The Barcode of Sustainability: Blockchain’s Impact on Carbon Emissions Monitoring

The Barcode of Sustainability: Blockchain's Impact on Carbon Emissions Monitoring

Written by Kelly Roegies


Imagine if you could track every tonne of carbon emissions as precisely as a barcode on a supermarket product. This is rapidly becoming a reality where blockchain technology empowers companies to proactively meet the stringent requirements of EU regulations such as the EU Emissions Trading System (EU ETS) and the Carbon Border Adjustment Mechanism (CBAM). By leveraging a decentralised ledger, businesses not only adhere to these regulations but also pioneer new standards in environmental responsibility. Furthermore, blockchain’s inherent transparency and immutability prevent the double counting of carbon credits, ensuring that every step taken is both transparent and verifiable.

Blockchain technology functions by creating a decentralised ledger that records all transactions across a network of computers. This setup ensures that data once entered is immutable, which means it cannot be altered or deleted. For carbon emissions tracking, this means every emission recorded on the blockchain can be traced back to its source without any tampering. Practical implementation includes integrating blockchain systems within environmental sensors and IoT devices at emission points. These devices can automatically record emissions data directly onto a blockchain, providing real-time, tamper-proof records.

Leading companies are already leveraging blockchain to monitor and manage their carbon emissions effectively. Major automotive manufacturers like Hyundai and Kia, for example, have integrated blockchain into their production processes to meticulously oversee their carbon outputs across different stages of production. This integration allows for auditable, real-time data that enhances compliance with environmental regulations and helps avoid the pitfalls of double counting carbon credits in the process.

Similarly, consulting giant Ernst & Young has launched an Ethereum-based platform to facilitate detailed tracking of carbon emissions at the product level. Companies can use this platform to monitor their Scope 1, 2, and 3 emissions, enabling them to make strategic decisions toward achieving net-zero emissions. Moreover, the tokenisation of carbon offsets on this platform adds a layer of transparency, allowing for the verification of these offsets by independent third parties, effectively addressing the risk of double counting.

However, the adoption of blockchain in carbon emissions monitoring, particularly networks relying on proof-of-work mechanisms, presents a bit of an irony. These systems are notoriously power-hungry, and their significant energy usage could contribute to the emissions we aim to reduce. Additionally, integrating this new technology to comply with existing complex and layered EU regulations poses a bureaucratic headache, demanding careful consideration and strategic planning.

In conclusion, blockchain technology is already making significant contributions to carbon emissions monitoring. Its ability to enhance transparency and ensure data integrity is proving to be essential in advancing our environmental goals. While leveraging blockchain for compliance and emissions tracking, we must also be mindful of its limitations, including its energy demands and the complexities of regulatory integration. Continuing to refine this technology and its applications allows us to effectively use its unique capabilities to support our sustainability efforts. Through thoughtful implementation and ongoing evaluation, blockchain is helping industry achieve practical and measurable improvements in carbon emissions management.


Further reading:

Blockchain for Climate Action – The European Commission

How blockchain is helping mining companies reduce carbon emissions– World Economic Forum (5 October 2023)


Written by Kelly Roegies

Comments are closed.