Blockchain for the Circular Economy


Prof. Dr. Moritz Petersen (Kühne Logistics University - KLU), Prof. Dr. Moritz Petersen (Kühne Logistics University - KLU)

Funded by Federal Ministry for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie (BMWI))

Brief description

Only 6% of the materials processed worldwide are recycled. More recycling in material flows would not only be a great relief for the environment but also holds enormous savings potential for companies of all sizes, especially SMEs. Effective recycling of products and materials often fails due to insufficient availability of product information along the supply chain. This research project aims to design Blockchain-based digital twins that maps the product's composition and origin in detail and evaluate them concerning their applicability in supply chains for the circular economy. As a result, companies can assess the technical scope, ecological and economic effects, and strategic implications.

Project purpose

The circular economy aims for a holistic approach that keeps all materials in the economic cycle as long as possible. In practice, effective recycling of products and materials often fails due to insufficient availability of product information along the supply chain. Most of the information about the product is lost at the time of its disposal. Consequently, products cannot be adequately recycled. We propose that the reduction of information asymmetries promotes the implementation of the circular economy.  The design of Blockchain-based digital twins that maps the product's composition and origin in detail could help provide simplified access to relevant product information throughout the entire life cycle. This way, the circular economy becomes a task and business opportunity for the whole supply chain. Moreover, planning and involvement of third-party companies also become possible. Blockchain technology allows for a non-discriminatory, structured, and decentralized data storage not managed by a central entity suitable for implementing a digital twin. As a result, companies can assess the technical scope, ecological and economic effects, and strategic implications of a Blockchain-based digital twin case-by-case. Overall these insights will allow for a first prototypical example implementation as well as a tool for decision support.

Small and medium-sized enterprises (SME) can particularly benefit from this project, because cross-supply chain data storage is not economically feasible for them; on the other hand, SMEs often have an intrinsic interest in sustainability and closing the production cycle. The support of existing circular economy approaches by providing better information is expected to have a positive economic and ecological impacts towards the procurement of raw materials as well as the disposal. It will motivate companies to consider new technologies such as Blockchain and their possibilities towards improving sustainability. Also, companies can strengthen their sustainability profile and gain new customers for whom ecological business is important. Lastly, the project enables the formation of networks that strengthen SMEs' position in the implementation of the circular economy. Gefördert vom Bundesministerium für Wirtschaft und Energie aufgrund eines Beschlusses des Deutschen Bundestages. Vorhaben der Industriellen Gemeinschaftsforschung mit der IGF-Nummer 21272.  Forschungsvereinigung: Institut für Energie- und Umwelttechnik e.V. (IUTA).

Subjects

Sustainability, Digital Transformation, Environment

Project partners

Hamburg University of Technology (TUHH)

Project Team

Niels Hackius (Kühne Logistics University - KLU)

Project Web link

Contact person

Profile image

Niels Hackius

Research Associate