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The global push for sustainable development has led to a significant focus on transitioning to cleaner and more environmentally friendly energy sources. Nearly 200 countries at the Cop28 climate summit have agreed to a deal that, for the first time, calls on all nations to transition away from fossil fuels to avert the worst effects of climate change.
This shift, known as the energy transition, aims to reduce greenhouse gas emissions, combat climate change, and create a more sustainable future.
One crucial aspect of the energy transition is the transformation of the transportation sector, which accounts for a significant portion of global emissions.
Heavy industrial and transport sectors, which account for more than 40% of global greenhouse gas emissions, need multifaceted solutions that accelerate the speed of technology development, build supporting infrastructure, and raise necessary capital to finance the transformation. A robust and ambitious policy agenda, supported by collaboration across sectors and between countries, is critical to aligning the decarbonization of heavy industrial and transport sectors with the pathways aligned with net-zero emissions by 2050.
As the world moves towards a decarbonized future, transition fuels play a vital role in bridging the gap between traditional fossil fuels and renewable energy sources. These fuels, such as Hydrotreated Vegetable Oil (HVO) or Renewable natural gas (RNG), offer a cleaner alternative to conventional diesel and gasoline. HVO is produced from renewable feedstocks, such as vegetable oils and animal fats, through a hydrotreating process. It can be used as a drop-in fuel in existing diesel engines without requiring engine modifications, making it compatible with existing fleets and infrastructure. RNG is produced from organic waste such as manure, food waste, or sewage and can serve as a drop-in replacement for natural gas in numerous applications, including motor vehicles, domestic heating, and industrial processes.
However, their reduction in emissions happens through the sourcing and production of the fuel itself, making supply chain and raw material traceability essential to proving the sustainability of this option.
Finboot’s MARCO Track & Trace technology enables digital traceability ecosystems for large industrial companies to help them gather and share supply chain and product data in a secure, reliable, and trustworthy way.
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Electric vehicles have gained significant traction in recent years as a sustainable alternative to internal combustion engine vehicles. EVs are powered by electricity stored in rechargeable batteries, eliminating tailpipe emissions. The widespread adoption of EVs relies on the availability of a robust charging infrastructure. Governments and private companies are investing in the development of charging stations to meet the growing demand for EVs. Additionally, advancements in battery technology are increasing the range and efficiency of EVs, making them more practical for everyday use.
At the COP28 climate change conference in Dubai, more than 130 national governments, including the European Union, agreed to work together to triple the world’s installed renewable energy capacity to at least 11,000 GW by 2030.
There is a need for more supply chain transparency to accelerate the circular transition. The Commission’s proposal for an Ecodesign for Sustainable Products Regulation (ESPR) includes obligations for a digital product passport (DPP). As a central digital and policy tool, the DPP is expected to revolutionise the way product-related data is collected and shared across supply chains. Batteries are the first product group for which the use of a DPP will be a legal requirement as of 2027, through the recently adopted Battery Regulation.
Following the 2023 revision of the EU Battery Legislation, the Chinese government launched the development of a Chinese digital battery passport. The aim is to facilitate trade with the EU, by requiring similar data transparency requirements along the EV battery value chain in China, such as carbon footprint, circularity, and ESG.
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The World Economic Forum's latest briefing paper makes a powerful case for a holistic digital vehicle passport (DVP) to accelerate the automotive industry’s journey to circularity.
This WEF briefing paper outlines that a DVP should combine the EU’s proposed circularity vehicle passport (CVP) and environmental vehicle passport (EVP). A holistic DVP should include: General vehicle information (e.g. registration numbers, ownership history); Upstream information (e.g. Scope 3 emissions of vehicle materials, supply chain due diligence); Vehicle use information (e.g. events tracking and accident history); and Downstream information (e.g. component disassembly information).
Such an approach would support informed purchasing decisions by increasing transparency. The transparent sharing of information is key to helping build trust while setting global standards. Compliance requirements are also being upgraded with the addition of ESG metrics. Such Digital Product Passports (DPPs), like CVPs and EVPs, and hopefully DVPs in the automotive sector, need to capture the entire life cycle of a product through its supply chain. This provides invaluable data for a regulator, but only if the data has integrity and trust.
By tracking products throughout their lifecycle, MARCO Track & Trace can help identify opportunities to recycle or reuse them at the end of their lives, making it simpler for the end-users to make informed decisions about their purchases and recycling habits. MARCO Track & Trace collects data about the product's journey from raw materials to finished goods, including information on the energy used, the emissions generated, and the waste produced. In addition, it would help businesses to design products with sustainability in mind.
The data is stored on a blockchain, a distributed database that allows for transparent and tamper-proof data sharing. The digital product passport can verify the sustainability of a product and ensure that it meets environmental and social standards.
Why Use Digital Product Passports?
Hydrogen fuel cell vehicles (FCVs) are another promising technology in the energy transition. FCVs use hydrogen gas stored in onboard fuel cells to produce electricity, which powers the vehicle's electric motor. The only byproduct of this process is water vapour, making FCVs emission-free. However, the widespread adoption of FCVs faces challenges, including the availability of hydrogen refuelling infrastructure and the high cost of fuel cell technology. Efforts are underway to address these barriers and promote the use of hydrogen as a clean energy source for transportation.
Hydrogen is considered an alternative fuel under the Energy Policy Act of 1992 and qualifies for alternative fuel vehicle tax credits in the United States.
Finboot's MARCO Track & Trace is a digital traceability solution powered by blockchain. MARCO Track & Trace enables trusted shared record-keeping between stakeholders in a supply chain. It empowers businesses to easily configure and create digital product passports and to manage their ESG and sustainability data through end-to-end traceability and visibility (from raw materials to finished products).
It can store, track, and share data regarding suppliers, quality control checks, production processes, sustainability claims, and much more. Moreover, it involves an automated calculation of a product's carbon footprint, and also includes automated reporting of sustainability credits and mass balance ledgers, aligning book keeping with physical tracking.
To support the transition to cleaner fuels and technologies, the development of infrastructure is crucial. This includes the establishment of refuelling and recharging stations for electric and hydrogen vehicles. Governments, private companies, and international organisations are investing in the expansion of this infrastructure to facilitate the widespread adoption of sustainable transport options. The availability of a comprehensive network of refuelling and recharging stations is essential to address range anxiety and ensure the convenience of using alternative fuels and technologies.
The new Regulation for the deployment of Alternative Fuels Infrastructure (AFIR) sets mandatory deployment targets for electric recharging and hydrogen refuelling infrastructure in the road sector. Fleet-based targets will ensure that the publicly accessible recharging infrastructure for cars and vans grows at the same speed as the electric vehicle fleet.
As you can see, legislation plays a crucial role in driving the energy transition in the transport sector. Governments worldwide are implementing regulations and standards to encourage the adoption of cleaner fuels and technologies.
The European climate law makes reaching the EU’s climate goal of reducing EU emissions by at least 55% by 2030 a legal obligation. EU countries are working on new legislation to achieve this goal and make the EU climate-neutral by 2050. For example, the European Union has introduced the ReFuelEU Aviation and FuelEU Maritime regulations to increase the use of sustainable aviation fuels and decarbonize the maritime sector. These regulations set targets for the minimum share of sustainable fuels, ensuring the reduction of greenhouse gas emissions in these industries.
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To achieve net zero by 2050 or sooner, industries must tackle Scope 3 emissions at a much faster pace. This requires companies to take responsibility for emissions beyond their immediate operations and make profound changes throughout their products and business models, using emerging technologies and embracing new partnerships across value chains.
In 2022, the World Economic Forum launched the Industry Net Zero Accelerator initiative to help accelerate the industry transition to net zero. The paper highlights emerging opportunities and best practices presenting 12 “No Excuse” opportunities for businesses and governments to accelerate their Scope 3 decarbonization journey. These opportunities are grouped into four action levels:
In the pursuit of a transparent and sustainable supply chain for electric vehicles, data plays a crucial role. By leveraging advanced technologies like blockchain, companies can ensure transparency, traceability, and accountability throughout the entire lifecycle. Blockchain technology enables secure and immutable data records, allowing stakeholders to track the origin of raw materials, monitor manufacturing processes, and verify the environmental impact of their production. This data-driven approach fosters trust and promotes sustainability.
The energy transition is driving the transformation of the transport sector, with a focus on sustainable fuels and technologies. Transition fuels like HVO, electric vehicles, and hydrogen fuel cell vehicles are offering cleaner alternatives to traditional fossil fuels. The development of necessary infrastructure, including charging and refuelling stations, is crucial to supporting the widespread adoption of these sustainable options. Legislation and regulations are playing a significant role in promoting the use of sustainable fuels in the transport, aviation, and maritime sectors.
Moreover, digital traceability plays a crucial role in reducing carbon emissions and ensuring the sustainability of the transport sector by improving resource management, enabling emissions monitoring, facilitating supply chain optimization, promoting sustainable fuel usage, and fostering transparency and accountability. These efforts collectively contribute to the reduction of the carbon footprint in the transport sector.
By embracing data-driven approaches and cutting-edge technologies like blockchain, stakeholders can ensure the tracking of the origin, production, and distribution of sustainable fuels. This heightened transparency fosters accountability, bolsters emissions reduction efforts, and aids in ensuring adherence to regulatory standards, thus significantly contributing to decarbonization initiatives.
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