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Published - 9 September 2025 - 5 min read

Impacts of Circular Economy: How Battery Passports Can Reduce Carbon Emissions

The global demand for sustainable alternatives to fossil fuels, like electric vehicles and energy storage solutions, is accelerating with each passing day. But are these solutions enough to lower humanity’s carbon footprint?

The environmental footprint of batteries is going through growing scrutiny. Every stage of a battery’s lifecycle, from mineral extraction to end-of-life disposal, contributes significantly to greenhouse gas emissions and resource depletion.

This raises a pressing question: how can the benefits of electrification be realised without shifting environmental and social burdens elsewhere?

One pathway is through the circular economy, which focuses on maximising resource efficiency, extending product lifespans, and recovering valuable materials at end-of-life. Within this framework, Digital Battery Passports (DBPs) are emerging as a vital instrument.

By providing transparent, traceable, and standardised data across the battery value chain, DBPs can support carbon reduction strategies, encourage sustainable production, and strengthen accountability among all stakeholders.

The Carbon Footprint of Batteries

Batteries carry a complex carbon footprint that spans mining, refining, manufacturing, and disposal. According to the European Commission (2020), battery production is highly energy-intensive, often dependent on fossil fuels in resource-rich regions.

  • Mining and refining emissions: Cobalt refining in the Democratic Republic of Congo (DRC) and nickel processing in Indonesia rely heavily on coal, creating substantial carbon emissions.
  • Logistics and manufacturing: Long-distance transport of raw materials, combined with manufacturing clusters in East Asia powered by fossil fuels, further amplifies emissions.
  • End-of-life impacts: When batteries are poorly recycled or landfilled, industries must return to primary mining to meet demand, adding both emissions and environmental degradation.

A circular approach helps reduce this footprint by closing material loops. DBPs provide the necessary traceability to ensure that lithium, nickel, and cobalt can be efficiently recovered and reused, lowering the need for virgin extraction.

Government Policies Driving Adoption

Public policy is a central driver in shaping the role of DBPs in reducing carbon emissions. The EU Battery Regulation (EU 2023/1542) requires Digital Battery Passports for large batteries from 2027, including:

  • Carbon footprint declarations across the entire lifecycle.
  • Recycled content targets, ensuring that critical minerals are reintroduced into the supply chain.
  • Performance and durability data improve consumer trust and enable longer product use.

Complementing this, the Ecodesign for Sustainable Products Regulation (ESPR) will expand the implementation and use of Digital Product Passports (DPPs) across multiple industries, harmonising transparency requirements and promoting repairability standards.

Beyond Europe, other regions are moving in similar directions:

  • China has already rolled out a mandatory digital tracking system for new energy vehicle batteries, integrating it into recycling regulations.
  • United States policymakers are debating federal-level frameworks, with the Department of Energy funding pilots to trace carbon emissions in battery supply chains.
  • Japan and South Korea are exploring blockchain and RFID-based systems for high-value battery tracking.

Together, these policies establish the regulatory certainty necessary for industry-wide adoption. By aligning compliance requirements with circular economy objectives, they create incentives for businesses to lower emissions while improving supply chain resilience.

Consumer Behaviour and Carbon Reduction

Policy alone cannot reduce emissions without active engagement from consumers. DBPs have the potential to transform consumer behaviour by making sustainability information visible and actionable.

By scanning a QR code linked to a DBP, consumers can access:

  • Carbon footprint data, showing the emissions profile of a battery.
  • Sourcing details, including information on ethical and sustainable mining practices.
  • Recyclability indicators, encouraging responsible end-of-life handling.

This transparency helps consumers to make informed decisions and rewards companies that adopt low-carbon and ethical supply chains. For example, a car manufacturer that sources materials from renewable-powered mines can differentiate itself in a competitive market.

Over time, consumer demand for verified low-emission products can create a market-driven incentive for the entire battery sector to embrace circular practices and reduce dependence on fossil fuels.

Lifecycle Tracking, Recycling & Renewable Integration

Digital Battery Passports (DBPs) are transformative because they embed lifecycle assessment (LCA) data that pinpoints carbon-intensive stages and enables targeted emission reductions. Implementations of DBPs can help optimise:

  • Emission hotspots, such as coal-powered mining and refining.
  • Logistics efficiency, through smarter routes and energy use.
  • Second-life reuse and recycling, extending battery life and circularity.

According to research by Tao et al., adding a second-life phase before recycling can reduce lifecycle carbon emissions by 8–17%, with cumulative energy demand decreasing by 2–6%, depending on chemistry and reuse method. Other LCAs estimate that battery production emits between 56-494 kg CO₂/kWh, depending on regional energy mixes and process efficiency.

A 2025 study on China’s EV fleet found that recycling and reuse strategies could reduce lithium, nickel, and cobalt raw material demand by up to 96%, and cut lifecycle carbon emissions by around 36–38% through 2060.

Recycling efficiency matters: some recovery processes can reclaim up to 95% of valuable metals such as cobalt and nickel. Digital Battery Passports help recyclers by recording composition, chemistry, and health data, allowing faster, safer, and more effective processing.

Challenges, Adoption Risks & Real-World Examples

Even with strong promise, DBP adoption faces real barriers:

  • Data silos and confidentiality concerns across supply chain actors can slow adoption and undermine interoperability.
  • Compliance costs pose a risk for smaller suppliers, particularly in emerging economies.
  • Consumer engagement depends on clear communication and intuitive interfaces; if DBPs are too technical, they may go unused.
  • Regulatory fragmentation, e.g. EU regulation being interoperable with China or U.S. systems, remains a complex hurdle.

Real-world pilots offer insight into logistics and benefits:

  • Volvo Cars has recently launched a live "battery passport" for its EX90 EVs in Europe and the U.S. Customers can view carbon data, recycled content, and provenance via QR code or app.
  • Empirical studies show DBPs can break down information silos, support reuse and recycling workflows, and level the playing field across suppliers.

Global Adoption Strategies

The adoption of Digital Battery Passports (DBPs) is gathering pace worldwide, though the approaches differ across regions. In Europe, the EU Battery Regulation (EU 2023/1542) sets the most ambitious standard, requiring DBPs for large batteries from February 2027. This regulation obliges manufacturers to provide carbon footprint declarations, meet recycled content targets, and comply with strict sourcing requirements.

In the United States, progress is more fragmented, with state-level policies such as those in California working alongside federal frameworks that address supply chain transparency and labour risks.

China has already taken a lead in digital traceability by mandating its national Battery Traceability Management Platform for all new energy vehicle batteries.

Japan and South Korea, both major battery producers, are testing blockchain and RFID systems to maintain competitiveness in export markets.

Emerging economies such as India are beginning to explore scalable solutions inspired by existing digital infrastructures like Aadhaar, which may allow them to leapfrog into transparent battery ecosystems.

Despite this momentum, interoperability remains a global challenge. Without common standards, companies operating across multiple markets risk facing fragmented reporting requirements and increased compliance costs. International cooperation and harmonisation will be essential if DBPs are to serve as a truly global instrument for emissions reduction.

Reducing Carbon Emissions With Circular Economy Business Models

Digital battery passports are not only about compliance; they are also opening the door to new business models that align with circular economy principles. Electric vehicle batteries that no longer meet mobility standards can be repurposed into stationary energy storage systems, extending their useful life while reducing the demand for new production.

Leasing and take-back programmes are another possibility. By retaining ownership of the batteries, manufacturers have a direct incentive to ensure they are collected, recycled, and reintroduced into the supply chain. The data embedded within DBPs makes these schemes easier to manage by recording composition, performance, and ownership history.

At the same time, recycling companies can use passport data to improve recovery rates and develop secondary raw material markets. This transforms end-of-life batteries from a waste management problem into a source of valuable materials, supporting a closed-loop system.

The BASE EU Project: Leading by Example

The BASE Project is demonstrating how DBPs can move from policy to practice. Its central aim is to develop a trusted and interoperable framework that harmonises lifecycle data across the battery value chain. To achieve this, the project integrates AI-driven tools capable of predicting battery health, recyclability, and repairability.

BASE is also embedding systemic circularity indicators that align with the EU’s strategy of “Reduce, Repair, Reuse, Recycle.” By validating DBPs in real-world industrial pilots, the project ensures the technology will be ready ahead of the 2027 deadline. This combination of regulatory readiness and technical innovation positions BASE as a leader in advancing a low-carbon, circular battery ecosystem.

Closing Thoughts

As DBPs develop, they will play a crucial role in enabling second-life applications, improving recycling, and supporting renewable energy integration.

Europe’s regulatory leadership, combined with global experimentation and projects like BASE, highlights how battery passports can transform sustainability from an abstract goal into a measurable reality.

By bridging policy, technology, and consumer behaviour, DBPs have the potential to reshape the global battery industry, reduce environmental impact, and accelerate the transition to a circular, low-carbon future.

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