News & Blogs

Published - 5 September 2025 - 5 min read

Ethical Supply Chains: How Battery Passports Can Confront Human Rights and Environmental Challenges

The global shift towards electric mobility and renewable energy storage is fuelling unprecedented demand for batteries. According to BloombergNEF, battery demand is expected to grow 10 times by 2035, driven primarily by electric vehicles and grid-scale storage.

Yet, behind this surge lies a troubling reality: much of the industry’s foundation rests on practices that exploit vulnerable workers and degrade the environment.

The extraction of critical raw materials such as cobalt, nickel, and lithium often involves child labour, unsafe working conditions, and severe ecological harm. These hidden costs threaten to undermine the very purpose of the clean energy transition. To align rapid industrial growth with genuine sustainability, the battery value chain must embrace ethical sourcing and verifiable transparency.

One solution gaining traction is the Digital Battery Passport (DBP). Being more than a compliance tool, DBPs provide a data-driven system to track a battery’s entire lifecycle, from mine to recycling. By integrating human rights, environmental, and governance indicators, DBPs can help reshape supply chains around accountability and fairness.

Human Rights Violations in Battery Manufacturing

Battery production depends heavily on raw materials sourced from high-risk regions where oversight is weak and exploitation is common.

  • Cobalt in the Democratic Republic of Congo (DRC): The DRC supplies over 70% of the world’s cobalt. Amnesty International reports that more than 40,000 children work in artisanal mines, some as young as seven. They face exposure to toxic dust and endure gruelling labour without protective equipment. Fatal accidents in unregulated pits are frequent.
  • Lithium in South America: In Chile’s Atacama Desert, lithium extraction consumes vast amounts of water — nearly 65% of the region’s fresh water in some areas. This has led to severe water scarcity, threatening indigenous communities and fragile ecosystems.
  • Nickel in Southeast Asia: Indonesia, the largest nickel producer, has faced criticism for deforestation, the displacement of local populations, and toxic waste discharges into coastal ecosystems. Villages near mining sites report declining agricultural productivity and health risks from pollution.

The impact extends beyond individual workers; entire communities are destabilised by poor labour practices and unchecked environmental harm. Without transparency, companies cannot credibly claim their supply chains are free from human rights violations.

Environmental Impact of Battery Production

The human rights challenges in the battery industry are deeply connected with environmental risks. Extracting and processing critical minerals often damages ecosystems and accelerates climate change.

  • Carbon footprint: The International Energy Agency (IEA) estimates that producing 1 kWh of EV battery capacity emits between 60–100 kg of CO2, depending on energy sources used in mining and processing. With global EV battery demand projected to exceed 4,500 GWh by 2035, the potential emissions are staggering without decarbonisation measures.
  • Water scarcity: Lithium mining in Chile’s Salar de Atacama consumes 1.9 million litres of water per tonne of lithium produced. Local farming and indigenous communities face declining water tables, with reports of pastures and wetlands drying up.
  • Toxic waste: Nickel processing in Indonesia and the Philippines generates millions of tonnes of tailings, some of which are dumped into the ocean. This practice has been linked to biodiversity loss and the contamination of coastal fisheries.

Weak environmental oversight in many mining regions only adds to these problems. Processing plants powered by coal further increase the carbon footprint, undermining the climate benefits of electric mobility.

A truly sustainable battery industry cannot rely solely on expanding production; it must also ensure that supply chains operate with ecological responsibility.

The Role of Battery Passports in Ethical Oversight

The Digital Battery Passport (DBP) is emerging as a cornerstone of the EU Battery Regulation (2027) and beyond. Unlike traditional audits, which provide only periodic checks, DBPs enable continuous monitoring and verification across a battery’s lifecycle.

Key features include:

  • Origin traceability: Recording where raw materials come from, including whether mines comply with frameworks such as the Initiative for Responsible Mining Assurance (IRMA).
  • Human rights indicators: Tracking labour standards, working conditions, and adherence to international guidelines such as the OECD Due Diligence Guidance for Responsible Mineral Supply Chains.
  • Environmental metrics: Documenting carbon emissions, water use, and waste output, with the ability to distinguish operations powered by renewable energy from those reliant on fossil fuels.
  • Technology integration: Blockchain platforms and IoT-enabled sensors strengthen reliability by reducing risks of data tampering and allowing near real-time updates.

The BASE Project is at the forefront of testing DBPs in Europe. Its approach goes beyond compliance to embed Environmental, Social, and Governance (ESG) indicators into the battery passport framework. This ensures that DBPs reflect not only regulatory requirements but also international human rights and sustainability commitments.

For example, if a smelter in Finland is powered by 100% renewable electricity, the DBP can record this fact. This transparency helps regulators enforce environmental standards and enables manufacturers to redesign supply chains around sustainability goals.

Case Studies: Early Steps Towards Battery Traceability

While the Digital Battery Passport is still being formalised in the EU, several companies and initiatives are already laying the groundwork for ethical and transparent battery supply chains.

  • Tesla and Cobalt Traceability: Tesla reports that it sources cobalt only from suppliers verified through third-party audits. In its 2023 Impact Report, the company confirmed that it had eliminated artisanal cobalt from its supply chain and increased direct sourcing from industrial mines with responsible mining certifications. Tesla has also piloted blockchain solutions to track cobalt from mines to manufacturing facilities (Tesla Impact Report, 2023).
  • CATL’s Supply Chain Audits: Contemporary Amperex Technology Co. Limited (CATL), the world’s largest EV battery manufacturer, conducts annual supply chain audits to ensure compliance with environmental and human rights standards. The company has partnered with global initiatives to improve traceability, including efforts to certify lithium supply from South America (CATL Sustainability Report, 2022).
  • Fair Cobalt Alliance (FCA): The FCA works in the Democratic Republic of Congo to formalise artisanal mining, reduce child labour, and improve working conditions. By integrating its data into emerging DBP frameworks, it provides a model for aligning social impact with supply chain traceability (Fair Cobalt Alliance).
  • Volkswagen’s Battery Passport Pilot: Volkswagen has tested digital passports for EV batteries in collaboration with the German government’s Battery Pass project. The pilot tracked lifecycle data, including raw material sourcing, carbon footprint, and recycling potential, demonstrating the feasibility of scaling DBPs across Europe (Battery Pass Project, 2024).

These early examples highlight both the potential and the challenges of implementing DBPs at scale. While industry leaders are moving forward, smaller suppliers in developing regions risk exclusion unless adequate support mechanisms are built into the system.

Sustainable Mining Practices as a Foundation

Ethical battery supply chains cannot exist without sustainable mining practices. This means ensuring safe working conditions, respecting community rights, and protecting biodiversity. Certification frameworks such as the Initiative for Responsible Mining Assurance (IRMA) and the Cobalt Industry Responsible Assessment Framework (CIRAF) are helping establish global benchmarks.

For example:

  • IRMA Certification: The Anglo American-run Amandelbult platinum mine in South Africa became the first IRMA-certified operation in 2023, demonstrating compliance with standards covering labour rights, environmental management, and community engagement (IRMA, 2023).
  • CIRAF Adoption: Companies, including Glencore, have aligned operations with CIRAF to monitor and disclose risks linked to cobalt sourcing, setting a precedent for accountability in high-risk sectors.

The BASE Project embeds these frameworks directly into the Digital Battery Passport. By recording certification data and sustainability indicators, DBPs allow manufacturers to verify that raw materials are sourced responsibly. This not only ensures compliance with the EU Battery Regulation but also creates pressure for systemic improvements in mining regions.

Renewable Energy Integration in the Supply Chain

Reducing dependence on fossil fuels in battery production is critical to lowering the industry’s overall carbon footprint. Mining and processing facilities are increasingly exploring renewable energy solutions:

  • BHP’s Escondida Copper Mine in Chile now runs on 100% renewable electricity, reducing emissions from one of the world’s largest mining operations (BHP, 2022).
  • Hydropower-powered smelting in Norway allows aluminium and nickel producers to supply low-carbon materials for European battery production.
  • Remote solar and wind microgrids are being deployed at lithium extraction sites in Argentina, replacing diesel-powered generators.

Digital Battery Passports make these efforts visible. By recording the percentage of renewable energy used at each stage of production, DBPs enable manufacturers and regulators to measure decarbonisation progress. This transparency also empowers consumers to choose products with verified low-carbon credentials.

Regional Approaches and Global Relevance

Efforts to integrate human rights and environmental safeguards into battery supply chains are accelerating worldwide:

  • European Union: Under the EU Battery Regulation (effective 2027), companies must conduct due diligence on human rights and environmental issues. The Digital Battery Passport will serve as the mechanism for compliance, ensuring transparent reporting across the value chain.
  • United States: The Uyghur Forced Labour Prevention Act (2021) restricts imports linked to forced labour, particularly from Xinjiang. Battery manufacturers must demonstrate traceability to access the US market (US Congress, 2021).
  • East Asia: Japan and South Korea, both leading battery exporters, are exploring digital traceability solutions to meet global buyer expectations. China has announced its own standards for “green batteries,” reflecting a shift toward internationally competitive compliance frameworks.

This global convergence highlights that DBPs are not just a European initiative but a worldwide tool to secure ethical supply chains and maintain market access.

Consumer Responsibility in Ethical Supply Chains

Consumers are increasingly aware that clean technologies are not automatically ethical. Surveys show that over 60% of European consumers consider environmental and social responsibility when purchasing electronics or EVs (European Commission, 2023).

By choosing products verified through Digital Battery Passports, consumers can:

  • Support companies that prioritise fair labour and sustainable sourcing.
  • Push lagging manufacturers to adopt transparent practices.
  • Influence market dynamics so that ethical production becomes a competitive advantage rather than a regulatory burden.

This dynamic turns DBPs into not only a compliance tool but also a market-driven incentive for ethical supply chains.

Supplier Engagement and Transparency

Creating ethical supply chains requires collaboration with suppliers, not just compliance checks. Mining companies, refiners, and transport providers must be active partners in data collection and sustainability verification.

The BASE Project is pioneering this approach by developing a collaborative DBP system that rewards supplier transparency rather than treating it as a box-ticking exercise. Suppliers who disclose reliable data gain easier access to global markets and strengthen their reputations.

This engagement reduces risks of:

  • Reputational damage from scandals.
  • Legal penalties for non-compliance.
  • Supply disruptions due to exclusion from regulated markets.

In the long term, the goal is a value chain where every participant — from miners to recyclers — is accountable for human rights and environmental standards.

Closing Thoughts

The battery industry faces a dual challenge: meeting the world’s growing demand for energy storage while protecting human dignity and ecosystems. Child labour in cobalt mines, water scarcity from lithium extraction, and pollution from nickel operations reveal that the costs of “clean” energy are too often borne by vulnerable communities.

The Digital Battery Passport offers a way forward. By embedding human rights, environmental, and governance indicators into a transparent and verifiable system, DBPs can transform the battery value chain into one that is accountable, sustainable, and fair.

Through projects like BASE, Europe is leading the way in proving that the transition to clean energy does not have to compromise justice or ethics. If implemented globally, DBPs can help ensure that the batteries powering our energy transition are built not only on technological innovation but also on respect for people and the planet.

Resources

International Energy Agency (2022). Global EV Outlook. https://www.iea.org/reports/global-ev-outlook-2022

Share this post