GAMBICA explains how Blockchain technology can help manufacturers

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Nikesh Mistry, Sector Head for Industrial Automation at GAMBICA, explains how blockchain technology can help manufacturers and their supply chain track their collective contribution to the UK’s requirement to reach net zero carbon emissions by 2050.

In June 2019 the UK became the first major economy to pass a law which requires the reduction of all greenhouse gas emissions to net zero by 2050. While this is a fantastic initiative, there are many fears that companies and groups have about how to manage their current and future emissions in order to achieve this target.

At the moment, there is no general standard for measuring carbon emissions. It seems that it has been a challenge to formulate a globally recognised method to calculate a carbon footprint.

In 1997 the Kyoto Protocol sanctioned the carbon credit system in which one carbon credit is issued to any company or group that reduces their carbon emissions by the equivalent of ten tons of carbon dioxide or equivalent gasses. While this is an excellent method for quantifying carbon emissions, worldwide, there are 180 currencies. This, in turn, means the price of a carbon credit earned in one country could significantly vary from another. Moreover, there is no single body of regulation for carbon emissions which means that the measurement, recording and reporting of emissions are prone to discrepancy.

Using blockchain technology is the solution to all of the above complications. What the blockchain can do, is provide a single platform of exchange (similar to a commodities stock market) for every contributor within the supply chain, from manufacturers to distributors. When using the blockchain, companies can work in unison with a transparent, open or closed-ended architecture. The blockchain provides a single unified platform where each network is able to report a level of carbon emissions based upon a standardised metric system. They are then able to exchange carbon credits with others within their value chain network, with the primary goal to reduce their carbon footprint.

The benefit here lies in the ease of collaboration between companies. Take, for example, a laptop. Laptops are mainly constructed from 4 components. A processor, a hard drive, a memory and a screen. Each of these components is usually manufactured by separate companies and supplied to a final equipment manufacturer, who then combines the components and releases them to the public market. At each step, a different level of emission is being produced; therefore it is an extremely difficult task to firstly quantify the carbon emission of a component manufactured product, and secondly to reduce the overall emission.

What the blockchain enables, is for each component producing company to be able to report its emissions and then exchange them with other companies producing the same end product. For example, if a screen manufacturer was able to reduce its emissions enough to earn credits, they could sell the credit generated to the processor manufacturer who may have been unable to do so. Thus, creating a synergy across the supply chain.

With this level of synergy, the possibilities are endless. The blockchain can be utilised by different industries to monitor and help balance the carbon emissions. If we’re able to use this blockchain to spread the concentration of emissions, we are allowing the UK to take a step closer to the 2050 target. The blockchain can act as a ledger for emissions and acts as a solution for issues with measuring and enumerating emission levels.

With technology being the forefront instrument in steering the world through the fourth industrial revolution, it is imperative that we utilise the ability of technology to create a platform which allows communication through all levels of the supply chain. From consumer level within a household, right through to component manufacture. Technology can allow not only an enhanced level of communication but also an increased measure of control and stability to our processes, which in turn means more valuable data is collected, higher levels of security can be implemented and a more accurate reduction in global emissions.

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