Blockchain technology applied to plastics traceability and sustainability
Resin suppliers Domo and Covestro are teaming up with transparency start-up Circularise in a collaborative project for circularity in the plastics industry through the use of blockchain technology. The newly-formed Circularise Plastics project group aims to set up an open standard for sustainability and transparency within this field. At K 2019, Domo and Covestro discussed the project with customers and looked for new partners to join them on this pathway towards full circularity.
Blockchain technology can track plastics across the entire supply chain while maintaining confidentiality and competitive advantage.Netherlands-headquartered tech innovator Circularise is making transparency and communication in global value chains possible by utilizing blockchain and zero-knowledge proof. Their protocol enables trusted data exchange in fragmented supply chains without public disclosure of datasets or supply chain partners. Unlike other blockchain transparency solutions, Circularise’s technology called “smart questioning” protects a company’s privacy and sensitive information.
This means that confidentiality and competitive advantage are always maintained. The technology also eliminates the need to trust a centralized party. “Because all of the verification is done by the system itself, the idea is that users do not need to rely on a central point of control. Instead, trust is transferred from one centralized authority (such as a verifying party) to many decentralized, anonymous participants,” says Mesbah Sabur at Circularise.
The Circularise Plastics concept involves a seven-step process whereby the source material can be followed through a blockchain pathway, ensuring end-to-end product traceability and provenance. If ultimately accepted by the original information holder (plastic producer/molder), the OEM can access important information and make statements accordingly. This solution has two basic main advantages over other initiatives. The open protocol will enable an industry standard (on any blockchain) and avoid monopoly. The Smart Questioning technology safeguards privacy, while still allowing for transparency.
Blockchain technology is a prodigious consumer of electricity. According to one estimate, each transaction on the Ethereum network consumes enough electricity to power two U.S. households for a day. Commenting on the energy consumption associated with the Circularise Plastics blockchain, Sabur said that while the proof of concept was carried out using the Ethereum network because it is the most open and secure, having the greatest number of users, Circularise Plastics blockchain agnostic so a switch could be made to another, more energy-efficient system for commercialization.
Ethereum and Bitcoin currently work on a proof of work principle but there is a long-term vision for Ethereum is to transition to a mining model called proof-of-stake (PoS). This way Ethereum’s energy requirements would be reduced by more than 90%. Proof of authority is another, less energy-intensive model.
The Circularise Plastics project is still at a very early stage and the objective at K 2019 was to raise interest among value chain partners, that are willing to join the consortium in the ideation and testing phase. New members will become sustainability innovators in the plastics industry. This will give them access to the latest information and resources, and present the opportunity to co-create an industry-wide communication standard for a circular economy.
“Registries and tracking systems are key to assessing progress towards global circularity goals. Blockchain can bring transparency where it's most needed, especially when it comes to supply chain traceability in our industry. Achieving a single standard for traceability to origin would enable the industry to ‘responsibilize’ and communicate regarding sustainability practices and attach proof of origin to materials,” says Alex Segers, CEO at DOMO.
The partners believe that achieving traceability and transparency in the plastics supply chain enabled by blockchain will make it more authentic and transparent. There are three main objectives:
Choose Circular: Make it easier for suppliers, processors, manufacturers, molders and brand owners to choose traceable, sustainable and circular materials.
Produce Circular: Create incentives for suppliers and manufacturers to produce traceable, sustainable and circular materials and products.
Make Circular: Provide critical information for reversed logistics and take back of products, materials and components.
The compatibility of blockchains has been a hot topic, including in the plastics space, where the benefits of this new technology can serve all parts of the supply chain. “For material suppliers and processors, as well as equipment and moldmakers, Circularise Plastics participation means increased material value and trust in your production, by adding material passports to plastic resin, additives, colorants and any other materials produced. For OEMs and brand owners, it helps on the road to achieving sustainability targets and a strengthened brand position, by revealing a product’s origin and transparency on its environmental impact,” says Dr. Burkhard Zimmermann, Head of Strategy, Sustainability and Digital at Covestro´s Polycarbonates segment. The value of blockchain is that it avoids the use of a powerful central authority and thereby gives equal rights to all participants.