Here’s How Borealis and Covestro are Using Blockchain to Trace Plastics in the Supply Chain
Blockchain technology is rapidly proving itself to be an incredibly useful tool when it comes to creating ever more transparent, secure, and trustworthy supply chains.
As the technology which underpins the cryptocurrency speculation bubble, few people even understand how blockchain works, or that it has applications outside of its use in the world of finance. Unfortunately, this means that the term blockchain is often used synonymously with cryptocurrency which leads many people to dismiss it out of hand as just another part of that swindle.
However, the secure hash-coded ledger system offered by blockchain technology is being deployed by the chemical industry to make sure the volume of plastics being used in its supply chain is kept to an absolute minimum.
Borealis and Covestro
As frontrunners in digital transformation, it is unsurprising that the chemical business has been leading the way in this regard and industry heavyweights Borealis and Covestro have now signed a special partnership with auto manufacturer, Porsche and blockchain technology trailblazer, Circularise to track plastics in the automotive supply chain.
“Circularise, as part of the Startup Autobahn innovation program, recently launched a project with Porsche and its pioneering material suppliers to enable the traceability of plastics on blockchain and to ensure that the use of sustainable materials in Porsche cars can be proven,” said Borealis in a press release. “By digitizing materials Circularise was able to create a digital thread through the whole supply chain, enabling material traceability, tracking the CO2 footprint and other sustainability metrics like water savings.”
The blockchain technology provided by Centralise creates a decentralised information sharing process which provides a way for all parties to view all relevant information at any time. Using blockchain removes the need for a go-between who would traditionally collate and distribute such data.
The tool collects information from cap part suppliers and lists vast quantities of information, including origin and environmental footprint. A third party can then audit the material batch and verify that the materials listed and the claims regarding their sustainability are true. This then means, car manufacturers such as Porsche can, at any time, access this information and gain greater insights into the materials which make up their vehicles – particularly in regard to chemical based and potentially environmentally harmful materials such as plastics.
“Verification is essential. Even with a supply chain involving blockchains we want independent auditors for our system,” said Borealis Vice President of Strategy and New Business Development, Christopher McArdle. “And this is how we gain the trust and confidence of all our value chain members. Several years from now, after these systems are in place on a wider scale, things will have been standardized. For now, it’s still early days. Auditors and certifications are essential to ensure that no one can engage in greenwashing.”
Blockchain
This revolutionary technology is creating new opportunities for the chemical supply chain business, and we need to see it come out from under the shadow of cryptocurrencies such as Bitcoin and Ethereum to reach its full potential.
Blockchain works by creating packets of data or blocks each time a new transaction occurs. Each block in the chain contains a complex hash code which also contains data relating to all the previous blocks. This, combined with the fact the blockchain is not stored in one location, is what provides the technology with its much-vaunted security and transparency. Anyone in the value chain can view the information at any time, but nobody can change any of the information without breaking into several servers around the world at the same time. By creating digital copies of each batch and storing them on the blockchain, Borealis and Covestro are able to offer its customers the kind of supply chain transparency they demand.
“A number of suppliers who can deliver sustainably produced materials for the automotive industry were involved in this project to realise the final outcome,” said Borealis. “Each batch of material was digitized on the blockchain receiving a digital copy called digital twin. The digital twin carries all relevant information regarding the batch, such as its environmental footprint and origin. This digital thread created transparency between project partners leading to an improved supply chain collaboration.”
Final Thoughts
Blockchain is a truly exciting technology for the supply chain business – especially for the chemical industry where potentially environmentally harmful material are being moved around the world. With the increasingly global nature of chemical supply chains, the need for increased transparency and accountability has never been greater.
You can hear Borealis Head of Global Logistics, Jan Roed, Covestro Senior Vice President, Head of Supply Chain & Logistics, EMLA, Hanno Bruemmer, and many more industry experts speak at LogiChem 2022, being held in March at De Doelen ICC Rotterdam, The Netherlands. Download the agenda today for more information and insights