Circularise empowers transparent material sourcing in blockchain technology partnership with Marubeni Japan

16 Feb 2021 --- Circularise is introducing its blockchain technology for increased transparency in plastics supply chains to Japan in partnership with diversified trading conglomerate Marubeni.

With the circular economy now a key strategic investment for many businesses, Circularise equips value chains with a public blockchain platform to allow material information to be shared while maintaining privacy over sensitive data.

Circularise will conduct demonstration projects with Marubeni’s domestic clients and investigate the benefits of a joint venture in Japan to commercialize its service.

“By working together, Marubeni and Circularise will contribute to the realization of a sustainable society and over the years put all supply chain actors in the position to implement circular economy practices at scale,” explains Jordi de Vos, Circularise founder.

Bridging the physical and digital worlds
Blockchain is essentially a series of data records or “blocks” managed by a cluster of computers or “nodes,” Igor Konstantinov, growth and business development at Circularise, tells PackagingInsights.

“Crucially, they are not run by a central authority, which makes this a far more democratic system – one that is open to building greater transparency along the supply chain.” 

On a practical level, Circularise uses blockchain to create a digital twin (or a virtual version) of a material, component or product.Circularise uses blockchain to create a digital twin (or a virtual version) of a material, component or product.

“Think of a digital twin as a bridge between the physical and digital world. This digital twin, however, can have all the information stored on blockchain that its physical version is lacking in the real world, including the quantity, ownership, (references to) material information and processing conditions,” continues Konstantinov.

“Now this information is on blockchain, Circularise protocol can allow companies to selectively disclose relevant information about their supply chains, products and materials without having to share sensitive data and risk losing their privacy.”

Transparency building blocks
Chemicals and plastics supply chain operators are increasingly sourcing raw materials from sustainable systems. However, validating sustainability claims has proven to be a problem due to a lack of an efficient and trustworthy data-sharing infrastructure, according to Circularise.

For Konstantinov, the main benefit of using a public blockchain is decentralization. Instead of data being stored on a centralized system run by a single entity (or small group of entities) controlling the system, public blockchains are freely available.

“Thus, public and open blockchains support use cases such as public and transparent ledgers where everybody can read and verify data. Supply chains are a prime example as they are multi-dimensional and often touch different industries,” he explains.

Transparency versus cost
One of the challenges of sharing information from the supply chain is the conflict between transparency at the cost of supplier and manufacturer privacy.

“For example, the materials’ certification is an important transparency characteristic for manufacturers and consumers alike. However, a product’s material composition may be of competitive advantage and suppliers might not be willing to share it,” Konstantinov notes.Chemicals and plastics supply chain operators are increasingly sourcing raw materials from sustainable systems.

Circularise developed a patent-pending Smart-Questioning technology to address this concern, enabling verified statements on public blockchains without revealing any underlying data. 

Porsche-proven technology
Circularise has partnered with leading companies such as BASF, Covestro, Domo Chemicals, Stanley Black & Decker, Arcelik, Porsche and a number of their Tier 1-2 suppliers in a paid pilot setting.

“In the most recent project with Porsche, we enabled the traceability of plastics on blockchain to ensure the use of sustainable materials in Porsche cars,” Konstantinov tells PackagingInsights.

“By digitizing materials, Circularise was able to create a digital thread through the whole supply chain, enabling material traceability and tracking the CO2 footprint and other sustainability metrics like water savings.”

Scale-up plans
Circularise plans to implement its technology at scale with a selection of plastic producers in 2021.

“Our technology is being evaluated by the EU-level trade association of European plastics converters (EuPC) to use Circularise as the digital platform to monitor the rate of the plastics recycling activities in Europe,” adds Konstantinov.

The blockchain technology can be particularly effective in monitoring Extended Producer Responsibility (EPR), as more countries turn to these systems to decrease waste.

In September 2020, Circularise was awarded a €1.5 million (US$1.2 million) grant by the European Commission.

This year, Circularise also aims to launch an initiative focused on establishing the open protocol – a non-proprietary, no vendor-lock system for transparency designed to prevent monopoly.

By Joshua Poole