Cobalt production is on the rise to support the growing needs of the automotive industry as automakers set electrified vehicle adoption targets worldwide. The calls for the adoption of sustainable business practices are growing larger as well, with Volvo announcing last week that it will lower its carbon footprint by 40 percent.
Volvo Cars will become the first automaker to implement global traceability of cobalt used in its batteries by applying blockchain technology. The technology will allow for transparency when it comes to sharing reliable data on the supply chain of the materials that cannot be simply altered undetected for profit.
“We have always been committed to an ethical supply chain for our raw materials,” said Martina Buchhauser, head of procurement at Volvo Cars. “With blockchain technology we can take the next step towards ensuring full traceability of our supply chain and minimising any related risks, in close collaboration with our suppliers.”
The Swedish automaker gets its batteries from CATL of China and LG Chem of South Korea, who have also agreed to be part of this tracking program when it kicks off later this year.
Technology firms Circulor and Oracle will operate the blockchain technology in CATL’s supply chain following successful testing during a pilot program over the summer. The Responsible Sourcing Blockchain Network, RCS Global, and IBM are rolling out the technology in LG Chem’s supply chain.
In the case of cobalt, blockchain will record the material’s origin, attributes including weight and size, chain of custody, and supplier behavior.
The agreements regarding blockchain technology between Volvo Cars, CATL, and LG Chem cover the supply of batteries over the coming decade for next generation Volvo and Polestar models.
What is blockchain? A blockchain is a digital ledger that includes records linked to each other via cryptography. When used in the constrains of supply chains, the technology is used to create records of transactions which cannot be altered. It also sets a standard for what data can be recorded. Blockchain allows participants to verify and audit transactions independently.