It’s a chain full of blocks and each block has information like a timestamp and transaction details. You add your block of information to the chain which has all prior handlers’ blocks attached. You can’t change their data, but it’s there. You just add yours and move it along to the next step in the chain. So when something, a feedstock, a product, whatever, reaches the end point, whatever that end point may be, it has a big, beautiful blockchain attached to it with a recording of all previous connections and links.
That’s about the quickest and most basic summary you can get of what blockchain is, yet it’s changing the world. It’s changing the way supply chains work. It’s changing even the way we look at currency with bitcoin.
So how does it work in the bioeconomy? Will blockchain be something that the biofuels and biomaterials industries use on a day to day matter of fact sort of way? Let’s take a look at how some are already using blockchain and what this could mean for efficiency, tracking and transparency and validation for the bioeconomy.
World’s first corn transaction using blockchain
Just recently blockchain changed the way corn transactions happen. New tech start-up Grain Discovery sets its sights on transforming the agriculture industry following the world’s first corn transaction using blockchain. This trade on the Grain Discovery platform is the first step in creating a more modern, transparent, and secure agricultural supply chain.
Founded in 2018 by leaders in the commodities, blockchain, trading and data fields, Grain Discovery aims to revolutionize how farmers trade their grain.
“Farming technology in the agricultural industry is incredibly advanced,” explained Rory O’Sullivan, CEO of Grain Discovery. “However, the way grain is bought and sold hasn’t changed much since our grandparents were farming! In the age of Amazon and eBay, we reckoned the industry deserves better.”
Grain Discovery’s online marketplace allows farmers and buyers to advertise their deals in real time and complete their trades through blockchain, resulting in secure and instant payment and built-in traceability that continues beyond the farm gate.
On December 24, 2018, following the unexpected rejection of two loads of corn, tested on-site to be just over the threshold for vomitoxin – a toxin produced by mould that has damaged much of Ontario’s corn harvest – Prince Edward County farmers Larry Reynolds and Lloyd Crowe used the Grain Discovery platform to find a new local buyer, confirm the trade and receive payment instantly.
“By using Grain Discovery, we were not only able to avoid hours of searching for a new buyer, but found one just down the road, at a better price than the original deal, and were paid instantly,” said Mr. Reynolds.
Grain Discovery is focused on untangling the complicated supply chain paths for grains. The Grain Discovery platform gives more control to both farmers and buyers and has endless applications, from allowing consumers to see the path their food travelled, to calculating the carbon intensity behind the production of food and biofuels.
“We are participating in a number of other pilot projects this year, including tracing soybeans from seeds in Canada to the export market in Japan and coffee from Columbia to your local café,” said Mr. O’Sullivan. “This transaction was the vital first step towards realizing our goals.”
For farmers like Mr. Reynolds it’s a simple equation: “If blockchain technology means a few extra dollars in my pocket and a few hours less trucking, then that’s a win.”
“Blockchain provides both corn producers and processors speed and transparency within the supply chain,” sums up Jim Grey, Former Chair of Renewable Industries Canada and Former CEO of IGPC Ethanol Inc. “Furthermore, emerging issues, such as grain and by-product quality, and the implied carbon intensity within the supply chain, will be better determined as a result of the providence blockchain technology provides.”
World’s first agricultural commodity transaction using blockchain
In The Netherlands, Louis Dreyfus Company, Shandong Bohi Industry Co., Ltd, ING, Societe Generale and ABN Amro completed the first full agricultural commodity transaction using a blockchain platform between the U.S. and China, as reported by NUU in January 2018.
In the test, the enhanced Easy Trading Connect platform was used to execute a soybean shipment transaction from the United States to China and covered the full complexity of the operation, including a larger number of participants and a broader scope. For the first time ever in the agricultural commodities sector, this trade included a full set of digitalized documents and automatic data-matching, thus avoiding task duplication and manual checks.
Time spent on processing documents and data has been reduced fivefold. Other benefits include the ability to monitor the operation’s progress in real time, data verification, reduced risk of fraud, and a shorter cash cycle. This shows huge potential to advance commodity trading and financing.
World’s first bunker delivery using blockchain
Earlier this month, GoodFuels used blockchain to help global mining company BHP and Japanese shipping company NYK fuel up with biofuel, as reported in The Digest. The successful delivery of sustainable biofuels to the BHP-chartered, NYK-owned bulk carrier Frontier Sky with CO2 savings was verified with BLOC’s blockchain fuels assurance platform.
In the Netherlands, GoodFuels Marine and blockchain technology and governance experts Blockchain Labs for Open Collaboration (BLOC) successfully completed the world’s first bunker delivery and transaction using blockchain technology, as reported by The Digest in September 2018.
The delivery represented a landmark moment for the shipping industry, which has traditionally been beset by quality and quantity disputes when fueling vessels. Unlike traditional bunker delivery notes (BDN), a paper document still widely used in the industry, blockchain – a decentralized, distributed and public digital ledger – provides end-to-end traceability of marine bunkering transactions from storage, to the barge or jetty, and on to the vessel’s fuel tank, thereby providing assurance to shipowners, shippers and charterers.
The landmark also represented the first transaction for Maritime Blockchain Labs (MBL), an initiative by BLOC of blockchain pilot projects conducted in collaboration with blockchain practitioners and industry actors. In addition, the event marked the first sustainable low carbon marine fuel delivery as part of the GoodShipping Program, which is part of MBL.
Dirk Kronemeijer, CEO and Founder, GoodFuels Marine, commented: “For too long shipping has been reliant upon paper transaction notes when bunkering, which expose shipowners, shippers and charterers to the potential of being misled on the quality and quantity of fuel. At GoodFuels, we are always striving to break convention – not for the sake of it, but because in this era there is no technological barrier to providing customers better assurance.
“In addition, for GoodFuels Marine, as the world’s first supplier of sustainable ‘drop-in’ marine biofuel, we realise we have to go beyond current standards to ensure traceability. This transaction – the first of many to come – shows the confidence we have in delivering ‘on spec’, sustainable low carbon fuel.”
Deanna Macdonald, CEO, BLOC, added: “This project not only allows us to validate the value of blockchain technology in the marine fuels supply chain, but also to identify incentives to ensure that users input correct information into systems, and that any technology and systems created can be used as widely as possible.
“The bunker industry – with its multiple large volume transactions, and history of fraudulent claims – provides an ideal platform to examine where blockchain’s digital platform can be utilised to increase transparency, and create better compliance and strong governance. The fact that the first transaction was for low carbon fuel makes both the project and the opportunity for the future all the more exciting.”
COFCO, ADM, Bunge, Cargill and Louis Dreyfus
Those are some big names here and they are on top of the latest digital tech. As reported in The Digest in December 2018, in Switzerland, COFCO International Ltd partnered with Archer Daniels Midland Company, Bunge Limited, Cargill Incorporated, and Louis Dreyfus Company to standardize data and digitize global agricultural shipping transactions. Together, the companies are looking to increase transparency and efficiency for customers through digital technologies, such as blockchain and artificial intelligence.
“Emerging technologies like blockchain give us the opportunity to create a transparent, secure and efficient platform and transform global agricultural trade operations,” said Johnny Chi, Chairman and CEO of COFCO International. “Our shared vision is to develop a new standard available to everyone, bringing industry-wide benefits.”
The partnership is initially focused on developing technologies to automate grain and oilseed post-trade execution processes, significantly reducing costs and resources needed to move documents around the globe. Longer term, the initiative will drive greater security, reliability, efficiency and transparency by digitizing manual, paper-based processes tied to contracts, invoices and payments, with a more modern, digitally based approach.
OriginOil and WaterChain
As reported in The Digest in April 2018, in California, the folks at OriginOil have been evolving their technology and applications into industrial water treatment as interest in algae biofuels died down earlier in the decade and are now evolving further by integrating blockchain technology into their new business WaterChain in an effort to offer wastewater treatment for industry powered by their own technologies mixed with blockchain.
In the current times of questionable data, twists and turns, longer supply chains than we ever imagined, more data than we could possibly want, blockchain can really help with the need for transparency, the validation of factual data, and the need for speed when it comes to transactions, payments, verification and more.
Like Ruairi Hanafin, Chief Architect, Grain Discovery said in an exclusive Digest interview, “If there is just one source of truth which everybody can reliably reference, then questions around traceability and provenance can rapidly be addressed.”
Hanafin also said, “What makes blockchain revolutionary is the fact that everybody who uses the blockchain retains the rights and control of their own data – meaning no single participant controls the chain, decides how your information is used, or manages your data on your behalf.”
“Just as the internet is a free public resource for information where businesses can generate value by participating, a blockchain network representing a shared ledger for supply chain participants which through automation, streamlined efficiencies, and selective cooperation when it is to all parties mutual benefit, can generate value for all participants, even those which may ordinarily be competitors.”
For biofuel specifically, “the benefits of blockchain are two-fold: it supports transparent and efficient purchasing of feedstock, like corn or soy, and it gives you the ability to trace the feedstock to its origin which allows you to more accurately calculate the carbon intensity of your fuel and ensure the quality of your by-products, said Rory O’Sullivan, CEO of Grain Discovery. Simply put, “blockchain saves time and money and allows you to better market your fuel and by-products.”
And that is a game changer.