Blockchain technology is a distributed record of transactions that is maintained by a network of computers on the internet. It is seen as a way to simplify complex and lengthy transactions in energy trading and reduce costs by digitalising key documents.
While blockchain first emerged as the technology and system underpinning cryptocurrency, logistics and shipping sector is also one of the potential use cases for the application of blockchain to optimise operations and processes.
On April 2, it was announced that China has successfully used blockchain technology for a shipment of gasoline from China to Singapore.
This blockchain gasoline shipment was the first of its kind and was carried out as a trial by Sinochem Energy Technology Co. Ltd, a subsidiary of the state-owned and China’s largest petrochemical company Sinochem Corporation.
Sinochem Energy Technology sent a shipment from Quanzhou, China to Singapore, claiming that it was the “first time that blockchain applications have been applied to all key participants in the commodity trading process”.
In fact, Sinochem Group has been experimenting with blockchain technology.
In December last year, Sinochem Group carried out its first crude oil blockchain import transaction. The trial was China’s first simulated transaction of crude oil import using blockchain technology.
According to the company’s press release, the trial was a practical step for the blockchain technology to be applied in China’s energy and petrochemical industry.
Sinochem Group also stated that the data analysis of the effect of the simulated transaction shows that digital bills of lading and smart contracts can significantly enhance the execution efficiency of crude oil transactions and optimise 20% to 30% of the financing costs.
The company also believed that blockchain will help improve the transparency of the transaction business in China’s petrochemical industry and enhance the overall risk management level of the industry.
Other than the petrochemical industry, China also pioneered the use of blockchain technology in the world’s first global agricultural trade.
In January this year, as reported by Reuters, China and the US completed the world’s first fully-fledged global agricultural trade using blockchain. The transaction involved a cargo of US soybeans being shipped to China, while all the sales contract, letter of credit and certificates were digitalised on the ING’s Easy Trading Connect (ETC) platform.
Companies that were involved in this trade include: Louis Dreyfus Co, Shandong Bohi Industry Co, ING, Societe Generale and ABN Amro. According to these participating companies, the benefits of using blockchain include cost savings and greater speed. It was said that in this particular agricultural trade, the time spent on processing documents and data had been reduced five-fold.
Images from Hacker Noon
Author: Nicky Lung