Green Proofs Overview
EW Green Proofs is a customizable solution for registering and tracking the environmental attributes of commodities, including renewable energy certificates (guarantees of origin), the carbon content of sustainable jet fuel or maritime shipping fuel, or green hydrogen.
Today it’s challenging to create standard procurement tools and establish mature markets for emerging clean commodities and products that span multiple geographies and jurisdictions because it's really difficult to establish a unifying framework, and deploy a common software solution, to measure, verify, and track energy attributes and sustainability claims throughout supply chains. This especially applies for products that have complex, global supply chains like aviation fuel, or steel, or even finished products, but also applies to electricity in many contexts (particularly deregulated markets and e-mobility).
What problem is Green Proofs solving?
In these settings (and to an extent, even in situations where established registries exist), it’s challenging for external stakeholders to independently verify anything about the process by which sustainability reporting and clean energy tracking is done. This makes it costly to audit, difficult to get buy-in from the general public, and challenging to grow markets.
Markets need a simple way for everyone involved to be able to verify that the data processing and the business logic and the data itself is all being handled in a proper way. This can help build trust and credibility, so that clean commodities can be truly differentiated and marketed as a value-added solution.
At a macro level, the goal of Green Proofs is to help energy markets and supply chains accelerate decarbonization by following the playbook that electricity markets used over the last decade to advance renewables: using voluntary purchasing of renewable electricity from large electricity buyers through various instruments like PPAs, RECs, and other procurement instruments that are widely recognized, easily implemented, and trusted. The main problem that we aim to solve is that in markets and commodities and supply chains where it's not practical for one single entity to be the sole administrator (or registry operator, or authority to govern the entire market) Green Proofs provide a solution that allows many different participants to mutually authenticate and engage in transactions while knowing that a set of rules and business logic that defines how the clean commodities will work is being executed correctly and securely and transparently.
What are the use cases for Green Proofs?
In 2023 Energy Web is focusing Green Proofs development on three specific use cases:
24x7 Clean Energy Matching for independent power producers, energy retailers / suppliers, e-mobility providers, and distribution utilities.
Sustainable Aviation Fuel tracking for fuel producers, airlines, and institutional aviation buyers.
Green Proofs for Bitcoin, an initiative to bring an independent, standardized energy measurement system to the Bitcoin mining industry.
Looking ahead to 2024 and beyond, there are many other emerging sectors like green steel, green hydrogen, some other heavy industries in the hard-to-decarbonize sectors that could leverage Green Proofs.
Green Proofs addresses two challenges currently facing clean energy supply chains:
In complex, multi-stakeholder environmental commodity markets, central administrators create bottlenecks. Well-intentioned regulators and standards bodies understandably want to increase their oversight of commodity markets to ensure that sustainability claims are accurate. However, given the inherent complexity and geographic scope of the supply chains targeted in this proposal, it is very costly and cumbersome if not impossible for a single entity to take on the responsibility of qualifying producers, administering transactions, and accounting for all market activity. For environmental commodity markets to scale and accommodate thousands of producers and facilities meeting demand from millions of buyers, methods to trace and verify data associated with these products need to evolve.
Because data is siloed across multiple participants, markets are opaque and commodities are difficult to differentiate. The supply chain for many emerging environmental products is inherently complex from an accounting and data reconciliation perspective. Data needed to establish that something is true about each of these products is fractured across multiple market participants, each of whom has limited information that is narrowly related to their specific role in the supply chain. This approach makes it difficult for interested buyers to trace products from cradle to grave, trust associated attributes, and as a result dampens demand. This problem is largely by design; historically, commodity markets have been optimized to produce interchangeable, identical products, so there was no need for full transparency. Yet differentiating sustainable vs. conventional aviation fuel, renewably produced vs. fossil fuel-produced cryptocurrencies, or hydrogen made from renewables vs. natural gas requires harmonizing multiple datasets across multiple organizations. These entities need a way to jointly share and process trusted data without revealing trade secrets or other confidential information; legacy technologies such as centralized databases offered as-a-service by large technology companies are not capable of meeting these requirements.
Green Proofs provides the simple user experience of a traditional book-and-claim registry platform, but leverages decentralized, open-source technology to unlock advantages over conventional alternatives in three key ways:
Streamlined auditing and verification capabilities enhance transparency and trust: In Green Proofs, user identities (and their associated credentials, roles, and permissions), low-carbon commodities, and the business logic that defines their various interactions and lifecycles are anchored as unique digital assets on a blockchain. No single party can unilaterally delete or tamper with these data. At the same time, many parties can quickly and independently verify the data, eliminating complex and costly data reconciliation processes. This enables a robust and transparent tracking system that improves confidence among stakeholders that emissions claims associated with registry activity are legitimate and unique.
Shared ownership and governance creates incentives for industry adoption: Green Proofs offers a unique commercial and governance model in which producers and buyers not only own the IP underpinning the registry (and capture value from its adoption) but also have the ability to jointly make decisions about its operation, as well as the creation and assignment of roles and permissions for users within the system. This supports traditional models of standards creation and administration (i.e., a single entity writes the standard and updates it from time to time) as well as decentralized models in which several organizations collaborate on this task. It can also support multiple companies serving as issuing bodies (while remaining subject to oversight and audits rights from other stakeholders), and a multilateral governance approach to transaction and other fees (where a consortium of relevant stakeholders can set and update fees on an ongoing basis).
Scalable and secure identity and access management: Green Proofs streamlines enrollment processes for users by leveraging a self-sovereign approach to identity and access management. In this approach, every participant manages their own identity, but acquires roles and permissions through credentialing processes that are jointly established by relevant stakeholders. Embedding identity and access management logic in this way obviates the need for a central administrator to review and approve users and improves security by eliminating a central repository of user data and credentials.
Green Proofs is built to provide maximum customizability while maintaining the simple user experience of traditional registry platforms. As an open-source solution, Green Proofs benefits from continual improvements and enhancements contributed to its codebase by Energy Web’s global community of members and customers.
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