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Blockchain technology can promote sustainable metals production

Metal production in Sweden has made great strides in terms of sustainability; however, there is currently no system in place to make apparent the benefits of environmentally friendly choices. The new project Traceability – for sustainable metals and minerals may change this.

“Our intention is to create good conditions for sustainable metal products to be competitive; for example, by recycling and reduced CO2 emissions,” says project manager Frida Höjvall of RISE.

As elements, metals are circular; they can be melted down and reused. Although this provides major benefits, it also presents challenges in identifying some form of lasting marking. An environmentally labelled apple is eaten or rots, while metals can be repeatedly used and then smelted down.

Benefiting sustainable stakeholders

In many regards, the Swedish mining industry has come a long way in its sustainability work. Unlike the food sector however, there is currently no way to purchase fair-trade or environmentally labelled copper for example. Copper prices are currently decided by the global market.

“We believe that there is a value in sustainably produced copper, and that the market is willing to pay for this value,” says Frida Höjvall.

This is where RISE comes in; together with the mining industry, we are investigating how to create a system that benefits sustainable stakeholders, something that in turn will promote the development of a sustainable industry.

“SveMin, the industry organisation for mines, mineral and metal producers, is the owner of the project and it is their members who highlight the issues and take the initiative to identify solutions,” explains Frida Höjvall.

Blockchains of particular interest

Blockchain technology is of particular interest, both as a possible solution for physical traceability – allowing production to be tracked along the entire value chain – or as a certificate trading solution. Certificate trading is used when physically tracking a product poses difficulties but the desire remains to benefit sustainable stakeholders. One example is palm oil, where food producers purchase certificates from palm oil manufacturers who use sustainable methods, even though they do not necessarily need to use that specific oil in their own products. Another inspirational example is green electricity, where a guarantee is given to produce the amount of green electricity that the buyer chooses to pay for, although there is no guarantee that the buyer will receive green electricity.

Blockchain technology is based on the dissemination of data to a network of users. These act as a check on one another, with subsequent greater protection against cheating. Blockchain technology made a broad impact through its association with cryptocurrency Bitcoin.

“One should bear in mind that there is nothing magical about a blockchain, it must be designed so that the correct data enters the system. It requires a hands-on approach and evaluation to identify the best method for applying the technology,” says Frida Höjvall.

The project is also studying how an ordinary customer can be made aware of sustainably produced metals. For example, is a system similar to the one used for green electricity a conceivable alternative – whereby the amount of renewable electricity you pay for will be produced but the electricity supplied to your home may be from another source.

“We want to examine various methods and concepts; however, what they have in common is some form of digital traceability rather than just physical traceability,” concludes Frida Höjvall.

The project Traceability is financed by the strategic innovation programme STRIM, a joint venture by Vinnova, Formas and Energimyndigheten.