L&F builds smart factory to meet EU battery passport requirements

Battery materials maker L&F has established a smart factory system that automatically calculates and manages carbon emissions and quality data, a move aimed at meeting global ESG regulations including the EU's mandatory digital battery passport.

L&F announced Tuesday that it has built the foundation for an "ABB (AI, big data, blockchain) smart factory" by linking a life cycle assessment (LCA) system with a blockchain-based data-sharing framework.

Global automakers have increasingly demanded carbon emissions data, quality histories and change records across the entire battery supply chain as key procurement conditions. With the EU's mandatory digital battery passport (DBP) set to take effect in 2027, the transparency and reliability of such data have emerged as a competitive differentiator for materials suppliers.

L&F carried out a two-year smart factory construction project at its Guji Plant 1 in Daegu starting in 2024. In the first year, the company built infrastructure to collect data across all production processes and designed a data-driven operational structure. In the second year, it constructed and verified the LCA and blockchain systems, then introduced and tested AI-based quality and equipment prediction models.

The centerpiece of the project is a system that automatically calculates carbon emissions generated at every stage from raw material input to finished product shipment. Through the LCA system, L&F generates carbon data from the production process and makes it available for sharing with external customers.

Data sharing uses a "data space" platform built on blockchain-based decentralized identity (DID) technology. The data space allows participating companies to securely exchange the data they need within a shared set of standards and security protocols.

L&F said it became the first company in South Korea to complete sandbox testing and verification on Catena-X, the standard data-sharing platform for the European automotive industry, in December last year. This gives the company the foundation to exchange carbon and quality data with global automakers in a standardized format.

The company has also upgraded its quality management system. L&F is building a structure that consolidates equipment, process and quality data into a unified format. This expands scalability to enable digital twin implementation — which replicates real factory data in a virtual environment — along with AI analysis and integration with other production and quality systems.

The system also incorporates quality management practices required by the automotive industry. It enables systematic tracking of quality histories from the product development stage through mass production and post-shipment management. The focus is on reducing quality variability by managing inspection results, nonconformance records and process changes as structured data.

L&F plans to use Guji Plant 1 as the starting point to establish a standard smart factory model, then roll it out line by line and stabilize operations across its facilities. As carbon data and quality history management become increasingly important criteria in supply contracts within the battery materials industry, the pace of building such systems is expected to accelerate.

"The core of this smart factory project is realizing a system where data equals trust," a company official said. "By providing data through the LCA system, we expect to strengthen our capacity to respond to ESG assessments and build greater confidence among our customers."

The official added that the company plans to "proactively respond to global regulations such as the EU battery regulation, while establishing a standard smart factory model starting with Guji Plant 1 and gradually advancing toward an AI-based autonomous manufacturing system."