Harnessing Blockchain to Achieve Net-Zero: How FiO Technology Contributes to a sustainable future
It is widely recognized that every tonne of CO2 emissions adds to climate change, which further pressures fragile ecosystems. The need for achieving a Net-Zero emission has become more crucial than ever.
As the CEO and founder of FiO Technology and a Harvard graduate, George Chu is deeply committed to addressing the pressing challenges of sustainability. Utilizing his expertise in blockchain technology, his company FiO Technology provides an advanced yet user-centric, self-served platform to collect and transform carbon assets into transferable carbon credit. In a recent speech at Cultivating Shared Value, Collaborative Strategy for a Sustainable Future in Industry 5.0 Global Summit, he underlined the significance of not just talking about sustainability but achieving tangible results and how FiO Technology can play a crucial role in contributing to Net-Zero emission.
The Integrity Challenges in Carbon Market
George first recognized the challenges we faced in ensuring the quality of carbon reduction projects and hence the quality of carbon credit. He further explained the five fundamental causes that result in a deficiency in quality:
Lack of additionality – “Additionality” is a crucial quality marker for carbon projects. A carbon project is “additional” if it has resulted in emissions reductions or removals above and beyond what would have occurred without the project existing. Unfortunately, according to a study conducted by Berkey University, 85% of offsets sold today are not additional. Additionality has become a big problem in the voluntary carbon market and something to be very aware of when organizations explore carbon offset efforts.
Verification difficulties – Carbon credit verification is a rigorous process that involves various steps to ensure the legitimacy of the credits. Unfortunately, there is no single governing body that certifies carbon offsets. Instead, a collection of nonprofit third-party companies check carbon offset claims. This is challenge number one for verification – there is no unified standard. Challenge two involved gathering reliable data and translating them into reports to go through the verification process due to a lack of technology, especially for small- to medium-sized carbon offset projects.
Double-counting – Double counting means a carbon credit (and the climate impact it represents) is claimed by multiple entities. That could be because more than one entity is claiming the same credit (often due to country-level carbon trading) or because the credit is issued multiple times by the issuer (either by accident/error or for financial gain). For offsetting to be truly impactful, organizations must have an exclusive claim to the carbon credits they purchase – they must be single-counted.
Absence of permanence – Permanence is one of the most critical factors when purchasing carbon credits. Here, “permanence” specifically refers to how long carbon will remain sequestered. The risk involved in permanence is often caused by the sequestered carbon engineered by a particular carbon reduction project being released back into the atmosphere due to natural processes or human activities.
Fraud-caused price volatility – Fraud is a unique challenge for offsets, given their distinctive attributes. For tangible commodities such as oil or wheat, verifying the delivery of the promised good is not too difficult. But in most cases, the owner of the carbon credits cannot realistically verify on their own that the promised reduction in emissions is occurring. For example, a reforestation project in Nigeria issued a carbon credit and sold it to a factory to offset the factory’s carbon emissions. One year later, a wildfire burned down the tree planted. But the credit would still be tradable until the wildfire news reached the market. Suddenly, the credit value evaporated, hurting the overall carbon credit price related to the reforestation projects. That’s why fraud costs price volatility and discourages potential buyers.
In summary, these causes are the result of a deficiency in quality.
Technology with Humanity at its Core is the Answer to the Quality Challenge
To address concerns about the lack of quality in carbon reduction and monetization initiatives, George proposes to leverage the power of technology guided by humanity. True sustainability remains elusive without a robust legal framework, international collaboration, and powerful decision-making processes. Building on the foundation of
- A robust auditing and verification process
- Transparent international cooperation and collaboration
- Adequate manpower and financial resources
George stressed the importance of using technological solutions, including IoT devices and blockchain technology, for quantifiable measurement and verification of carbon reduction efforts, ensuring their integrity and effectiveness. These tools, combined with advancements in artificial intelligence and the power of the Internet of Things (IoT), enable the six elements that safeguard the value of carbon credit: trackable integrity, traceable executional trails, open transparency, ensured additionality, immutable records for cross-referencing, and quantifiable performances.
Transparency Reinvented: How Blockchain Makes a Difference
One of the cornerstones of George’s vision is the integration of blockchain technology. Blockchain, often associated with cryptocurrencies, offers a decentralized and transparent ledger system. Utilizing blockchain allows every transaction and data point to be permanently stored and tracked, ensuring authenticity and eliminating the risk of fraud or double counting. With blockchain, stakeholders can confidently trace the entire lifecycle of a carbon reduction project, enabling effective monitoring, reporting, and verification. This immutable system ensures the authenticity and legitimacy of each project, allowing for efficient cross-region checks and trust-building among nations and stakeholders.
D-MRV Enabled by IoTs
To overcome the challenge of verification difficulties, he suggests leveraging technology solutions like digital MRV (Measurement, Reporting, and Verification), already utilized by major companies such as Microsoft and Oracle. By harnessing the power of data analysis, AI, and digital MRV, stakeholders can ensure accurate monitoring, reporting, and verification of carbon reduction efforts. But how to gather qualified data reliably? The answer lies in the adaptation of IoT devices. These interconnected devices collect data from various sources, providing real-time information about carbon emissions, energy consumption, and environmental factors. Organizations can make informed decisions based on accurate and up-to-date data by incorporating IoT devices into the monitoring and reporting process.
FiO Technology is Committed to Enhancing Carbon Quality through Quantifiable Integrity with Immutable Ledger
Over the past three years, FiO Technology has invested in developing innovative solutions for organizations to achieve carbon reduction and monetization through cutting-edge blockchain technology and a user-centric interface.
Carbon Credit Lifecycle Tracking System & Digital MRV Integrations
The system will be able to track and visualize the creation, verification, certification, trading and retirement of carbon credits.
S.M.A.R.T. Checker for Carbon Credits
S.M.A.R.T. is an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-bound. This means it can clearly outline the conditions under which carbon credits will be issued, including the amount of credits, the timeframe for verification, and the criteria for determining whether emissions reductions have been achieved.
Many renewable energy companies have already connected to the FiO platform to create, track, and authenticate carbon assets using simple Plug-n-Play APIs and applying protocols recognized by various trusted carbon registries worldwide. By combining advanced technology, social considerations, and human values, FiO Technology aims to build a sustainable future by empowering the achievement of Net-Zero.