Blockchain Reducing Carbon Footprints?

In the recent UN Climate Change Conference, experts have noticed that a new technology- “Blockchain” could play a significant role in balancing climate change. Currently, it is crucial to fight against the rising global warming. Therefore, non-profitable companies like CDP, Sierra Club, World Wildlife Fund, and Nature Conservancy put global pressures on companies to submit their carbon emission report. Since there is no improvement in global warming, these organizations set its vision to achieve a thriving economy suitable for both people as well as the planet.

Organizations don’t follow any structure for calculating the carbon footprints. They adopt random manual methods to evaluate the carbon emission and deliver it to the NGOs and NPOs.

But, that report is neither accurate nor reliable. Henceforth, implementing the blockchain to calculate CF with the help of IOT enabled Smart meters and smart contracts can provide a measuring standard to the organization.

Before understanding the impact of the blockchain, we shall first understand the Carbon Footprints.

Carbon Footprinting is the total amount of carbon dioxide emitted to the surrounding by companies, individuals, event, or product. Thus, according to the non-profitable companies, considering carbon emission on a daily, weekly or monthly basis through reports can help in reducing its impact on the environment. The last three glacial cycles statistics noted from ice cores say that the current level of CO2 has reached upto 448 ppm. It means the level is now 36% higher than the highest level recorded in the last 400,000 years. Therefore, it is essential to evaluate carbon emission to save the climate while reducing pollution.

Author’s Bio


Akash Takyar

CEO LeewayHertz

Akash has built over 100+ digital platforms used by millions of consumers. Akash is a core member and ambassador of Hedera Hashgraph and Hyperledger. Akash has invented a reverse geocoding algorithm used by Uber and Twitter. Akash is a technical architect and has been a consultant to McKinsey, 3M, Simens and Hershey’s. Akash holds a masters degree in computer applications.

Blockchain can be the rescue to this problem, but first, it is imperative to understand how carbon footprinting is calculated nowadays.

Existing way of generating carbon footprints:

  • Every month, representatives manually record the reading from the meters to calculate the total energy consumption or direct emissions.
  • Further, a representative multiplies the meter’s reading with the area’s conversion factor to determine the carbon footprints (CF).
  • The CF value is then added to the spreadsheet file, containing previous month’s records.
  • Lastly, the carbon footprints value of the year are calculated to get the total emission of carbon produced by the organization.

From the above information, what we infer is that evaluating the carbon footprint is a complicated and time-consuming task. Also, the data is not reliable and anyone can easily manipulate it.

For more understanding, let’s discuss the problems faced by the organization while calculating carbon footprint manually:

  1. Manual inputs: Nowadays, measuring carbon footprints is a manual process. From recording the meter’s value to finding the total carbon emission, adding it to the sheet and preparing its annual report. Due to human intervention at every step, it increases the chances of errors.
  2. Time-consuming: Performing every task manually increases the time limit, thus making the entire process time-consuming.
  3. Unreliable: After the reading is taken from the meters, it is stored on the centralized server, increasing the chances of manipulation or data loss.
  4. Security: Also, the security is a big issue as unwanted tampering of data can incur a substantial financial loss for involved parties.
  5. Expensive calculation methods: The manual calculation of greenhouse emissions involve too many intermediaries, adding high cost to the system. It also has the risk of inaccuracy.

Prominent organizations, fuels firms, banks and many technology firms are facing pressure from stakeholders to submit their carbon footprint report annually. But, fret not, the above problems can be eradicated efficiently with the Blockchain.

Let’s discuss how blockchain can decode the complexity of current carbon footprint reporting.

blockchain reducing carbon footprints

Carbon Footprinting blockchain solution can be divided into four stages:

  1. Data Generation
  2. Data Cleaning
  3. Data Processing/Capturing
  4. Data Utilization

Data Generation

To implement the blockchain in Carbon footprinting; it is essential to know the type of data, how and where it is being generated.

Every company whether it is using diesel, coal or solar energy, should be connected with smart electricity meters.

The smart IoT enabled meters generate readings which are used for evaluating the carbon footprints consumed by an organization.

Unlike the existing method, organizations will no more have to take readings manually which are vulnerable to errors due to human intervention.

Data Cleaning and Filtration

Data cleaning is done for adding more value to the data by structuring it.

Since storing unstructured data on the blockchain can lead to inaccuracy and inconsistencies and inefficiencies, information to be saved should be structured, accurate, secured and time-stamped.

Data can be cleaned before storing it on the Blockchain with the help of following three steps:

  • Removing the duplicate data
    Firstly, it is essential to make sure that the data generated by the smart meter is not duplicate. Saving the redundant data could lead to inefficiencies.
  • Data should be compliant
    It is crucial that compliance check is maintained before the carbon footprints get added on the Blockchain. Compliance ensures that every personal information is associated with smart meters is kept secure.
  • Adding metadata
    Adding meta information like companies name, companies address, timestamp, stakeholders and more can make the generated data more structured and efficient.

All the steps mentioned above can add worth to the data to be added to the Blockchain.

Data Processing/Capturing

The blockchain is a distributed ledger technology that can possibly eliminate the pain points of the current way of generating carbon footprints.

We shall now discuss how could blockchain work to calculate the carbon footprints with the company’s electricity generation.

When the data gets stored on the blockchain, the smart contracts will trigger to calculate the carbon footprints based on factors, including energy sources (diesel or coal), meters efficiency, conversion factor and greenhouse gas emission.

Thus, smart contracts based on the above factors help to create a reliable and authenticated CF report, which contains the actual company’s carbon consumption of the year.

Data Utilization

Organizations within the blockchain network can access a company’s tamper-proof records of carbon footprints.
To utilize carbon emissions, companies can do carbon trading.

Carbon trading is an approach used for controlling pollution level by providing incentives to the companies achieving emission reductions.

Therefore, the companies can trade carbon emissions with credits for GHG reductions or sell them to another firm having low emissions.

CF report generated through smart contracts can be used by investors or critical customers to decide with whom they should do business and how much they should invest in it.

There are different types of energy sources through which carbon can be released into the atmosphere.

But we are discussing three significant sources and how the carbon footprint report is generated from each of them.

Case 1-Calculating CF report of the companies run by diesel electricity generator:

  1. The first step is to install an IoT-enabled smart meter (M1), which is connected to the diesel electricity generator.
  2. Then, the smart meter generates the reading and save it directly on the blockchain. Meanwhile, readings can be captured on the weekly, monthly or annually basis.
  3. Later, to calculate the CF report, Smart meter will trigger the smart contracts based on the following factors:
    1. Type of electricity generator
    2. A conversion factor of the particular area
    3. Meters are working correctly or not
    4. Company’s total gas consumption.

    The companies will automatically get the Carbon Footprint value on their mobile apps or web portals using smart contracts.

    Companies can take their carbon footprint report generated with the help of the Blockchain to non-governmental organizations focused on environmental issues.

    Organizations will be able to save their turnaround times they spend on calculating the carbon amount manually. Moreover, they will always have room for improvement by tracing the carbon footprints from time to time.

Case 2: Generating CF report of the companies run by Coal electricity generator:

The process of calculating CF for a coal electricity generator is similar to that of the diesel generator. However, the outcome could be different. CF value will be calculated based on the regions and its conversion factor. So, while keeping all the parameters into consideration, companies connected to coal generator will have different CF.But, the entire process of generating CF report is the same, firms will able to check their CF in their account using the mobile app/web portals.

Case 3:  Generating CF report of the companies run by Solar Energy:

This case is also similar to Case 1 and 2. The evaluation process is the same but will have different outputs.Well, with all three different Cases we have understood that how companies can generate CF reports by using the Blockchain platform.Now let’s proceed with the benefits of using Blockchain to reduce carbon emission.

Benefits of Blockchain-based Carbon Footprint Reporting:

  1. Smart IoT-enabled meters: Installation of smart meters for automatically calculating greenhouse gases, eliminate the manual processing. The meter’s reading will directly go to the Blockchain and will be visible to everyone within the network.
  2. Immutability: Once the data is transmitted to the Blockchain, it is never deleted or altered.
  3. Trust: Since smart contracts enable controlled data disclosure, the organizations can trustfully exchange their footprinting reports with the entities they want.
  4. Transparency: Every authorized member within the network can access the carbon footprint reports generated through smart contracts, bringing transparency to the ecosystem. So, it can help investors make informed investments in the organization having low carbon footprints.
  5. Lower cost: Elimination of human intervention through the entire process of carbon footprints calculation reduces the cost and increases the efficiency.
  6. Traceability: Manual records are hard to trace, but with the use of Blockchain, it becomes easy.
    The Blockchain can help to verify the authenticity of records while preventing the frauds.
  7. Smart Contracts: Business parameters defined in it can help generate an automatic and accurate carbon footprinting reports.

Once the blockchain is adopted in the carbon footprint report generation, it can have a significant impact on the overall industry.

Here is how blockchain could have a considerable impact on the entire carbon footprinting ecosystem:

  1. Awareness: It will be an accelerator in the adoption of this technology for companies to track their carbon footprint. So, firms can take necessary actions in the direction of a greener approach to save the environment.
  2. Timely Reporting: When smart contracts will automate the carbon footprinting process, there will be no delays while submitting CF reports to non-profitable companies.
  3. Environment-friendly: Companies will pay more attention towards nature and work hard to stop damaging the environment.
  4. Fraud-less results: No manipulation, no deletion, and no alteration could be done with the data available on the blockchain.
  5. Improvement checks: Every company can check other’s company’s CF which gives them the scope of improvement. Moreover, the organizations will try hard to emit less carbon and increases its market value.
  6. Maximum ROI: With the regular check on the CF report, the companies will try to reduce its carbon usage. It results in getting more investors, thus, increasing the firm’s return on investment.
  7. Carbon Footprints Exchange: Calculating carbon emission will help out in many ways from environment protection to the increasing market value of companies. Also, the transparency attribute of the blockchain will allow the companies to check the carbon emission of all other firms.
    As everyone’s report is visible to the parties involved in the network, they can exchange their carbon footprints with a company having low emission with crypto-currency. It helps organizations having high emission value reduce its value in the final CF report.
Many organizations have already adopted the Blockchain technology while reaping the benefits of greater transparency, enhanced security, improved traceability and reduced costs. It can have a notable result on the efficiency and accuracy of carbon footprint reporting.Connect with the team of blockchain experts at LeewayHertz to understand how calculating carbon footprint is a hassle-free process using the blockchain.

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