Volvo Uses Blockchain to Prove Cars Made from Ethical Materials

According to a report via Reuters, global car manufacturers are under increasing pressure to prove that the materials they use in their vehicles are ethically sourced. Mentioned specifically as causes of concern are so-called conflict materials, which are often supported by child labor or to finance armed conflict. In an effort to prove the materials it uses are ethically sourced, Volvo Cars, owned by China’s Geely, has been experimenting with blockchain technology to track materials at each point of their supply chain. The firm has just announced that it has successfully manufactured its first vehicles made using recycled cobalt, tracked from source using blockchain technology. The company states that the distributed ledger technology, which first found application in decentralized digital currencies like Bitcoin, will improve the accountability and transparency of its supply chains. In comments emailed to Reuters, Volvo states that the aim is “full transparency and tractability.” The motoring giant also wrote of its blockchain solution:

“It tracked cobalt from a Chinese recycling plant to Volvo Cars Zhejiang over a two-month period to June 27.”

Volvo has been working with British blockchain startup Circulor as well as technology provided by US firm Oracle. The supply chain tracking solution is expected to be introduced across the company later this year. Although the technology is starting to find some use in supply chain management in various industries, the blockchains referred to in stories like this differ vastly from those that are used for open network cryptocurrencies like Bitcoin. Closed systems, like the Volvo solution, require permission be granted to run a validating node. Such a distinction has prompted cryptocurrency proponents to liken the blockchain efforts from private companies to the intranets of the early 90s and open source, permissionless networks, like Bitcoin, to the open internet. For them, the true innovative potential of the technology lies in the latter application. What do you think about Volvo’s blockchain endeavors? Do you see other manufacturers following their lead? Let us know your thoughts in the comments below.