The Hague, The Netherlands, September 13: Today, Circularise publicly announced a pioneering joint project with the certification scheme ISCC, material suppliers Asahi Kasei, Borealis, Neste, Trinseo and Shell, original equipment manufacturers (OEMs), brands Arcelik, Philips Domestic Appliances and EVBox, as well as trading companies Marubeni and Itochu, in which partners tested a blockchain system to complement the ISCC Plus certification. These parties were brought together by Circularise and Marubeni. This is the first time that 10 chemical industry players and appliance companies got together to test a blockchain-based digital system to complement a sustainability certification process of complex value chains.
The Circularise’s blockchain-based digital system was tested with the ISCC Plus certification to make auditing of certified parties more efficient, and to strengthen integrity of certified data. Participants utilised a public blockchain enabling authentication, decentralisation and encryption of data verifying material flows and related sustainability attributes. This innovative approach differs from other blockchain projects where companies use a private blockchain operated by pre-selected participants, such as members of a consortium. Instead, Circularise and project partners used a public blockchain, making 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. “We are excited to bring our knowledge in supply chain traceability and data management to project partners to test a public decentralised blockchain with the ISCC Plus certification.”
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.
“Certification will become more digital in the future. It will allow certification schemes to simplify the auditing process of supply chain actors and reduce the risk of mistakes. Companies will have an easier way to show compliance and adhere to auditing rules,” said Jan Henke from ISCC. “We are excited to have tested Circularise’s traceability software on ISCC procedures.”
Currently, the chemical sector is engaged in significant sustainability transformation efforts, including rethinking of 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 to the certification requirements.
One of the greatest challenges the mass balance approach faces in the plastics and chemicals industries is awareness and understanding. Through this project, the collaborating partners managed to deepen their knowledge on the topic, align internal processes with ISCC Plus requirements, and test a new futureproof way for bookkeeping of mass balance credits, while easily sharing them across organisations. Overall, this allowed value chain actors to better substantiate sustainability claims and improve collaboration. Beyond this project 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 sustainable transition.
Circularise is a supply chain traceability provider founded in The Netherlands in 2016. Circularise’s software system helps suppliers in chemicals, plastics, battery materials, metals, and other industries to trace materials and share their environmental footprint without risking their sensitive data. By extension, it helps brands to get visibility into their own Scope 3 emissions and other metrics, which is aligned with the regulatory push around Digital Product Passports, the German Supply Chain Act, and the Corporate Sustainability Reporting Directive.
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ISCC is a global multi-stakeholder, sustainability and greenhouse gas certification scheme for circular and biogenic raw materials. It covers entire value chains from the point of origin of waste and residues or farms and plantations to final products. Via independent third-party audits, sustainability, traceability and chain of custody requirements need to be successfully certified. ISCC has system users in more than 100 countries and is governed by the ISCC multi-stakeholder Association with more than 200 Members. The scheme is continuously being further developed in an open multi-stakeholder approach.
ISCC for the circular economy: https://www.iscc-system.org/about/circular-economy/