Automotive Supply Chain Carbon Reduction Case Study | CarbonNewture - Supply Chain Carbon Management Platform Facilitates Battery Companies in Achieving Product Carbon Footprint Traceability

introduction:

The electrification of automobiles is crucial for the decarbonization of the transportation sector. The growth of new energy vehicles has led to a sharp increase in demand for power batteries, and the demand for lithium batteries is expected to reach 4700 GWh by 2030, approximately 6.7 times that of 2022 [1]. The development of new energy vehicles aims to reduce carbon emissions, and the power battery, as the "heart" of electric vehicles, accounts for about half of the total carbon emissions throughout the vehicle's lifecycle [2].

Electric vehicles and power batteries

In recent years, driven by a dual force of policy and market dynamics, the carbon footprint of the entire lifecycle of power batteries has become a focal point of attention for both government and businesses. It has also emerged as a key focus in green trade related to import and export. For instance, the European Union's "New Battery Regulation" stipulates that starting from July of this year, automobile batteries exported to the EU must declare their product carbon footprint, and from 2026 onwards, they must possess a "battery passport" to be eligible for sales in the EU market.

Product Carbon Footprint Certification of Qingyou Materials

Recently, CarbonNewture assisted Zhejiang Qingyou Materials Technology Co., Ltd. (hereinafter referred to as "Qingyou Materials") in completing the carbon footprint certification for three popular products. These three products are core separator materials for power battery cells and pack insulation materials used in BYD's battery production. So, what were the motivations and benefits for Qingyou Materials to undergo product carbon footprint accounting and certification? What role do downstream chain-leading enterprises (such as BYD) play in this context?

01.Trend: Rapid Development of Electrification in Automobiles with High Demand for Power Batteries

Transportation is one of the major sources of global carbon emissions, accounting for approximately 21% of the total global emissions [3]. Therefore, decarbonization in the transportation sector is crucial for achieving global climate goals, and the electrification of the automotive industry is currently one of the primary measures to reduce carbon emissions. As shown in the figure below [4], the global stock of electric vehicles reached 26 million in 2022, with China contributing to nearly 50% of this total. According to the latest statistics from the Ministry of Public Security, the stock of new energy vehicles in China reached 20 million in 2023 (including 15.52 million pure electric vehicles), far exceeding expectations in terms of growth rate.

Global Electric Vehicle Stock, Source: IEA

The rapid development of electric vehicles in the automotive industry is entering a period of explosive growth, leading to a significant surge in demand for power batteries. As a key driver of the transformation in automotive energy, the power battery industry holds a crucial position within the automotive sector. Power battery companies consider product decarbonization as a vital development strategy. With the increasing strength of international green trade barriers, the carbon footprint certificate for the entire lifecycle of batteries is gradually becoming a globally recognized "green passport" in circulation.

02.Case Study: Upstream Materials Companies in the Power Battery Industry - Product Carbon Footprint Has Become a Necessity

Qingyou Materials is a high-tech enterprise engaged in research and development, production, and sales. The company focuses on the field of new energy vehicle materials, providing thermal management solutions at the cell level, module level, PACK level, and vehicle level. Qingyou's series of products have been supplied to various vehicle and PACK enterprises, including BYD, SAIC, Chery, EVE Battery, Lishen, MGL, National Power, Weihong Power System, SVOLT Energy, FUNENG, Gotion High-tech, and others.

Source: Qingyou Materials

Case background

Against the backdrop of intensifying global climate change, in order to meet the low-carbon development demands of policies and markets, automotive OEMs and battery PACK enterprises are actively pursuing green upgrades and transformations. They are gradually strengthening the management of product carbon footprints and supply chain carbon emissions. However, whether conducting carbon footprint accounting for battery products or managing supply chain carbon emissions, it is necessary to accurately collect carbon data from upstream suppliers in the industrial chain. As a result, automotive or battery companies seek precise, reliable, and traceable carbon emission data from upstream enterprises.

Carbon data traceability relationship in the battery industry, created by CarbonNewture

Enterprise pain points

Qingyou Materials has been requested by downstream chain-leading enterprises such as BYD to "provide carbon footprint data for the supplied products". Qingyou Materials realizes that product carbon footprint data is gradually becoming a "green pass" for product sales, and these data need to be calculated and traceable based on scientific methods.

Carbon footprint accounting - Data challenges. The process of carbon footprint accounting not only involves the company's own production data but also requires the collection of upstream material-related carbon data, consuming time and effort to obtain crucial data. Additionally, there is currently no universally applicable activity factor database for the battery industry, and some activity factors still need to be obtained through literature research and other means.

Carbon footprint accounting - Modeling challenges. Accurately calculating the carbon footprint of the entire product lifecycle requires precise modeling. In the absence of professional carbon accounting talent, the accounting results are likely to be questioned by downstream enterprises.

Carbon footprint certification - Authority needed. After completing the carbon footprint accounting for products, obtaining a carbon footprint certificate ensures the authority of the carbon footprint data. This can be seen as obtaining a stamp for the product's "green passport."

Carbon data system - Traceability challenges. The traditional method of collecting and calculating data using spreadsheets is no longer sufficient to meet the increasingly stringent carbon data traceability requirements of downstream enterprises. Companies need a digital carbon management system to ensure data security while meeting the verification and traceability needs of downstream enterprises and government agencies for carbon data of products/companies.

Solution

Through the product carbon footprint accounting and certification services provided by CarbonNewture, and by utilizing the CarbonNewture digital carbon management platform, Qingyou Materials has completed the carbon footprint accounting and certification for three core products. The carbon data has been transmitted to downstream customer BYD as required.

Product Series 1

Qingyou Materials produces coated soft foam cushioning materials UF-440 and UF-471, which are PU cushioning foams. When used between battery cells, they can absorb the expansion stress of the cells, contributing to the improvement of the cycle life of power batteries. In non-cell applications, these materials can be used for module support beneath, collision prevention and insulation above the module, and prevention of adhesive leakage at the edges of water-cooled plates, among other purposes.

UF-440 Polyurethane Cushioning Foam Structural Components Product and Its Carbon Footprint Certificate

UF-471 Polyurethane Cushioning Foam Structural Components Product and Its Carbon Footprint Certificate

Product Series 2

Qingyou Materials produces polyurethane insulation structural components UR-240, which are designed for the insulation structure of new energy power batteries and energy storage battery systems. These components help maintain a stable operating temperature during system operation, reducing the energy consumption of power battery packs. Additionally, they help delay the loss of charge in batteries when exposed to high or low-temperature environments, thus optimizing overall performance.

UR-240 polyurethane thermal insulation structural parts product and its carbon footprint certificate

03.Chain-leading Enterprises: In need of a more intelligent supply chain carbon management platform

For the management of automobile carbon footprint and Scope 3 carbon emissions, it is necessary to collect a massive amount of carbon data from upstream enterprises. A single automotive company often has hundreds or thousands of first-tier suppliers, not to mention second-tier and even more remote raw material suppliers, making it challenging to manage such a vast number through traditional means.

Taking BYD as an example, by the end of 2022, BYD had collaborated with over 11,000 suppliers [5]. Faced with such a large number, automotive industry chain-leading enterprises like BYD require a more intelligent supply chain carbon management platform to enhance management efficiency and precision.

CarbonNewture Supply Chain Emission Management Platform

By leveraging digital technologies such as blockchain, big data, IoT, etc., CarbonNewture has developed a supply chain carbon management platform. This platform not only quantifies carbon emissions at the production level but also efficiently manages multiple levels of upstream supply chain enterprises. Additionally, the confidentiality, privacy, and security of data can be ensured.

Chain-leading enterprises can not only view real-time submissions of carbon footprint data for products supplied by upstream supply chain companies through a data dashboard but also confirm supply chain emission reduction progress based on real-time data. This enables them to advance supply chain emission reduction goals by optimizing procurement plans.

CarbonNewture Supply Chain Emission Management Platform- Dashboard

CarbonNewture Supply Chain Emission Management Platform-Supplier management interface

By utilizing CarbonNewture's supply chain carbon management platform, we refine the granularity of carbon data, monitor and manage carbon reduction in the supply chain in real-time. We scientifically break down carbon reduction goals, truly driving enterprises towards comprehensive carbon neutrality.

References:

[1] 《GBA 2030 Vision》,可联系后台获取

[2](a)“付于武:如何构建动力电池回收新业态”, https://baijiahao.baidu.com/s?id=1786957827863142543&wfr=spider&for=pc

(b)“出口“新三样”亮丽成绩的背后,小心这些隐形碳壁垒!”,https://www.bjnews.com.cn/detail/1705458684168828.html

[3] Transport (Paris: IEA, 2022), https://www.iea.org/reports/transport

[4] https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf.

[5] 比亚迪2022年社会责任报告