Developments in blockchain technology could revolutionise the way we buy fuels, says BLOC’s Deanna MAcDonald
Blockchain’s value to the supply network has been questioned of late, with many asking
if it has a place outside of cryptocurrency. If the work of BLOC is anything to go by, the erstwhile superstar of the tech world could have a bright future in shipping after all.
Speaking at IMPA London, BLOC Co-founder and CEO Deanna MacDonald, outlined how blockchain was providing traceability for fuels. Preventing unethical vendors from stealing fuel or dumping bad chemicals in batches of bunkers.
“No one knows what fuel they are getting, or where they are getting it from,” MacDonald said. “This is a market where it is price-per-ton that drives all decisions.”
In a demonstration project earlier this year, BLOC traced a batch of biofuels as it was created, processed, blended, and delivered to the NYK vessel Frontier Sky, as it delivered cargo for BHP. Against a backdrop of tightening environmental regulation, the digital paper trail it created allowed regulators and clients to verify that shipping companies were keeping their carbon-cutting promises.
“We need to have fuel that we can actually understand better, in terms of our suppliers having an understanding of the fuel that they’re supplying”
It is a transparency that has been all too rare for the industry, but one that is becoming increasingly relevant. With the global 2020 sulphur cap that is coming into play, shipping companies need to know the grade of fuel they are purchasing, where they are purchasing it from, and its quality.
To combat the issues, BLOC has developed BunkerTrace, a marine fuel assurance tool built in collaboration with two partners. It is like nothing else on the market, combining blockchain accountability with synthetic DNA and high-end fuel testing.
“The shipping sector is the first sector in the world to be able to see this technology come together,” MacDonald said. “We need to have fuel that we can understand better, in terms of our suppliers having an understanding of the fuel that they are supplying.
“Then, when it is adulterated, mixed, blended or touched throughout the supply chain, as operators, we need more detailed fuel analysis. This will helps us to be able to comply with the IMO 2020 regulation.”
“The DNA code added to the fuel contains origin and quality information. It can be time stamped and codified, pinpointing the geography and quality metrics from the start of the supply chain to the end. This means that in a single minute and with one simple test on board the ship, it is possible to verify if the fuel is compliant and tallies with the order you made”
The system is modelled off BIMCO new bunkering contracts as well as legal terms and conditions and traced fuels with the vendor GoodFuels and from a total of 250 vessels worldwide. This allowed BLOC to create a baseline of the value chain from start to finish.
“Now what we’ve done is essentially revamped our systems, so that we have every single form necessary to a bunkering operation,” MacDonald said. “So from bunker delivery nodes to the proof of sustainability forms to the COQ forms that are required. These forms are amendable for any port or any authority that requires different parameters, or any vessel operator that would like
to have them specified to their own operations. They are easily amendable and easily specified for any case example.”
The technology could revolutionise the procurement of bunkers, which should not be taken lightly. The DNA code added to the fuel contains origin and quality information. It can be time-stamped and codified, pinpointing the geography and quality metrics from the start of the supply chain to the end. This means that in a single minute and with one simple test onboard the ship, it is possible to verify if the fuel is compliant and tallies with the order you made.
“In a minute we can tell you all that information,” McDonald told delegates. “That goes from, right now, the current standard of 14 days before you get your test results back. Sometimes you can get it faster in eight or ten days. We have now moved into one minute onboard the ship.
“So if you do not get your specified fuel, you do not put it on. You do not bunker. And if you do not bunker, you do not have to worry about demurrage fees and fines and accountability and the legal situations associated. And you furthermore you do not have to take it out with you out to sea, which could be a year before you come back to debunker. “We are able to do realtime procurement of bunkering fuel. We are able to show the availability of the fuel in the ports. We are able to train a very easy system, that gives you a green light, an amber light, and a yellow light, based on your risk profiles of what their tolerances are. It will change the way marine fuels are bought.”
