Energy Informatics (Sep 2022)

Enabling end-to-end digital carbon emission tracing with shielded NFTs

  • Matthias Babel,
  • Vincent Gramlich,
  • Marc-Fabian Körner,
  • Johannes Sedlmeir,
  • Jens Strüker,
  • Till Zwede

DOI
https://doi.org/10.1186/s42162-022-00199-3
Journal volume & issue
Vol. 5, no. S1
pp. 1 – 21

Abstract

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Abstract In the energy transition, there is an urgent need for decreasing overall carbon emissions. Against this background, the purposeful and verifiable tracing of emissions in the energy system is a crucial key element for promoting the deep decarbonization towards a net zero emission economy with a market-based approach. Such an effective tracing system requires end-to-end information flows that link carbon sources and sinks while keeping end consumers’ and businesses’ sensitive data confidential. In this paper, we illustrate how non-fungible tokens with fractional ownership can help to enable such a system, and how zero-knowledge proofs can address the related privacy issues associated with the fine-granular recording of stakeholders’ emission data. Thus, we contribute to designing a carbon emission tracing system that satisfies verifiability, distinguishability, fractional ownership, and privacy requirements. We implement a proof-of-concept for our approach and discuss its advantages compared to alternative centralized or decentralized architectures that have been proposed in the past. Based on a technical, data privacy, and economic analysis, we conclude that our approach is a more suitable technical backbone for end-to-end digital carbon emission tracing than previously suggested solutions.

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