Blockchain Technology in Renewable Energy Certificates in Brazil

https://bar.anpad.org.br

BAR − Brazilian Administration Review

Vol. 18, No. Spe, Art. 3, e200069, 2021

https://doi.org/10.1590/1807-7692bar2021200069

Special Issue on

Blockchain, Cryptocurrencies and Distributed Organizations

Research Article

Blockchain Technology in Renewable Energy

Certificates in Brazil

João Akio Ribeiro Yamaguchi

Teresa Rachael Santos

André Pereira de Carvalho

Fundação Getúlio Vargas, São Paulo, SP, Brazil.

Received 01 July 2020. This paper was with the authors for three revisions. Accepted 13 September 2021.

First published online 20 October 2021.

Editors-in-Chief: Carlo Gabriel Porto Bellini (Universidade Federal da Paraíba, Brazil);

Ivan Lapuente Garrido (Universidade do Vale do Rio dos Sinos, Brazil)

Guest Editors: Jorge Renato Verschoore (Universidade do Vale do Rio dos Sinos, Brazil);

Eduardo Henrique Diniz (Fundação Getúlio Vargas, EAESP, Brazil);

Ricardo Colomo-Palacios (Østfold University College, Norway)

Reviewers: Jefferson Marlon Monticelli (Universidade La Salle, Canoas, RS, Brazil) and one anonymous reviewer

Editorial assistants: Kler Godoy and Simone Rafael (ANPAD, Maringá, PR, Brazil)

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 2

ABSTRACT

Several renewable energy certificate (RECs) applications point out that the blockchain technology

can be useful in ensuring the traceability and transparency of transactions, despite some barriers

to its implementation, such as the legal and market development. However, it is not clear how

the organizational positioning, in relation to its given market, influences the artifact developed.

In this study, through design science research (DSR) and case study methodology, we structure

the problem space of two different positioned organizations in the sustainability field, with

blockchain-based applications to produce and trade RECs. We find out that: (a) the position of

the organization in relation to other stakeholders changes the behavior of the technology

adoption; (b) the technological solution preceded the perception of the problem; (c) organizations

create different representations of the artifact for each stakeholder. We suggest other studies to

deepen these findings in order to better develop theories that explain how organizations see their

problem when developing technological solutions while using DSR.

Keywords: blockchain; design science research; renewable energy certificates; energy

JEL Code: M15

Blockchain technology in renewable energy certificates in Brazil 3

INTRODUCTION

The need to limit global warming to even 1.5° C above pre-industrial levels demands rapid, far

reaching, and unprecedented changes in the current production and consumption model

(Intergovernmental Panel on Climate Change [IPCC], 2018). In 2010, 35% (17 GtCO2eq) of

global anthropogenic greenhouse gas (GHG) emissions were released in the energy supply sector.

When GHG emissions from electricity and heat production are attributed to the final consumer

sectors (i.e., indirect emissions), the shares of the industry and buildings sectors represent 31%

and 19% of global emissions, respectively (Intergovernmental Panel on Climate Change [IPCC],

2014).

Besides decarbonization, i.e., the necessary reduction in carbon intensity of energy generation,

the electrical power systems are being affected also by two other main drivers of change:

digitalization of energy trading, which offers opportunities for new business models based on

peer-to-peer (P2P) and transparent transactions; and decentralization of power systems, including

distribution networks that comprise decentralized generation (most based on renewable energy

sources), storage and active participation of the consumers, some of them turned into prosumers,

as they also produce energy on the decentralized system (Silvestre, Favuzza, Sanseverino, & Zizzo,

2018).

In energy markets, it is impossible for consumers to distinguish between the consumption of

renewable energy (RE) and non-renewable energy. The decarbonization of the electricity

generation is addressed by governments through traditional policy tools, such as taxes and

subsidies, and through the implementation of certification schemes to promote the use of RE,

such as renewable energy certificates (RECs) (Hulshof, Jepma, & Mulder, 2019). RECs are a

market-based policy instrument that represents the property rights to the environmental, social,

and other non-power attributes of a fixed amount of electricity, usually one megawatt-hour

(MWh), generated and delivered to the grid from a renewable energy source (RES), typically

covering a range of renewable technologies in an undifferentiated way (Criscuolo, Johnstone,

Menon, & Shestalova, 2014; United States Environmental Protection Agency [US EPA], 2017).

And although RECs have different characteristics in each country depending on grid and market

specificities, as well as on national laws and regulations, there has been criticism of the RECs

trade process, particularly due to the existence of double counting of this type of certificate

(Frenkil & Yaffe, 2012).

Within this context, the blockchain technology “could contribute to greater stakeholder

involvement, transparency and engagement and help bring trust and further innovative solutions

in the fight against climate change, leading to enhanced climate actions” (United Nations

Framework Convention on Climate Change [UNFCCC], 2017, online). by improving carbon

emission trading, facilitating low-carbon energy trading, and enhancing climate finance flows

(UNFCCC, 2017). Blockchain was initially identified as the technology used in Bitcoin

cryptocurrency (Nakamoto, 2008), thus was first applied in the development of cryptocurrencies.

Simply said, blockchain is a decentralized and distributed ledger used to store transactions,

contracts agreements in a digital record able to combine the more efficient information security

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 4

methods by using various cryptographic protocols and by recording information in a distributed

database (Kushch & Castrillo, 2017). However, in the last five years, the interest in blockchain

application has grown in different areas, including sustainability applied to the energy sector. For

instance, blockchain can be a tool to avoid double counting of RECs, by allowing greater

traceability and transparency in transactions (Abou Jaoude & Saade, 2019; Pournader, Shi,

Seuring, & Koh, 2020; Silvestre et al., 2020), to reduce the operational costs of developing a REC

market platform (Castellanos, Coll-Mayor, & Notholt, 2017) and to encourage consumer

participation in the RECs trading market on energy systems with a high percentage of RE

available (Zhao, Guo, & Chan, 2020). However, certificate trading schemes, such as RECs, based

on blockchain applications remain in a nascent stage (Burer, Lapparent, Pallotta, Capezzali, &

Carpita, 2019). It is not clear in the literature, however, how organizational positioning in a given

market (sustainability and RECs), influences the implementation of blockchain and the artifact

developed.

To make a contribution within this subject, in this study, through a review of the issues on

blockchain applied to the energy sector, and specially on RECs, and using design science research

(DSR) and case study methodology, we structure the problem space (Maedche, Gregor, Morana,

& Feine, 2019) to identify how two organizations in the Brazilian sustainability field, with

different market positions and backgrounds, understand their problems and propose blockchain-

based technological artifacts to produce and trade RECs. Among the aspects considered are

traceability, transparency, and the influence of the regulatory and political context for the

development of blockchain applications (Brilliantova & Thurner, 2019; Burer et al., 2019).

Additionally, we discuss the impact that blockchain could produce on the Brazilian RE market,

in which RES accounted for 46% in the national matrix in 2019, almost triple the global average

in 2017 (14%). The electricity generation is predominantly from renewable sources (83%), based

mainly on hydropower (65%), followed by wind (8.6%), biomass, such as sugarcane bagasse

(8.4%), and solar photovoltaic (1%) (Empresa de Pesquisa Energética [EPE], 2020). Considering

the decarbonization commitments assumed by countries under the Paris Agreement, and by

companies on a voluntary basis or in response to regulation, the high share of RES in the Brazilian

energy matrix makes the country a player with great potential in the global RECs market. At the

same time, members of the energy supply chain might benefit from blockchain technology

applied to RECs issued in Brazil to attract new participants and turn this market more efficient.

By studying the relationship between organizational positioning and blockchain technology, we

hope that these findings can guide entrepreneurs in the energy sector in the process of thinking

about their business models and its relationship to technological development.

LITERATURE REVIEW

Blockchain applied to the energy sector

Sustainability became one of the key objectives of energy policy and an important driver of

innovation in the energy sector. Energy strategies are built around the following hierarchy in

Blockchain technology in renewable energy certificates in Brazil 5

energy options from the most to the least sustainable: energy conservation through improved

energy efficiency and rational use of energy, increasing use of RES and exploitation of

unsustainable resources using low-carbon technologies (Saygin & Çetin, 2010). Energy systems

are undergoing rapid changes to be able to accommodate the increasing volumes of embedded

RE generation. RES went through massive development enabled by the unbundling of the energy

sector and privatizations, boosted by international and national energy policy initiatives and

financial incentives (Andoni et al., 2019), represented in the 2015’s United Nations Global

Opportunity Report by three distinct avenues of action to address the risk of lock-in to fossil fuels

(table 1).

Table 1

Avenue of action on risk of lock-in to fossil fuels by United Nations Opportunity Report

Avenue of Action

Description

Regulated Energy Transition

Regulatory initiatives can accelerate the transition to cleaner energy generation. Redirecting

fossil fuel subsidies, trade regulation favoring low-carbon products and services, and setting

a price on fossil fuels that reflects their cost to the environment are all prominent tools.

Besides pushing for a more sustainable energy system, clear and meaningful regulation can

provide dynamic incentives for innovation of new low-carbon solutions.

Energy Autonomy

Autonomous energy generation from renewable sources is a promising means of electrifying

off-grid areas. In many high-income countries, small-scale energy systems today are

transforming the role of households in national energy infrastructure. This approach

generates several added benefits, including the chance to combat energy poverty and

increase resilience to extreme weather events.

Green Consumer Choices

Consumers’ concerns about the environment and climate change can be translated into

sustainable choices. Making the green choices easy and attractive can empower consumers

to act and thereby initiate larger structural changes by applying pressure from the demand

side.

This scenario leads the energy sector to undergo a far-reaching shift toward decarbonization of

energy generation, decentralization of energy supply, allowing increased customer participation

and demanding innovation at the distribution level, and digitalization of energy trading, based

on by peer-to-peer and transparent transactions. Combined, decarbonization, decentralization,

and digitalization (the three Ds) impact the way that electrical power systems are managed and

coordinated, as well as its business models (Brilliantova & Thurner, 2019; Silvestre et al., 2018).

Blockchain technologies play an important role in this changing scenario. Andoni et al. (2019)

indicate that the energy industry stakeholders, utility companies, and energy decision-makers are

interested in blockchain technologies. Thought an analysis of 140 blockchain applications in the

energy sector, they identified eight categories of blockchain applications for energy applications:

(a) metering, billing, and security; (b) cryptocurrencies, tokens, and investment; (c) decentralized

energy trading; (d) green certificates, including RECs, and carbon trading; (e) grid management;

(f) internet of things (IoT), smart devices, automation, and asset management; (g) electric e-

mobility; and (h) general purpose initiatives developing underpinning technology. Among the

applications examined, 33% of the applications concern decentralized energy trade; 19% concern

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 6

cryptocurrencies; and 7% accounts for green and RE certificates and the carbon market.

Blockchain applications expand the possibilities of solutions and applications to be implemented

in the energy sector, and indicate that this technology can bring benefits to energy system

operations, markets, consumers, allowing disintermediation, increasing transparency, and

empowering consumers and small RE producers.

Similarly, O’Donovan and O’Sullivan (2019) also explore the evolution of blockchain

applications in energy: of the 129 cases found, only nine (7%) are related to energy certificates

and carbon credits. Fields with greater representativity are: 46 (36%) related to decentralized

energy transactions, 26 (20%) to cryptocurrencies, and 16 (12%) to IoT and smart devices.

Analysis by Andoni et al. (2019) and O’Donovan and O’Sullivan (2019) confirm the low presence

of RECs blockchain-based application development in the energy sector.

Analyzing some of these applications, some authors are already able to identify the main groups

and objectives of blockchain adoption. According to Abou Jaoude and Saade (2019), blockchain

energy applications target four aspects: (a) controlling the inter-machine electricity market, with

consumer choice of multiple suppliers; (b) facilitating energy transactions, with the creation of

local markets; (c) increasing the security of energy grids; and (d) increasing the supply of low-

carbon energy, as schemes such as RECs become more trustworthy.

Brilliantova and Thurner (2019) divide the blockchain energy applications into two groups: the

technical ones, addressing the decentralization of power generation and grid management; and

the economic ones, which deal with transaction and payment methods. The energy trade using

blockchain-based applications, with increased traceability and transparency, facilitates P2P RE

trading among suppliers and consumers (Pournader et al., 2020).

Silvestre et al. (2020) divide blockchain applications in the electrical power industry into two

classes according to its main concern: electrical energy trading between two parties exchanging

electricity against a unit of value (e.g., P2P energy trading), which can be efficiently managed by

a grid operator or in a decentralized way; and demand response tracing and RECs, in which

blockchain records the amount of RE added into the grid by one site or recognizes the

contribution of a prosumer in an aggregation program or a demand response program.

The adoption of blockchain energy applications is not exactly dependent on technological

limitations, but the development of the energy industry. Among the risks reported by the authors

are: the cost of blockchain distribution; integration challenges between organizations in the

energy supply chain; legal uncertainty due to lack of regulation; and manpower requirements

(Brilliantova & Thurner, 2019). Regarding legal uncertainty, as the role of consumers could

change from a largely passive market participant and subject to a protective legal approach to an

actor at the heart of the market as a prosumer, this change demands the current actors’ definitions

(producers, transmission and distribution system operators, suppliers, and consumers) to be

reconceptualized in the electricity law (Diestelmeier, 2020).

Blockchain technology in renewable energy certificates in Brazil 7

Blockchain applied to renewable energy certificates (RECs) schemes

In energy markets, it is impossible for consumers to distinguish between the consumption of RE

and non-renewable energy. The energy production often occurs far from consumers and in the

electricity grid the distributed energy mixes both sources, which may cause the problem of

information asymmetry, leading consumers with low-carbon energy preferences to buy less or

none RE. RECs, a market-based policy instrument, were introduced in energy markets to address

this information asymmetry, enabling consumers (businesses or individuals) to make better

decisions and encouraging the production of RE (Hulshof et al., 2019).

RECs schemes were used since 2001 in countries like Australia, Sweden, Italy, Germany, UK,

and India to promote growth of RE under a supportive policy and regulatory regime (Narula,

2013). In the European Union (EU), the guarantee of origin (GO) is defined in the EU Directive

2018/2001/EC as “an electronic document which has the sole function of providing evidence

to a final customer that a given share or quantity of energy was produced from renewable sources”

(European Union [EU], 2018, online). Member states have been given a duty to develop a reliable

GO certificate system in EU Directive 2001/77/EC. Systems may differ in architecture, but each

member state has a GO issuing body in charge of implementing it. The Association of Issuing

Bodies (AIB), created in 2002, is made up of 28 countries and developed the European Energy

Certificate System (EECS), a voluntary scheme in accordance with the EU directive requirements.

In 2019, 707 million certificates (707 TWh) were issued (https://www.aib-net.org/ retrieved on

July 10, 2021). In the United States and Canada, RECs are supported by different levels of

government, regional electricity transmission authorities, and non-governmental organizations,

but the certification is completely entrusted to private organizations. Ten regional electronic REC

tracking systems ensure that each REC is counted only once by assigning a unique serial number

to each MWh of renewable electricity generation (Hulshof et al., 2019; National Renewable

Energy Laboratory [NREL], 2015).

Besides the GO tracking system in Europe and the REC tracking system in North America, the

International REC Standard (I-REC Standard) scheme has been used in 40 countries in Latin

America, Asia, Africa, and the Middle East, including China, India, Russia, South Africa, and

Brazil. The I-REC Standard Foundation, a non-profit organization headquartered in the

Netherlands, provides the tracking standard to be used around the world. In 2020, 31 million

certificates (31 TWh) were issued (International REC Standard Foundation, 2020).

In the private sector, RECs promote the acquisition of electricity produced from RES among

companies willing to reduce GHG emissions through the electricity purchased, in addition to

investments in energy conservation and energy-efficiency, which in inventories standards such as

the GHG Protocol Program is considered as Scope 2 category emission (Chuang, Lien, Den,

Iskandar, & Liao, 2018).

Especially when RECs are sold unbundled from electricity, buyers and sellers must ensure that

certificates are not double-counted (Frenkil & Yaffe, 2012). Once the data recorded in the

blockchain cannot be tampered privately, blockchain technology can improve the trade of RECs

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 8

by increasing transparency and efficiency in this market ensuring that each unit of RE produced

in the electric system can be traced back and is taken into account only once (Gacitua et al., 2018;

Hou, Wang, & Luo, 2020; Imbault, Swiatek, Beaufort, & Plana, 2017; Khaqqi, Sikorski,

Hadinoto, & Kraft, 2018; Spinnell & Zimberg, 2018).

Once the power system sector might involve several authorities (e.g., grid operators, aggregators,

banks, certification entities for equipment providing data, data protection officers) that do not

trust each other, the blockchain plays the important role to guarantee, under regulated or non-

regulated market, that the system works properly, from the technical authorization for an RE

transaction given by the grid operator to the transfer of financial assets of the parties, also keeping

their identities safe (Silvestre et al., 2020).

Blockchain applications in RECs are incremental innovations from a regulatory point of view,

since they can be introduced in the current legal framework or require minor adjustments. The

response of energy and data regulators is adaptive: to award legal recognition of the blockchain

as a legitimate source of information on which commercial transactions can be based, including

certification schemes (Amenta, Sanseverino, & Stagnaro, 2021).

Castellanos, Coll-Mayor and Notholt (2017) performed a simulation of a RECs market based on

cryptocurrencies. The authors conclude that the Ethereum blockchain lowers the operational

costs of developing a market platform. Thus, prosumers and consumers can enter the market

without a big investment. Code optimization can still lower transitional costs; however, the

volatility of gas and ether prices imposes uncertainty.

Burer, Lapparent, Pallotta, Capezzali and Carpita (2019) list some organizations that work in this

area: Volt Markets, which integrates energy origination, tracking, and a trading platform that sells

both energy and RECs; Ideo CoLab, a solar-panel designer; and the sensor maker Filament.

Zhao, Guo, and Chan (2020) developed a blockchain-based RECs simulation combining theories

of social norm and peer effects. They found out that the higher percentage of RE on the market,

the more residents are willing to participate in trading RECs. The simulation of the I-Green also

shows that improvements can be made on the consensus mechanisms, as the authors developed

their proof-of-green protocol, which improved the market liquidity compared to traditional

protocols like proof of work (PoW) and proof of stake (PoS).

Through this collection of cases in the literature, we can identify how the application areas of

blockchain in sustainability are distributed, pointing out that the REC applications are still in an

early stage of development (Andoni et al., 2019; O’Donovan & O’Sullivan, 2019). Others already

incipient develop analytical divisions on the application areas (Abou Jaoude & Saade, 2019;

Brilliantova & Thurner, 2019; Silvestre et al., 2020). In addition, a third group is studying the

consequences of blockchain implementation in a defined context (Burer et al., 2019; Castellanos

et al., 2017; Zhao et al., 2020).

Blockchain technology in renewable energy certificates in Brazil 9

METHOD

Due to the early stage of blockchain development and its applications in RECs, we have chosen

to use DSR as a way to evaluate these solutions and produce knowledge about the challenges of

their application context. DSR is a robust method to study artifacts as answers to classes of

problems; consequently, their solutions are not just a punctual answer to a certain problem in a

certain context (Lacerda, Dresch, Proença, & Antunes, 2013). Case study is a method suitable

for studying real life situations as detailed situations, especially when there are complex issues

and there is little prior theory or empirical evidence (Eisenhardt, 1989). Combined, these

methods allow us to apprehend the complexity of the context in which the problem is built and

the characteristics of the artifacts built as a solution for a given class of problem.

DSR is a method that aims to propose and evaluate IT artifacts that address innovative ways to

solve organizational problems (Hevner & Chatterjee, 2010). These artifacts can be defined as:

constructs (vocabularies or symbols); models (abstractions or representations); methods

(algorithms or practices); or ‘instantiations’ (systems and prototypes).

Hevner, March, Park and Ram (2004) formulate a list of seven guidelines to delimit the

requirements of research using the design science research method. The first guideline is design

as an artifact. The second guideline is the relevance of problems. The third guideline is evaluation

design; metrics must demonstrate the utility, quality, and effectiveness of the artifact. The

contribution to the area of knowledge is the fourth guideline. The fifth guideline is research rigor.

The sixth guideline is design as a process. The last guideline is research communication, which is

oriented to management audiences and technology. Other authors conceptualize different stages

for the execution of DSR projects (Aken & Romme, 2009; Baskerville, Baiyere, Gergor, Hevner,

& Rossi, 2018; Peffers, Tuunanen, Rothenberger, & Chatterjee, 2007; Santos, Koerich, &

Alperstedt, 2018; Sein, Henfridsson, Purao, Rossi, & Lindgren, 2011). However, even with

variations, authors who propose methods for DSR projects focus on defining a problem (a);

building a solution (b); evaluating the solution (c); and formalizing the learning or artifact (d).

Several authors are exploring the use of DSR to analyze the relationship between technology and

sustainability (Albizri, 2020; Almeida, Borsato, & Ugaya, 2017; Baldassarre et al., 2020; Diniz et

al., 2021; Eidelwein, Collatto, Rodrigues, Lacerda, & Piran, 2018; França, Amato, Gonçalves, &

Almeida, 2020; Stiel, Michel, & Teuteberg, 2016). Even beginning to be widely used in solution

development, especially in the field of sustainability, the theoretical development of DSR was

built from the artifact perspective and evaluation, in contrast with the delimitation of the

problem that the artifact is trying to solve. Finally, other authors are already applying DSR in

studies beyond the field of technology (Bianchi & Ferraz, 2020; Debastiani, Alperstedt, Santos,

& Koerich, 2020; Gaspareto & Henriqson, 2020).

Maedche, Gregor, Morana and Feine (2019) found three types of problem formulation in design

science based on Kuechler and Vaisnhavi (2012), Peffers, Tuunanen, Rothenberger and

Chatterjee (2007), and Sein, Henfridsson, Purao, Rossi and Lindgren (2011). Based on this

analysis, Maedche et al. (2019) developed a conceptualization of the main aspects of the problem

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 10

space in DSR projects, which was not precisely developed in the literature, especially if compared

with the artifact analysis. This conceptualization breaks down the problem space into four

components: needs, goals, requirements, and stakeholders. The need refers to what is desired by

the project in a larger perspective than the resolution of the problem, indicating opportunities

that have not yet been delimited as a problem. The goals represent the results or states desired by

the project, describing the intentions of the stakeholders. Goals can be conflicting and are more

specific in purpose and more abstract than objectives. Requirements refer to technical specificities

of software engineering, such as user and system capability, and documented stakeholder needs

and goals. Finally, stakeholders would be people or organizations that are directly involved in the

project or that are affected positively or negatively by it.

Thus, Maedche et al. (2019) proposed a conceptual model relating problem space and solution

space. In problem space, the needs inform the goals needed for the project, which must be

satisfied by the requirements; these constructs are communicated among themselves by the

stakeholders of the project. From this problem construction, the artifact is proposed. The model

organizes and structures the process of analysis and description of the problem, in contrast to

literature that presents variant terminology. The author proposes that the model can be extended

by sub-concepts or new concepts can be introduced.

Figure 1. Problem space model based on Maedche et al. (2019).

In this study, we use the framework proposed by Maedche et al. (2019) to relate each artifact

(solution space) to the problem space, conceptualizing the organizational needs, goals,

requirements, and stakeholders. Through semi-structured interviews, we identified how

organizations understand the constructs related to their application of blockchain. This effort

highlights the kernel knowledge boundaries that provide understanding of the problem and the

organizational context (Hevner, Brocke, & Maedche, 2019). We expect to contribute on how the

market position can influence the understanding of blockchain in the RE system, so we selected

two organizations with different market positions and backgrounds to explore similarities and

differences, relying on theoretical sampling (Eisenhardt & Graebner, 2007).

All company and product names have been anonymized. ALL is the biggest certificate issuer in

Brazil, not only in environmental topics. The organization is the local issuer of I-REC, regarding

RECs, and implemented a blockchain-based system in 2019. BC-Company is an organization

Blockchain technology in renewable energy certificates in Brazil 11

created by the environmental investment group Credit-C, which started in April of 2019 its

operations on RECs through blockchain.

Regarding data collection, as a first step we used reports and semi-structured interviews with

researchers to understand the Brazilian RE ecosystem. In this process, we decided to collect data

from additional organizations that are part of the ecosystem, ABC, Trading, and EnergyS,

allowing us to better apprehend the problem space (Maedche et al., 2019) and to triangulate with

ALL and BC case studies (Patton, 1999). ABC’s core business is the generation and

commercialization of energy through large assets enabling the corporation to provide affordable,

sustainable energy. In Brazil, it had the concession in the south region and in São Paulo City.

Recently, ABC (the Brazilian branch) sold both to resume its original goal toward generation and

commercialization of energy. Not long ago, ABC wanted to improve the I-REC system with

blockchain technology. EnergyS is a RE generator in Brazil with São Simão Hydroelectric Power

Plant, Vale dos Ventos Wind Complex, Millennium Wind Farm. They have an opinion against

RE certification. Trading assists businesses to enter the free energy market; and recently, they

implemented a blockchain system for bilateral short-term contracts in energy purchase. To enrich

our understanding of this phenomena and bring perspectives from other players (Patton, 1999),

the interviewees were chosen for their knowledge and interests on the topic of RECs, for their

direct participation in the process of defining the problem/solution of the blockchain-based

artifact for the generation of RECs, or for their technical knowledge in the creation or

implementation of such an artifact, which increases the credibility of the study (Lincoln & Guba,

1985). Actors from different organizations and hierarchical levels are unlikely to engage in

converging retrospective views on context (Eisenhardt & Graebner, 2007). Data was collected

from semi-structured interviews conducted with 12 professionals (Appendix A) among managers,

directors, and founders of the organizations.

Regarding data analysis, to be able to capture an appropriate understanding and description of

the underlying problem space in the creation of ALL’s and BlockC’s artifacts, we decided to focus

on the needs, goals, requirements, and stakeholders that define it, following Maedche et al.’s

(2019) framework, through within-case and cross-case analysis (Eisenhardt & Graebner, 2007),

allowing the transferability of the results for other contexts (Lincoln & Guba, 1985). We,

therefore, reach our research objective by identifying how different positioned organizations

understand their problems and propose their technological artifacts applications on RECs (Table

5), which grants dependability to this study, and shows that the results can be replicable (Lincoln

& Guba, 1985).

After that, we triangulate data with Trading, EnergyS, and ABC to discuss the implications to the

blockchain application literature and DSR theory, to grant the study’s confirmability (Lincoln &

Guba, 1985). Finally, we discuss how the energy market will change in future years with new

technological applications.

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 12

RESULTS AND DISCUSSION

In this section, we provide a clear description on the case analysis through the Maedche et al.’s

(2019) framework, with illustrative quotes. Tables 3, 4, and 5 represent our conclusions about

the model concepts in the cases analyzed.

Case 1: ALL

ALL was founded in 2003 as an accreditation company on quality accounting and work safety.

In 2013, it launched a REC created at the request of the Brazilian Clean Energy Generation

Association (Portuguese acronym ABRAGEL) and the Brazilian Wind Energy Association

(Portuguese acronym ABEEólica), which were looking for an instrument that could highlight

both social and environmental attributes of the RE generated in Brazil. Once the certificate had

international quality, in 2016, ALL was accredited as a local issuer of RECs in Brazil by the I-

REC Standard.

During the first two years as an I-REC issuer, ALL issued a low volume of certificates, which

allowed a simplified control and a manual issuance procedure. However, in 2019, with an

increase in the volume of certificates issued, from 100 thousand to millions, the organization

started to have problems in its traditional way of working. The increase in workload was felt,

since auditing work is a time-consuming task and highly dependent on human analysis resources.

Those internal workload issues became how ALL framed its needs (Maedche et al., 2019). Other

kinds of certifications do not prioritize IT investments in ALL’s perspective, as they require a low

work volume.

Due to the founders’ interest in new technologies and the market’s confidence in blockchain,

the system was created in a way that could be compatible with it. There were other requirements

(Maedche et al., 2019) for the implementation of the blockchain, mainly investments in

technology and human resources. Currently, an internal IT team manages the platform. Each

condition needed to be fulfilled in order to construct the system.

In December 2019, ALL put the new system (without blockchain) into operation with a good

performance. It facilitated the issuance of RECs directly by authorized companies. In 2020, they

could put the complete database on blockchain technology and the implementation was designed

to add more security to the certification process, increasing the quality of the I-REC product. The

blockchain technology could also provide a greater traceability on the I-REC and ensure that

there is no double beneficiary on the certificates. ALL intended to consolidate itself as a reference

in the market.

“For the companies that acquire the [blockchain-based] certificates, the advantage is that they have one

more security layer, although this was never a requirement; because, when a consumer presents a RECs

statement with the ALL logo, as we have a whole governance process, we are audited, thus, we have a

whole control here, this was never questioned, that’s why I’m realizing that it is one more security layer.

It’s not because it was unsafe, but it became safer, so that’s the advantage.” ALL interviewee A.

Blockchain technology in renewable energy certificates in Brazil 13

Comparing these goals (Maedche et al., 2019) with the reported needs of the company, we notice

a disconnection in how these two factors are explained. While the needs are described as internal

inefficiencies in the company, its objectives are described as additions to its final product, thought

mainly from the customer’s perspective. In an artifact perspective, those blockchain qualities of

transparency and traceability do not demonstrate the artifact utility for solving the workload

problem as indicated by Hevner and Chatterjee (2010).

In 2020, ALL has 95% of the RE generated in Brazil registered on its blockchain, for that it uses

data from the Electric Energy Trading Chamber (Portuguese acronym CCEE) and from

distributed electricity generators. According to an interviewee of ALL:

“This is important because to issue a certificate you must have the evidence that the electric RE was

generated. In order to comply with international standards, we asked that this evidence be evaluated,

checked, verified by an independent third party. Invariably this information sent by clients came from

CCEE, through reports sent by companies from which the manual issue of RECs would be made.” ALL

interviewee B.

The CCEE is a private entity, established by law. It is a private association with several functions;

one of them is to take stock of energy contracts. To sell or to buy energy on the free market it is

required to have a user, an associate of CCEE. Thus, the shared data contains both information

about the energy sold and its seller and information about the energy bought and its buyer.

With the digitalization of RECs issuance process, ALL started to capture this generation

information directly from the CCEE databases. Therefore, companies no longer have to send the

evidence, once ALL already has this evidence captured directly from CCEE, and, consequently,

all energy generation companies able to generate RECs have a checking account. Energy (in

MWh) can be added by ALL to the company’s checking account every month based on CCEE

data.

However, the relationship with stakeholders (Maedche et al., 2019) could change due to the

implementation of the blockchain. ALL intends to acquire some RE generation plants looking

to become independent from CCEE data, reducing the one-month delay. The purpose is to have

plants in which generation is connected by the internet to be able to use the internet of things

(IoT) to feed the database directly. The CCEE and other regulators of the energy sector are being

called to be validators on the blockchain platform. Thus, data providers would become data

validators. The formation of these alliances is a process in which ALL communicates their

product and vision for the market, further developing relationships.

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 14

Table 3

ALL — Synthesis of the problem space, based on the interviews

ALL

Stakeholders

Industry regulators and other organizations participate in the platform. Search for other validators.

Plan to use IoT so as not to depend on data from regulatory agencies.

As it is already a third party, companies are more comfortable sharing the data.

Market confidence on blockchain.

Some organizations on other projects do not understand the meaning of the blockchain.

Needs

Growth in work volume.

Time-consuming audit work.

Chains with little data volume do not need blockchain.

Requirements

Resources for investment in technology and people.

Companies need RECs to prove that they consume RE, reducing GHG emissions through the electricity

purchased.

IT team already manages the platform.

IT system had already been built before without blockchain.

Goals

Consolidate itself as a reference in the market.

Quality increase in the existence service, with: (i) one more layer of security, (ii) greater traceability, and

(iii) no double beneficiary.

IT system of REC.

In ALL’s case, its objectives are related to the characteristics of its products, such as adding a

security layer to the certification service, a new feature for the consumer. Moreover, the old work

routines do not change after the implementation of the blockchain. Thus, the implemented

technology is not a solution to ALL’s needs, but the market consensus about the blockchain has

a greater influence on the company’s decision regarding implementation. ALL identifies that it

is necessary to search for projects that understand (already existing) meanings of the blockchain.

Case 2: BC-Company

BC-Company belongs to a group of companies, all of them derived from Credit-C Brazilian

Company, which develops projects related to the carbon market. Cofounder A, one of the Credit-

C founding partners and owner of other companies in the group, works since 2000 in the RE

sector through companies that have direct and indirect participation in businesses associated with

the increase of RE supply and the reduction of GHG emissions. In 2017, considering that the

investment in RE was something that was already widespread, Credit-C decided to experiment

with the development of new technology-based business models through involvement with other

stakeholders (Maedche et al., 2019). Credit-C hired a company focused on technology projects

that identified the blockchain’s potential to support companies toward more sustainable business

models, including carbon markets. It resulted in a process of experimentation with the technology

and two companies were created: XC2, a platform specialized in carbon credits, and BC-

Blockchain technology in renewable energy certificates in Brazil 15

Company, based on a system that allows companies to map their emissions throughout their

entire value chains. The IT technical knowledge, business experimentation, and experience in

the sustainability sector were the main requirements (Maedche et al., 2019) for the development

of new companies.

Credit-C’s greatest needs (Maedche et al., 2019) were related to its internal work process. In the

view of the interviewees, the growth in labor productivity was linked to the work time of auditors,

which made data verification activities costly and could demand a long time to be performed. In

the business model of BC-Company, the blockchain will be used to ensure the validity and

traceability of the emission mapping. This system would be fully automated and therefore would

depend on as little audit labor as possible for data verification.

“This sustainability advisory business has a capacity for growth, like any other consultancy. And the

consultancy is a business that grows with man-hours. So, it was a business decision. These two friends

talked like this: We won’t be able to make a business explode, unless I’m willing to explode my labor

force, because I only sell hours; so, I have to have hours to sell. Thus, they started to think about a new

business model, and presented the blockchain technology, which they came to the conclusion that, if they

are right, it will be the reason why this research started.” BC-Company interviewee A.

However, the complete system, the company’s objective (Maedche et al., 2019), is being built in

stages. In addition, BC-Company prioritizes the mapping of specific production chains, in which

there is an interest of the market for its traceability. Blockchain’s technology, for giving

traceability to transactions, was identified as a possible solution to BC-Company’s needs

(Maedche et al., 2019). Moreover, these blockchain-based by-products have a specific market

meaning for each stakeholder. BC’s role in this case would be to create this representation and,

from it, to generate a process of convincing of its importance to the market.

“The company has to design effectively what is the searched value by each of those involved in that

representation, on that entity that is creating the blockchain. Being it [the representation] an

informational registration or a possession right.” BC-Company interviewee B.

One of these by-products is BC-REC, a blockchain-based REC that does not follow the I-REC

Standard. To issue the certificates, BC-Company would certify the entire documentary process of

the distributor, which delivers the energy. For that, data integration with other stakeholders,

mainly with CCEE, is needed (Maedche et al., 2019). The system would search CCEE website

for data on the energy production of generators to issue the certificate. In other words, when

acquiring a certain amount of energy from a wind generator, for example, and, in turn, a

customer-consumer bought, when acquiring an MWh certificate, it must be equal to or less than

the amount that the generator sold to the distributor. With blockchain, this certificate can be

inviolable, thus there is no possibility for the generator to sell the same energy certificate to two

different people, that is, there is no double counting. Additionally, the marginal cost of each

certification decreased expressively after the implementation of the system, due to the lack of

audit work for the data verification.

BC-Company’s founders believe there is a demand for initiatives capable of tracking companies

“emission reductions, more specifically, tracking companies GHG emissions,” as several

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 16

companies have committed to make GHG emissions inventories. They see weaknesses in the

mapping and traceability of GHG inventories. One of the partners explains: “As the main

characteristic of blockchain technology is immutability/inviolability, for me it becomes extremely

interesting for any use case linked to traceability. But, mainly, for those cases where the

information is transmitted by means that you do not control and in which there is no established

trust relationship. So, you use technology precisely to ensure that there is no possibility of the

information being modified by one of the agents participating in the chain. And, consequently,

it does not get lost or defrauded.” However, obligations regarding GHG emissions inventories

are necessary for more companies to embrace the use of RECs.

“No, I don’t think so, because I think that while there is no compliance program, some legal requirement,

companies will always do very little. It is very complicated for companies to spend money without showing,

in an unequivocal way, the results of this money invested.” BC-Company interviewee C.

Table 4

BC-Company — Synthesis of the problem space, based on the interviews

Stakeholders

Recognition of the company in the sustainability market.

Negotiations depend on the market network.

Search for IT knowledge in other organizations.

Mandatory GHG emissions inventories are necessary for more companies to embrace the use of RECs.

There is a process of convincing about the importance of technology.

Blockchain can assure the reliability of data that the organization does not control or trust.

Data by regulatory agencies is used.

Blockchain can offer an alternative to the I-REC certification standard in the Brazilian context, with its

large RES matrix. The technology must have a business meaning that varies according to the

stakeholder; the company must design that representation.

Needs

Labor productivity growth.

Better data integration between platforms.

Time consuming and high cost of audit work.

Versatility of technology to track different chains.

Fragility in mapping and tracking these inventories.

Requirements

Technical IT knowledge.

Experience in the sustainability sector.

Market influence for prospecting clients.

Need for experimentation and testing with the technology before release.

Goals

Mapping the emissions throughout the value chain.

Specific by-products, such as RECs.

Greater speed, reliability, and lower cost of the company’s value proposal.

REC with ballast in public information for greater credibility.

Blockchain technology in renewable energy certificates in Brazil 17

In BC-Company’s case, the blockchain is intrinsically connected to explore possibilities of

internal work organization, since the company has a limitation in the labor force. Within these

possibilities, the company tries to create blockchain-based products, exploring the versatility of

the technology. However, for this to occur there is the requirement of specialized IT knowledge

that is shared by external organizations.

Other organizations researched

In this section, we present the solutions of the supplementary interviewed companies. From

them, in the following section, we triangulate this information with the vertical analysis of ALL

and BC-Company, with the purpose of reflecting on the DSR model used.

ABC also had a market leader behavior regarding the creation of new products. The organization

understood that there was market demand for RECs, so much so that it decided to certify its own

plant for the generation of I-RECs not depending on ALL as an I-REC issuer anymore. However,

likewise, from a technological reading of the market, they want to improve this specific process

of generating RECs by using blockchain technology to guarantee the reliability of the source and

reduce the time it takes to authenticate and generate the certificate, by not needing to review the

entire chain. However, they chose to not create a new certificate, but improve the I-REC

certification. They identify, therefore, two products already understood by the market, the I-RECs

and the blockchain technology, and try to mix them.

“Our option to continue with the I-REC certification, specifically, is because it is already established, it is

already a recognized certificate and we did not want to create a market, or a proposal to renew the market,

as a first step. We are taking this first step to optimize the process of generating I-RECs, specifically,

because it is already a recognized certificate in the country.” ABC interviewee A.

However, there are risks in creating new products based only on the reputation of their attributes.

The employees interviewed at EnergyS, for example, were critical about RECs. They understood

that RE trading contracts would already prove the origin of the energy. In addition, they

considered that a large part of Brazilian energy would already be renewable due to the high

participation of hydroelectric plants. These reasons would make customers not so interested in

the certificates. New solutions in the sustainability market, therefore, would be imported from

other countries, without considering if they would make sense in the Brazilian context.

Trading also does not see a demand in the area of RECs. Following the logic that energy purchase

transactions would already prove the RES, the company carried out a project to implement the

blockchain in bilateral short-term contracts. However, regarding the certificates, the company

states that the implementation of blockchain means an evolution of the already existing

certification method. Nevertheless, Trading had to create a separate company to develop these

new technology projects, TEC-Trading, with specialized knowledge.

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 18

Cross-case analysis

The application of the framework (Maedche et al., 2019) in the case of ALL and BC-Company,

combined with the analysis of other organizations, gave us data to identify the limits of the

concepts and the relationship between them in theory. We present an analysis model triangulated

for the organizations and, from this analysis, a reading of how the cases in depth can contribute

to the theory of DSR.

Table 5

Cross-case analysis — Synthesis of the problem space, based on the interviews

Cross-case Analysis

Stakeholders

Market leader (ALL, ABC, Trading) wants to identify a blockchain product that is already

understood by other market stakeholders.

Market challenger (BC-Company) wants to create a new representation of blockchain technology

to offer to stakeholders.

Needs

Audit tasks are costly and time-consuming and the market challenger (BC-Company) wants to

achieve a competitive advantage through blockchain. The market leader (ALL) wants the

coexistence of old and new practices.

Requirements

Human and technological knowledge are necessary for the development of blockchain

applications (BC-Company, ALL, Trading). However, the market challenger (BC-Company) must

experiment with new business models to ensure the creation of new representations of blockchain

for the market.

Goals

The market leader (ALL, Trading, ABC) wants to add a security layer to an existing service. Market

challenger (BC-Company) wants to create new services around the blockchain.

First, the companies in the study cannot clearly separate their needs and objectives from the needs

and objectives of their clients. In ALL’s case, they argue about the low productivity of internal

manual audit work; and, as Spinnell and Zimberg (2018) state, blockchain can make the

recording of RE more cost-efficient. However, when they think about their objectives, they

emphasize the usefulness of the artifact for their client, that is, the characteristics of traceability

and transparency of the blockchain, aspects already identified by the literature (Gacitua et al.,

2018; Khaqqi et al., 2018; Pournader et al., 2020; Silvestre et al., 2020; Spinnell & Zimberg,

2018). This shows that there could be a theoretical separation of the needs and objectives of each

stakeholder for understanding the problem space (Maedche et al., 2019). Most other models do

not have this conceptual separation (Hevner & Chatterjee, 2010; Kuechler & Vaishnavi, 2012;

Peffers et al., 2007).

Second, stakeholders not only have a role in communicating the needs, requirements, and

objectives of companies, but depending on market positioning, each organization can follow a

distinct path in developing blockchain solutions. Some authors point out that the adoption of

blockchain technology is dependable on the market and regulatory development (Brilliantova &

Thurner, 2019; Burer et al., 2019). Furthermore, we contribute to the literature of blockchain

Blockchain technology in renewable energy certificates in Brazil 19

applications on RECs on how the regulatory context and the market positioning of the

organization influence the blockchain implementation. In this study, we identify that leading

organizations expect a consensus from stakeholders regarding new technologies and then

implement them; this was the case in ALL, Trading, and ABC. However, other organizations,

seeing these perspectives of other stakeholders, decide not to implement this technology

consensus, as in the case of EnergyS, while the challenging one, BC-Company, produced through

trial and error new possibilities of representing technology to convince stakeholders of its utility.

There is, therefore, a direct link between the artifact and the stakeholder, which is not present in

the model of Maedche et al. (2019).

This trial and error process, which was not present in Meadche et al. (2011), can be found in

Sein et al. (2011), at the principle of reciprocal shaping. Thus, the IT artifact implemented and

the organizational context would be inseparable. The application design, for example, can change

the business environment understanding and vice versa. Even so, the different representations of

technology for stakeholders are not present in the model of Sein et al. (2011).

Finally, leading companies, after waiting for stakeholder consensus on the new technology

panacea, can implement technologies without a clear sense of what needs they are having. This

consensus is subsequent to the increase in RE produced (Empresa de Pesquisa Energética [EPE],

2019), and the consequent market development and entry of new players into the market (Zhao

et al., 2020). This may be one of the causes of the disconnection between needs and objectives

already reported by ALL and ABC. However, in the model (Maedche et al., 2019), the path to

understanding the problem is only taken from the needs to the objectives, which presents a

limitation in contexts where there is an euphoria for the use of new technologies without a clear

justification.

In Kuechler and Vaishnavi (2012), we can make a parallel with the awareness of the problem and

the development of the artifact; with needs and goals (Maedche et al., 2019). In this science design

model (Kuechler & Vaishnavi, 2012), reasoning is viewed in DSR as a cycle. Thus, suggestions

and the development of the artifact can indicate new forms of awareness of the problem, with

the cycle continuing its steps later. Even so, we still cannot identify the process of creating

meaning, in which the consensus of the adoption of new technology finds a justification in the

organization, as a solution in search of a problem, but without a subsequent reflection or change

in the design of the solution. Other models only express a one-way rationalization direction

between problem identification and solution objectives (Aken & Romme, 2009; Peffers et al.,

2007) and others present no clear way of rationalization between them (Hevner & Chatterjee,

2010).

In case studies via DSR, either in the sustainability field (França et al., 2020; Stiel et al., 2016) or

in other areas (Bianchi & Ferraz, 2020; Debastiani et al., 2020; Gaspareto & Henriqson, 2020),

there is a clear rationalization between the problem to be solved and the solution proposed or

analyzed, always in a direction in which the problem induces the solution. However, in the case

analyzed the ways in which organizations justify the implementation of their solutions and the

resolution of their problems are built in a different way: organizations, whether leaders or

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 20

challengers, choose the blockchain as a panacea and apply it to the resolution of several problems

by trial and error in an attempt to justify the resolution of problems that are not actually solved,

such as the traditional forms of auditing that remain without internal changes, that are intrinsic

and dependent on the policy and regulatory context (Burer et al., 2019). It is speculated how

DSR theories can be compatible in these environments with disconnection between the needs

and objectives of companies, which resemble behaviors understood in the garbage can model

(Cohen, March, & Olsen, 1972).

As for practical implications in public policy, this behavior is mirrored in the multiple streams

model (Kingdon, 2011); in this case, blockchain policy entrepreneurs can influence its

implementation in areas without reflection, which occurs in the problem stream. Therefore, it is

also important to analyze the stakeholders’ interpretation of the technology, which is not present

in the reviewed DSR models.

CONCLUSION AND FUTURE STUDIES

The objective of this study was to identify how different positioned organizations understand

their problems and propose their blockchain technological artifacts in the RECs market. Using

a case study methodology and design science research (DSR), we analyzed the problem space

(Maedche et al., 2019) of two different organizations that propose blockchain-based applications

to produce and trade RECs. We confirmed that blockchain can make the recording of RE more

cost-efficient (Spinnell & Zimberg, 2018). In addition, entrepreneurs emphasize the

characteristics of traceability and transparency of the blockchain (Gacitua et al., 2018; Khaqqi et

al., 2018; Pournader et al., 2020; Silvestre et al., 2020; Spinnell & Zimberg, 2018).

We also contribute to the literature of blockchain applications on RECs by identifying ways in

which the organization’s market context influences blockchain adoption and development. We

found that depending on the market positioning of the organization, its behavior regarding the

development of the blockchain solution will be different. While leading organizations expect

market consensus on technology adoption, challenger organizations use experimentation

processes to create new technological products, which involves creating technology

representations for different stakeholders. In addition, organizations implement the technology

without a clear notion of the problem to be solved, which may lead to failures in business models

and coexistence of analog and technological processes. These findings can guide entrepreneurs

in the process of thinking through their business model and its relationship to technology

development.

We contribute to the literature of DSR by providing an in-depth description of the cases based

on the model (Maedche et al., 2019) and we point out inconsistencies that can be explored in

future studies to improve the theory. More specifically, we found that: (a) the position of the

organization in relation to other stakeholders changes the behavior of the technology adoption:

leaders and challengers have different behaviors; (b) the technological solution preceded the

perception of the problem, as leading companies, after waiting for stakeholder consensus on the

Blockchain technology in renewable energy certificates in Brazil 21

new technology panacea, can implement technologies without a clear sense of what needs they

are having; (c) organizations create different representations of the artifact for each stakeholder

to persuade them of its efficacy.

We suggest other studies to deepen these findings in order to develop theories that explain how

organizations see their problem when developing technological solutions while using DSR. Not

only due to the use of the case study methodology, but also due to the specific regulatory and

economic context, this research has limited potential for generalization. Nevertheless, studies

from other developing countries or investigations on other technologies in Brazil could find

similarities.

REFERENCES

Abou Jaoude, J., & Saade, R. G. (2019). Blockchain applications – usage in different domains. IEEE Access, 7, 45360-

45381. https://doi.org/10.1109/ACCESS.2019.2902501

Amenta, C., Sanseverino, E. R., & Stagnaro, C. (2021). Regulating blockchain for sustainability? The critical

relationship between digital innovation, regulation, and electricity governance. Energy Research & Social Science,

76, 102060. https://doi.org/10.1016/j.erss.2021.102060

Andoni, M., Robu, V., Flynn, D., Abram, S., Geach, D., Jenkins, D., McCallum, P., & Peacock, A. (2019).

Blockchain technology in the energy sector: A systematic review of challenges and opportunities. Renewable and

Sustainable Energy Reviews, 100, 143-174. https://doi.org/10.1016/j.rser.2018.10.014

Aken, J. E. V., & Romme, G. (2009). Reinventing the future: adding design science to the repertoire of organization

and management studies. Organization Management Journal, 6(1), 5-12. https://doi.org/10.1057/omj.2009.1

Albizri, A. (2020). Theory-based taxonomy of feedback application design for electricity conservation: A user-centric

approach. Communications of the Association for Information Systems, 46, 16.

https://doi.org/10.17705/1CAIS.04616

Almeida, S. T., Borsato, M., & Ugaya, C. M. L. (2017). Application of exergy-based approach for implementing

design for reuse: The case of microwave oven. Journal of Cleaner Production, 168, 876–892.

https://doi.org/10.1016/j.jclepro.2017.09.034

Baskerville, R., Baiyere, A., Gergor, S., Hevner, A., & Rossi, M. (2018). Design science research contributions:

Finding a balance between artifact and theory. Journal of the Association for Information Systems, 19(5), 358–376.

https://doi.org/10.17705/1jais.00495

Baldassarre, B., Konietzko, J., Brown, P., Calabretta, G., Bocken, N., Karpen, I. O., & Hultink, E. J. (2020).

Addressing the design-implementation gap of sustainable business models by prototyping: A tool for planning

and executing small-scale pilots. Journal of Cleaner Production, 255, 120295.

https://doi.org/10.1016/j.jclepro.2020.120295

Bianchi, E. M. P. G., & Ferraz, S., Junior (2020). e-Qualifácil: Preparing small businesses for a quality management

system. Brazilian Administration Review, 17(1), e180154. https://doi.org/10.1590/1807-7692bar2020180154

Brilliantova, V., & Thurner, T. W. (2019). Blockchain and the future of energy. Technology in Society, 57, 38-45.

https://doi.org/10.1016/j.techsoc.2018.11.001

Burer, M. J., Lapparent, M., Pallotta, V., Capezzali, M., & Carpita, M. (2019). Use cases for blockchain in the energy

industry opportunities of emerging business models and related risks. Computers & Industrial Engineering, 137,

106002. https://doi.org/10.1016/j.cie.2019.106002

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 22

Castellanos, J. A. F., Coll-Mayor, D., & Notholt, J. A. (2017, August). Cryptocurrency as guarantees of origin:

Simulating a green certificate market with the Ethereum Blockchain. Proceedings of the 2017 IEEE International

Conference on Smart Energy Grid Engineering - SEGE (pp. 367-372), Oshawa, ON, Canada.

https://doi.org/10.1109/SEGE.2017.8052827

Chuang, J., Lien, H.-L., Den, W., Iskandar, L., & Liao, P.-H. (2018). The relationship between electricity emission

factor and renewable energy certificate: The free rider and outsider effect. Sustainable Environment Research, 28(6),

422-429. https://doi.org/10.1016/j.serj.2018.05.004

Cohen, M. D., March, J. G., & Olsen, J. P. (1972). A garbage can model of organizational choice. Administrative

Science Quarterly, 17(1), 1-25. https://doi.org/10.2307/2392088

Criscuolo, C., Johnstone, N., Menon, C., & Shestalova, V. (2014). Renewable energy policies and cross-border

investment: Evidence from mergers and acquisitions in solar and wind energy. OECD Science, Technology and

Industry Working Papers, 3. https://doi.org/10.1787/5jxv9f3r9623-en

Debastiani, A. L. S., Alperstedt, G. D., Santos, G. F. Z., & Koerich, G. V. (2020). A design research business model:

A framework built with Brazilian farmers. BAR. Brazilian Administration Review, 17(1), e190032.

https://doi.org/10.1590/1807-7692bar2020190032

Diestelmeier, J. (2020). Meeting emissions limits while improving efficiency. MTZ worldwide, 81(4), 60-66.

https://doi.org/10.1007/s38313-020-0204-z

Diniz, E. H., Yamaguchi, J. A., Santos, T. R., Carvalho, A. P., Alégo, A. S., & Carvalho, M. (2021). Greening

inventories: Blockchain to improve the GHG protocol program in scope 2. Journal of Cleaner Production, 291,

125900. https://doi.org/10.1016/j.jclepro.2021.125900

Eidelwein, F., Collatto, D. C., Rodrigues, L. H., Lacerda, D. P., & Piran, F. S. (2018). Internalization of

environmental externalities: Development of a method for elaborating the statement of economic and

environmental results. Journal of Cleaner Production, 170, 1316-1327.

https://doi.org/10.1016/j.jclepro.2017.09.208

Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–

550. http://doi.org/10.2307/258557

Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy

of Management Journal, 50(1), 25-32. https://doi.org/10.5465/amj.2007.24160888

Empresa de Pesquisa Energética. (2019). Balanço Energético Nacional 2019 - Relatório síntese/Ano base 2018. Retrieved

from https://www.epe.gov.br/sites-pt/publicacoes-dados-abertos/publicacoes/PublicacoesArquivos/publicacao-

377/topico-470/Relatório Síntese BEN 2019 Ano Base 2018.pdf

Empresa de Pesquisa Energética. (2020). Balanço Energético Nacional 2020 - Relatório síntese/Ano base 2019. Retrieved

from https://www.epe.gov.br/sites-pt/publicacoes-dados-abertos/publicacoes/PublicacoesArquivos/publicacao-

479/topico-521/Relato%CC%81rio%20Si%CC%81ntese%20BEN%202020-ab%202019_Final.pdf

European Union. (2018). Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December

2018 on the promotion of the use of energy from renewable sources (Text with EEA relevance). EUR-Lex.

Retrieved from http://data.europa.eu/eli/dir/2018/2001/oj

França, A. S. L., Amato, J., Neto, Gonçalves, R. F., & Almeida, C. M. V. B. (2020). Proposing the use of blockchain

to improve the solid waste management in small municipalities. Journal of Cleaner Production, 244, 118529.

https://doi.org/10.1016/j.jclepro.2019.118529

Frenkil, D. J., & Yaffe, D. P. (2012). Renewable energy certificates: A patchwork approach to deploying clean

technologies. The Journal of World Energy Law & Business, 5(1), 1–12. https://doi.org/10.1093/jwelb/jws001

Blockchain technology in renewable energy certificates in Brazil 23

Gaspareto, M., & Henriqson, É. (2020). Business model analysis from the activity system perspective: A design

science research. BAR. Brazilian Administration Review, 17(1), e190049. https://doi.org/10.1590/1807-

7692bar2020190049

Gacitua, L., Gallegos, P., Henriquez-Auba, R., Lorca, Á., Negrete-Pincetic, M., Olivares, D., Valenzuela, A., &

Wenzel, G. (2018). A comprehensive review on expansion planning: Models and tools for energy policy analysis.

Renewable and Sustainable Energy Reviews, 98, 346–360. https://doi.org/10.1016/j.rser.2018.08.043

Hevner, A. R., March, S. T., Park, J., Ram, S. (2004). Design science in information systems research. MIS Quarterly,

28(1), 75–105. https://doi.org/10.2307/25148625

Hevner, A., & Chatterjee, S. (2010). Design science research in information systems (pp. 9-22). Boston, MA: Springer.

Hevner, A., Brocke, J. V., & Maedche, A. (2019). Roles of digital innovation in design science research. Business &

Information Systems Engineering, 61, 3-8. https://doi.org/10.1007/s12599-018-0571-z

Hou, J., Wang, C., & Luo, S. (2020). How to improve the competiveness of distributed energy resources in China

with blockchain technology. Technological Forecasting and Social Change, 151, 119744.

https://doi.org/10.1016/j.techfore.2019.119744

Hulshof, D., Jepma, C., & Mulder, M. (2019). Performance of markets for European renewable energy certificates.

Energy Policy, 128, 697-710. https://doi.org/10.1016/j.enpol.2019.01.051

Imbault, F., Swiatek, M., Beaufort, R., & Plana, R. (2017, June). The green blockchain: Managing decentralized

energy production and consumption. Proceedings of the 2017 IEEE International Conference on Environment and

Electrical Engineering and 2017 IEEE Industrial and Commercial Power Systems Europe - EEEIC/I&CPS Europe (pp. 1-

5), Milan, Italy. https://doi.org/10.1109/EEEIC.2017.7977613

Intergovernmental Panel on Climate Change (2014). Summary for policymakers. Climate change 2014: Mitigation of

climate change. contribution of working group iii to the fifth assessment report of the intergovernmental panel on climate

change. Cambridge, UK: Cambridge University Press. Retrieved from

https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_summary-for-policymakers.pdf

Intergovernmental Panel on Climate Change (2018, October 8). Summary for policymakers of IPCC special report

on global warming of 1.5 °C approved by governments. IPCC. Retrieved from

https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-

approved-by-governments/

International REC Standard Foundation (2020). About the I-REC standard foundation. Retrieved from

https://www.irecstandard.org/about-us/

Khaqqi, K. N., Sikorski, J. J., Hadinoto, K., & Kraft, M. (2018). Incorporating seller/buyer reputation-based system

in blockchain-enabled emission trading application. Applied Energy, 209, 8-19.

https://doi.org/10.1016/j.apenergy.2017.10.070

Kingdon, J. (2011). Agendas, alternatives and public policies. Boston: Longman.

Kuechler, W., & Vaishnavi, V. (2012). A framework for theory development in design science research: Multiple

perspectives science research: multiple perspectives. Journal of the Association for Information Systems, 13(6), 395–

423. https://doi.org/10.17705/1JAIS.00300

Kushch, S., & Castrillo, F. P. (2017). A review of the applications of the blockchain technology in smart devices and

distributed renewable energy grids. ADCAIJ: Advances in Distributed Computing and Artificial Intelligence Journal,

6(3), 75-84. https://doi.org/10.14201/ADCAIJ2017637584

Lacerda, D. P., Dresch, A., Proença, A., & Antunes, J. A. V., Júnior (2013). Design science research: Método de

pesquisa para a engenharia de produção. Gestão & Produção, 20(4), 741-761. https://doi.org/10.1590/S0104-

530X2013005000014

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 24

Lincoln, Y. S. & Guba, E. G. (1985). Naturalistic inquiry. Newbury Park, CA: Sage Publications.

Maedche, A., Gregor, S., Morana, S., & Feine, J. (2019). Conceptualization of the problem space in design science

research. In B. Tulu, S. Djamasbi, G. Leroy (Eds.), Extending the boundaries of design science theory and

practice. DESRIST 2019. Lecture Notes in Computer Science (Vol. 11491). Cham: Springer.

https://doi.org/10.1007/978-3-030-19504-5_2

Nakamoto, S. (2008). Re: Bitcoin P2P e-cash paper. Satoshi Nakamoto Institute. Retrieved from

https://satoshi.nakamotoinstitute.org/emails/cryptography/1/

Narula, K. (2013). Renewable energy certificates (RECs) in India – a performance analysis and future outlook.

Renewable and Sustainable Energy Reviews, 27, 654-663. https://doi.org/10.1016/j.rser.2013.07.040

National Renewable Energy Laboratory. (2015, August). Renewable electricity: How do you know you are using it?

National Renewable Energy Laboratory (NREL/FS-6A-20-64558). Retrieved from:

http://www.nrel.gov/docs/fy15osti/64558.pdf

O’Donovan, P., & O’Sullivan, D. T. (2019). A systematic analysis of real-world energy blockchain initiatives. Future

Internet, 11(8), 174. https://doi.org/10.3390/fi11080174

Patton, M. Q. (1999). Enhancing the quality and credibility of qualitative analysis. Health Services Research, 34(5 Pt

2), 1189-1208. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1089059/

Peffers, K., Tuunanen, T., Rothenberger, M. A., & Chatterjee, S. (2007). A design science research methodology for

information systems research. Journal of Management Information Systems, 24(3), 45-77.

https://doi.org/10.2753/MIS0742-1222240302

Pournader, M., Shi, Y., Seuring, S., & Koh, S. C. L. (2020). Blockchain applications in supply chains, transport and

logistics: A systematic review of the literature. International Journal of Production Research, 58(7), 2063-2081.

https://doi.org/10.1080/00207543.2019.1650976

Santos, G. F. Z., Koerich, G. V., & Alperstedt, G. D. (2018). A contribuição da design research para a resolução de

problemas complexos na administração pública. Revista de Administração Pública, 52(5), 956–970.

https://doi.org/10.1590/0034-761220170014

Saygin, H., & Çetin, F. (2010). New energy paradigm and renewable energy: Turkey's vision. Insight Turkey, 12(3),

107-128. Retrieved from http://www.jstor.org/stable/26334108

Sein, M. K., Henfridsson, O., Purao, S., Rossi, M., & Lindgren, R. (2011). Action design research. MIS Quarterly,

35(1), 37-56. https://doi.org/10.2307/23043488

Silvestre, M. L., Favuzza, S., Sanseverino, E. R., & Zizzo, G. (2018). How decarbonization, digitalization and

decentralization are changing key power infrastructures. Renewable and Sustainable Energy Reviews, 93, 483-498.

https://doi.org/10.1016/j.rser.2018.05.068

Silvestre, M. L., Gallo, P., Guerrero, J. M., Musca, R., Sanseverino, E. R., Sciumè, G., Vásquez, J. C., & Zizzo, G.

(2020). Blockchain for power systems: Current trends and future applications. Renewable and Sustainable Energy

Reviews, 119, 109585. https://doi.org/10.1016/j.rser.2019.109585

Spinnell, J. J., & Zimberg, D. L. (2018). Renewable energy certificate markets: Blockchain applied. ResearchGate.

https://doi.org/10.13140/RG.2.2.26140.64643

Stiel, F., Michel, T., & Teuteberg, F. (2016). Enhancing manufacturing and transportation decision support systems

with LCA add-ins. Journal of Cleaner Production, 110, 85-98. https://doi.org/10.1016/j.jclepro.2015.07.140

United States Environmental Protection Agency. (2017, September). Renewable energy certificates (RECs)

Arbitrage. Retrieved from https://www.epa.gov/sites/default/files/2017-09/documents/gpp-rec-arbitrage

Blockchain technology in renewable energy certificates in Brazil 25

United Nations Framework Convention on Climate Change. (2017, June 01). How blockchain technology could

boost climate action. United Nations Framework Convention on Climate Change. Retrieved from

https://unfccc.int/news/how-blockchain-technology-could-boost-climate-action

Zhao, F., Guo, X., & Chan, W. K. V. (2020). Individual green certificates on blockchain: A simulation approach.

Sustainability, 12(9), 3942. https://doi.org/10.3390/su12093942

Authors’ contributions

author: conceptualization (lead), data curation (lead), formal analysis (lead), investigation (lead), methodology

(lead), validation (equal), writing-original draft (lead), writing-review & editing (equal).

author: conceptualization (equal), formal analysis (supporting), investigation (equal), methodology (equal),

resources (equal), validation (equal), writing-original draft (supporting), writing-review & editing (equal).

author: conceptualization (equal), formal analysis (equal), supervision (equal), writing-original draft (equal).

Authors

João Akio Ribeiro Yamaguchi*

Fundação Getúlio Vargas, Escola de Administração de Empresas de São Paulo

Av. Nove de Julho, n. 2029, Bela Vista, 01313-902, São Paulo, SP, Brazil

[email protected]

https://orcid.org/0000-0002-0917-3958

Teresa Rachael Santos

Fundação Getúlio Vargas, Escola de Administração de Empresas de São Paulo

Av. Nove de Julho, n. 2029, Bela Vista, 01313-902, São Paulo, SP, Brazil

[email protected]

https://orcid.org/0000-0002-6128-3505

André Pereira de Carvalho

Fundação Getúlio Vargas, Escola de Administração de Empresas de São Paulo

Av. Nove de Julho, n. 2029, Bela Vista, 01313-902, São Paulo, SP, Brazil

[email protected]

https://orcid.org/0000-0002-9451-9609

* Corresponding author

Peer review is responsible for acknowledging an article's potential contribution to the frontiers of scholarly knowledge on business

or public administration. The authors are the ultimate responsible for the consistency of the theoretical references, the accurate

report of empirical data, the personal perspectives, and the use of copyrighted material.

This content was evaluated using the double-blind peer review process. The disclosure of the reviewers' information on the first

page is made only after concluding the evaluation process, and with the voluntary consent of the respective reviewers.

J. A. R. Yamaguchi, T. R. Santos, A. P. de Carvalho 26

APPENDIX A

Table A1

Interviews and interviewees

Interviewee

Interview

Institution

Position

Date

Format

Duration

ALL

Founder and director

March 06, 2020

Online video call

27 min

ALL

Administrative analyst

September 23,

2020

Online video call

20 min

BC-Company

Co-founder and COO

December 21,

2019

Online video call

31 min

BC-Company

Co-founder

December 3,

2019

Online video call

23 min

BC’s technology

advisory

Software services director

December 4,

2019

Online video call

43 min

EnergyS

Trading director

July 21, 2020

Online video call

45 min

Business development and M&A

specialist

ABC

R&D and innovation coordinator

July 30, 2020

Online video call

32 min

Senior R&D and innovation analyst

Trading

Relationship manager

July 27, 2020

Online video call

22 min

Trading

IT infrastructure manager

September 25,

2020

Online video call

16 min

Note.

Information was not provided, but interviewees belong to the same department as the relationship manager.