A blockchain and internet of things-based information infrastructure for the Chinese automotive sector carbon-credit market

Abstract

Abstract In 2021, 12 fraudulent cases were identified in the Chinese carbon market. As a critical component of this emerging market, China’s carbon-credit scheme in the automotive sector faces several shortcomings, including informational opacity and operational inefficiency, which affect market functionality and fairness. This study develops an information system that integrates blockchain technology and the Internet of Things to manage a carbon-credit scheme. Specifically, we attached carbon credits to each vehicle with radio frequency identification electronic tags and a chained data structure to ensure the traceability and reliability of information flow. We use the distributed ledger technology and establish five distinct types of smart contracts for decentralized operations to ensure that all procedures of the Chinese carbon-credit scheme are standardized and under public scrutiny. The proposed infrastructure has the potential to significantly enhance the transparency and efficiency of China’s carbon-credit schemes.