Consortium to examine use of blockchain technology in bunkering

Consortium to examine use of blockchain technology in bunkering

Blockchain Labs for Open Collaboration (BLOC) has announced through its subsidiary Maritime Blockchain Labs (MBL), the establishment of a consortium to address traceability and transparency in the marine fuel supply chain.

Lloyd’s Register, Precious Shipping, Bostomar, BIMCO, International Bunker Industry Association (IBIA), and GoodFuels will join the consortium, which will look at where blockchain technology can be used to increase transparency, create better compliance and stronger governance.

The organisations will look at where blockchain technologies could be used to make the supply chain of fuels more efficient, tamper-resistant, and auditable. It will focus on improving confidence of fuel being purchased to reduce safety threats and create a more trustworthy framework for monitoring emissions from shipping.

Deanna MacDonald, CEO and co-founder of BLOC, said: “MBL takes an industry-led approach – meaning that the solutions will be identified, designed, and tested by the industry itself, with MBL facilitating governance and developing the technology to ensure these solutions are relevant and used. A consortium approach is essential due to the need to cross regulatory boundaries and work within different organisational bodies and systems.”

“Too often with blockchain, and digital initiatives in shipping in general, we see a top-down approach where new technology is pushed on the industry. However, this means that complex human and governance elements are ignored, limiting the eventual adoption and usefulness of the technology.”

Khalid Hashim, managing director at Precious Shipping said: “As an off-taker of marine fuels, it’s vital for us to ensure that the fuel we use is compliant – particularly when we think about the market post-2020, and the need to ensure the quality of blended products coming in to meet the 0.5% Sulphur limit. Blockchain is ideally placed to create the reliable chain of custody we need to do this.”

Grant Hunter, Head of Contracts & Clauses at BIMCO added: “We are delighted to be involved with a consortium that could play an important role in realising the transformative potential of blockchain within shipping, beginning with a timely and relevant first use case in the bunker industry. As the global leaders in the development of standard contracts and clauses used in shipping, we feel we have an essential role to play in investigating the use of new technologies that may help evolve the way contracts are used. Bunker purchase contracts are one part of a complex chain of activities in the bunker industry. Blockchain “Smart Contracts” based on harmonised terms and conditions like the BIMCO Bunker Terms 2018 could be a stepping stone for the industry to achieve greater transparency and efficiency.”

Lloyd’s Register’s fuel testing services team, LR FOBAS, will focus on sharing knowledge about the fuel supply chain and quality testing process. The team will also provide bunker quality test data for the building and piloting phase and provide and environment for piloting and input to dispute resolution.

BIMCO will advise on contractual aspects of this demonstrator. It has recently published a standard set of terms and conditions for the purchase of marine fuels which it hopes will be widely adopted by bunker traders and suppliers.

Precious Shipping will play a role in the demonstration of the fuels quality traceability and accountability programme.

Bostomar Shipping will participate in the demonstration as a buyer and off-taker of marine fuel oils in Singapore.

IBIA, the International Bunker Industry Association (IBIA) will advise BLOC for the demonstration of the fuels quality traceability and accountability program.

GoodFuels, which provides biofuels to the marine industry, will demonstrate the fuels quality traceability and accountability program.