CVA Social Club: The Digital Product Pass, How Blockchain Can Help Save the Planet's Resources

Transcript

thank you very much for coming along for our newest edition of the uh social club from the crypto Valley Association as well my warm welcome to everybody that is online connected tonight we do that always as a hybrid event so with people that are here uh in surich and as well around the world and I think I'm very pleased to welcome today uh Peter Peter kumaka uh from blog Cent um I think it's quite interesting topic about the digital uh product passport that we're going to talk today uh Enterprise solution aspect of this blockchain technology Peter he actually

looks back to a career in web development uxx and uh and even magnetic systems uh that you had in the past and now you started your own blockchain you will definitely a blockchain project you will definitely talk about that in a second and with me is as well my co-host ra or future co-chair of the working group ra and yeah independent blockchain expert yes very glad to have you both here but let's Deep dive into the topic right away and um it's actually quite a new topic so in July uh 24 so last year the EU commission actually launched the

EU regulation that was in the old days where ESG and so on were still important now of course things have changed and we are now in the ESG winter now I'm just kidding um actually that framework which is the ecosystem uh uh requirements for sustainable products became valid and a key component in that is actually the digital product C short the DPP so you were following that development we always since couple of years and so on can you can you quickly perhaps explain us what the European Union wants to achieve with

that yeah hello everybody thanks for the question Den um the DPP actually is um a derivate of the Paris clate agreement first of all then of the European green deal and then what it shall achieve is to give uh better approach to sustainable and to Circular products in general so that is a one point the second point that is that shall give a consumer information um which shall aim to to lead to traceability to full transparency of each product and as well to uh to give the consumer the

possibility to compare products so that we have a list of products we can compare them um apply our criterias to choose them and then we can decide for the one we want to decide but we do do have full transparency and third of this um of these points the third point is that it helps the European Union to arrive at in 2050 at Net Zero and this is the one of the main argumentations of the ESP that came out uh yeah last year last year and and and you the the the Showcase that you are already

elaborating or is already in now let's say more than an MVP mode is is is is the electronic um um pass for the digital battery pass actually so can you perhaps explain the concept behind that and what is the digital battery pass um about yes of course um we have to distinguish one is the battery regulation that came out a bit earlier and the other one is the ESP the ESP is referring to dpps to digital product passports in all Fields except for a few exceptions uh exceptions like animal

food like uh um Pharma Pharma is accepted from that because it's differently regulated and a couple of other exceptions but the DPP is a pure uh D is a derates of the ESP whereas the battery passport is regulated by the battery regulation that came out in 20 late 2023 and there we are on an MVP stage and we are uh having our application on the ICP blockchain uh so it's a web three application where we have um we do

have our demonstrator and the next step is to connect it to the with the data room with the data space with the container X data space to actually be able to access all the data needed for the passport MH and the battery the battery itself I mean that what does this battery passport then all contain I mean it is about the origination of the product it's about the entire life cycle of the product and then as well information about the recycling behind it and how I can I found it that sounds quite complex for something I can battery as well as very important can you deep dive on that

yeah sure the the thing is we have a very special case with a battery passport we have static data as you mentioned like originator origin data uh we have data of the component itself we have material data we have um we have um sustainability data etc etc we have also we have a a static let's say 70% of the data is static 30% is dynamic data and the dynamic data We Gather from the battery Management Systems in brief another abbreviation BMS Battery Man management system uh that provides us with the data so if we want to look at

the state of health of the battery uh it will give us um we will have actual data at this at for our disposition to see um what is the current state of health which is um a no because in earlier days I just had a battery in front of me and couldn't tell what's the state of the battery and I couldn't tell either what is in the battery itself so we have a full clear picture of the of the composition of theine front of us good um if if I would summarize in simple words you have kind of a data

sheet about a battery or a digital product pass and you have all the data Dennis mentioned you just explains which is of course in the circle economy important it's important because of the European commission's regulation that we have uh equivalent uh regulations for sustainable product and life cycle tracking and uh of course the um the footprint we want to track but if I want to challenge you I would ask you well these data could easily be on the web page of each manufacturer why did you choose blockchain yeah a good question good question but there are several reasons actually that that it makes really clear that blockchain is the best

solution of course the data could be stored in a cloud but let's say A supplier goes bankrupt the data is lost so this is not going to happen with our passport because the data needs to be stored immutably so that is one thing then it's uh for safety reasons therefore we use a digital uh distributed electric technology and uh also with the DAT with the the blockchain that we can use now like the ICP blockchain which is one of the most efficient and one of the fastest one um we are not far behind also what what the cost Factor um refers to uh we are not far behind in

comparison to a Cloud solution but we are actually on a web 3 solution that provides much more security well with the traceability and trust and imitability absolutely but let's think about um still having this kind of um web three based data sheet in mind not everybody should have access to every data right I mean that's not important for everybody not for the end consumer maybe also data protection wise is that something you also tackled in your approach absolutely absolutely access control is the magic word there so um we we have a a Gateway the authentication Gateway where we can actually distinguish uh who has the right what

roles to do we access do we leave access to because that is also um a requirement of the European regulation Regulators need to have access of course right not only The Regulators but also who has a um a legitimate right to access the data meaning the recycler does not have the a does not have a right to see the performance data of the battery for example and the performance um the performance um data need to be is is quite delicate and it's quite sensitive actually so also there only people and the roles that are allowed to see the data will get access to the to the data

so access control is is also key in this I mean fact that this well I mean I'm I once talked as well with people that are specialized in recycling and I think for them it's really crucial to have this kind of information because what they do today is do like a re-engineering of a product or about or um yeah a re-engineering actually of the product to know actually okay how can we actually uh pull the the the valuable resources the copper the the the the the the other um materials that are in there how can we get them actually out because usually they don't have this information

so that's probably really huge advantage of the product it's a it's a really big step it's a really big step because I know exactly what is in the battery and be it the salt be it a metal whatever in earli days everything was shreded to Black Mass so-called black mass and then with certain thermic or other means they were they try to extract the the metals and the salts from from this Mass but all in the unknown with big question marks and where is right now if you look at the passport at this data sheet as you call it but Dynamic data sheet um there you can you can see exactly what is the percentage of material that

is in there in there of each material and you can try to extract them already beforehand so very important point also a point that we have not mentioned yet also in the circularity in what concerns the circularity is that um future batteries need to contain recycled material so there is up to 2030 gradual requirements rais in using material that has been recycled to not exploit uh other more material when you talk now about the circular economy about the life cycle of a product and so on but um I mean in the

pre-t talks that we had you mentioned as well that there is a huge potential for example in marketing because suddenly you have different ways to interact with your customer yes and so what is that what kind of showcases you have in in that context yeah well if we take a look at for example the the first digital product passport that will be that will be um apply where it will be applied to that will be textile most likely and textile that shall arrive in 2027 in summertime most likely it's not finally at the date but most slly so therefore in the textile textile we mean from the shower curtain to um to the T-shirt um

manufactured in Bangladesh to the old cure um dress to um airplane seats for example that is all textile it's all included there and when when we look at the possibility that for example in the b2c interaction ction there's a huge playground for marketing that can be added to the the QR code that is required and so I see the digital product passport F first which has priority then I can add add marketing information that is has not been forbidden so everyone accepts that it's allowed to do so that is the acceptance

so I get really close to the customer mhm once more I have to was close to the customer in the shop and then with the QR code I can get close again I can link to the to an online shop I can link to additional material or um for example on a construction site each window for example would have a would have a a QR code um if there is a a screw missing or whatever QR code can be scanned and I can end up at the B2B online shop just matching you know you have your VR glasses or your glass in the future and you walk through the world and everywhere the product information is popping

up all the passports all the you need a data sheet for the passport exactly but if you think about the the real potential which is there think about uh a huge clothing chain uh which is starting with h and maybe ends with M um who's selling a green clothing line but if you actually track that and that's actually open information it's not as green it's a little bit green washed to put it like that or if you think think about fidy water maybe not so popular in Switzerland or something but they have such a strong um message that it's healthy and fantastic but they have a huge carbon footprint because they imported so much also if you think about luxury products how to be really safe that you really buy the aoms back from a real stuff you have a kind of really

fantastic opportunity not only to bind in the community but also tokenization proof of origin something like that right a lot of opportunities where you can close even if you have now popping up all and from a marketing perspective as well when you when you for example you have a product that you distribute indir through resellers or through agents and suddenly have an opportunity to really go back into a direct customer relationship which is very very interesting for services so where where do I order Services when I have to repair the product for ex long or have to replace the product or even do the disposal of the product that's can get directly then from the manufacturer

which is very interesting from the circular economy because I mean what will be a problem that a lot of Manufacturers have in the future is how do I get the materials you know how do I get the recycling materials and that could be really very good advantage of the product there is one thing we have not mentioned yet actually which is very important for the circular economy and that is that the business models can change actually so the producers of let let's say washing machines they are interested in a lifelong um a live that they can follow the entire life cycle of the of the washing machine for example so new business models are being developed like washing as a service that

the the the producer is not selling the machine anymore it's just like offering it as a service and is therefore fully informed about the product itself throughout its entire life cycle and that is a complete Paradigm Shift um where we are standing now towards the future so the the the materials will be maintained and keep the cycle as long as possible which is actually green deal as well as Circ economy the principle of it big time green deal so before we get here totally ere excited as as as here in the panel and so on I mean it the social club is as all about discussing so that you can bring in your questions

that you have and you would like to um know here so are there any questions at this stage so for example for the battery you said 70% of the data is static and is relying on the data source being input by the producer the the companies who mine you know the lithium so is there and I know this is probably not part of the scope of your work but how can we trust these data sources right because this is these are the basis of calculating the the CO2 and the the emissions right so if I don't know a Chinese company says well it takes me x amount of carbon to mine this lithium

but maybe it's twice or three times the amount then the whole um you know Prospect of okay it's great that we record it on the blockchain and it's immutable but if we begin with the wrong data source so I quickly repeat the question for our online uh viewers so the thing is how can we make sure that the data source is is correct because it all depends on the data source I mean when you enter rubbish you have rubbish in the in the in the product pass how can we ensure that uh just one short answer and we cannot we cannot because that's we can only rely on the data sources that where

we we can rely them as far as there is a signature in the stamp of the company filling out filling in the documents and that has been the case throughout the past uh 10 15 years in the automotive industry already I mean for the automotive industry it's not such a big step they do have 80% of the data already in within their databases their data pools um now it's to gather the information and to display it and the the case is that if there is a suspicion that the data is not true it will be follow up followed up as it had been followed up before so meaning that it is illegal to sign and stamp a document

that there is false information so that will be persecuted by the by the um respective States yeah I think that's the thing I mean then you have the product Parts you as well have a clear declaration exactly and from the from the manufacturer declaration and then then the Declaration is fraudulent and somebody needs to find out and probably that are Regulators or consumer protection agencies or or somebody but but it is improvable yes this is rent so I think there will be as well a certain kind of self regulational self contr control that you should not te on the

data because somebody find out but there's other projects for example do you had this a couple years ago this initiative where they funded projects where they used iot do have things you know a lot of devices to measure for example um fertilizers in soil levels and then these were recorded on the blockchain so again the use of blockchain was very beneficial paired with um deices and you know measurable data that came from sources that could not be alter so I'm sure there's a lot of great things out there that could probably be connected to the digital pth directly feing data into from mining from

Transportation absolutely yes I mean thing is there are good examples from from various uh tools that um as well control already the quality of of of inputs to a product uh from from in the mining envir or in the you know s s scg for example a typical good source for for controlling things um how could these things integrated in in in a solution like uh like the digital product P yeah it is being integrated already because one part that the one of the dynamic parts of the digital battery passport is the event log so meaning that if there is an

an extraordinary event uh happening let's say um a battery is is overcharged a battery is overheated a battery is undercooled uh a batter's got an outage uh all these events negative events basically have to be locked by requirement of the European Union so and therefore once more we use we make use of the blockchain to actually have these uh recorded and uh that will show us what's the the batter's value at the end of the today together with the state of health MH and the the B and the loog file we have um a full Declaration of of its

Health interesting I think there was another question though we have a second part of Q&A if there is a yes please go ahead thank you thank you sure and thank you for interesting coming up very very great has a lot of potential in my the question upon the right are they based in the Blain to or do you have external access rights on the S St I will just repeat the question for our online viewers the question is about access rights if you have it on on the blockchain or outside approaches MH and we do have uh the access Rights Management on the blockchain itself so the application also lies on the

blockchain we do store certain uh certain data outside of chain but the application itself and the the Gateway lie on the blockchain itself on the ICP blockchain okay super so um maybe we continue with uh because we touched upon um sustainability a bit and uh as you are all hopefully aware the subtitle of our event is how we can save maybe our planet's resources so if you think about uh the digital product passes also of course digital battery part and all other options we have where do you see a potential to focus on sustainability and improving the en environmental foot footprint with this approach maybe from block sense but also maybe in a broader

aspect then the thing is we chose a blockchain that is actually very efficient and very very uh low in energy consumption that is one thing so we do not want to raise the the car footprint by storing the information or storing or providing the the information in in terms of a a digital product p transport but uh what it helps uh what sustainability is being supported by is that it really supports the second life of a good let's say let's take again the the example of the battery passport uh the battery itself has a life up to

75% of state of health so which is not that much I mean it's still uh it's still three quarters of of an entire exactly state of health so but it cannot be used anymore in the everyday uh car use so what is being done is the second life is being supported by the battery passport because it gives me a clear view of the state of health of the battery so these batteries they are being taken being dismantled and being uh each cell or each module depending on the kind of of Second Life usage is being reused and repurposed as an energy storage like not a a dynamic energy or a

mobile energy storage but U an immobile or a storage for a for Peak shaving which is helping U big energy companies to actually reduce the peaks of their energy um consumption and so the it it means that the repurposing is strongly supported to go towards sustainability of the battery I think we can really um imagine a lot of options for other products for other areas right absolutely because that you have the tracking and and all the possibilities to really understand what what kind of reprocessing is and that will feed into the circular economy exactly um aspect definitely what the the now I just have quick question on

that I mean the the owner of the product is that mandatory to be on the passport as well or or is that not mandatory I don't know I mean when I not okay owner is um is a difficult term very often it's the the triber economic operator the the operator yeah the operator and so especially in the case as I Des described before with the washing machine so it would be the economic operator and not the user so meaning that very often the owner is also the economic operator so that is where the responsibility lies and also that is where theer the responsibility lies for

Gathering all the information and aggregating all the information into the passport this is a if I may remain there for a moment each uh each supplier in the in Upstream information and the entire um supply chain is responsible for the data provided from his um supplier MH so it goes all along the chain and responsibility is finally ending up at the economic operator mhm because I found it a bit yeah this is this probably a tricky piece with the with the passport you know when do you need to have the information about the owner when do you need to have

information about how the owner uses the product and let's take the washing machines I think it makes a difference when I wash uh normal clothes like puls or when I put my running shoes in in air honestly I know running shoeses not a good idea each one for the prod so you have also one for the running shoes there it says don't put it into the washing machine don't put it into the washing machine exctly yeah or only once and yeah no that will also be declared of course and that is probably part of of the of of your of the warranty also that you shouldn't put running shoes into the washing machine

maybe basically can yeah you can yeah but maybe it is really part of of the instruction um what uh how this machine shall be used yeah actually it's not the running shoes that are the problem it is the mud and the dirt that you have little Stones day break you my washing machine so now we know where Dennis is always doing his weekend walks so much personal story yeah it would be quite interesting I mean um we talked about the General concept about um uh your digital battery pass and before we had uh this event just quickly when we had a coffee together you shared that there's a new announcement you can make because

there's a a publication you will do maybe it's outside of the concept you actually wanted to talk but I think it's might might be interesting for our uh audience here maybe you want to share about this specific use case if you want um just a couple of days ago we we got um do we were under NDA beforehand but we got the to actually publish a case study of a company called Bard compression and there we this uh case study is now in the translation it will be ready within two three days then it can be published and uh we are very happy with that because that really shows the work company has to do um how

to establish a digital product passport there it was about the gas wolf an industry case and they are really now at the stage where the pilots this pilot project shows the effort that the company actually needs to to do to get to the data to get to the right data sources to do the data governance within the company very important topic and then finally how to get it out of the of the system to us where we build uh we will build interfaces to actually gather the data of sh quite good for you so it will be ready in a couple of days very good

you know where to get it right maybe as a closing question or is there's a question could we what happens Cas is second hand Goods ORS and eting third part of countries is there of crossb rules or regulations in place to enforce what happens in the EU so that like you goes abroad is there any Clarity on that I will just repeat the question for our audience online so the question is right now we're talking about the regulation from the uh European union and what if products are

going cross B to other countries where maybe different regulations or third party countries exactly which are not part of the U thank you good question would you like very good question very question especially in Switzerland because the the is here they are so far concerned as if when they want to deliver towards the European Union they need to have the passport ready by like in the battery case by February 27 um Switzerland itself has not given out a regulation yet that is in Burn now in the works until uh it is expected that in Fall 25 there will be a regulation what is expected is that they

will accept the European regulation with couple of accept exceptions but um there is not to be expected a no or like that the the regulation is being being more um emphasized on certain parts rather a bit more permissive um that will be the the case in Switzerland what from what I heard uh in other countries it seems like also other countries are waiting for the European regulations to actually um set up their regulations from the US we do not expect very much rather um they don't expect

anything anymore um so I mean there's the regulation from the European Union probably as well from other countries and so on but I imagine as well there need to be like industry standards I mean like let's go back to the washing machine example so all washing machine producers probably would need to sit down and say hey uh you know all my washing explanations are there we are using these Dean uh signs and uh descriptions that are there we have the same decoration what is wool what is not wool for example I'm just picking something up now but so so how do you observe that I mean are the standardization regulations

are the industry bodies already active it's in the make let's say it that way it's uh it's being developed uh just a couple of weeks ago four or five weeks ago uh a new Dean Standard came out um also um that is actually describing the passport and so are other uh standards because interoperability we have not talked about that yet is a very important topic and for interoperability standards are necessary so we do not yet know we do not know yet exactly what standards will will win the fight we are um to to have uh the ability to

communicate between machine between uh between the goods and between the passports and the data sheets so we will we will um we will know pretty soon so far it seems like the asset Administration shell is a very important part and the the epcis is a Chason abbreviation um will also take a big part in the exchange of data requirement is the data is reasonable by machine because that's what we say is very very important and um because when you read from the European commission the feedback side on on their on their call for evidence I mean when you scroll through that everything you read is

interoperability uh Tech openness transparency of data processing uh market efficiency freedom of providers there's a l a long wish list which in the past showed that it that's how then standards or yeah standards actually become live very well and broadly accepted but there's a lot of vises of being really you know Tech neutral and so on yes and I just imagine it's difficult the one one do it on a website and Central service things and then you have it on the blockchain and that interoperability is a tricky thing absolutely absolutely the thing is we we

don't know yet exactly what it is it's it's being drafted but it's not being regulated yet so what what we are expecting is um we are DPP providers we we are digital product passport providers we will become official once we get the chance and what does that mean it means that uh there is a a European um regulator um an agency that will accredit a digital product passport provider so we need to wait for this regulator uh instance to be set up so that we can be accredited in the future is an ISO number I think that's

like a global standard right So eventually or no uh a g gaten number maybe um like that you mean the barcode or an ISO regulated product number that's oh very okay I don't know exactly customer product it applies to and a lot of other things but it does seem like it's regulated from top down um and it the requirements have been set by the EU for a global B is the goal I mean the goal would be that there's also this regulation or a set of senders for digital product

passage and there could be many providers who create digital product passes for various products but they allign to the same standers right is that correct yeah would you like to repeat the V so I mean when they comes a question about or it comes about a standard about you know product numbers and serial numbers and and and so on then that that it needs to be ensured that they are all applying to the right standard and how that could happen that's question so you're DPP provider and there's other companies who do this similar type of digital passports right but at the moment there's not an

industry standard that tells you as a DPP provider what type of information exactly you need to right in what format is that correct um almost it's no no it's it's being it's it's really being worked on but for the battery uh in the battery regulation we do have a set of 108 data fields already defined that might vary a bit towards the the final uh decision and what is there is the that the the parts are being defined roughly partly already in detail but the final Reg ation it's expected by the end of 25

so moving towards the DPP there it is really being in the make it's not sure yet what kind of standard is going to be used what uh information is going to be used as dynamic or static information so also this is a very important question um does a t-shirt a t-shirt will not use static information except for maybe tracking the lot from A to B to C to to the shop at the end of the day because a t-shirt will have a product passport that is for the entire lot and not for a Unique Piece so we have to distinguish there and and

um all that is not written yet or not really um definite yet so therefore each part of the of the industry will Define its own rules or the commissions will Define their own own rules and we expect them within this year next year to finalize on the topic of of Outlook um we talked about why we think that ddps is important why blockchain is a very I mean it's a given case that it's fantastic as a technology to use it but give us some thoughts for your future U maybe very personal maybe very block sense oriented um we heard about that some things are still not clear yet will

see what what actually could be the standard but give us your personal opinion where is blin where is it all heading so we we're heading actually towards a solution a digital product passport solution provider so we will do both we will provide the hosting for the data we will provide the data rooms to aggregate the data in various businesses so first we are now on the development as mentioned before work the development of integrating data rooms and through the connections so by June we will have uh the the the data flowing from A to B from B to C and parall we are developing and following first following the the

regulations and then parallel develop a digital passport um prototypes for companies because it's now the time to start exactly only not a lot it's very important to actually be aware of what kind of system they have and what they need to urate and to change to be able to provide the data once they're needed to not block them in the European market absolutely we have a question from the from the audience sorry extra cost for manufacturers and hope can make sure that theer doesn't have to pay more because the manufacturer is trying to comply with

the leg M so the question is if there will be extra cost which will be uh to the end user because the manufacturer might raise prices because of additional costs being uh in the compliance yes yeah to the course good good question very good question um we cannot make sure that this is not going to happen but what this I mean the cost question is an important one because there will be costs to actually streamline the data to make uh a lean data management for each company there will be cost but there will also be benefits in efficiency so at the end of the day each company will profit from stream streamlining their data and from it from

setting up their systems and as we heard marketing it will open up a new marketing channel also which is not to underestimate in my point of view yeah and the community thought it can be applied there also be not as close as that so I think have uh as we still have an upro going on maybe one last question and I'm sure Peter will have a lot of room still while taking a glass of wine or maybe a nice up later on but please go ahead what is your question intelligence is used in combination with dig passport in the data I mean there are obvious use cases but is it

already just quickly repeat sorry yeah thank you very good question question is if there are some already used cases where we use blockchain digital passport and um ai ai agents maybe which is the even more current topic um thank you for the question we forgot about that one well it's still here but uh thanks a lot for that um there is not many cases yet um also in in our case uh I didn't want to spoil the surprise when you ask me about the Outlook um we we are working on predictive model modeling because once you have this Treasure of data um it's it's really a treasure that can work with that can start analy let's take the

example of the battery you have have a battery in front of you and you have 10 batter you have 100 batteries and you get the data you can start Ming with this data and and also uh start um aggregating uh other elements other factors to play with data so you can actually model with the data you it's called predictive modeling and also with the predictive maintenance when you also use the current data you can go into the predictive maintenance sector which is very helpful to actually um predict and plan maintenance of machines of airplanes of uh production uh units and

so on so there's not many cases in place but there will be is Al so thank you very much Peter for this very interesting talks and definitely at the Appo we have additional time to to Deep dive on one or the other topic uh thank you very much everybody for for joining us and uh and the next uh event I mean we have this series now actually full the entire year the next one will be then already in a month's time uh on the 19th of of March about another corporate topic uh Enterprise topic which is Corporate treasury because when you don't have money you company goes easily anr and the question there we

Deep dive is of course okay sustainable um uh not word blockchain of course blockchain exactly with stable coins exactly and how stable coins can actually change the way we do corporate R yeah it's top well thank you very much to the audience online as well thank you for for dialing in and uh let's hope see you at one of the next CBA uh Social Clubs thank you