How the need for secure supply chains is propelling blockchain

When several large automakers considered how to confront a looming sustainability problem, they turned to blockchain. The issue? Even as electric vehicles (EVs) penetrate the market in growing numbers, with global sales jumping 40 percent year-on-year in 2019 according to the IEA, questions around the ethical sourcing and disposal of their batteries have lingered.

In response, Volvo and BMW are using blockchain technology to track the raw materials used in EV lithium-based batteries from the source. This includes the mining of the key component, cobalt, which has historically been marred by child labor and other human rights abuses. Mercedes is working on a pilot blockchain project to track CO2 emissions in the cobalt supply chain, as part of its efforts to create a carbon-neutral passenger car fleet by 2039.

It is this ability to provide provenance — to track and trace materials, products, and services — that has been singled out by PwC as the biggest driver behind the widespread adoption of blockchain technology. In a 2020 study, PwC’s economists ranked the top five uses of blockchain by their economic potential, predicting that using blockchain to prove provenance could generate US$962 billion for global GDP over the next decade. Notably, this was more than double the potential of any other use case.

In many ways, this focus on provenance is a sign of the times.
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