Emerging Technologies – Sustainability

This short series on emerging technologies has covered a number of topics over previous months. It seems fitting as we commence 2023 to now consider the topic of sustainability, a ‘trending’ theme through recent years but one that I see having an increasing impact on our market sector.

The aim of this article is once again to identify those areas in the tax stamp and traceability businesses where opportunities may be found. The Tax Stamp & Traceability Forum™ (TSTF), May 2022 meeting provided a partial overview, so we should begin there.

The evidence from TSTF 2022 

Perspectives presented at TSTF 2022 can be used as a start to this discussion but, as we will see, the topic looks likely to progress much further.

A review of the forum (TSTN May 2022) noted that there were two emerging technologies presented that link directly into the topic of sustainability. These were direct marking and recycling, topics summarised In TSTN November 2022 and October 2021, and we will consider these together in this article.

Sustainability was noted as a driver in several presentations, notably those of OPTEL Group, Securikett and the Authentication Solution Providers’ Association (ASPA). It has become a strong political and social driver to industry and ours will be no exception, through 2023 and beyond. A number of relevant technologies featured in this debate and this article will build on these.

Recycling technologies

It was noted at TSTF 2022 that direct marking has the additional benefit of contributing to sustainability – printed barcodes can be used not just for track and trace solutions but to also contribute to sustainability by marking the packaging for recycling.

However, recycling and wider sustainability issues are rightfully attracting a lot of attention in other industries, so we should also look further afield. A good example of this, cited at TSTF 2022, began as a ‘battery passport’ initiative but looks to be spreading much wider, a development that could impact both the tax stamp and traceability businesses.

A report from the Fraunhofer Institute for Systems and Innovation Research (ISI) on sustainable battery recycling in Europe lays out the scale of the challenge here.

The report forecasts that the EU will consume 2.5 megatons per year of new batteries by 2030. Out of this, a key and growing sector is lithium-ion batteries, important for the emerging electric vehicle sector – end-of-life lithium-ion batteries and battery components to be recycled could amount to about 230 kilotons per year from 2030, and about 1,500 kilotons per year from 2040.

The role of product passports

Clearly something needed to be done here, if only from the automotive industry. As noted at TSTF 2022, this resulted in the German battery passport initiative, as an 11-partner consortium of companies that include BMW and BASF. The consortium received €8.2 million in funding to develop a common set of standards for gathering and disclosing data on European batteries, in order to trace the batteries’ environmental impact and manage their performance across the full industry value chain.

The battery passport is defined as a digital twin of a physical battery. Effectively, it consists of a QR code linked to an online database, where businesses, electric vehicle owners, and regulators can access information on the composition of a battery.

In that respect, this initiative rather resembles what we are doing in the tax stamp and traceability industry – we should perhaps consider this as both an opportunity and a threat with the potential for new entrants into our business.

At TSTF 2022, it was noted that we should watch for action on this from the European Commission, in which case it could become statutory for business in the European Union. This has now happened, and the EU has announced a requirement that some products sold in the European market will have to have what has become known as a Digital Product Passport. Again, we should consider this as both an opportunity and a threat as there is substantial overlap with the business of traceability.

This is because the Digital Product Passport aims to contain traceability data on the product across the complete life cycle. The driver for this is sustainability and to enable a circular economy in support of some wider European Union initiatives in this area. The key ones so far appear to be the proposed new Ecodesign for Sustainable Products Regulation, published in March 2022 in support of the longer- term European Union Circular Economy Action Plan.

The topic of sustainability therefore looks likely to embed traceability into further groups of (as yet undefined) products in the next few years. While we should view this as a positive development for traceability in general, there is the possibility that this could displace some existing solutions and change some longer-term plans. Regulations, plus the associated area of international standards for sustainability, is an area we should continue to monitor.

International standards to support sustainability

The topic of international standards was again one that featured strongly at TSTF 2022 and is becoming a significant element in the demonstration of sustainability and congruence with the UN Sustainable Development Goals.

Standards development organisations support these initiatives through activities such as certification, verification, and audits, in addition to shepherding national positions on standards development.

On the topic of sustainability, the key documents are the ISO 14000 ‘Environmental management systems’ series of standards, the work of ISO Technical Committee 207, ‘Environmental Management’.

Demonstrating congruence with the UN Sustainable Development Goals looks set to become more important to governments and shareholders through 2023, and international standards is a good way to demonstrate this. These should therefore be considered as a part of the demonstration and implementation of sustainable practices for our industry, an area that is already becoming apparent in currency. Life cycle assessment, also a topic of ISO Technical Committee 207, again looks likely to be a topic of consideration for our industry.

This article has a notable omission: the place of materials such as substrates and inks in considerations around sustainability. These are important considerations and will be the subject of the final article in this series on Emerging Technologies, to appear next month.

A good example of how our industry can approach such issues can be found in the Reconnaissance International publication ‘Cash: A Roadmap to Sustainability’.