Shipping is facing a major turning point having to change power sources over the next three decades, writes BunkerTrace co-founder and BLOC chief executive office Deanna MacDonald
As we navigate through the challenging effects of COVID-19 there has been speculation that shipping is turning its back on decarbonisation initiatives at this crucial time, as key environmental meetings such as MEPC are postponed. Although many first movers remain committed to long-term sustainable business practices, it is going to be difficult for the sector as a whole to maintain momentum unless we build new platforms to help us shift to more sustainable ways. This is where it helps to take advantage of new technologies such as blockchain.
IMO 2020 has already shown how blockchain can be instrumental in managing risk for owners – specifically, the risk that comes from fragmentation in fuel supplies as more fuel is blended to meet compliance. Despite IMO’s sulphur cap and carriage ban rulings, a number of vessels have been found to be burning or carrying fuel with sulphur content over 0.5%; the need to provide compliance at the points of bunkering and loading are crucial.
Blockchain helps us mitigate this risk. As traceability is at the core of the technology, it is ideally suited to resolving issues in complex supply chains, like bunkering. It can act as a neutral intermediary for recording information, by leveraging its nature as a permission-based, privacy-oriented means of storing data. In the same way as it allows trusted transactions to occur without the need for an overseeing party, it can allow parties to exchange data they can trust, without the fear that it might be used by a competitor or put them at a disadvantage. Securing the proof, time and geo-stamps of the records of events in an immutable blockchain creates a verifiable source of truth and removes issues with physical paper trails, all of which is highly applicable to the marine fuels supply chain.
"As traceability is at the core of the technology, it is ideally suited to resolving issues in complex supply chains, like bunkering"
Documenting this type of chain also requires physical logging of data, as well as digital data transfer via blockchain, which is why we add synthetic-DNA with our solutions to enhance traceability. This solution enables tagging through synthetic-DNA markers, flagging using a highly sensitive molecular label, and tracing in the form of a blockchain encrypted Bunker Delivery Note (BDN). This technology offers end-to-end oversight and control of the marine fuel supply chain, designed as a solution to help shift shipping towards more sustainable fuels.
This added layer of traceability allows for a much greater degree of assurance for multiple parties. Particularly for tanker owners and operators, the technology gives them access to real-time information that provides them the certainty to accept or decline the fuel stem before it is delivered to their vessel, and helps inspections run smoothly and efficiently.
So how does this take us forward to decarbonisation? Many in the industry anticipate that alternative fuels will be the main driving force of decarbonisation, but they themselves have long and complex supply chains so they need some type of veracity or chain of custody to prove traceability. This is particularly pertinent when it comes to documenting genuine sustainability in alternative fuels – that biofuels have not come from sources that lead to deforestation, for example. In this scenario, the BunkerTrace solution can act as a facilitator in tracking zero- or low-carbon fuels and will help prove that these supply chains are compliant.
Moreover, this is where blockchain can go one step further in documenting and verifying ‘well-to-tank’ emissions and ESG compliance, while avoiding unnecessary administrative burden. This then could provide the verified information required for evidence-based policy making or for confirmation and monitoring of investments with green performance.
Applying a digital mechanism in conjunction with a physical solution has opened up new approaches to compliance and traceability for shipping. If driven by financiers and shipping companies, technology like this can not only help manage risk now, but also propel the industry towards meeting and exceeding its 2030 and 2050 emissions targets.
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