Volvo invests in blockchain to trace cobalt

16 July 2020

16 July 2020

Volvo Cars (Volvo) has invested in British blockchain developer Circulor. The carmaker is looking to boost the traceability of the materials it uses in its electric-vehicle (EV) batteries. The two companies have been working together in recent years, alongside CATL and LG Chem, implementing blockchain technology to make the origin of cobalt supplies more transparent.

This latest investment allows Volvo and Circulor to expand their focus beyond just cobalt. The two have already implemented blockchain technology into the mica supply chain. This mineral is used as an isolation material in Volvo’s EV battery packs. Further work is underway to scope out other materials to trace. There is even the potential for the buisnesses to use blockchain in tracking and reducing CO2 levels.

Blockchain building

Blockchain acts as a decentralised digital ledger that records transaction information online. Also known as distributed ledger technology, it makes the history of an asset unalterable and transparent through cryptography.

Circulor’s blockchain technology is used throughout the carmaker’s battery supply chain. The manufacturer explained to Autovista Group that its system is bolstered by a programme of audits, which ensures Volvo’s responsible sourcing expectations are met by its providers.

Volvo asserts that it was the first carmaker to implement global traceability of cobalt in its batteries by applying blockchain across its supply chain. The manufacturer looks to achieve 100% traceability of cobalt used in the XC40 Recharge P8, its first fully-electric car. Volvo illustrates how it traces the material with this technology in the video below.

Volvo told Autovista Group how this process is implemented at a more granular level. ‘Batches of material are tagged at source,’ it said. ‘At every processing or manufacturing step on the material’s journey to the car, data is collected about weight, process steps, time and intermediate products shipped to the next participant. The blockchain provides an immutable record of all these transactions along defined pathways, with machine-learning algorithms identifying anomalies for investigation.’

Ethical supply

As battery-reliant technology booms, there is an increasing demand for the materials used in the manufacturing process. However, the ethics of sourcing metals like cobalt have come under the spotlight. As demand soared, so did concerns that exploitation was being fuelled in the Democratic Republic of Congo, which accounts for 60% of the world’s supply.

This has led to manufacturers urgently trying to ensure their materials are ethically sourced, and not the result of exploitation in conflict-consumed countries. Volvo has clearly been motivated to ensure its cobalt can be traced back to its origins, which include both newly-mined and recycled materials.

‘We are committed to an ethical supply chain for our raw materials and our partnership with Circulor has been instrumental in that regard,’ said Martina Buchhauser, chief procurement officer at Volvo Cars. ‘By supporting Circulor’s ongoing development we can expand the use of blockchain technology in our operations and contribute to a more sustainable business.’

‘The Responsible Business Alliance last year awarded its innovation prize to Volvo Cars for pioneering use of this technology to bring greater transparency to complex supply chains,’ the carmaker added. While setting out to do something new is never without its challenges, the car manufacturer said its suppliers were keen to get on board.

‘Supply chain participants have been keen to participate as they recognise the importance of greater transparency in the cobalt supply chain and recognise that many of their other customers would also want the same when the system was in place,’ Volvo said.