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UTILIZING BLOCKCHAIN TO CREATE
CARBON CREDITS FOR EV DRIVERS
CASE STUDY
FG – AM – 7 | 24 September 2019
Sean Batir and Henry Pease
Page 2GTM Conference | Batir and Pease | 25 September 2019
01
INTRODUCTORY VIDEO
Page 3GTM Conference | Batir and Pease | 25 September 2019
02
WHAT IS LCFS?
Page 4GTM Conference | Batir and Pease | 25 September 2019
LCFS OVERVIEW
The California LCFS program seeks to reduce the carbon intensity of transportation fuels by 20 percent by 2030.
There are two categories of regulated parties
• Opt In: Suppliers of low carbon transportation fuels, like biofuel refiners, electricity and natural gas
suppliers
• Mandatory : Petroleum fuel producers within California (refiners) or importers of a refined petroleum
product
Carbon intensity is technology neutral and based on:
• Full lifecycle including direct and indirect emissions
• Tailpipe + production + distribution + land use change
Carbon Credit
marketplace
Credit generation
from electric
vehicle
Page 5GTM Conference | Batir and Pease | 25 September 2019
CALIFORNIA LOW CARBON FUEL STANDARD PROGRAM
Gasoline Fuel
Emissions
ARB Emissions Threshold (CO2 /MJ)
Electric utilities generate LCFS credits for
every kWh of electric fuel they dispense to
electric vehicles, in an amount equal to the
difference between the ARB emissions
threshold
Grid
Electricity
Average
Emissions
Oil Refineries are responsible for
purchasing credits equal to the amount
they exceed the ARB emissions limit
Smart
Charging
Renewable
Energy
Credit
Matching
California Grid Average Emissions (CO2/MJ)
Page 6GTM Conference | Batir and Pease | 25 September 2019
03
WHY BLOCKCHAIN?
Page 7GTM Conference | Batir and Pease | 25 September 2019
BENEFITS OF BLOCKCHAIN
Credit generation
Blockchain simplifies credit generation, validation, and marketplace verification through a decentralized ledger
Validation Marketplace
• Track all charging sessions in an
immutable ledger
• Calculate LCFS credits
automatically through smart
contracts
• Incorporate multiple vehicles
across a fleet with a decentralized
infrastructure
• Provision of audit trails is inherent
to blockchain ledger architecture
• Validate credits for a wide array of
stakeholders
• Reduce manual verification steps
through digital settlement process
• Aggregate buyers and sellers
without intermediaries
• Permit smaller players to
participate in ecosystem
Page 8GTM Conference | Batir and Pease | 25 September 2019
APPLICATIONS OF LCFS BLOCKCHAIN
A variety of solutions exist in credit generation and marketplace use cases
Automated calculations of LCFS credits for
Metered data
Data from various inputs include telematics, meter,
Inverter, RECs, etc.
Charge events tied to unique IDs
without exposing PII data
Auditability features for CARB
Facilitate transactions of LCFS credits between
buyers and sellers
Counterparties transact without intermediaries
Entities can aggregate counterparties
at larger volume
Contracts are digitized, providing a virtual footp
versus paper trails and email attachments
Carbon Generation Marketplace
Page 9GTM Conference | Batir and Pease | 25 September 2019
04
HOW THE SMART CONTRACT WORKS
Page 10GTM Conference | Batir and Pease | 25 September 2019
HANDLING DISPUTES
Smart contracts handle conditional logic and permit state changes
Make contract
Credits go in
Transaction
contract enter
challenge
period
Contract in
Dispute State
Credits
released
Buyer
receives
credits
Seller
receive
creditsAgreement
recorded //
Seller ignores
Buyer agrees to
contract
Seller disputes
sent payment
CARB resolves
CARB resolves
Seller resolves
dispute
Page 11GTM Conference | Batir and Pease | 25 September 2019
CALCULATING CARBON CREDITS
Carbon emission and credit calculation transparency improve audit efficiency
Seller
receive
credits
Simplicity is key, complexity a myth
• Aggregate ”Most Important
Variables” in a Request structure
• vehicle telematics ( kiloWatts /
Hour)
Store LCFS credit calculation inputs
to promote radical transparency
• Simplifies audit trail
• Minimizes uncertainty about how
final LCFS credit was computed
• Calculation is publicly available
Page 12GTM Conference | Batir and Pease | 25 September 2019
05
LESSONS LEARNED
Page 13GTM Conference | Batir and Pease | 25 September 2019
LESSONS LEARNED
There is potential for blockchain systems to accelerate renewable energy initiatives
You need a growth mindset for your company to succeed in blockchain adoption. Web3 development
skills are rare, in demand, and different from traditional web development roles.
Must be mindful to engineer custom solutions, in order to adapt abstract blockchain solutions for
concrete, government sponsored green programs
Innovation, can be accelerated by combining small, “loonshot” specialized development teams with
larger organizations that possess the resources, capital, and an addressable business needs.

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How BMW is Utilizing Blockchain to Create Carbon Credits for EV Drivers

  • 1. UTILIZING BLOCKCHAIN TO CREATE CARBON CREDITS FOR EV DRIVERS CASE STUDY FG – AM – 7 | 24 September 2019 Sean Batir and Henry Pease
  • 2. Page 2GTM Conference | Batir and Pease | 25 September 2019 01 INTRODUCTORY VIDEO
  • 3. Page 3GTM Conference | Batir and Pease | 25 September 2019 02 WHAT IS LCFS?
  • 4. Page 4GTM Conference | Batir and Pease | 25 September 2019 LCFS OVERVIEW The California LCFS program seeks to reduce the carbon intensity of transportation fuels by 20 percent by 2030. There are two categories of regulated parties • Opt In: Suppliers of low carbon transportation fuels, like biofuel refiners, electricity and natural gas suppliers • Mandatory : Petroleum fuel producers within California (refiners) or importers of a refined petroleum product Carbon intensity is technology neutral and based on: • Full lifecycle including direct and indirect emissions • Tailpipe + production + distribution + land use change Carbon Credit marketplace Credit generation from electric vehicle
  • 5. Page 5GTM Conference | Batir and Pease | 25 September 2019 CALIFORNIA LOW CARBON FUEL STANDARD PROGRAM Gasoline Fuel Emissions ARB Emissions Threshold (CO2 /MJ) Electric utilities generate LCFS credits for every kWh of electric fuel they dispense to electric vehicles, in an amount equal to the difference between the ARB emissions threshold Grid Electricity Average Emissions Oil Refineries are responsible for purchasing credits equal to the amount they exceed the ARB emissions limit Smart Charging Renewable Energy Credit Matching California Grid Average Emissions (CO2/MJ)
  • 6. Page 6GTM Conference | Batir and Pease | 25 September 2019 03 WHY BLOCKCHAIN?
  • 7. Page 7GTM Conference | Batir and Pease | 25 September 2019 BENEFITS OF BLOCKCHAIN Credit generation Blockchain simplifies credit generation, validation, and marketplace verification through a decentralized ledger Validation Marketplace • Track all charging sessions in an immutable ledger • Calculate LCFS credits automatically through smart contracts • Incorporate multiple vehicles across a fleet with a decentralized infrastructure • Provision of audit trails is inherent to blockchain ledger architecture • Validate credits for a wide array of stakeholders • Reduce manual verification steps through digital settlement process • Aggregate buyers and sellers without intermediaries • Permit smaller players to participate in ecosystem
  • 8. Page 8GTM Conference | Batir and Pease | 25 September 2019 APPLICATIONS OF LCFS BLOCKCHAIN A variety of solutions exist in credit generation and marketplace use cases Automated calculations of LCFS credits for Metered data Data from various inputs include telematics, meter, Inverter, RECs, etc. Charge events tied to unique IDs without exposing PII data Auditability features for CARB Facilitate transactions of LCFS credits between buyers and sellers Counterparties transact without intermediaries Entities can aggregate counterparties at larger volume Contracts are digitized, providing a virtual footp versus paper trails and email attachments Carbon Generation Marketplace
  • 9. Page 9GTM Conference | Batir and Pease | 25 September 2019 04 HOW THE SMART CONTRACT WORKS
  • 10. Page 10GTM Conference | Batir and Pease | 25 September 2019 HANDLING DISPUTES Smart contracts handle conditional logic and permit state changes Make contract Credits go in Transaction contract enter challenge period Contract in Dispute State Credits released Buyer receives credits Seller receive creditsAgreement recorded // Seller ignores Buyer agrees to contract Seller disputes sent payment CARB resolves CARB resolves Seller resolves dispute
  • 11. Page 11GTM Conference | Batir and Pease | 25 September 2019 CALCULATING CARBON CREDITS Carbon emission and credit calculation transparency improve audit efficiency Seller receive credits Simplicity is key, complexity a myth • Aggregate ”Most Important Variables” in a Request structure • vehicle telematics ( kiloWatts / Hour) Store LCFS credit calculation inputs to promote radical transparency • Simplifies audit trail • Minimizes uncertainty about how final LCFS credit was computed • Calculation is publicly available
  • 12. Page 12GTM Conference | Batir and Pease | 25 September 2019 05 LESSONS LEARNED
  • 13. Page 13GTM Conference | Batir and Pease | 25 September 2019 LESSONS LEARNED There is potential for blockchain systems to accelerate renewable energy initiatives You need a growth mindset for your company to succeed in blockchain adoption. Web3 development skills are rare, in demand, and different from traditional web development roles. Must be mindful to engineer custom solutions, in order to adapt abstract blockchain solutions for concrete, government sponsored green programs Innovation, can be accelerated by combining small, “loonshot” specialized development teams with larger organizations that possess the resources, capital, and an addressable business needs.

Editor's Notes

  1. Outside of test driving race cars, I think we have the best job at BMW We are a small team at a small office in Silicon Valley, thousands of miles from the Munich headquarters We do technology scouting and proof of concepts For over a year, we’ve been exploring use cases of blockchain along with our local northern CA utility, PG&E In the next few minutes, I’m going to explain the context of the renewable energy for transportation fuel program we want to augment with blockchain technologies, my colleague Sean is going to tell you about the use cases we found, the challenges we faced, and the lessons we learned along the way But first, we actually have a short video on the project to kick things off
  2. 2
  3. At the end of the day, our goal is to tie the credits generated by every EV charging more directly into the LCFS program and ultimately aggregating into a carbon credit marketplace
  4. STREAMLINE SEAMLESS and EFFECTIVE