GSBN, Cosco Complete Blockchain-Based Biofuel Certification Pilot

by Jenny Messenger (Global Trade Review) Hong Kong-based consortium Global Shipping Business Network (GSBN) has concluded a pilot project with Cosco Shipping to issue blockchain-based certificates for biofuel purchases.

GSBN’s Hi ECO product uses its blockchain-enabled network to establish a link between the proof of sustainability certificate issued to buyers and the green certificates issued to sellers.

This “guarantees that each green certificate corresponds to an actual purchase of biofuel”, GSBN says.

The certificate records key metrics, including the amount of CO2 emissions saved, the number of twenty-foot equivalent units transported and the quantity of biofuel used in a given period.

The scheme is designed to “enhance market confidence in GHG [greenhouse gas] reduction claims” and make sure that all claims to using biofuel can be documented transparently.

The consortium says this is the first step in its plans to “document the entire biofuel procurement process, from its source to its consumption, on the GSBN blockchain”.

“The completion of this pilot with Cosco is a positive step towards ensuring that green claims are traceable and verifiable,” says GSBN’s chief executive, Bertrand Chen.

“In doing so, we can create a virtuous cycle in which the value of green shipping can be accounted for to justify investment and further expand green shipping over time,” he says.

The certificate aids Cosco’s plans to reduce emissions through the “entire well-to-wake cycle”, adds Tang Wei, strategic customer developing and maintaining department manager at Cosco Shipping.

Tracking well-to-wake emissions means taking into account emissions from the point of fuel production all the way through to emissions from a ship’s exhaust, as opposed to tank-to-wake, which only tracks them from when the ship’s tank is filled with fuel.

The International Maritime Organization’s (IMO) life cycle assessment guidelines govern the calculation of well-to-wake emissions and were adopted in July 2023. Further development of the guidelines is due to be discussed in September this year.

Last month, the IMO agreed a “possible draft outline” of a net-zero framework, including a new global fuel standard and a global pricing mechanism for maritime GHG emissions.

The fuel standard would see marine fuel’s GHG intensity reduced through a series of phases, while the pricing mechanism would require shipping companies to pay a fee for every tonne of carbon they emit by burning fuel.

The IMO agreed revised GHG goals in July last year, targeting a 70% reduction in total emissions by 2040, with net zero to be attained “by or around” 2050. READ MORE

Excerpt from GSBN: The completed pilot sets to enhance market confidence market confidence in GHG reduction claims -- Global Shipping Business Network (GSBN), a neutral, not-for-profit consortium enabling paperless, accessible and sustainable global trade with its data infrastructure and ecosystem of partners, has completed a pilot with COSCO Shipping (COSCO) to issue traceable and verifiable green certificates powered by blockchain technology.

As global shippers step up to their corporate responsibility of safeguarding the environment, leading corporations have started to pay a green premium on biofuel usage in exchange for Greenhouse Gas (GHG) reduction claims or Green Certificates. To increase traceability and verifiability, COSCO has partnered with GSBN, an established neutral party in the shipping industry, to launch its Hi ECO blockchain-based shipping product. GSBN leverages its blockchain-enabled network to establish linkage between the Proof of Sustainability (PoS) Certificate, which documents the purchase of biofuel by the carrier, and Green Certificates issued to corporations. This connection guarantees that each Green Certificate corresponds to an actual purchase of biofuel, instilling confidence in the marketplace. Furthermore, the technology enables easy verification through attestation, allowing stakeholders to validate the veracity of the claims. This enhances credibility and establishes a foundation of trust among all participants involved in the shipping process.

Establishing a connection between the Proof of Sustainability and the Green Certificate is merely the first step. The ultimate goal is to document the entire biofuel procurement process, from its source to its consumption, on the GSBN blockchain. GSBN’s vision is to create a transparent and continuous chain of custody of biofuels, thereby upholding the integrity of environmental claims linked to biofuel.

Bertrand Chen, CEO at GSBN, said, “Measuring the impact of decarbonisation requires access to trusted data. The completion of this pilot with COSCO is a positive step towards ensuring that green claims are traceable and verifiable. In doing so, we can create a virtuous cycle in which the value of green shipping can be accounted for to justify investment and further expand green shipping over time. We look forward to working with our members and partners to deploy even more solutions to assist their decarbonisation transition.”

Tang Wei, Strategic Customer Developing & Maintaining Department Manager at COSCO Shipping, said, “The Hi ECO Certificate complements our commitment to reducing emissions throughout the entire Well to WAKE cycle, and underpins the value we aim to provide our customers through green shipping. This pioneering solution has been further guaranteed to be fair and equitable through GSBN which serves as a neutral party and through its blockchain-enabled platform, provides our customers assurance of immutability and traceability.”

The Global Shipping Business Network (GSBN) is a neutral, not-for-profit consortium whose mission is to enable efficient, paperless and sustainable growth in global trade with its data infrastructure and ecosystem of partners. GSBN facilitates trusted collaboration between participants across the shipping industry to enable greater efficiencies, paperless trade as well as supporting the shipping industry’s decarbonisation transition.

GSBN’s ecosystem includes shipping lines, terminals, banks, application developers and other consortia. The entire network accounts for more than half of the containers handled in the world.

COSCO SHIPPING Lines is engaged in domestic and international maritime container transport services. With 503 container vessels with a total capacity of 3.08 million TEUs, COSCO has the fourth-largest fleet in the world. Operating 403 international and domestic shipping routes covering 602 ports in 144 countries, COSCO is committed to building a globalised and digitalised container supply chain service system, providing high-quality “End-to-End” transportation solutions for customers. READ MORE