A recent press release on September 5, 2018 confirmed a fresh, new relationship between VeChain and Chinese automobile manufacturer BYD to create a series of proof of concepts relating to their “carbon banking” solution for automobiles.
What Is Carbon Banking?
The newly-formed partnership will allow BYD to use VeChain’s automobile lifecycle management solution to create a carbon banking structure that will reward vehicle operators with credits according to their carbon footprint, which is based on their driving performance and carbon reduction.
Each vehicle operator’s footprint is recorded on the VeChain blockchain, making it verifiable and immutable.
The Carbon Banking solution was co-developed with DNV GL, a global quality assurance and risk management company. They are an independent, trusted third-party company who will certify and verify the entire process.
George Kang, CEO at DNV GL Greater China stated;
This solution represents the first major partner to utilize our Carbon Banking solution. BYD has gone to significant lengths to ensure our goal of making the world safer, smarter and greener.
How Does It Work?
BYD and DNV GL have developed an app called the “Carbon Credit” app. This app collects driving data and habits such as the mileage, fuel, and electricity consumption of each BYD vehicle. The team have also created a VeChain Smart Contract on the VeChain Thor blockchain, which is based on an emissions reduction formula provided by DNV GL.
Carbon credits are then rewarded to users based on the data collected and the emissions reduction formula.
VeChain has long been described as the blockchain for products and information. It is a blockchain-based ledger that is designed for large-scale logistics for enterprise. It specializes in supply chain management and now, with this recently formed partnership, has branched out to insurance and automobiles.
This is the second major partnership announced by VeChain this month, as the blockchain based company recently developed another relationship with the People’s Insurance Company of China (PIIC).
The PIIC intend to use the VeChain Thor blockchain to reduce the vast amount of paperwork required to underwrite insurance certificates. It is also aiming to bolster data verification and deliver instant compensations via the VeChain Thor network through smart contracts.
For more information on VeChain’s supply chain solution and its 10,000 transaction-per-second capability, we recommend our “What is VeChain” guide.
Who Will Benefit From The VeChain-BYD Partnership?
Clients, such as financial and insurance services, that are interested in taking part in the the carbon reduction initiative can benefit from the partnership, as they will be able to use the data recorded on the VeChain blockchain to provide their customers with more personalized and accurate packages.
Insurance companies will have access to much more reliable and accurate data regarding driving habits and records, which will allow the company to provide cost-effective packages for both the driver and insurance company.
Perhaps the most exciting effect of the project will be the increased reintroduction of government carbon subsidy policies, as they will now be able to monitor individual carbon emissions much more accurately and therefore be able to provide fairer subsidies.
Why Is This Partnership Important?
The VeChain-BYD partnership is a first in helping vehicular carbon monitoring for developing sustainable ecosystems, making VeChain the first enterprise application to move the initial batch of the millions of cars, buses, and trains onto the blockchain. This is extremely important in a world where carbon emissions are rapidly getting out of hand, posing a threat to localized and global ecosystems alike.
BYD, the largest Chinese car brand and the world’s largest plug-in electric car manufacturer, will further benefit from this partnership, as the data access control will allow them to analyze the Internet of Vehicle Information for research and development.
The President of BYD commented in the press release:
This technology not only improves our current offering but allows us to create completely new markets. The unique aspects that VeChain provide will empower carbon monitoring development and sustainable ecosystems. This solution is a glimpse into what we think we can achieve through this partnership.
Pioneering partnerships such as this one open doors for future partnerships to develop and flourish. This will lead to bridging the far-removed gap between the blockchain and the real word, thus increasing the adoption rate of the Internet of Things.