Volvo wants to make supply chain transparent by blockchain

Handling problematic raw material cobalt

In order to make the origin of the cobalt required for battery production perfectly traceable, Volvo will in future rely on the blockchain.

Lithium-ion batteries, as used in notebooks, smartphones and electric cars, require cobalt. The problem is that the raw material is often mined under catastrophic conditions. This is a particular problem for the automotive industry, which wants to market its electric vehicles not least as a more environmentally friendly alternative to the combustion engine. In addition, the batteries used generally come from suppliers, which makes it more difficult to trace the raw materials used. Volvo now wants to tackle the problem on a technical basis by mapping the entire cobalt supply chain in the form of a blockchain.

Volvo is cooperating with the two battery manufacturers CATL from China and LG Chem from South Korea. Each relies on its own blockchain, in which the origin of the cobalt, details such as weight and size as well as evidence that the OECD supply chain guidelines were observed during mining and transport are noted. For example, the Swedish carmaker wants to ensure that no cobalt is used in the Group's vehicles that has been mined in violation of human rights or in violation of current environmental and labor standards.

Child labour and accidents: the cobalt mining situation remains a problem

Around half of the world's cobalt reserves are stored in Congo. Some of the raw material is mined there under catastrophic conditions. By 2018, around 30 percent of Congolese cobalt is said to have been mined in unregulated small mines. Although it is officially prohibited, children also work here. Guidelines on occupational safety and environmental protection are also frequently ignored.