How Blockchain Technology Will Save the Environment

Ever since the Paris Agreement was drafted in 2015, there has been growing pressure on governments, institutions, and businesses to reduce their carbon footprints. Yet, despite technological innovations such as artificial intelligence, big data and IoT, monitoring and reducing our impact on the environment has been challenging.

Blockchain technology has long been associated with cryptocurrencies such as Bitcoin. It’s a distributed ledger technology (DLT) that stores and processes data in a peer-to-peer (P2P) network with no centralised authority. In fact, blockchain’s applications extend far beyond cryptocurrencies. People with interest in the environment are promoting applications in forestry, farming, energy production, pollution monitoring, recycling, and carbon emission tracking.

Blockchains are tamper-proof databases that make it possible to store, process, and share any kind of information. It’s therefore possible to track and verify transactions that carry an environmental impact and progress to net zero carbon.

In this article, we’ll examine a few applications of blockchain in environmental monitoring, and how it contributes to data management and ecological progress.

What is blockchain technology?

Blockchain is a distributed ledger technology (DLT) that keeps a record of all transactions across a peer-to-peer (P2P) network. Blockchain stores, shares, and synchronises data in blocks. Blocks represent a set of transactions. Each new block is linked to the previous block, literally creating a chain of blocks. For example, each new block of bitcoins is linked to the previous block tracing back to the Genesis Block released on January 3rd, 2009.

The release of each new block must be approved by all the participants on the network -i.e. networked computers. A consensus mechanism sets the rules for the verification, validation, and addition of transactions to the public record (or ledger). The most common consensus mechanism is a called “Proof of Work” (POW), where participants compete to find a solution to a complex cryptographic algorithm. Once a “miner” finds the solution, the other participants on the network verify the answer, and the block is added to the blockchain. All copies of the ledger are updated across the network, and the changes are permanent.


Each block is timestamped. A unique hash references the previous block. Public key cryptography ensures the authenticity and integrity of transactions. Constant updates and validation to the blockchain make unauthorised changes mathematically impossible. So, the public ledger held on each participant’s machine is unique and immutable, ensuring trust among the participants.

Further, smart contracts enable the automatic execution of contracts with no human intervention, or verification by a central authority.

Contrast blockchain ledgers to the traditional ledgers used by banks: the bank acts as the exclusive manager of the ledger, with sole responsibility for storage, updates, and verification of transactions.

Now that we have some understanding of blockchain technology, how can it be used to positively impact the environment?

Blockchain for carbon trading

It might not always be obvious, but our daily choices leave a carbon footprint. From the obvious,

like filling our cars with petrol, to the more subtle, like buying a cup of coffee or upgrading our cloud storage plan.

Carbon credits provide a mechanism within which organisations and individuals can take responsibility for their carbon choices. Carbon credits were meant to provide a tangible and practical way to meet out carbon reduction targets.

Yet the carbon market has been beset with difficulties pretty much since carbon credits were first proposed in the 1997 Kyoto Protocol. Differing standards and regulations have resulted in a lack of confidence. And a lack of transparency prevents many from trusting carbon credits as an asset.

Without a universally accepted ledger, it’s difficult for individuals and organisations to track how much carbon they’ve used or offset. By now, you understand a blockchain is an immutable and permanent record of transactions. It’s the perfect mechanism to tokenise and scale carbon trading. It provides for transparent and reliable tracking of carbon emissions. It allows businesses, consumers, and governments to track the environmental impact of the products they buy, sell, and produce.

Blockhain for energy efficiency

There’s little doubt that smart meters have had a positive impact on environmental awareness. They’ve sparked a greater awareness of energy usage and spurred an interest in renewable energy. Coupled with advancements in IoT devices, energy companies have a unique opportunity to transform the energy sector.

The only problem is the energy grid is mostly controlled in a centralised fashion. This creates

inefficiencies where surplus energy is not redistributed to where it’s needed. Peer-to-peer (P2P)


energy trading is an energy production structure that decentralises this control and allows consumers to also become producers of energy.

Homeowners produce electricity from solar panels, for example, and redistribute excess power to other peers (homeowners) on a local microgrid.

The advantage is power is generated, stored, and distributed locally. And it limits the need to transmit energy over long distances where losses will occur during distribution.

Blockchain algorithms are the perfect device to regulate such a network. They can monitor energy usage on the microgrid and redistribute excess power to where it’s most needed. Again, smart contracts automate tariff charges and other business rules.

Blockchain for waste management

With the U.N. estimating that 300 million tonnes of plastic waste are produced every year, and only 9% being recycled, plastic waste carries serious implications for the environment. Even more alarming, if current trends continue, there will be more plastic than fish in the oceans by 2050.

The recycling industry is plagued with inefficiencies and a lack of data. There’s a need for greater supply chain visibility for better decision-making in resource planning, pricing, and inventory management.

Companies like RecycleGO are building applications to track every piece of data about an item from production to consumption to recycling.

Blockchain could also facilitate incentivisation. Current recycling programmes don’t offer people much incentive to take part. They’re often administered by separate cities and local authorities. It’s difficult to track and compare the results from each programme.

Plastic Bank is working on a blockchain-powered app that will allow people in third world countries to exchange plastic items for cryptographic tokens. These tokens can then be exchanged for items and services like phone charging and cooking fuel.

Blockchain in supply chain

With a growing degree of environmental awareness, consumers want to buy products that are ethically sourced. But most feel they simply don’t know how to tell the difference. It’s far too easy for companies to withhold information about how they made their products, what materials they used, and how they dispose of waste.

Let’s say you’re a furniture manufacturer and you wish to prove you only use wood from sustainable forests. You would have to trace every piece of wood from forest to the final piece of furniture. At the moment, this is done through a process of labeling and certification. The problem with this approach, there’s no way of validating every single piece of wood. To complicate matters,


each certification organisation follows their own process. Thus, the furniture manufacturer is forced to follow the certification process imposed by the particular certifying body and has no way of proving conclusively their wood is sourced responsibly.

The Programme for the Endorsement of Forestry Certification is responsible for certifying some 700 million acres of forests. It’s been investigating the use of blockchain technology as a way of tracing the provenance of wood. Again, the benefits are evident. Blockchain technology is capable of recording every transaction in a publicly accessible ledger which no single party can manipulate.

The same applies to food. Blockchain technology could record the provenance of every ingredient and save millions of consumers from the complications of allergies. It could also show where food was farmed locally or prove that crops were produced by a fair trade farmer.

Blockchain in environmental treaties

Environmental treaties carry moral weight, but do they carry legal weight? With trust in governments and public policies at an all-time low, there’s often a feeling among citizens that there’s little incentive for governments or businesses to keep their commitments. Rightly or wrongly, there’s a suspicion it’s far too easy to manipulate data to serve political needs.

Blockchain would make it very difficult for corporations and governments to misreport their progress and renege on their promises. Once data is recorded on the blockchain, it’s publicly available for all to scrutinise.

The blockchain could also serve as a record of legal treaties themselves, again leaving them open to scrutiny.

Final thoughts

Most of us have heard of blockchain and the extravagant returns that are possible in the cryptocurrency markets. It’s important to remember that blockchain is the technology that powers these markets. The same technology can be applied to many other markets. At its core is a system of recording and validating transactions without relying on a single authority. It has the power to

inspire trust across the entire value creation chain, whether it’s carbon trading, energy management, recycling, or indeed any other value chain.

Why P2P energy trading is key to digital transformation

While over 100 countries have committed to net zero carbon emissions by 2050, progress on the ground is slow. With leading nations still relying on fossil fuels for their energy production, there’s a long way to go. To tackle this issue, the integration of renewable energy resources into the existing grid is emerging as a viable option.

P2P energy trading is an energy consumption model that turns passive consumers into active producers. Peer-to-peer (P2P) technology is fueling the sharing economy. It’s disrupted traditional industries like banking and it’s set to do the same for energy.

With the digitisation of the energy network begun by the smart meter rollout, the options for consumers to save money and cut carbon emissions are multiplying.

The move from centralised energy production to a decentralised peer-to-peer model presents its challenges. First, there needs to be a greater adoption of small-scale renewable energy generation eg. But there are also technical and regulatory challenges to address.

In this article, we’ll explore how distributed ledger technologies like blockchain address these challenges and enable consumers to buy and sell their own energy. As such, we’ll show that P2P energy trading is the future of the digitally-enabled energy grid.

The current state of energy trading

Before 1996 the supply of energy in the European market was controlled by monopolies. They owned production, distribution, and trading of energy. These monopolies were able to set energy prices and restrict access to new entrants since they also owned the infrastructure.

In order to stimulate competition in the internal energy market, the European Union began liberalising electricity and gas markets in 1996. Instead of developing competing networks, liberalisation separates production and supply on the one hand and distribution on the other.

This meant that generation, transmission and distribution became “unbundled”.

Where a monopoly had to be maintained (typically distribution) regulations would control the activities of operators. This would then leave energy supply open to competition.

To enable fair access to the grid for producers and suppliers, distribution would have to be maintained by independent network operators:

  • The first Electricity Directive in 1996 (Directive 96/22/EC) required suppliers to separate their accounts for production, transmission, distribution, and supply activities.
  • In 2003, Directive 2003/54/EC went further, and required functional unbundling. This created vertically integrated companies (VICs) which separated the transmission and distribution from the production and supply activities. This meant that each function was ensured by a separate company. However, this did not prevent these companies from belonging to the same group of companies.
  • The 2009 Electricity Directive recognised this limitation and introduced 3 new types of unbundling for network operators only: 1) In ownership unbundling, producers and suppliers cannot own network operating companies and vice versa. 2) Alternatively, network operators can choose not to operate the network themselves and appoint an independent system operator (ISO) instead. 3) Lastly, network operators can choose to remain within a VIC and become an independent transmission operator (ITO). However, strict rules prevent the parent company from intervening in the affairs of the network operator.

The Renewables Directive (Directive 2009/28/EU) introduced in 2009 requires network operators to ensure their grids are able to receive supplies from renewable energy production resources. They are also required to provide priority access to these resources.

What is P2P energy trading?

To meet net zero carbon emission targets, mass adoption of renewable energy resources is needed. Traditionally, consumers of energy are the passive recipients of supply from utilities. As the concept of democratisation of resources gains popularity, coupled with greater environmental awareness, there’s a growing distrust of utility companies.

The prosumer has a key role to play in the emerging energy trading economy. A prosumer consumes energy but also resells any surplus back to the grid, or to a neighbour. Peer-to-peer, or P2P energy trading is  the natural vehicle for this new economy.

Prosumers access the main grid through microgrids. A microgrid is a small-scale power generation system. It generates renewable energy locally via devices such as solar panels or wind turbines, and connects to the main utility grid. It’s a two-way system that balances the load between local power generation and the main grid. Thus, prosumers can buy or sell power from or to the grid. Microgrids can also operate independently in what’s called an islanding mode, disconnected from the main grid.

A decentralised P2P energy trading grid has many benefits including cost savings for consumers, increased network resilience, and fewer grid losses. But as the grid grows larger, trades between independent agents become more complex. Thus, there’s a need for a stable and reliable solution for data exchange and load balancing on the network.

Blockchain technology is generating a lot of interest in that regard. A blockchain is an open distributed ledger that records transactions verifiably and permanently. Distributed ledgers themselves are databases which store information across multiple sites. They aren’t controlled by a central authority. Combined with smart contracts, a blockchain stores tamper-proof records of transactions.

Blockchain technology enables P2P transactions in a transparent and secure manner:

  • It’s open and accessible to all
  • It records transactions efficiently and is scalable
  • The transactions, once recorded, cannot be altered

Basic set-up of a P2P energy trading platform

Setting up a P2P energy trading platform is not just about the technology. Market and regulatory factors contribute to a successful implementation.

Grid set-up. In order to create a viable P2P network it makes sense that there should be enough participants that wish to trade energy. There should also be a sufficient number of participants with power generation capacity. Participants should also decide whether to install a separate transmission line or whether to trade via the main grid. The P2P enabled grid, or microgrid, should be able to couple with the main grid as well as operate separately in islanding mode. Thus trading is possible with the participants on the microgrid exclusively, or surpluses can be traded with the main grid.

Hardware. At the physical level we need smart meters that monitor power production in real time, as well as smart grids (mini-,grids, microgrids, nanogrids). At the virtual layer, secure communication protocols enable communication between participants, encrypt transactions etc…

Software. Software provides a platform for P2P energy trading, supply and demand forecasting, and data analytics. Software also provides for the automated execution of trades. control of pricing mechanisms, and energy bidding mechanisms.

Regulations. Regulations govern the collection and use of data. They also outline roles and responsibilities of stakeholders, define market operation rules, and protect the rights of consumers. They provide for network access criteria and network access charges.

Benefits of P2P energy trading

We’ve just seen how P2P energy trading enables consumers to take control of their energy supply, contribute to reducing carbon emissions, and make a positive contribution to their community.

P2P energy trading supports mini-grids

Most P2P energy trading projects operate on isolated mini-grids, also called microgrids. Users on the mini-grid are often supplied with power through home solar panels which cannot store surplus electricity.

A P2P mini-grid enables homes connected to the grid to access surplus electricity. This improves access to local renewable power generation. It also makes the community resilient to power outages and may also improve access to the main grid.

P2P energy trading supports the main grid

A P2P microgrid balances local supply and demand in real-time. It reduces peak loads on the main grid. Thus it reduces the need to invest in capacity and infrastructure that meets peak demand. The operator of the main grid can further incentivise prosumers that help reduce grid congestion. Furthermore, the P2P microgrid can serve as a virtual power plant that coordinates distributed energy resources.

P2P energy trading facilitates Citizens Energy Communities

As part of its commitment to place the EU at the forefront of the clean energy transition, the European Commission released the Clean Energy for all Europeans Package (CEP) in 2016. The package consists  of 8 laws affecting, among others, renewable energy, energy efficiency, and most notably electricity market design.

With the package, the EU aims to place the consumer at the centre of not just consumption but the generation of electricity. This will give European consumers a greater choice of electricity supply, access to reliable price comparisons, and the opportunity to produce and sell their own electricity.

Citizen Energy Communities (CECs) will have the power to generate, distribute, consume, store, or provide other electricity services such as electric vehicle charging to its members. CECs are based on voluntary participation and are controlled by members and shareholders. The CEP also makes provisions for Renewable Energy Communities (RECs) where all energy production assets are renewable.

​The Clean Energy Package stipulates that the energy trading process should not be hindered by or influenced by the collection of network tariffs. Furthermore. CECs are empowered to apply whatever technology they need to facilitate the trading process. This leaves the door wide open to P2P energy trading platforms.

Final thoughts

Ever since 190 countries committed to reducing global carbon emissions at the Paris summit in 2015, the European Union and other governing bodies have been searching for ways to encourage mass adoption of renewable energy supplies. P2P energy trading empowers consumers with access to fair energy prices but also turns them into producers that serve their local communities. It comes at just the right time where environmental responsibility and the democratisation of resources is becoming centre stage.

Why Every Company Should Trace the Source of its Energy

The Green Deal

The European Green Deal vows to make Europe climate neutral by 2050, which means achieving net-zero carbon emissions. It aims to do this by cutting emissions, restoring biodiversity, and focussing on a cleaner, circular economy.

However, the current set of Green Deal policies makes reaching these targets highly unlikely. In order to be on track to being climate neutral, there needs to be a far greater focus on promoting the use of green energy.

The importance of using green energy

Green energy is any form of energy that is generated from natural resources, without harming the environment. This type of energy can come from sunlight, wind, or water, and therefore it emits no greenhouse gases into the atmosphere, which are the leading cause of climate change. These natural resources are also renewable, so they not only have little to no environmental impact but can also be used repetitively without depleting the Earth’s resources.

The last decade has seen a significant increase in the use of renewable energy sources, and it has been one of the most pivotal moves towards tackling emissions. Not only on an industrial size scale, but businesses of all sizes are now realizing the importance of harnessing the power of green energy.

Energy transformation to a cleaner, more sustainable energy source is vital in order to come close to meeting the Green Deal’s targets. Using green energy is one of the key ways to reduce the impact of climate change on the environment, by preserving natural resources and reducing harmful emissions.

The benefits of tracing and certifying green energy

Once a business is using green energy it is highly valuable and necessary to trace and certify the procurement of energy from green power sources, in order to fully achieve its decarbonization goals.

Due to consumers’ significant and increasing awareness over the use of green energy, there is a high demand for businesses to be transparent about their energy usage. Authorities are also actively pushing for an increase in energy transformation and certification.

Consistent and reliable tracing allows a business to easily monitor its clean energy use and maintain a stable assurance of its origin as a renewable source. Certifying its source as green energy provides transparency and reassurance to the business itself, as well as to its clientele; establishing trust is vital for any business that claims to use green energy, in an effort to demonstrate its commitment to supporting renewable energy growth.

Blockchain technology

Blockchain technology, a type of DLT (distributed ledger technology), is a record of transactions that form a block or a group, which are then chained together and easily shared among all related parties. This type of technology has a distributed ledger which makes it impossible to violate, guaranteeing that all data involved is immutable.

Blockchain technology is a key tool in the green energy market as it assures the transparency of energy usage and sourcing through the permanent recording of data. It can be used to trace the source of energy consumption and make transactions secure and traceable.

The high degree of traceability and transparency that blockchain provides makes green energy certification processes straightforward and quick, and the supply of green energy more efficient. This encourages the production and consumption of renewable energy, ultimately speeding up the efforts to fight climate change.

Prosume’s energy source tracing service

Thanks to digitization, both the internal and external energy supply sources of any industrial building can be monitored in real-time and managed remotely and automatically. This is invaluable to the increasingly complex energy systems which are now used.

Prosume’s energy tracing technology uses blockchain and DLT solutions, which guarantee reliability and grant access only to the stakeholders that are involved. The service certifies that the procurement of energy comes from a green power source, providing transparency as a green energy consumer. The system monitors renewable power plants’ activity, generating “green tokens” that uniquely match the energy consumed. Businesses can achieve their decarbonization goals by using this technology to assure that their energy usage is fairly and consistently traced and recorded.

Prosume’s platform allows businesses to certify the green energy origin of their supply sources, forming environmental sustainability reports, and reporting the data in official financial statements. The platform legitimizes the accuracy and immutability of energy consumption data from all sources, while its easy-to-use interface encourages more sustainable habits and generates energy consumption savings.

Prosume’s platform can be tailored to each user’s needs, depending on their individual energy consumption needs and goals. The platform consistently provides transparency and trustworthiness, supporting all its users in their energy transformation journey.

Making the transformation towards green energy is essential for all industries and across all levels to significantly reduce their carbon emissions and move towards a more sustainable future. Once this has been implemented, green energy habits need to be recorded and certified efficiently. Without this, businesses are at risk of providing inaccurate and untrustworthy data that can not only greatly affect their reputations, but lead to serious repercussions.

Joining Prosume means joining a community that is intent on achieving climate neutrality as soon as possible. Prosume fosters the use of renewable sources and supports and promotes the move to a greener future for everyone.

Prosume named as one of the best Italy based software companies by Best Startup

101 startups and companies were selected for exceptional performance in one of these categories: Innovation, Growth, Societal impact, Management. Prosume is one of these.

Milan, june 2021 – Best Startup published the list of top picks for the best Italy based Software companies. These startups and companies are taking a variety of approaches to innovating the Software industry, but are all exceptional companies well worth a follow.

Prosume has been positioned among these cutting edge companies and it is an honour to see our hard work, commitment and enthusiasm recognised. 

Since the birth of the company, our mission has been to make the energy market decentralized and sustainable, providing an interoperable digital layer that connects final users with energy service providers. Day after day, month after month, year after year we have seen our aspirations take shape and be acknowledged as a priority in today’s society. 

The advantages of decentralising the energy system are clear: a reduction in transmission losses,  a higher security of supply, and a more renewable generation mix. 

Besides this, we believe that distributed models will have a great impact on society as we know it now, raising awareness about energy usage, environment, data protection and transparency. 

We are firmly committed to defining new rules for the community we live in, based on the principles of transparency, sustainability, independence and efficiency. At Prosume we believe that protecting the environment and social rights are fundamental steps to build the  future of the world we all share.

Decentralized, decarbonized, digitized policies are the only possible future for sustainable energy matrices.

Prosume awarded the “Blockchains for Social Good Prize” from the European Commission

We are honoured to announce that Prosume has been awarded the ‘Blockchains for Social Good Prize” from the European Commission! Our open source and interoperable blockchain solution for sustainable and decentralised energy production and consumption has been selected among almost 200 applications coming from 43 countries worldwide.


The European Innovation Council (EIC) Prize has awarded €5 million to six winners selected in a call to identify scalable, deployable and high-impact blockchain solutions for societal challenges. The winning solutions propose blockchain applications for fair trade and circular economy, increasing transparency in production processes and quality information, improving accountability and contributing to financial inclusion and renewable energy.

I warmly congratulate all the winners. The proposed solutions show how blockchain can create positive social change by supporting fair trade, increasing transparency in production processes and e-commerce and contributing to financial inclusion by exploring decentralised economic structures. I hope that this award can help upscale these outstanding ideas and inspire many others innovators. (Mariya Gabriel, Commissioner for Innovation Research, Culture, Education and Youth)

This is an important victory for us and the whole renewable energy community: energy was not foreseen in the official prize categories, and we won ex aequo with another company. The energy transition is one of the biggest structural challenges humanity is facing today: our vision is that in the current climate crisis renewables need to be considered a common good (instead of a mere commodity) and that decentralising their production and distribution is crucial to avoid the appropriation of this common good by energy monopolies, which can easily create an artificial scarcity with strong repercussions on social and economic inequalities.


In a world that is increasingly digital – thus dramatically energy-dependent at household level as well as at industrial one, the energy sector transition should be a worldwide priority. Imagine a renewables-based economy, where both the energy and the infrastructure distributing it are considered common goods, just like the streets we walk in. Where privacy, data protection and information security are the backbones of decentralized energy platforms and infrastructures. Where citizens are empowered to make sustainable choices and own their local energy production. This is the world we are building at Prosume. (Alex D’Elia, Founder and President of Prosume)


Due to the magnitude of the material infrastructure needed to run energy production and distribution, decentralisation alone in the energy sector does not guarantee that at the level of governance there will be a shift of power from big players to citizens: indeed, most blockchain projects in the energy market limit themselves to localised tokenisation of energy led by monopolies. Instead, PROSUME addresses the problem of social justice in the energy market by allowing the equal participation of prosumers to energy production and balancing. The centrality of prosumers implies increasing the amount of renewables in circulation, reducing the monopoly of traditional energy players, optimising energy consumption and production, as well as rewarding citizens who produce and consume responsibly. In a word, a true decentralisation.

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