DIC Corporation, one of Japan’s leading fine chemical manufacturers, is launching a pilot project which seeks to utilize blockchain technology and crypto tokens to improve transparency in plastic recycling and help it meet its environmental, social and governance (ESG) goals.

The pilot will use SAP’s GreenToken and will allow DIC, which produces and sells polystyrene, but also specialty plastics, printing inks, compounds as well as biochemicals, to track raw materials along the supply chain.

The aim here is to gain greater visibility over the manufacturing and inspection processes, as well as access critical information on physical properties and quality of the recycled materials.

This will ultimately allow customers to know with certainty how much recycled material is contained in their products when they use recycled plastic materials, and will enable them to make better informed decisions.

The project, which is part of DIC’s ongoing recycling initiative for food packaging, will also help the company “substantiate environmental claims,” Yuji Morinaga, Executive Officer and General Manager of the Packaging Materials Product Division of DIC, said in a press statement, and help refute any doubt of greenwashing.

Chemical recycling is critical to accelerate the shift to a circular economy and yet plastic from chemically recycled plastic waste is indistinguishable from plastic from conventional sources, James Veale, GreenToken by SAP’s co-founder, said. This opacity leaves room for misleading information and deception.

Just last month, a new report released by the Changing Markets Foundations (CMF) claims that huge multinationals like Coca-Cola and Unilever are misleading consumers by stating that their plastic packaging is environmentally friendly.

“Our latest investigation exposes a litany of misleading claims from household names consumers should be able to trust,” George Harding-Rolls, campaign manager at CMF, said, as quoted by the Guardian. “The industry is happy to gloat its green credentials with little substance on the one hand, while continuing to perpetuate the plastic crisis on the other.”

For example, Perfetti Van Melle, the maker of Mentos mints, has made grand claims about new cardboard box packaging, but yet, the firm has failed to mention that the packaging is an unrecyclable composite material made out of card, aluminum and plastic, the report says.

Another example is Proctor and Gamble’s Head and Shoulders shampoo bottles, which are promoted as being made out of “beach plastic” but yet are dyed blue meaning that they cannot be recycled further, it says.

Improving supply chain transparency

GreenToken is able to tackle these problems by making use of blockchain technology and tokenization to enable visibility of any one or more unique attributes, such as origin, circularity status or carbon footprint, of raw materials across global supply chain networks. These attributes are then recorded in a blockchain-based digital ledger, ultimately providing a complete auditable and immutable chain of custody record for raw materials.

GreenToken by SAP dashboard, Source: GreenToken

Founded and developed in Asia Pacific and Japan as part of the SAP.io intrapreneurship startup program, GreenToken by SAP is one of the many blockchain projects that have emerged over the past couple of years to address transparency challenges in long and complex supply chains.

IBM, for example, has developed one of the largest blockchain-based agrifood platforms in the world, bringing together hundreds of growers, food manufacturers and retailers including Dole, Nestlé, Walmart and Carrefour, onto its IBM Food Trust platform for end-to-end food visibility across global supply chains.

In the pharmaceutical industry, healthcare services provider Zuellig Pharma has created a traceability solution called eZTracker. eZTracker tracks individual products and packs, and can be applied in use case such as real-time counterfeit detection and cold chain monitoring.

GreenToken’s partnership with DIC was unveiled just a few months after SAP inked a similar pilot project with Unilever to increase transparency in the global palm oil supply chain.

It followed a successful proof-of-concept in Indonesia where GreenToken was used to track, verify and report in near real time the origins and journey that palm oil took through its entire supply chain.

Featured image credit: DIC