Lauren Foye, Head of Research & Consultancy at Zero Carbon Academy spoke with Jessica Green, Deputy Director of External Affairs at Circulor on the 29th October 2024.
Circulor, headquartered in London with a global team, is the leader in traceability-as-a-service helping trace complex industrial supply chains using AI and blockchain.
Across industries, businesses are facing mounting pressure from incoming regulation related to supply chain traceability. Circulor wants to help companies meet the challenges to become compliant, working as an independent and neutral third-party traceability provider.
Jessica Green explained: “Doug, our founder and CEO started Circulor back in 2018, with the ambition to make complex industrial supply chains transparent, because today these are largely opaque. This comes with huge amounts of risk from not knowing what's going on in your supply chain and what you're inheriting from your upstream suppliers”.
To advance the green transition, moving away from traditionally polluting industry practices and processes, the world has seen the introduction of a wealth of new technologies including renewable energy, electric vehicles (EVs), and smart devices - collectively termed ‘clean technologies’. This change, however, has led to mounting challenges around the ethical sourcing of materials, questions relating to the risk and efficiency of these supply chains and standards of processes used in production. Jessica Green outlined Circulor’s reasons for focussing on products such as EV batteries and renewable energy solutions:
“We're focused on clean energy technologies for two reasons. Firstly, as we globally transition to these technologies, we need to ensure that we're doing that as responsibly, ethically, and sustainably as possible. We cannot just create further problems by having human rights concerns or huge emissions within these supply chains, because we would just create a new challenge for future generations to overcome. Secondly, these supply chains are complex - our tech stack uses Blockchain technology as a premise, alongside IoT devices and AI to help gather all the information from supply chains, end to end.”
Whilst some of the more stringent legislation around sustainability and traceability is being introduced in the European Union for now, this has significant repercussions for companies across the world, given that these rules impact businesses operating, or trading within the EU. Further, these changes span the supply chain, meaning suppliers, manufacturers, finishers and sellers must all be aware of, and compliant with, incoming regulation.
Notably, we are seeing the mandating of Digital Product Passports (DPP) - a tool which contains a product’s full life cycle data, covering how the product is made, how it’s used, and what happens at the end of its life. Starting with Batteries by February 2027.
DPPs are a key component of the EU’s Ecodesign for Sustainable Products Regulation (ESPR) which was introduced in July 2024. The ESPR is part of a package of measures that are central to achieving the objectives of the 2020 Circular Economy Action Plan, which itself is part of the EU’s Green Deal. However, while this is currently a framework regulation, full details of implementation are currently in development and set to be released in follow-up regulation termed “delegated acts”[i].
DPPs will support enabling a circular economy given the objective is about retaining the value of products and materials for as long as possible over the course of their lifecycle. Therefore, product passports would enable manufacturers to offer data that could improve a products circularity later in its lifecycle. This could include information on repair or recycling instructions, where prior to the introduction of DPP’s, manufacturers didn’t have an incentive to make this information easily available. As Deloitte recently stated, “The DPP aims to change this, by setting requirement to make this information available for actors across the value chain, such as resellers, users, or recyclers”[ii].
The most imminent change comes in the form of battery passports, these have been mandated by the EU and will be fully implemented in 2027. As Jessica Green noted, batteries are the first product under the EU’s ESPR to have “stringent sustainability and circularity, requirements, and as well as having digital product passports or so-termed ‘battery passports’”. Circulor themselves have placed the end-to-end traceability of batteries as a central part of their operations. Green explained the benefits:
“We're gathering the data to prove the provenance of the materials [in batteries]. So, we can for example, say that the cobalt in this battery came from this [exact] mine site in the DRC [Democratic Republic of Congo]. Not another mine site 200 metres down the road, where there could be less control and management, [meaning] there could be concerns around forced labour, child labour, or unsafe working conditions”.
She added: “We're tracking material through the supply chain as it undergoes industrial, chemical, and physical changes through each process. This is not just happening in Europe or the UK, these supply chains are global which requires tracking them on their journey through each facility”.
She explained that the benefits include transparency for consumers for example “when Volvo Cars place their electric vehicle on the market, both they and the end-consumer knows where all the components in that specific battery, in that vehicle, have come from and what the carbon footprint of that specific battery is.”
In fact, Circulor’s work with Volvo Cars has seen the pair break new ground and mark a world first: “Volvo have published the world's first battery passport for their EX90. This means that their vehicles that are coming onto both the European and the US market now have battery passports on them,” Green explained, “There's a QR code on the B Pillar of the car which consumers can scan to understand exactly what I've talked about- where are the materials coming from. And what's the carbon footprint of their vehicle before they've driven it away from the showroom.
She noted that Volvo Cars are both ahead of their rivals, and of the looming EU regulation: “Yes, they're ahead of the time scales, but also Volvo Cars really wanted to showcase the work they've been doing to try to manage their supply chains and their operations”. In fact, Volvo Cars were recently identified by ICCT as the only company out of the 10 largest vehicle manufacturers in Europe who are on track to meet their 2025 CO2 targets for new passenger cars in the EU [iii].
As mentioned, battery passports will become mandatory from February 2027, other milestones such as supply chain due diligence rules can be seen in the diagram from Circulor below:
Source: Circulor
“It's time to get started now… Gaining visibility of your supply chain is not an overnight activity, and that's the first requirement of the batteries regulation” – Jessica Green
While batteries are set to become the first to require passports, further priority products and materials will be required to have DPPs. These products include iron and steel, aluminium, tyres and electronics, the specifics for each will be defined in a DPP Working Plan, which is expected to be adopted by April 2025[iv]. Jessica Green stated the importance of the batteries regulation, and the lessons it can give to operating in other sectors:
“The ESPR is a transversal regulation, and it is applied product by product… I look at the batteries regulation as a lighthouse regulation in terms of setting these stringent requirements that other regulations under the ESPR will then follow suit”.
With Circulor the benefits of traceability are clear: “We're able to say to the downstream OEMs (Original Equipment Manufacturers), we know exactly where the materials in your products have come from and attribute those materials to the end product,” said Jessica Green. “Some organisations have tried to calculate their carbon footprint for each of their facilities. This is great because they're trying to tackle their scope 1 and scope 2 operational emissions, but what’s really required and more important is tackling what's inherited from the upstream. This is where most of the emissions are coming from”.
While the legal requirement for traceability under the Battery Regulation is clear, other global regulations stipulate the use of traceability to help prove regional sourcing and recycling. For example, in the US traceability is required to claim for section 30D tax credits[v]
“Our traceability platform is gathering all that data to enable businesses to prove the provenance [of products and materials], and that's for the batteries regulation initially with that being the first requirement that comes in next August. From August 2025 economic operators, the OEMs, essentially those placing the products, the battery on the market have to prove who is in their supply chain, and where the materials, cobalt, lithium, natural graphite, originate”.
This is where Circulor’s PROVE platform can provide help, offering the following:
· Supply Chain Mapping- Companies can map their entire supply chain with granular precision, identifying risks and opportunities for optimisation.
· Digital ID Creation - Create comprehensive digital identities for each material, ensuring traceability and authenticity from source to product.
· Track and Trace - Achieve end-to-end visibility with precise tracing of every material through its life cycle, enhancing accountability.
· Rules Engine - Implement dynamic rules for real-time decision-making so the platform is tailored to business needs.
· Integrations and APIs – integration including with ERP, enhancing data flow and operational synergy.
· Reporting and Analytics - Gain critical insights to enable sustainability reporting, due diligence, and compliance with global regulations.
“Companies have to know who's in their supply chain, the quantities of materials, where they're coming from, and which facilities they're going through. They also have to implement a number of due diligence policies and risk mitigation strategies too”. - Jessica Green
Circulor were recently announced as winners of the Artificial Intelligence category in the Zero Carbon Academy 2024 Cleantech awards. We asked Jess Green what winning this award meant to Circulor.
“It's great. It's always exciting for the whole team and for us to be get 3rd party validation of the work that we're doing. It's not just us saying: ‘we're doing very well; we have these customers…’ having that 3rd party validation is very helpful for us. Particularly when it's around net zero and driving that change, I think that's really what makes a difference for us,”
“And it's always great to share these achievements with the broader team, especially those who are focus on product development side of things so don't always get to see the bigger impact of the work they’re doing.”
To find out more about the Zero Carbon Academy cleantech awards, and to view the full list of winners visit: Cleantech Awards 2024.
*Readers note: this article is a follow on from the 2024 Zero Carbon Academy cleantech awards which were judged independently by our panel of industry experts. Views expressed here are those of the interviewee, and do not necessarily reflect those of Zero Carbon Academy. No payment or sponsorship was made for this article.
[i] Ecodesign for Sustainable Products Regulation - European Commission
[ii] Digital Product Passports are just around the corner | Deloitte UK
[iii] ID-242-–-EU-CO2-cars_final.pdf
[iv] Ibid
[v] Final regulations provide Section 30D clean vehicle battery rules: PwC
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
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