Canada is in talks to create a passport-style system that would label electric-vehicle batteries based on whether their source material meets certain ESG standards, The Logic has learned. 

It’s an attempt to overcome ethical and environmental concerns about the mining of critical minerals as the government vies for deals that would see multinational automakers build EVs and their components in the country.

Natural Resources Canada is working with the Global Battery Alliance, a consortium of NGOs, companies, academics and governments spun out of a World Economic Forum project, on a partnership to “support the piloting of a Canadian battery-metal traceability project,” according to a February briefing note The Logic received in an access-to-information request. 

NRCan declined The Logic’s request for an interview, but said in an emailed statement that it is working “closely with allies in provincial and territorial governments, as well as industry and international partners, to consider the value of establishing a national battery passport by developing supply-chain traceability systems.”

Environmental, social and governance standards, or ESG, are meant to give investors and the public information about a business’s practices and have become a priority for major EV markets like Europe. As the EV industry has boomed, the industry has faced questions about whether it is living up to its “clean” reputation amid clashes with Indigenous communities, reports of child labour in the supply chain and concerns about how discarded batteries and mining byproducts will affect the environment.

Battery passports aim to make a “quality seal for batteries” to promote “responsible purchasing by consumers,” the GBA says, and a platform to verify a battery’s supply chain. Julie Paquet, vice-president of communications and ESG strategy at the Quebec battery-material miner Nouveau Monde Graphite, said the program has the potential to satisfy critics who don’t believe batteries are cleaner than oil, and to showcase on the world stage Canada’s potential as a clean supplier in the battery business.

“What’s the difference between Chinese or Quebec or Alabama battery cells? … You don’t know the energy was coal energy or hydroelectricity,” said Jean-François Béland, vice-president of Quebec resources at Investissement Québec, the province’s investment arm. 

“With a battery passport and with traceability, it’s the way of knowing, guaranteeing, that these batteries are made in an ESG context with green energy. And that’s where, for us, it was fundamental to our strategy.”

It’s not clear how far talks have progressed on a national strategy or whether the passport would be the ultimate outcome. But Canada’s interest in a national traceability push comes as the GBA’s battery-passport program committee, co-led by representatives from Investissement Québec and Tesla, gains momentum with key trade partners. Germany—home to major automakers Volkswagen, Audi, Porsche, BMW and Mercedes-Benz and top auto supplier Bosch—announced plans to create a battery passport for Europe this year, and Canada has been courting battery deals with many of those companies, including one with Vancouver’s Rock Tech Lithium that explicitly calls for audits of mining sites.

The United States also put pressure on battery traceability last month, by adding batteries to the Labor Department’s list of goods made with materials known to be produced with child or forced labour. 

The GBA’s battery-passport steering committee is co-chaired by Tristan Mecham of Tesla and Simon Thibauld of Investissement Quebec. NRCan also has two representatives listed on the 19-person committee.

All together, it means that Canada’s fingerprints are on a new rulebook setting global battery-tracing standards, working alongside companies like Honda, Audi and LG Chem. 

It’s not yet clear from NRCan’s statements exactly how a Canadian version of the passport program would be implemented, either by government, between nations or through a consortium of companies. Canadian battery companies told The Logic that the domestic industry is supportive and discussions about a Canadian approach to a battery passport have been heating up over the past few weeks. ​​Raj Das Gupta, CEO of the Ontario battery maker Electrovaya, told The Logic in October he knew there had been task-force meetings in the fall about a potential Canadian battery passport.

“The tone has kind of changed on battery passports, I would say in the last 30 days, with the government, at least in Canada and in the U.S. And those are just two governments we’ve spoken to,” said Adam Johnson, vice-president of external affairs at the B.C. battery-material maker Nano One. “I think this is kind of the next piece that’s coming.”

Investissement Québec’s Béland said his agency has been very focused on the issue. IQ backs Nouveau Monde Graphite, one of the first Canadian companies to announce a traceability pilot directly with the GBA. Béland said he aims to check on Nouveau Monde as often as once a week and is in talks with lobbyists and industry daily trying to strike the right balance between industry self-regulation and government regulation on the battery supply chain and traceability. He said that a North American approach to traceability would likely make more sense than a completely made-in-Canada battery, given the possibility of the supply chain today.

Nouveau Monde’s Paquet said the mining company was serving as a test case for the feasibility of attaching a carbon footprint to “every batch of production” of the mining process. The company was able to demonstrate the tracking process because it both mines and refines the battery metal. 

NRCan said that as an “observing member” of the GBA, it is “still analyzing the results of the pilot.” 

Paquet said the GBA is working on its next wave of pilot programs, using the Quebec miner’s feedback. She declined to comment on whether Tesla executives recently spotted at its facility were a part of the GBA committee leadership, saying she “can’t comment on potential customer visits.” 

“It’s not going to be generating the sales contract,” she said of the GBA program. “But it shows the seriousness that we do put toward that effort, and making sure that we can develop a sustainable, green and transparent battery ecosystem. The GBA or pilot projects or forums like that are great opportunities to find like-minded clients.”

Kunal Phalpher, president at the battery-material company Li-Metal, said he also supports the idea, but said any pilot would need to be designed not to hamper growth, and ideally, requirements, software and fees would somehow scale with the size of the business.

“The industry is growing so rapidly, there’s not that infrastructure built out of new production and new processes and new technologies,” he said. “We’ve got to think about a timeline that aligns with the industry growth.”