Europe-led global certification scheme for raw materials expected in 2020
A group of European bodies and companies have joined efforts to create the first global certification scheme ensuring consistent standards of environmental, social and economic impact throughout the entire raw materials value chain, to be launched next year.
CERA (CErtification of RAw Materials), conceived in 2015 by German engineering and consulting firm DMT Group, counts with the support of the UN Economic Commission for Europe, the European Commission’s Joint Research Centre (JRC), EIT RawMaterials, Volkswagen, Fairphone and research institutions from across Europe.
There currently are at least 40 different certification methods for the mining industry alone and the number increases exponentially when considering the entire value chain.
Andreas Hucke, CERA Project Director, Head of Raw Materials Sustainability at DMT.
Companies are under pressure from consumers and investors to prove that minerals are sourced without human rights abuses but tracking raw materials throughout their journey is challenging.
There currently are at least 40 different certification methods for the mining industry alone and the number increases exponentially when considering the entire value chain. Some are specific to a geographic region, process or humanitarian concern, while others tackle a single mineral.
An additional barrier for the current certifications to work, is that most of them are complex, expensive and inconsistent, says Andreas Hucke, CERA Project Director, Head of Raw Materials Sustainability at DMT.
“This resulting in different approaches to how sustainability and ethics are defined from country to country, mineral to mineral, and company to company,” Hucke says. “CERA solves those problems”.
The certification process will be carried out using a private blockchain while its verification and search will be available on a public blockchain. The technology, the same that’s behind cryptocurrency bitcoin, provides a shared record of data held by a network of individual computers rather than a single party.
Formal CERA pilot projects addressing sustainability in the exploration, extraction and processing of lithium and cobalt will commence in late 2019.
Blockchain at work
There are several other blockchain projects focused on proving the authenticity of commodities and products.
Responsible-sourcing group RCS Global is helping IBM develop a cobalt traceability solution for Volkswagen, Ford and others.
From “Digitalizing the mining and metals global supply chain: Rise of blockchain and the smart contract.” Courtesy of White & Case.
World’s No. 1 diamond producer by value, De Beers, is in the advance stages of testing its Tracr platform, which allows tracing gemstones throughout the entire value chain — from mine to buyer.
Current regulations includes the EU’s Conflict Minerals Regulation, a law covering the sourcing of tantalum, tin, tungsten and gold – or ‘3TG’, which will come into force next year. Those rules are based on the Organization for Economic Co-operation and Development’s (OECD) guidance for sourcing minerals from conflict-affected and high-risk areas. It requires companies to prove they are investigating due diligence within their supply chains. The law is restricted, however, to those four commodities.
Other metals are covered by the Responsible Raw Materials Initiative (RRMI), an industry-led due diligence process supported by tech giants such as Apple, Microsoft, Samsung and electric car developers Renault, Ford and General Motors. Abiding by such initiative, however, is voluntary.
In the next weeks, CERA will be identifying pilot project partners for Chain of Custody, set to begin in 2020. It will receive applications from 2020 and issue first certificates in 2021.