ClearTrace is Bringing Accountability to Energy Usage. Time for a Cap and Trade Exchange Platform?

In early May 2021, Patent Forecast® highlighted a mysterious Canadian company patenting methods to tokenize royalties on mineral and gas rights. Shortly thereafter, an application was published for ClearTrace, disclosing complementary technology. ClearTrace is developing a reliable method of carbon accounting, which is meant to increase clarity and transparency of carbon reduction practices by digitizing the entire supply chain from the well or the mine to the final use. The application tells us that this quantification could be based on the amount of raw material used (e.g. petroleum), or it could be based on measured impact to air quality. 

ClearTrace raised $4 million in December 2020 and this represents its second patent asset in the Energy Tokenization space, after a patent issued in April 2021. While ClearTrace is a relatively new company, its technology could make big waves. Cap and Trade solutions to climate change have been proposed for decades and some studies have shown them to be quite effective. While Europe has created a large cap and trade market, efforts to establish a national market in the US have been largely unsuccessful. However, a tokenized platform could change everything and others are already trying to seize the opportunity. In December 2020, the Universal Protocol Alliance, a coalition of various blockchain and cryptocurrency companies, launched the first tradable carbon token. However, given ClearTrace’s early investment in carbon accountability technology, it is well positioned to either challenge the UPA or assist in its efforts.  

If ClearTrace chooses to support the UPA, the UPCO2 carbon token could be bolstered by improved accountability verifying exactly where carbon sources are flowing from and who they are flowing to. Right now, ClearTrace’s focus appears to be merely accountability methods, rather than exchange platforms, but the application does mention the possibility that these tokens could be exchanged. Given the opportunities afforded by such technology, it would not be surprising to see a company like AliBaba seize the opportunity to buy ClearTrace and incorporate Cap and Trade technology into its existing physical asset tokenization platform. Patent Forecast® will keep track of ClearTrace’s movements both in the market and in its patent filings, so check out the Securities Tokenization Patent Forecast® for updates.

Illustration: Patent Matrix® claims of ClearTrace’s patent. Patent Matrix is included with every Patent Forecast