Blockchain-Based Carbon Emissions Tracking in Supply Chains: A Smart Contract Solution for Scope 3 Reporting

The forthcoming European regulatory mandates, which require companies-including non European entities with operations in Europe-to report indirect emissions within their value chains by 2025, present significant challenges. These include the difficulty of tracking emissions from activities outside the company's direct control, such as transport-related emissions from vehicles not owned by the entity. Our project proposes a solution through the development of a smart contract based on Ethereum blockchain technology, aimed at enhancing sustainable supply chain management. This smart contract facilitates the transparent and accurate reporting of Scope 3 greenhouse gas emissions, thereby addressing issues of under reporting and opacity. The methodology employs a distance-based calculation for emissions, chosen for its relevance to standard business operations and its capacity to streamline the estimation process. A case study on the global shipment journey of an electronic control unit lot illustrates the application's functionality, demonstrating the system's ability to provide detailed emissions insights across a complex, multimodal logistics pathway. The study is aligned with upcoming regulatory requirements, offering an immutable, transparent ledger for emissions data. Future improvements aim to enhance the system's accuracy and user engagement, expanding the scope to include a wider range of emissions categories and incorporating advanced technologies for data collection and analysis.