IBM just announced the winning prototype to Reduce Methane Emissions with Supply Chain Tokens built by members of Hyperledger’s Climate Action and Accounting Special Interest Group (CA2SIG) has been awarded first place in the 2022 IBM Call for Code Green Practices Accelerator. Each year, the IBM Call for Code challenge seeks the most creative and innovative solutions to help address issues of sustainability.
Reducing methane emissions by the oil and gas industry is a vital step to achieving global greenhouse gas (GHG) reduction targets in the short-term. More than 5% of global emissions are caused by leaked, vented and flared methane gas during oil and gas production. This is a valuable natural resource with a market value exceeding $50 billion.
The team working on the winning prototype is developing an emission certification (token) platform for oil and gas production to support sustainable financing aligned with Environmental Social and Governance (ESG) investing. An ESG investor portal will help integrate verified methane emission metrics into performance-based financial instruments. Learn more about the Hyperledger Climate Action and Accounting SIG solution here.
The prototype uses Distributed Ledger Technology (DLT) to support the management of production and emissions data. This includes both private and public network components. The former includes Hyperledger Fabric emission and product data channels to support the verification of high volume data from oil and gas facilities. Using Hyperledger Cactus, these enterprise data networks are securely connected to Ethereum-based decentralized applications. This combination of DLT protects the privacy and commercial sensitivity of industry data, while providing verifiable metrics that can be tracked and traded as part within the measurement economy for GHG emissions.
In the near-term, our team will focus their efforts on organizing public geospatial data on oil and gas assets and production into a structured database. This is connected to our ESG investor portal to compare a registry of oil and gas assets, and their operators, against benchmarks for U.S. oil and gas production.
In the long-term, our team is designing an emission certification platform coordinated by a Decentralized Autonomous Organization (DAO) that will bring together verification professionals, standard setting bodies, data providers, and other industry stakeholders (e.g., regulators, voluntary carbon market providers).
Our vision is to provide the solutions needed to create an efficient marketplace for climate data that will incentivize corporations to decarbonize their supply chains by unlocking the combined incentives provided by green investment, government regulation, and consumer demand. To help accomplish this in the ongoing development of this prototype, the certificates issued to oil and gas producers are not only transferred to their downstream consumers such as energy and other commodity providers but extended into new certificates that can help provide a total value chain perspective on the waste emissions in the oil and gas supply chain.
Congratulations to CA2SIG community members Bertrand Roux, Si Chen, Arezki Djelouadji, and Sherwood Moore!
Want to get involved? We invite you to visit our Oil & Gas Methane Reductions Page, join our bi-monthly Peer Programming Calls, and/or our Bi-Monthly Climate Action and Accounting General Meetings!