The project represents the initial stage of the Lloyd’s Register-funded MBL initiative, the first industry collaboration for the creation of blockchain technology in the maritime space.
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.
As such, 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.
Each member of the consortium represents a different actor in the marine fuels value chain or wider shipping industry, and contributes accordingly:
Lloyd’s Register FOBAS, LR's fuel testing services team, will share knowledge 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, is an advisor 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, a dry cargo ship-owner operating in the Handysize, Supramax and Ultramax sectors of the tramp freight market, 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, operating dry bulk ships worldwide, will participate in the demonstration as a buyer and off-taker of marine fuel oils in Singapore.
The International Bunker Industry Association (IBIA), representing the global bunker industry, will be an advisor to BLOC and the affiliated industry consortia for the demonstration of the fuels quality traceability/accountability program.
GoodFuels, supplier of sustainable marine biofuels for the shipping industry, will play a key role in the demonstration of the fuels quality traceability/accountability program.
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.
Grant Hunter, Head of Contracts & Clauses at BIMCO added:
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.