As part of its sustainability efforts, Continental Tire Japan plans to use the PROJECT TREE blockchain initiative to ensure that some of its AllSeasonContact tires use responsibly sourced natural rubber. PROJECT TREE is an initiative of Japanese conglomerate ITOCHU, which owns a rubber processing company in Sumatra, Indonesia, and Britain’s Kwik Fit, a major network of tire fitters and car servicers. ITOCHU officially launched this sustainability initiative in December 2021.
PROJECT TREE’s tires are sold at full price and the money is redirected to smallholder farmers by providing them with agricultural tools, fertilizers and training. Indonesian rubber company uses blockchain during sourcing process to record where rubber comes from to track which tires are using PROJECT TREE rubber and trace it from raw material to sale by retail.
Almost 60% of the world’s rubber comes from Thailand and Indonesia. According to Continental, 70% of the world’s natural rubber is used for tire production and 85% of production is based on plantation agriculture.
Kwik Fit initially ran a four-month trial with Pirelli tires, but later added Continental and South Korean tire maker Hankook. Customers were notified of a small price premium for the PROJECT TREE initiative, and Kwik Fit found that sales exceeded expectations. It now expects to sell 150,000 PROJECT TREE tires this year.
The educational aspect is an essential part of the project. When the demand for rubber increases, additional land is often cleared to plant new trees, in some cases illegally and at considerable environmental cost. Because it takes up to six years for rubber trees to produce usable latex, demand has often dwindled by then. Instead, the training helps farmers increase yields on existing land and increase production without planting new trees.
Continental has already engaged in blockchain initiatives to share data with self-driving vehicles and a money market pilot with Commerzbank. Meanwhile, SAP has developed a blockchain prototype to track tire retreading activities.
ITOCHU has supported another blockchain sustainability initiative by investing in coffee traceability startup Farmer Connect.