Battery Pass consortium analysis reveals benefits, challenges of European Battery Passport

A consortium of 11 leading international industry, technology and science organizations have found that battery passports are a strategic opportunity for businesses to generate value, foster digital and green markets, and introduce sustainable business models, according to a study released April 11.

The consortium, led by Systemiq, released the Value of the EU Battery Passport study by the Battery Pass project April 11, which was co-funded by the German Federal Ministry for Economic Affairs and Climate Action, BMWK.

"The German government is supporting electric mobility and the ambition to create a competitive, sustainable battery production in Europe. More transparent battery value chains, enabled by the digital Battery Passport, are vital for this," BWMK Parliamentary State Secretary Stefan Wenzel said in a statement, adding that the BWMK had been funding the Battery Pass project since 2022.

He noted that the recent study highlighted the importance of regulatory support for the adoption of digital product passports, which would promote transparency, efficiency and environmental stewardship in the battery sector.

The study analyzed the benefits and challenges of digital product passports for batteries, as well as where and how economic, environmental and social value could be generated by the adoption of battery passports, which are required by the EU Battery Regulation to increase transparency, circularity and sustainability in the battery value chain.

Other findings of the study included the suggestion that battery passports could reduce future procurement costs for independent operators by around 2%-10% and reduce costs for pre-processing and treatment for recycling by 10%-20% due to reduced sampling needs.

It also found that recycling rates could be improved by around 1%-2%, and around 370,000-1.3 million mt/year of CO2 could be saved in the EU through the extended service life of batteries.

Several advantages, including transparency

"The EU Battery Pass has several advantages for the entire industry: we gain transparency about the raw materials used, their origin and the supply chain. This is important for processing and subsequent recycling," Josef Schon, Corporate Strategy at Audi, said in the statement.

Another finding was that policymakers played a pivotal role in realizing the benefits of battery passports by creating and enabling efficient regulatory conditions, which would minimize costs for affected companies and provide support to small and medium-size enterprises.

The study also found that incorporating battery passports into vehicle de-registration and export procedures could potentially unlock around 5%-20% of active material demand for electric vehicle batteries forecast for 2045 in Europe.

Another finding was that battery passports could empower consumers to make informed decisions when purchasing or selling batteries, provided effective communication strategies are implemented.

Challenges outweighed by benefits

The study also looked into the challenges that companies might face, depending on their type and size, which the consortium said could "lead to drawbacks diminishing the overall value when unmitigated."

"Technical and battery passport system challenges are expected to mostly affect the passport issuer and require industry collaboration, investment in emerging technology and authority support in enforcing standards," it found, adding that capability and resource challenges were estimated to mainly affect SMEs and necessitate early intra-organizational alignment, harmonized requirements and financial support.

"While unmitigated challenges may decrease the passport's overall value, the benefits derived from above explained use cases are expected to outweigh the drawbacks," the consortium said.

"After collaborating extensively with industry stakeholders to ensure reliability, we're pleased to validate our positive expectations," Battery Pass consortium lead and Systemiq Director, Sustainable Mobility and Batteries Tilmann Vahle said. "However, challenges remain, particularly for small and medium-sized enterprises who should receive government support."

The consortium plans to complete its assessment with a systems level analysis, which will published in autumn, Vahle said.

Other partners in the consortium include Global Battery Alliance, Audi, BASF, BMW Group, Circulor, Umicore, Mercedes-Benz, RWE, Acatech, Fiware Foundation, Fraunhofer, Twaice, VDE Renewables, GS1 and SAP.

Platts, part of S&P Global Commodity Insights, assessed both battery grade lithium carbonate and hydroxide at $14,500/mt CIF Europe on April 10, both stable on the day and week on week.