Circularise, a supply chain traceability provider launched in 2016 has launched a joint project with ISCC, a sustainability and greenhouse gas certification scheme, to test whether a blockchain system could be used to complement ISCC Plus certification - a sustainability certification process of complex value chains.
The project was participated in by a number of material suppliers Neste, Asahi Kasei, Borealis, Trinseo and Shell, original equipment manufacturers (OEMs), brands Arcelik, Philips Domestic Appliances and EVBox, and the trading companies Marubeni and Itochu. All participants were originallybrought together by Circularise and Marubeni.
The aim was to examine whether Circularise’s blockchain-based digital system could make the auditing procedures required to obtain ISCC Plus certification more efficient and to strengthen the integrity of the certified data.
Unlike other blockchain projects, where a private blockchain operated by pre-selected participants is used, here, the project participants made use of a public blockchain that enabled the authentication, decentralisation and encryption of data verifying material flows and related sustainability attributes. Using a public blockchain makes it virtually impossible for companies to appear more sustainable than they really are by reusing the proof of a sustainability claim across assets. This principle forms the foundation of trust in data integrity.
“Blockchain technology is revolutionising how data is stored and shared. Now companies don’t need to individually keep a balance of goods and transactions in excel. Instead they can use blockchain and smart contracts to store balances, record transactions, and apply mass balance rules. Every transaction is fully traceable. Auditors can therefore rely on the blockchain for parts of the audit,” said Mesbah Sabur, Circularise’s Founder. “
Material traceability and verification of data at individual sites and across the value chain were guaranteed by ISCC Plus certification of each site of the operators, requiring site-specific audits, certification and mass balance calculations to provide reassurance about the sustainable content. The data was uploaded to the Circularise software system to improve mass balance bookkeeping and reporting.
According to ISCC System director Jan Henke, certification will only become more digital in the future, allowing certification schemes to simplify the auditing process of the supply chain actors and reducing the risk of mistakes.
“Companies will have an easier way to show compliance and adhere to auditing rules,” said Henke.
Currently, the chemical sector is engaged in significant sustainability transformation efforts, including rethinking the use of raw materials, circularity, and climate impact of operations and entire value chains. This transformation is largely built upon sourcing new, more sustainable feedstocks, while maintaining efficient processes, a viable economy and high credibility.
Certification schemes providing an option to use the mass balance system can facilitate a gradual switch towards increasing the replacement of fossil feedstock and materials with renewable and recycled raw materials, while enabling the use of existing infrastructure and equipment instead of constructing parallel plants and value chains. In the mass balance system, data storage and data integrity are key elements in verifying sustainability and compliance with the certification requirements.
Yet the mass balance approach remains relatively new and unknown in the plastics and chemicals industries This project allowed the participants to gain a better understanding of the topic, to align their internal processes with ISCC Plus requirements, and test a new, future-proof way for bookkeeping of mass balance credits - all while easily sharing them across organisations. Overall, this allowed value chain actors to better substantiate sustainability claims and improve collaboration.
Ultimately, the project indicated that blockchain technology will play a critical role in complementing supply chain certification to enable certification schemes to simplify the auditing process of supply chain actors, reduce the risk of mistakes and accelerate the transition towards a more sustainable plastics economy.