of Polestar. “This is the climate year. Change and improvement must happen all the time now, and we cannot afford to wait. I am proud to say that we reduced greenhouse gas emissions per car sold by 6 percent.”

Circulor is also working with Volvo Cars to enable the manufacturer to trace cobalt from source to electric car. In 2019, Volvo became the first automaker to start implementing traceability of cobalt used in the batteries of its electric and plug-in hybrid cars using Circulor’s blockchain technology, and they want to do more. “We plan to use it to track and reduce the carbon footprint of our supply chain, which will be a fantastic step forward,” Kerstin Enochsson, head of procurement at Volvo Cars, said at a recent blockchain panel discussion in Davos, Switzerland. “We are also working on getting lithium and nickel into the blockchain as well.”

Circulor can attribute emissions data to give a product or material a CO2 carbon footprint, and keep track of ESG (environmental, social and corporate governance) certifications and standards that suppliers upload to the system and assign this information to their part of the flow of material.

Measuring CO2 emissions when building an electric car is one way to help car manufacturers find savings. Polestar believes transparency is a key driver of climate action and uses CO2e (carbon dioxide equivalent) tracking to see the embedded emissions that have been created as part of the manufacturing process, per plant as well as those inherited from suppliers throughout the supply chain. Using the blockchain-based greenhouse gas tracking tool is said to enable a more accurate CO2e footprint than using generic emissions data from databases.

Cars obviously need more than batteries, and even the last touches can have a major environmental impact. A report by the Leather Panel states that 17 kg of CO2 is generated for every square meter of leather produced, and that figure rises to 110 kg CO2e/m2 ​​when cattle farming is taken into account.

Jaguar Land Rover (JLR) partnered with Circulor, Bridge of Weir Leather Company and the University of Nottingham to trial the use of traceability technology in the leather supply chain. A digital twin of the raw material was created, allowing its progress to be tracked through the leather supply chain simultaneously in the real world and digitally. A combination of GPS data, biometrics and QR codes were used to digitally verify the movement of leather at each stage of the process using blockchain technology. This has enabled JLR to assess the carbon footprint of its leather supply network and track the lowest carbon option from farm to finished article.

Defining the verification process has created a repeatable plan for tracking a single piece of leather, which can be used across JLR’s global supply chain and by other industries that rely on leather, such as fashion and footwear.

Traceability-as-a-service has already proven invaluable in the automotive industry, but it could prove transformative in many other industries as well. Johnson-Poensgen believes any business with verified sustainable practices will have “a clear advantage”.

The competition between car manufacturers to convince consumers of their eco-intentions and drive real change is good news for everyone. While this may be the first stage for traditional businesses to embrace blockchain, the journey ahead will certainly include this new technology.