BLOC announces industry-led demonstrator consortium for
blockchain use in bunkering with Lloyd’s Register, BIMCO, Precious
Shipping, Bostomar, IBIA, and GoodFuels
Consortium will demonstrate the application of blockchain as a means of facilitating an increase in transparency and traceability in marine fuel supply chain as part of the maritime-focused Maritime Blockchain Labs (MBL) initiative
Blockchain technology and governance experts Blockchain Labs for Open Collaboration (BLOC) today announced, through its subsidiary Maritime Blockchain Labs (MBL), the establishment of a consortium to address traceability and transparency in the marine fuel supply chain, bringing together industry partners Lloyd’s Register, Precious Shipping, Bostomar, BIMCO, International Bunker Industry Association (IBIA), and GoodFuels.
Following extensive research, MBL has identified the bunker industry, with its multiple, complex transactions as an ideal use case where blockchain technology can increase transparency, create better compliance and stronger governance.
The consortium will evaluate how blockchain technologies could help to provide an efficient, tamper-resistant and auditable chain of custody on quality and quantity recording activities, together with a reputation system of the compliance of fuels prior to purchase, benefitting both buyers and regulatory bodies. Such characteristics help to provide greater confidence in the fuel being purchased, ultimately resulting in reduced safety risk and creating a more trustworthy framework for accurately monitoring emissions from shipping such as sulphur, and carbon.
The project represents the initial stage of the Lloyd’s Register Foundation-funded MBL initiative, the first true industry collaboration for the creation of blockchain technology in the maritime space.
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 commented:
“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.”
Each member of the consortium represents a different actor in the marine fuels value chain or wider shipping industry, and contributes their expertise and insight accordingly as the consortium builds and validates this blockchain use case. The members and their roles are:
Lloyd’s Register FOBAS, Lloyd’s Register’s fuel testing services team. LR FOBAS will share knowledge and information about the fuel supply and quality testing process as well as provide bunker quality test data for the building and piloting phase. LR FOBAS will provide an environment for piloting and input to dispute resolution.
BIMCO, the world’s largest international shipping association, with around 2,000 members in more than 120 countries. BIMCO is an advising partner on contractual aspects of this demonstrator, having 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, is a pure dry cargo ship-owner operating in the Handysize, Supramax and Ultramax sectors of the tramp freight market. Precious Shipping is an off-taker of marine fuel oils in the port of Singapore, and as such plays a key role in the demonstration of the fuels quality traceability and accountability programme as a buyer.
Bostomar Shipping, operates dry bulk ships worldwide and also facilitates ship and structured commodity finance services primarily to the dry bulk sector, with a chartered fleet of 4-5 vessels. Bostomar will participate in the demonstration as a buyer and off-taker of marine fuel oils in Singapore.
IBIA, the International Bunker Industry Association (IBIA), who represents the global bunker industry. IBIA will be an advisor to BLOC and the affiliated industry consortia for the demonstration of the fuels quality traceability/accountability program.
GoodFuels, the world’s leading supplier of commercial and sustainable marine biofuels for the shipping industry. With a market presence in the ARA, it will play a key role in the demonstration of the fuels quality traceability/accountability program.
Notes for Editors
(BLOC) Blockchain Labs for Open Collaboration, is the leading service provider for digital solutions that bridge the digital and the physical divide and solve for global challenges facing critical infrastructure. BLOC believes in a systemic approach to building technology, that this development cannot be done in isolation and that solutions will be built upon a range of different technologies combined to deliver real-world value.
BLOC’s area of specialisation is in framing problems and connecting the relevant stakeholders across the value chain to develop solutions through collaboratively prototyping and validating blockchain applications to then be accelerated and scaled together with our partners. To support this process, BLOC provides a range of expert services and solutions, such as technical and non-technical training, expert consulting and advisory, and feasibility studies.
BLOC’s applications are built together with its distributed community of public and private actors, institutions and technology providers that have come together under the collective ambition of solving for the problems that undermine the core of trust and inclusivity in society.
Maritime Blockchain Labs (MBL) is a subsidiary of BLOC, set up to establish an ecosystem within the sector to foster innovation and collaboration between blockchain practitioners and industry actors.
Peter Jackson, BLUE Communications
M: +44 7757 393786
T: +44 1865 514214
About Lloyd’s Register (LR)
We started out in 1760 as a marine classification society. Today, we’re one of the world’s leading providers of professional services for engineering and technology – improving safety and increasing the performance of critical infrastructures for clients in over 75 countries worldwide. The profits we generate fund the Lloyd’s Register Foundation, a charity which supports science and engineering-related research, education and public engagement around everything we do. All of this helps us stand by the purpose that drives us every single day: Working together for a safer world.
In a world of increasing complexity – overloaded with data and opinion – we know that our clients need more than technology to succeed. They need an experienced hand. A partner to listen, cut through the noise and focus on what really matters to them and their customers. Our engineers and technical experts are dedicated to assurance. That means a commitment to embracing new technology, and a deep rooted desire to drive better performance. So we consider our customers’ needs with diligence and empathy, then use our expertise and over 250 years’ experience to deliver the smart solution for everyone.
After all, there are some things technology can’t replace.
About Lloyd’s Register Foundation
Connecting science, safety and society.
Lloyd’s Register Foundation is a UK charity, established in 2012, which funds the advancement of engineering-related education and research and supports work that enhances safety of life and property. It is funded partly by the profits of its trading company, Lloyd’s Register Group Limited, a global engineering, technical and business services organisation.
Its vision is to be known worldwide as a leading supporter of engineering-related research, training and education that makes a real difference in improving the safety of the critical infrastructure on which modern society relies. In support of this, it promotes scientific excellence and acts as a catalyst working with others to achieve maximum impact.
Lloyd’s Register Foundation’s strategy for 2014-2020 focuses funding on four strategic themes: promoting safety and public understanding of risk; advancing skills and education; supporting excellent scientific research; and accelerating the application of research. Four research themes have been prioritised: structural integrity and systems performance; resilience engineering; human and social factors; and emergent technologies.