The production of raw materials such as steel and aluminum require a significant amount of energy and are among the biggest contributors to global greenhouse gases.
The production of one ton of aluminum, for example, could result in four tons of CO2 emissions if produced using hydroelectric energy or as much as 15 tons if produced using coal.
Consequently, producers are making significant investments in clean energy and other technologies to reduce the carbon emission per ton of raw material produced. By doing so, they can command a premium for their products. Today, large consumers who want to meet their sustainability goals must negotiate individual deals with producers and purchase credits or offsets in the secondary marketplace. This is because it is difficult to distinguish low carbon products from other similar products in the supply chain where fabrication from raw material to finished goods occur.
Currently, there are different ways of regulating and certifying these emissions. They vary by geography, they vary by scope, e.g., cradle-to-gate, cradle-to-grave, etc., and they vary by process, e.g., bauxite to alumina to aluminum, etc.
Groups such as the Aluminum Stewardship Initiative, Responsible Minerals Initiative, and Responsible Steel Initiative are attempting to streamline these certifications. Providing a means by which these certifications can be placed on a distributed ledger in a standardized manner--and attached to a SKU as it transforms from raw material to finished goods--will allow producers to get a premium and consumers who pay the premium to account for it on their carbon ledgers.
The scope of the OriginBX Mining & Minerals ESG Working Group is to build out an open, distributed ledger carbon certification standard to help producers, consumers and supply chain fabricators with their sustainability goals.
The WG will make it possible to standardize how existing carbon certifications can be tracked via use of blockchains for the data that's needed by current and emerging carbon ledger accounting certification standards.
The WG will produce a data representation of the core attributes needed for the standardized representation of a carbon certification on a blockchain with pointers to the attestations provided by the carbon certification bodies.
These attributes are expected to be attached to the SKUs as they travel from mines to factories to distribution centers.
This will be done keeping blockchain interoperability and agnosticity in mind with legacy system IO and connectivity.
The WG is seeking representative participation from a wide spectrum of the industry.
| Type of Organization | Value |
|---|---|
| Producers, i.e., Miners, Ore Processors, etc. | Ability to originate certifications and attest through the supply chain ecosystem |
| Commodity Traders | Ability to ensure premium paid on buy-side for low carbon is recoverable on sell-side |
| Consumers, i.e., Large finished good buyers | Ability to account for low carbon purchases on carbon ledger |
| Banks and FIs | Ability to link financing with sustainability objectives |
| Certification standardizing groups | Coordinate existing certifications with ecosystem wide transferability |
| Regulatory bodies, Carbon offset issuers, trade & tariff regulators, Customs, etc. | Coordinate the development of emerging carbon tracking systems with emerging carbon accounting standards |
| Academia - Business schools and School of Earth Sciences | Observers to the process who can help integrate disparate efforts across ecosystems with emerging standards |
| Other | TBD |
Organizations impacted by these standards are welcome to support the work of OriginBX and be represented in this and other Working Groups and on the Project Governing Board. Contact [email protected] for more information.
Individuals are welcome to make technical contributions as this work progresses.