Maritime Blockchain Labs: Shipping Emissions MRV

Building digital infrastructure to enhance coastal community health and safety through traceability of shipping emission and enforcement of environmental regulations.

Shipping emissions pose a disproportionate threat to the health and safety of coastal communities, in addition to impacting economic, social, environmental and political stability worldwide. The effects of GHGs and non-GHG emissions (sulfur oxides, nitrogen oxides and particulate matter) include rising sea levels, marine biodiversity destruction, acid rain, reduced agricultural yields and water contamination. Furthermore, toxic emissions from shipping has been reported to cause cardiovascular and respiratory diseases, accounting for as many as 60,000 cardiopulmonary and lung cancer related deaths annually with most deaths occurring near coastlines in Europe, East Asia and South Asia.

Addressing the systemic root of the challenge is about improving data transparency and accountability in the fuel supply chain, unlocking decade long processes that have been exposed to fraud and misappropriation. Currently, there is little pressure on marine fuel suppliers and fuel  terminals to provide quality fuel since shipping companies do not have access to quality assurance data prior to purchasing. New regulations seek to address fuel quality and thus bring down emissions, but coordination in the form of data collection and reporting is lacking and thus enforcing these regulations is difficult for coastal communities/port states.

Therefore, BLOC has established a consortium of industry and technological partners to create a solution that addresses traceability and transparency in the marine fuel supply chain. The consortium consists of industry partners who have provided the problem statements, expertise and testing, BLOC and their technology partners have developed the matching blockchain solution on open source Hyperledger, and it will be piloted in the Port of Singapore with expected expansion into the Port of Rotterdam and Port of LA, to start. This solution will demonstrate the use of blockchain to secure the chain of custody for marine fuel data in a real world setting. The solution will create a decision support system for enforcing and complying with global environmental regulations.

This is the first of three demonstrator labs as apart of Maritime Blockchain Labs (MBL) as funded by Llyod’s Register Foundation with focus on the areas of risk, safety and decarbonisation. The objectives are to inclusively create, demonstrate and trial blockchain solutions in industry, establish a network/community of users within maritime and foster collaboration between blockchain practitioners and industry actors to share knowledge and best practices and ensure that solutions are interoperable. This will serve to de-risk, standardise, demonstrate, validate and scale the opportunities that blockchain technology enables.

Present also in the energy and climate sectors, our solutions centre around ecosystem capacity building and open collaboration. We aim to get real-world applications on the ground as soon as possible, and to share knowledge and methodologies among users. Blockchain is fundamentally a collaborative technology and will only truly transform our industries and society if we are all working from the same or interlinked systems, rather than competing. We are agnostic to the technology or blockchain used so long as it addresses the problems we are trying to solve and that it is tested, scalable and secure.

Following extensive research we identified the bunker industry’s multiple, complex transactions as an ideal use-case where blockchain technology can increase transparency, create better compliance and stronger governance. Our innovation derives from our resolve to strengthen the governance of port-bunker operations by implementing blockchain technology to ensure transparent procedures for monitoring, reporting and verification of CO2 emissions and in collaboration with relevant stakeholders, including authorities and civil society organizations. This type of inclusive upstream technological development is unique and innovative, especially in the maritime and blockchain sectors. Our approach to collaborative ecosystem building is also a unique business-model innovation.

Technology is integral in providing the assurance, traceability and security of information used to make decisions that affect the physical world. Ports are equipped with Mass Flow Meters and we gather data from lab testing services and fuel suppliers to trace the purchases of fuels back to their origins. When a ship fuels at any port, this data will be automatically captured, tagged to the ship and secured. This provides a secure the chain of custody and link the physical and digital for marine fuel data to create a globally accessible support system for global environmental regulations.

First quarter: technology development, testing, iteration and piloting in industry with consortia, documentation of the business case and value propositions for regulatory compliance and launching the demo at various industry conferences. Second quarter: onboarding of additional users (port authorities, terminal operators, fuel purchasers), data providers for uptake of solution and embedding solution in digital infrastructure in Singapore, Rotterdam and LA ports. Third and fourth quarter: onboarding more port authorities, venture building partners, finalise feasibility study including plan for go to market, scaling and replicating system to shipping and various transport sectors for emissions MRV.

The shipping industry is the backbone of our economy, yet it uses the dirtiest fuel, accounts for 10% of carbon emissions and is largely overlooked. We have been able to obtain significant data and create transparency and traceability in the world’s largest bunkering port (Singapore) from just the piloting phase. After a year of use in the industry, and when used in various ports and in combination with other systems, we believe we will begun to enable port states/coastal communities worldwide to enforce environmental regulations, reduce emissions in shipping and generate tax revenues for their communities.

By focusing on ecosystem-building, our partners and beneficiaries are directly invested in solutions. We retain beneficiaries by continuing to bridge digital, physical and the supporting ecosystem. After demonstrating this solution in the global context with our first 5 ports from year one, we will integrated by aligning with the global ports sustainability programme and the 55 ports that have signed the World Ports Climate Initiative. As ships’ fuel purchase history can then be traced between ports with this system, this design is scalable, replicable and geographically agnostic. On-boarding ports will create efficient global transfer of emissions reporting and global compliance.

The Maritime Blockchain Labs is currently serving the Port of Singapore (the world's second busiest port) directly benefiting the ecosystem of partners with additional benefits to those working on the ships and ports, and living in the heavily urbanised city (population 5.6 million). A significant proportion of the population is directly exposed to emissions which can contribute to health problems (particularly fo children, the elderly and outdoor and sector workers). Moreover, since the ships participating in our solution, travel globally the impact on emissions is distributed to the international port network and can be scaled globally.

We will be scaling through partners and ports with 4 ports this year and 3-5 ports per year thereafter. As our focus is on reducing toxic emissions from shipping we will be serving  coastal communities globally as shipping causes 60,000 cardiopulmonary and lung cancer related deaths annually with most deaths occurring near coastlines in Europe, East Asia and South Asia. Additionally, we are addressing the tremendous challenges facing the marine and energy sectors  to create alternative solutions that transform value chains and challenge the status quo, making them fairer, more equal and more democratic. 

The core team of 10 includes experts in shipping industry, software development (blockchain), systems design and engineering, financial management and investment, cybersecurity, education and research, regulations and policy, and international business development.

Our CEO has a decade of experience in applying and scaling industrial technologies. Our CFI is from the shipping industry. Our CSO helped develop the World Bank’s Blockchain carbon markets framework and the EU’s largest cleantech innovation partnership program.

We are a diverse team in terms of gender, age, sector, region and backgrounds.

In additional we have15-30 distributed suppliers and 50 industry collaborators (across maritime and energy sector).

We seek sovereign funding for the seeding and upstream development of solutions. If these solutions are validated, verified and proven to be scalable and secure, we then invest the in the long-term sustainability of these solutions and their go to market strategy. This can be done through a myriad of partnerships such as spin-outs, join venturing, equity investments and incubating the solutions. 

Short-term revenue streams: grant funding, industry sponsorships and memberships, revenues from the software-as-a-service and licensing fees of IP created. 

Long-term revenue: portfolio of sustainable technologies, solutions and equity ventures. 

We measure our success by our social, environmental and economic contributions and metrics.

Governance is a vital part of BLOC’s models. Technology in isolation cannot change inefficiencies and inequalities in global value chains – governance is an essential element in making sure it is used effectively. As such, BLOC applies as much emphasis to building consortia, demonstrating and testing, as much as we do to building the technology itself.

We have received significant funding from the Danish Maritime Fund, the EU Climate-KIC, and from the Lloyd's Register Foundation.

Solve can help to create awareness and partnerships with ports, regulatory bodies, industry actors, sustainable fuel suppliers, and complementary technology and solution providers as well as peer review, critique, advising and steering for the solution together with our governance partners. Blockchain is fundamentally a collaborative technology and will only transform our society if we are all working from the same or interlinked systems, rather than competing. We are agnostic to the technology so long as it addresses the needs and that it is tested, scalable and secure. We welcome any partners attempting to solve for these challenges.

Solve will help us address four key barriers:

Advocacy and awareness by igniting the public and private spheres to engage with an industry is not highly visible yet affects them greatly;

Solution uptake and integration by championing and advocating best practices;

Leveraging impact and investment through further legitimacy and co-financing to onboard more partners (including in-kind contributions and those helping to build the solution); and

Capacity building by ringing forward further actors from sustainable development and affected regions to engage in meaningful change in the shipping sector with major impact on the quality of life in coastal communities and oceans.