Fuel Consortium to Use Blockchain to Deliver Fuel to Ships

Blockchain Labs for Open Collaboration shows how Blockchain technology can benefit the supply chain. Credit Shutterstock.

A consortium of maritime bunker fuel supply, approval and consumer companies have established a system of delivering low sulphur fuel to ships using a system of pre-approved partners within a blockchain community.

Maritime Blockchain Labs (MBL) has announced that it will be scaling up the use of its blockchain-based maritime fuel quality assurance and sales system in January and the company is inviting potential partners to contact them to join the group as the upscaling phase starts in earnest.

The year 2020 could be a seminal year for the maritime community with the introduction of low sulphur fuel oil (LSFO) for all vessels, the uncertainty for owners about the availability of bunker fuel (ship's fuel) and the quality are challenges that will concern all stakeholders in the supply chain.

Quality fuel is a key element for ship operators as the LSFO will be blended and if the quality standard is low or the blend is not correct vessels could suffer from engine damage or worse, engine failure, a scenario that could strand millions of dollars worth of cargo at sea, which in turn could hit retailers or production lines.

Buying fuel from approved or trusted suppliers will become a far more important issue following the introduction of the 0.5% sulphur cap for ships on 1 January 2020. It was with these issues in mind that MBL, a subsidiary of the Denmark-based start-up Blockchain Labs for Open Collaboration (BLOC) established its demonstrator model for the delivery of high-quality fuels to the maritime industry via a blockchain solution.

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Founded by Deanna MacDonald, the current CEO, and the late Maurice Meehan of the Carbon War Room, BLOC is unique in its methodology for developing solutions, using collaborative projects with maritime industry insiders so that the solutions are developed in a way that suits the shipping industry best.

So far BLOC has launched just one demonstrator. In late July the group announced its bunker fuelling system with a host of collaborators, ranging from Lloyd's Register FOBAS to BIMCO, Precious Shipping and including bunker supplier GoodFuels. This week the company announced its second demonstrator, crewing certification with another industry consortium that includes Maersk, Hanseatic Shipmanagement and the Missions to Seamen, and MacDonald told FreightWaves that BLOC will quickly roll out a third demonstrator to be announced within the next few months.

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It is the success of the original demonstrator that has allowed the roll out of new solutions and has ultimately led to the latest announcement that the company intends to upscale the fuel demonstrator capturing fuel deliveries and associated verified data into the system.

It is intended that this will be undertaken by a consortium formed of ship owners or operators, fuel suppliers, port authorities and a fuel testing body, most Likely Lloyd's Register's Fuel Oil Bunker Analysis and Advisory Service (FOBAS). MBL is inviting interest from stakeholders within these groups to join and co-sponsor this next phase of work. It is expected to begin January 2019.

MacDonald said, "It is the learning that we have taken from the original consortium and the contributions and value propositions that have informed the next phase and will allow us to create a global fuel consortium and a process that will tackle the problem of how to trace fuels and know that they are compliant."

She went on to say, "One of the earlier learnings we had was that we thought we might have been solving for a specific problem in bunkering that had been flagged to us by several industry actors, until we brought together several stakeholders from the bunkering supply chain and held a workshop to dive deeper into the problems. It was then that we were redirected to a new set, or a more specific and different, set of problems we needed to address."

It was through the industry collaboration that the new direction was highlighted and that shows the benefits of including the experts in the development of new systems explained MacDonald.

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