The rapid growth of battery demands has expanded battery production tremendously. Electric vehicles, energy storage, and industrial applications have put critical raw materials such as lithium, cobalt, nickel, and graphite into the centre of global sustainability debates. These materials are essential for batteries, particularly rechargeable battery production. Yet, their sourcing and processing are frequently associated with environmental degradation, human and labour rights violations, and non-transparent supply chains.
With regulatory expectations tightening across Europe and beyond, manufacturers are now required to demonstrate that their raw materials are sourced responsibly, sustainably, and transparently, while paying full attention to due diligence.
Digital Battery Passports (DBPs) are emerging as a key mechanism to support this shift. By linking verified data on material origin, processing, and compliance to individual batteries, DBPs provide a practical way to operationalise ethical sourcing commitments and regulatory obligations across complex, multi-tier supply chains.
Why Critical Raw Materials Require Enhanced Due Diligence
Critical raw materials are not just economically important; they are often sourced from regions with governance challenges, limited supply-chain visibility, and elevated social and environmental risks. For example, artisanal and small-scale cobalt mining in the Democratic Republic of the Congo has been repeatedly linked to child labour, unsafe working conditions, and ecosystem degradation. (OECD, OECD Due Diligence Guidance for Responsible Supply Chains of Minerals, 3rd ed., 2016)
The European Union has responded with a suite of regulatory instruments that increasingly require responsible sourcing and supply chain transparency:
- EU Battery Regulation (EU 2023/1542) — introduces due diligence obligations for companies placing batteries on the EU market, requiring them to identify, assess, prevent, and mitigate social and environmental risks in their supply chains. EUR-Lex link
- EU Critical Raw Materials Act (COM (2023) 160 final) — aims to strengthen the EU’s resilience in access to critical raw materials, including through transparent and sustainable sourcing practices. European Commission link
- Corporate Sustainability Due Diligence Directive (CSDDD) — once adopted into EU law, will require large companies to integrate due diligence into their governance, including reporting on human rights, environmental impacts, and actual supply chain practices.European Commission link
Meeting these obligations requires more than high-level reporting. Companies must be able to trace materials back to their source, assess risks across suppliers, and demonstrate ongoing monitoring and mitigation. That’s where advanced digital tools become essential.
The Role of Digital Battery Passports in Ethical Sourcing Verification
What Digital Battery Passports Capture
Digital Battery Passports are digital representations of a battery’s lifecycle data, capable of storing, structuring, and securely sharing information about raw materials, intermediate components, and compliance attributes.
Under EU approaches like the Battery Regulation’s Digital Battery Passport (DBP), a passport can contain:
- Material provenance — country of extraction, mine operator, and certification status
- Processing history — refining facility data, process inputs, and intermediate ownership
- Compliance indicators — due diligence checkpoints, audit outcomes, and risk scores
- Environmental metrics — lifecycle assessment figures, carbon intensity, water use
- Social and governance data — worker safety records, certifications, human rights risk assessments
This data is often organised using standardised ontologies and identifiers and is linked to a physical product via a machine-readable token such as a QR code.
How DBPs Enhance Traceability
Traditional supply chain declarations often rely on supplier self-reporting, fragmented spreadsheets, or periodic audits. Digital Battery Passports transform this landscape by:
- Enabling real-time, structured data capture at each handoff point
- Supporting automated verification workflows with cryptographic integrity checks
- Linking upstream and downstream data with persistent identifiers
- Reducing reliance on manual documentation and retroactive audit reconstruction
These capabilities are not theoretical. Digital traceability systems in other sectors (e.g., pharmaceutical serialisation under the EU Falsified Medicines Directive, GS1 standards in food) demonstrate that end-to-end provenance visibility materially improves risk detection and compliance quality.
Verification Mechanisms in DBP Frameworks
For DBPs to support ethical sourcing, data must not only be collected but verified. Verification assures that the information reflects real conditions rather than unsubstantiated claims.
Several approaches contribute to verifiable DBP data:
- Third-party certification integration: DBPs can embed trusted certificates from recognised schemes. These certificates link material origin claims to validated audits.
- Blockchain or distributed ledger anchoring: cryptographic proofs can be stored in decentralised ledgers to enhance tamper resistance and data lineage tracking.
- API-based data exchange: connects the operational systems of miners, refiners, and manufacturers, enabling continuous data flow and reducing reliance on manual submissions.
- Semantic interoperability standards: ontologies and shared data schemas ensure that systems interpret compliance attributes consistently across suppliers and tools.
By combining these mechanisms, DBP systems can elevate due diligence from periodic paper reports to persistent, queryable digital evidence that supports regulatory checks, audits, and corporate disclosures.
Aligning DBPs with EU Regulatory Expectations
The EU Battery Regulation explicitly links Digital Battery Passports to due diligence and transparency goals. From 2027, certain batteries must carry passports containing structured material and compliance data, enabling both industry and regulators to assess traceability in a standardised format.
The passport requirement aligns with international guidance, such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, which outlines six steps for responsible sourcing: supply chain mapping, risk identification, risk mitigation, tracking, reporting, and stakeholder engagement. OECD link
By structuring data according to recognised standards and linking it to individual products, DBP systems help companies align with both EU and global regulatory requirements without duplicating effort across frameworks.
This alignment reduces regulatory burden. Companies no longer need to prepare separate reports for different locations; instead, they can rely on a unified digital record that supports audits, regulatory checks, CSR reporting, and stakeholder inquiries.
Improving Transparency and Trust Across the Battery Value Chain
Ethical sourcing frameworks ultimately depend on trust. Yet trust in complex, global battery supply chains cannot be built on declarations alone. It requires consistent, verifiable evidence that can be accessed and validated by different stakeholders at different points in time.
Digital Battery Passports change how trust is created. Instead of relying on periodic audits or supplier questionnaires, DBPs enable continuous access to traceability data that is linked directly to physical products. This allows downstream actors such as cell manufacturers, OEMs, recyclers, and regulators to verify sourcing claims without re-running upstream assessments.
For suppliers, this visibility can become a differentiator. Companies that invest in responsible mining practices, transparent refining operations, or certified processing routes gain tangible recognition through passport-linked data. Over time, this helps shift market incentives toward higher environmental and social standards, rather than rewarding the lowest-cost supplier regardless of risk.
From an investor and policymaker perspective, DBP-backed systems also reduce information asymmetry. Sustainability claims supported by structured, traceable data are easier to assess, benchmark, and audit. This strengthens confidence in corporate disclosures and reduces exposure to greenwashing risks.
From Due Diligence to Economic Value Creation
Ethical sourcing is often framed as a compliance obligation, but Digital Battery Passports reveal its economic dimension. Reliable traceability of critical raw materials has direct financial implications across the battery value chain.
First, transparent sourcing data lowers supply chain risk. Companies with visibility into upstream operations are better equipped to anticipate disruptions, respond to regulatory enforcement, or adjust sourcing strategies in response to geopolitical changes. This resilience has become increasingly important as demand for lithium, nickel, and cobalt accelerates and supply constraints tighten.
Second, DBP-enabled due diligence supports access to sustainable finance. Financial institutions are increasingly aligning lending criteria with ESG performance and regulatory compliance. Verifiable sourcing data strengthens eligibility for green bonds, sustainability-linked loans, and public funding mechanisms, including those under EU programmes such as Horizon Europe and the Innovation Fund.
Third, traceability supports circular economy strategies. When recycled materials are reintroduced into battery production, DBPs help demonstrate that secondary raw materials meet both quality and ethical sourcing requirements. This is particularly relevant under the EU Battery Regulation’s recycled content targets, where proof of origin and processing is essential for compliance.
In this sense, DBPs help turn ethical sourcing from a cost centre into a strategic asset that supports competitiveness, financing, and long-term resource security.
BASE and the Digital Battery Passport as a Due Diligence Enabler
Within this evolving regulatory and industrial landscape, the BASE project plays a critical role in translating policy ambition into practical implementation. BASE focuses on building a trusted, interoperable Digital Battery Passport framework that supports ethical sourcing, lifecycle traceability, and regulatory alignment across the battery value chain.
From a technical perspective, BASE addresses several core challenges that are central to due diligence:
- Interoperability: BASE develops harmonised data models and semantic structures that allow sourcing and compliance data to move across systems, organisations, and borders without loss of meaning.
- Data integrity and trust: The framework incorporates mechanisms for secure data exchange and verification, ensuring that sourcing information remains reliable as it passes through multiple actors.
- Lifecycle continuity: Ethical sourcing data captured upstream is preserved throughout manufacturing, use, second life, and recycling, rather than being fragmented or lost at handover points.
- Regulatory alignment: BASE aligns its DBP framework with the EU Battery Regulation’s due diligence requirements, while remaining compatible with international guidance such as the OECD Due Diligence Guidance.
By focusing on usability as well as compliance, BASE helps reduce the administrative burden associated with ethical sourcing. Instead of duplicating reporting efforts, companies can integrate due diligence evidence directly into operational systems and reuse it across regulatory, ESG, and commercial contexts.
Strengthening Ethical Sourcing Without Slowing Innovation
A common concern among manufacturers is that stronger due diligence requirements could slow innovation or create barriers to market entry. Digital Battery Passports offer a pathway to avoid this trade-off.
When ethical sourcing data is embedded into digital workflows rather than managed through manual reporting, compliance becomes more predictable and less disruptive. Standardised data structures reduce uncertainty for product development teams, while clear traceability supports faster validation of new suppliers or materials.
For SMEs and specialised suppliers, DBP-based systems can level the playing field by making compliance requirements clearer and more scalable. Instead of negotiating bespoke audits or documentation requests with each customer, suppliers can rely on a single, structured digital record that is recognised across the value chain.
In this way, DBPs support both responsible sourcing and industrial innovation, reinforcing Europe’s position as a leader in sustainable battery manufacturing.
Closing Thoughts
As the global battery economy expands, ethical sourcing of critical raw materials is no longer optional. Regulatory frameworks such as the EU Battery Regulation, the Critical Raw Materials Act, and corporate due diligence requirements demand proof, not promises.
Digital Battery Passports provide the missing link between policy intent and operational reality. By embedding traceability, verification, and lifecycle transparency into product-level digital records, DBPs enable companies to demonstrate responsible sourcing in a credible, scalable way.
Through its work on interoperable Digital Battery Passports, the BASE project shows that ethical sourcing can be operationalised without excessive burden. When implemented effectively, DBPs strengthen due diligence, build trust across supply chains, and support a battery transition that is not only low-carbon but also socially and environmentally responsible.
The BASE project has received funding from the Horizon Europe Framework Programme (HORIZON) Research and Innovation Actions under grant agreement No. 101157200.
References
European Commission, Regulation (EU) 2023/1542 concerning batteries and waste batteries: https://eur-lex.europa.eu/eli/reg/2023/1542/oj
European Commission, Critical Raw Materials Act: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202401252
OECD, Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: https://www.oecd.org/en/publications/2016/04/oecd-due-diligence-guidance-for-responsible-supply-chains-of-minerals-from-conflict-affected-and-high-risk-areas_g1g65996.html
European Commission, Corporate Sustainability Due Diligence Directive: https://eur-lex.europa.eu/eli/dir/2024/1760/oj/eng
European Commission, EU Battery Regulation – Sustainability and Due Diligence Overview: https://eur-lex.europa.eu/EN/legal-content/summary/sustainability-rules-for-batteries-and-waste-batteries.html