California’s Digital Identifiers forge a more equitable energy transition

Welcome to the Circulor monthly newsletter, where we highlight progress toward more resilient, transparent, and responsible global supply chains.  

The Advanced Clean Cars II (ACCII) regulations, adopted by California’s Air Resources Board (CARB) in August 2022, sets a second phase of ambitious targets for the state of California in reducing vehicle emissions and accelerating the transition to zero-emission vehicles (ZEVs). Currently these targets specify that all new vehicle sales in the state will be zero emission by 2035, with an interim target of 35% by 2026.

More than reducing tailpipe emissions through the adoption of technologies like electric vehicles (EVs), ACCII also incorporates what it calls “assurance measures” in pursuit of a just and equitable energy transition. In line with this goal, ACCII sets specific labelling requirements for the batteries of all ZEVs, plug-in hybrid electric vehicles (PHEVs), hybrids, and mild-hybrid vehicles—requiring automakers to provide detailed information on their batteries’ health, safe handling, and more, starting in 2026.

A battery’s label is to be attached to its exterior and also made available in the vehicle’s powertrain or cargo department. It must contain a digital identifier via a QR code that shares the battery’s composition, charging rates, handling instructions, and state of health for at least the next 20 years.

For CARB, digital identifiers make zero transportation more equitable. They give consumers assurance that their purchase, specifically of a used or pre-owned zero emissions vehicle, meets certain product requirements. This level of transparency through California’s digital identifiers instills confidence for underserved communities in adopting used EVs and hybrids, creating broader uptake of zero emission transportation and reducing tailpipe emissions both in underserved communities and the state as a whole. Learn more on the full scope of benefits that come with digital identifiers here.  

California enjoys the largest zero emission vehicle market in the nation, but ACCII won’t only affect the world’s 5th largest economy. To date, 17 states including New York, Washington, Massachusetts, and Oregon, have announced plans to adopt ACCII goals and assurance measures. And when considering batteries for EVs, PHEVs, hybrids, and mild-hybrids, in all these states, we’re talking about digital identifiers needing to be created and maintained for tens of millions of batteries over the coming decades.

In light of the U.S.’s recent elections, it’s important to note that CARB and president-elect Donald Trump have a historically contentious relationship—and it’s expected that the Trump Administration will try once again to revoke CARB’s emissions autonomy and authority. However, if the past is prologue, the majority of industry will opt for continuing to prepare for California’s requirements, moving forward with their already planned EV model lines.

We look forward to continuing to bring you these global insights here, as well as on circulor.com and LinkedIn. More on the latest global traceability trends below.   

What we’re reading…

Unlocking the value of the EU Battery Passport

The Battery Pass project have published an insightful study on 'Unlocking the Value of the EU Battery Passport’, with practical next steps for businesses to maximise their strategic potential. As the technology lead for the Project and our work implementing Battery Passports at production scale, Circulor is proud to have contributed to this report.

Canada introduces mandatory climate disclosure requirements

Canada has introduced mandatory climate disclosures, as reported by ESG Today, for large organizations, effective in 2025, requiring them to report climate risks, financial impacts, and Scope 1, 2, and 3 emissions data. This aligns with global regulations such as those from the EU, focusing on transparency and sustainability in corporate operations and supports Canada's net-zero transition goals.

Company car subsidies drain €42 Bn from EU taxpayers annually

A study by Transport & Environment shows that fossil fuel subsidies for company cars cost EU taxpayers €42 billion annually, mainly benefiting petrol and diesel vehicles, which dominate new car registrations. T&E recommends that more EU countries adopt policies like those in the UK, Spain, and Belgium, which use higher taxes and electrification targets to encourage electric vehicle adoption. Such measures would reduce emissions, align with EU climate goals, and lessen taxpayer burdens.

 Is there really a slowdown in EV sales?

As presented at the BloombergNEF Summit, global EV sales are set to reach a record 16.7m units this year, despite slowing growth rates. Sales climbed 26% in the first half of 2024. In Europe, some EV sales have dipped due to subsidy adjustments, with affordable models expected to launch in 2025 to meet stricter EU emissions standards. The U.S. lags behind but is on track for a record year, with EVs projected to reach 10% of total sales.

What we’re sharing…

How prepared are you for next year’s compliance requirements?

Kumi Consulting and Circulor recently hosted an essential webinar on how to prepare for the due diligence obligations, which must be implemented by August 2025. Hear about the key concepts and principles of due diligence in battery supply chains, the scope and expectations set by the Batteries Regulation, and practical implementation to ensure adherence. Watch here.

Volvo Cars: Leading the way in emissions reduction

Following Volvo Cars battery passport milestone in June 2024, recent analysis by the ICCT shows Volvo has already reached the 2025 CO2 emissions target for new cars in Europe. While other automakers need to increase their battery electric vehicle (BEV) share from 16% to 28% by 2025, Volvo’s proactive approach highlights their strong environmental commitment. Watch this review of the Volvo EX90, featuring the battery passport.

Navigating the EU Battery Regulation with PROVE 

The EU Batteries Regulation, effective August 2023, sets a new standard for sustainable, transparent battery production in Europe. It places responsibility on Economic Operators to meet stringent requirements based on battery type. Circulor has the solutions to enable companies to meet these regulatory requirements and is already delivering them at scale. Read more.

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