A non-fungible token model for tracking emissions in the fuel value chain

Abstract

We introduce a novel framework for tracking greenhouse gas (GHG) emissions across a fuel supply chain. It facilitates the exchange of emissions inventory data between organizations to determine a products cumulative carbon footprint based on the Life Cycle Assessment (LCA) methodology. It offers a systematic approach to exchange data and overcome challenges in reporting indirect value chain, or scope 3, emissions. We highlight how the tracking system can impact reporting transparency, accuracy and reliability, while also addressing data privacy issues and commercial interests of participating organizations. The framework has been implemented within the Hyperledger Labs Blockchain Carbon Accounting Project using the ERC-1155 multi-token standard. A Net Emissions Token network is used by registered dealers to issue tokens for audited emissions data or carbon offset credits. These are aggregated into non-fungible tokens (NFTs) within the Carbon Tracker network. The NFTs represent unique emissions profiles that are linked to product quantities used to transfer inventory data between organizations. We present stylized examples based on emission performance certification in voluntary markets, cross-border trade, and for performance based financing.