Implementation of a Distributed-Ledger based European CO2 Emission Trading System

Abstract

This article presents the implementation of an upstream CO2 emission trading system based on distributed-ledger-technology. The system is able to cover all CO2 emissions that are consumed within the EU while maintaining the competitiveness of domestic companies. Instead of free allocation of allowances, border adjustments for imports and exports are used to create fair competitive conditions. CO2 tokens allow the determination of product-specific emission intensities while energy and goods are further processed among the value chain. All identities in the value chain are handled confidentially with respect to privacy. An implementation example based on R3 Corda will be presented.