The Chinese energy sector is responsible for the emission of about 3.3 billion tons of carbon, combined with other emission sources. China now holds the world record for being the largest producer of greenhouse gases. However, this is starting to change as the Asian country has begun to turn towards clean energy sources through programs like its energy trading system which will help enforce carbon emission compliance with greenhouse mitigation frameworks like the United Nations Paris Agreement.
Right now, China is trying to keep its carbon emissions under control while pushing to become a leader in clean energy adoption. This drive has led to a partnership between global enterprise blockchain platform – VeChain and two major energy and gas firms, ENN Energy and government-owned Shanghai Gas. These energy firms will work with VeChain to pilot the development of a blockchain enabled liquefied natural gas (LNG) management solution. The natural gas blockchain solution was detailed in a press release published by China Gas Association and the partnership was announced at the China International Gas & Heating Technology and Equipment Exhibition.
China’s Growing LNG Demands
Despite being one of the world’s largest producers of LNG, China also holds the second position for the largest importer of LNG. This is due to the country’s rising energy demands, and the government preference for natural gas to coal as the fossil fuel source has been identified as a contributing factor to China’s air pollution crisis.
The International Energy Agency has stated that China will eventually surpass Japan to become the largest importer of LNG by 2020. To cope with the growing liquefied natural gas imports, the Chinese government has constructed several LNG industrial parks around the country. Zhoushan LNG Storage and Distribution Centre is the largest of these parks and it is capable of processing 3 million tons of LNG annually.
Conventional methods for processing large quantities of imports are not very efficient causing delivery delays other supply chain hiccups. Safety and efficiency are critical when dealing with the import of LNG. An effective system for handling the tracking, transportation, trading, and auditing of the massive volume of LNG imports is needed. A natural gas blockchain solution is not just an option but a necessity.
Natural Gas Blockchain Initiative
VeChain’s partnership with China’s largest clean energy distributors will help the nation manage the increased imports of LNG and also assist in controlling the safety, trade, and auditing of LNG based products and services around the country.
Under this proposed system, ENN Energy Holdings Limited will be in charge of designing and constructing LNG-themed business scenarios while also providing the necessary equipment and vehicles to ensure a smooth running of operations. On the other hand, VeChain will be responsible for providing the core blockchain platform and other software for tracking and storing vital data. VeChain will utilize its native Thor blockchain for auditing the LNG market. Shanghai Gas (Group) will be taking up a managerial role and will oversee operations while also helping with government-related processes by providing policy guidance.
This initiative will be able to manage quality assurance processes for different types of natural gas. A third party authority will certify all LNG-related data and transfer it to the VeChain Thor blockchain. Utilizing blockchain will improve the industry’s credibility and enforce adherence to government standards. Zhoushan LNG Storage and Distribution Centre will be the first to adopt this system in the pilot phase before it is rolled out on a larger scale across the national LNG market.
The Global Renewable Energy Leader
China is deeply invested in clean energy solutions to help curb its greenhouse emissions problem. Its One Belt One Road initiative has helped the nation further expand its business in the renewable energy sector. According to a report by IEEFA, China has exported $8 billion worth of solar energy equipment since the initiative began in 2013.
Development of other renewable energy sources has also been in focus. As the report stated that:
“China’s presence in wind power globally is also on the rise, led by international activities of companies such as Goldwind and by China Three Gorges’ diversification away from hydroelectricity.”
Since the United States embraced coal energy and pulled out of the Paris Agreement, IEEFA has stated that China is now poised to take the lead in renewables, and will dominate international investment in this area in the near future.
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