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Published - 31 July 2025 - 5 min read

Understanding the Circular Economy: The Role of Battery Passports

As industries adopt greener practices, the circular economy has become a strategic framework for reducing waste and extending the life of products and materials. Within this context, battery passports are emerging as a digital innovation designed to enhance transparency, traceability, and sustainability throughout the battery value chain.

In this article, we’ll explore the circular economy model, the significance of batteries in sustainable development, and how battery passports are shaping the future of the circular economy.

What Is the Circular Economy?

The circular economy is an economic model that focuses on resource efficiency by maintaining the value of products, components, and materials for as long as possible. Unlike the traditional linear economy, which follows a take–make–dispose pathway, the circular model aims to minimise waste, reduce environmental harm, and regenerate natural systems.

According to the Ellen MacArthur Foundation, circularity is achieved by designing for durability, reuse, repair, remanufacture, and recycling. This aligns with the European Union’s Circular Economy Action Plan, which is central to the European Green Deal and instrumental in accelerating sustainable industrial transitions.

The Role of Batteries in a Circular Economy

Batteries are critical to clean energy systems and the shift towards electric mobility. However, their production depends on finite raw materials such as lithium, cobalt, and nickel, all of which carry environmental and ethical concerns. Mismanagement at end-of-life stages can also lead to significant pollution and lost resource value.

At the same time, used batteries contain valuable materials that could be recovered and reused.  With that in mind, creating a closed-loop system for battery production, use, and recycling is a must. To address these challenges, the European Union introduced the Batteries Regulation (EU) 2023/1542, which enforces environmental, performance, and safety requirements across a battery’s lifecycle.

One of the key features of this regulation is the implementation of the battery passport, a digital tool mandated for all industrial and electric vehicle batteries above 2 kWh from February 2027.

Technologies Powering Battery Passports

Battery passports rely on a blend of digital technologies to ensure accuracy, security, and accessibility. These include:

  • Blockchain for immutable, verifiable records
  • Cloud platforms for real-time data sharing
  • IoT sensors for condition monitoring
  • AI tools for lifecycle optimisation

Projects such asBASE at the European level are helping to establish common standards and governance frameworks that enable broad adoption.

Challenges in Implementation

Despite their promise, battery passports face several implementation hurdles:

  • The absence of universal data standards
  • Technical and financial barriers for SMEs
  • Concerns over data privacy and protection of trade secrets
  • The need for cross-border regulatory alignment

Overcoming these challenges will require continued coordination between policymakers, technology developers, industry leaders, and civil society.

Supporting Circularity Through Battery Passports

Battery passports directly support circular economy objectives by improving supply chain transparency, enabling second-life use cases, improving recycling processes, and ensuring regulatory compliance.

For example, having access to accurate information about a battery’s chemistry and health enables its reuse in less demanding applications such as stationary energy storage. Moreover, recyclers benefit from clearer data on material composition, resulting in higher recovery rates and increased efficiency.

With the help of a digital chain of custody, battery passports can also discourage unethical raw material sourcing and improve accountability across stakeholders/

BASE Project: Strengthening the Digital Infrastructure for Battery Passports

One of the key initiatives advancing this innovation is the EU-funded BASE Project (Battery Passport for Resilient Supply Chain and Implementation of Circular Economy). The BASE consortium is developing a robust architecture for battery passports that prioritises:

  • Interoperability across sectors and jurisdictions
  • Secure and standardised data sharing
  • Alignment with European regulatory and industrial frameworks

BASE brings together experts in batteries, digitalisation, policy, and sustainability to design a platform that supports value chain traceability, ESG and circularity indicators, and AI-powered analytics for monitoring battery safety and performance. This multi-disciplinary approach ensures that the passport system is both technically viable and policy-aligned.

Through demonstrators and real-world pilots, BASE aims to validate the passport framework across diverse battery use cases, including e-mobility, energy storage, and recycling scenarios. It also supports industry adoption by providing guidelines and tools that help companies, including SMEs, meet compliance and performance expectations under the new regulation.

Closing Thoughts

Battery passports represent a significant advancement in sustainable battery management and circular economy implementation. With standardised and transparent lifecycle data, battery passports facilitate ethical sourcing, product reuse, efficient recycling, and regulatory compliance.

Initiatives like the BASE project are working tirelessly to pave the way for the large-scale deployment of interoperable and trustworthy digital battery passports. As battery demand grows in transport, energy, and consumer electronics, the role of battery passports will be vital to achieving Europe's climate goals and securing a circular and sustainable future.

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