Volvo chooses blockchain for cobalt traceability

Committed to an ethical supply chain for its raw materials, vehicle manufacturer Volvo turns to blockchain to ensure full traceability of cobalt used in its lithium-ion batteries

Through the application of blockchain technology, Volvo claims that it will become the first car maker to implement global traceability of the cobalt used in its batteries. The announcement follows the reveal last month of the company’s first fully electric car, the XC40 Recharge.

A spokesman for the company says in a statement that traceability of raw materials such as cobalt – which is used in the production of lithium-ion batteries – is one of the main sustainability challenges faced by vehicle manufacturers. “Volvo is committed to full traceability, ensuring that customers can drive electrified vehicles knowing the material for the batteries has been sourced responsibly,” the statement says.

A blockchain is a digital ledger containing a list of records linked to each other via cryptography. Within supply chains, the technology creates records of transactions that cannot be changed, while also enforcing a common set of rules for what data can be recorded. This allows participants to verify and audit transactions independently.

According to the statement, Volvo has reached an agreement with its two global battery suppliers – CATL of China and LG Chem of South Korea – as well as with leading global blockchain technology firms to implement traceability of cobalt, starting this year.

Following a successful pilot programme, Circulor and Oracle will operate blockchain technology across CATL’s supply chain, while the Responsible Sourcing Blockchain Network (RSBN) – together with sourcing specialists RCS Global and IBM – will roll out the technology in LG Chem’s supply chain.

“We have always been committed to an ethical supply chain for our raw materials,” says 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.”

According to Buchhauser, in this particular case data in the blockchain includes the cobalt’s place of origin, its weight and size, as well as information relating to its chains of custody while it is on its way to the production line. “This approach is aimed at creating trust between participants along the supply chain,” she says.

Last month Volvo launched its XC40 Recharge in Europe, the first of an upcoming family of fully electric cars under the Recharge banner. By 2025, it expects half of its global sales to consist of fully electric cars, with the rest hybrids.