Fujitsu and IHI Start Joint Project on New Environmental Value Distribution Platform Using Blockchain Technology
IHI Corporation (hereinafter IHI) and Fujitsu Limited announced the launch of a joint project on environmental value trading(1) starting April 1, 2022, with the aim of contributing to the realization of a carbon-neutral society and to revitalize the market of environmental value trading ecosystems.
Under this joint project, IHI and Fujitsu will work toward the commercialization and promotion of an environmental value distribution platform by leveraging their business knowledge in blockchain technology and carbon neutrality solutions. The two parties will issue environmental value “tokens”(2) based on data on the reduction of CO2 emissions collected through IHI’s IoT platform “ILIPS” (IHI group Lifecycle Partner System)(3) and establish a platform for distributing these tokens to the environmental value trading market by leveraging Fujitsu’s “ConnectionChain” security technology to interconnect various blockchains.
Through this new platform, the two companies aim to support an efficient distribution of environmental value and the reduction of CO2 emissions generated by companies around the world, and contribute to the realization of the common global goal of a carbon-neutral society.
The trading of environmental values such as carbon credits(4) has been gaining increasing attention as it constitutes a cost-efficient means of reducing CO2 emissions and supports various countries and companies in their efforts to contribute to the realization of a carbon neutral society.
At the same time, the expansion of the distribution volume of carbon credits on the market represents an urgent issue in efforts to bolster environmental value trading. Currently, international initiatives including TSVCM(5), a taskforce working to scale voluntary carbon markets, are promoting measures to expand the scale of transactions and standardize trading systems for carbon credits.
Public and private sectors in Japan are further promoting the use of carbon credits through measures including the “J-Credit Scheme,” a system in which the Japanese government certifies the amount of CO2 emissions reduced through measures including the promotion of renewable energy and forest management. These measures shall offer individuals and small and medium sized companies new opportunities to create environmental value, digitize the creation and utilization process of environmental value, create a trading market and ultimately expand the supply and demand of environmental value to improve the institutional environment.
Current initiatives of the two companies
As part of its initiatives to go carbon neutral, IHI is utilizing its IoT platform “ILIPS” to calculate the amount of CO2 emissions and reductions(6) from operation data of its equipment and facilities. It has additionally started deployment of a digital platform for the visualization and creation of environmental value using blockchain technology in February 2022.
Fujitsu is providing its “ConnectionChain” blockchain technology to interconnect multiple ecosystems consisting of blockchains and other technologies, that is expected to serve as the basis for environmental value trading. ConnectionChain leverages Hyperledger Cactus, an open source software (OSS) project for secure and reliable integration between multiple blockchain platforms hosted by Hyperledger Foundation. Fujitsu has been contributing to the development efforts for “Hyperledger Cactus”(7) since its inception in 2020. Through these efforts, Fujitsu aims to establish a business platform that enables seamless and efficient commercial transactions of a variety of digital assets including environmental values, as well as crypto assets and STOs(8) which are gaining increased attention.
Outline of the joint project
Within this joint project, IHI and Fujitsu will construct a new system that leverages IHI’s ILIPS platform to calculate the amount of CO2 emission reductions and Fujitsu’s ConnectionChain blockchain technology to distribute tokens as high-reliable digital assets to the environmental value trading market. In this way, IHI and Fujitsu aim to launch a new platform for the efficient distribution of environmental value on a global scale and will work to expand the market for environmental value trading. At this end, the two companies will promote the application of digital technologies in the process of creating, managing, and trading environmental value tokens, and aim to create a sustainable value chain model in which funds can be reliably delivered to companies that are engaged in environmental contribution initiatives including the use of green energies and measures to reduce their CO2 emissions.
Prior to this project, the two companies conducted and completed demonstration trials on linking IHI’s ILIPS platform to Fujitsu ConnectionChain to distribute tokens to the environmental value trading market in the end of March 2022.
Moving forward, the two companies aim to realize an environmental value distribution platform by the end of fiscal 2022 and will further promote discussions and demonstration projects with partner companies, related ministries, agencies, and organizations that support this initiative with the goal to contribute to effective and concrete actions toward a carbon neutral society.
(1) Environmental value trading:
Measurement and certification of the reduction, absorption, or removal of CO2 and other emissions with the goal to create tradeable values based on decarbonization results.
Digitized rights and assets issued independently by companies and organizations using blockchain technology.
Common platform for IHI Group products that integrates data on equipment and facilities into cloud servers for use in life cycle business with the aim of enhancing IHI Group products and services.
(4) Carbon credit:
One representative example of environmental value. Tradeable certificates of greenhouse gas reductions.
“The Taskforce on Scaling Voluntary Carbon Markets”. International initiative led by the private sector to expand the scale of the carbon credit market.
(6) Calculation of CO2 emissions/reductions:
Calculations are based on fuel consumption, electric power consumption and a smart contract using methodologies of the J-Credit system and emission factors preset by the Japanese Ministry of the Environment.
(7) Hyperledger Cactus:
OSS development project to integrate different blockchain platforms hosted by Hyperledger Foundation, the open, global ecosystem for enterprise blockchain technologies.
“Security Token Offering”. Project to raise money mainly on stocks and other bonds; issues and sells its own currency “security token” to qualified investors to raise funds.
Source: Fujitsu Limited