Bioplastics value chain and blockchain: reducing transaction costs

Abstract

Purpose  This paper aims to identify and explain the main transaction costs (TCs) in the second-generation bioplastics value chain and to propose the insertion of blockchain technology to reduce TCs.

Design/methodology/approach  It is a holistic single case study of a firm that produces a bioplastic resin made from açaí seeds residues. It analyzed transactions occurred between input supplier (cooperative) and resin factory and between resin factory and transformation industry.

Findings  Dominant TCs result from monitoring specific attributes of pretreated açaí seeds and biopolymers, supplier selection, environmental purchasing, time and place specificity, quality control management and technological specificity.

Research limitations/implications  Blockchain can potentially reduce TCs by enhancing trust, transparency, material traceability and information exchange.

Practical implications  Blockchain can support the further development and commercialization of genuine biodegradable bioplastics by assuring product quality and functioning as a distributed database for stakeholders, minimizing a specific type of opportunism: “greenwashing”.

Social implications  This study can help create metrics and policies to achieve the United Nations’ Sustainable Development Goal related to consumption and production patterns by doing better with less and increasing resource efficiency while contributing to strengthening Brazil’s circular (bio)economy.

Originality/value  This study’s originality lies in framing the most important challenges regarding TCs in developing bioplastics chains, which can be significantly reduced using a particular distributed database technology.

Second-generation bioplastics; Blockchain; Transaction costs; Circular economy; Biodegradable; Value chain transparency

^1.

Introduction

Plastic production’s exponential growth and use reached almost 500 million tons annually in 2022 (Williams & Rangel-Buitrago, 2022). Currently, 32% of all used plastics end up directly in the environment; 39% are dumped in landfills; 15% are burned; and only 14% are recycled. Of this 14% recycled, only 2% is optimally recycled, whereas the remaining 12% is “downcycled”, producing new material with limited quality and functionality compared to the original (Rangel-Buitrago & Neal, 2023).

Persson et al. (2022) highlight that plastic pollution is an important aspect of deep concern regarding the safe operating space within planetary boundaries (the limits to Earth system processes integrity). To stay within a scenario in which plastics comply with their assigned safe operating space in 2030, it will be necessary to significantly improve recycling technologies and recycling rates, coupled with biomass and plastics production (Bachmann, Zibunas, & Hartmann, 2023). Consequently, new bio-based, biodegradable and compostable plastics (BBCP) classes have been increasingly proposed as alternatives to mitigate global plastic pollution and reduce carbon emissions (Ali et al., 2023; Iles & Martin, 2013). The total amount of manufactured bioplastics in 2021 was approximately 2.36 million tons; 1.55 million tons were degradable and 0.86 million tons were nondegradable. There is also an expected increase in the production of biodegradable bioplastics to 5.33 million tons in 2026 (Ali et al., 2022).

Bioplastics are products based on nonfossil carbon sources, which are important components of circular economy (CE) and bioeconomy ideals. One condition to mainstream those ideals is an infrastructure for information sharing and platforms for collaboration. This infrastructure is essential to a CE, as shared and transparent information is the foundation for building different resource and material flows (Derigent & Thomas, 2016). Such an information technology infrastructure could be provided by blockchain technology (BT) (Böckel, Nuzum, & Weissbrod, 2021). Böckel et al. (2021) state that a frequently mentioned context for blockchain was supply chain management, particularly sustainable supply chain tracking; in such a context, the plastic sector has been frequently mentioned in research and practice.

Therefore, this paper analyzes the second-generation bioplastics (produced with residue) supply chain, extending from obtaining raw material to selling bioplastic resin, with Transaction Costs Economics as its theoretical basis. It fully comprehends the value chain and the transaction costs (TCs) in place. After mapping all TCs that are effectively present, we propose the insertion of blockchain in the entire supply chain, also evaluating spots where that insertion is more relevant.

This introduction follows a literature review on bioplastics industrial production, Transaction Cost Economics and blockchain (Setion 2). Next are the empirical strategy (Section 3), results and discussion (Sections 4 and 5) and conclusion (Section 6).

^2.

Literature review

^2.1

Bioplastics industrial production

Understanding challenges to upscale bioplastics value chains is critical for advancing both circular and bioeconomy policies. First, regarding the market entry of bioplastics, the use of “drop-in” or “non-drop-in” bioplastics has direct implications for diffusion processes. “Drop-in” bioplastics can be produced using the same industrial machinery that processes fossil polymers. “Non-drop-in” bioplastics have a significant market disadvantage because a complete machinery change is necessary (Barbato & Pamplona, 2022).

In addition, an economy based on biomass and renewable resources is not necessarily sustainable as land and water use changes within biorefineries must be considered as factors that can alter food prices and security (Scheiterle, Ulmer, Birner, & Pyka, 2018). In this case, agro-industrial and urban waste recycling could mitigate adverse effects. Notably, compared to pure starch, blends with starch residues (also called second-generation resources) show a reduction of up to 60% in land use, 40% in eutrophication potential, 10% in GHG emissions and 60% reduction in nonrenewable energy use (Broeren, Kuling, Worrell, & Shen, 2017). Therefore, the safe use of waste and secondary streams is critical to the environmental performance of bioplastics, and it must be considered at planning/production stages (Bishop, Styles, & Lens, 2022).

Implementing bioplastic production has several legal challenges (Jayakumar, Radoor, Siengchin, Shin, & Kim, 2023). For example, according to EN 13432 on biodegradable packaging, packaging materials should disintegrate 90% after 12 weeks and undergo 90% biodegradation after six months. Similarly, according to Barbato and Pamplona (2022), biodegradable plastics undergo a composting process within 180 days. However, legislative frameworks on the production, sales and labeling of products made of BBCP must be urgently implemented in Brazil since current legislation has not been sufficient to combat greenwashing practices (Moreno, Rodrigues, Afonso, Jimenez, & Castro, 2023). Therefore, utensils made from BBCP frequently claim biodegradability on labels due to a lack of market regulation (Napper & Thompson, 2019; Nazareth, Marques, Leite, & Castro, 2019), whereas real biodegradability is essential for bioplastics chains to reduce amounts of generated waste (Kawashima, Yagi, & Kojima, 2021).

^2.2

Transaction costs economics

Market transactions entail costs, which may be reduced if transactions occur within a firm rather than using pricing systems (Coase, 1937). This explanation for the firm’s existence laid the most important foundation for Transaction Costs Economics. This theoretical perspective regards the transaction as the basic unit of analysis and holds that the organization of economic activity is to be understood in TC economic terms (Riordan & Williamson, 1985).

The main attributes that help explain why and when TCs occur were identified by Williamson (1985, 1996). He argues that transactions that require a substantial degree of specific assets, occur frequently and/or face a high degree of future uncertainty have higher costs due to economic agents’ bounded rationality and potential opportunistic behavior (Rindfleisch, 2020).

Firms participating in a value chain adopt a supplier selection process, assessing factors such as stability, profitability potential, quality, capacity and technological compatibility, volume to be purchased, supplier’s ability to supply, previous relationship with the supplier and degree of uncertainty (Campos & Mello, 2017). Other screening criteria currently considered are management, R&D, flexibility, reputation, safety and environmental impacts (Campos & Mello, 2017).

In addition to ex ante costs of searching, preparing, negotiating and safeguarding a contract (Williamson, 1985), agents face costs during the transaction, which often arise from negotiation and refer to conflicts of interest, the willingness of parties to trade and uncertainty of rights and duties in the contract (Hobbs & Young, 2000). Finally, there are also ex post costs of monitoring, adjusting and adapting due to execution changes caused by failures, errors, omissions and unexpected changes (Williamson, 1985).

These costs have also been called “appropriation concerns” (Gulati & Singh, 1998). They include the risk that other parties will shirk their agreed-upon responsibilities. For instance, the farmer might deliver a product of inferior quality if they know the processor cannot identify and measure the violation (Barzel, 2000), or the risk of hold-up when specific investments have been made by the processing firm (Williamson, 1991). Therefore, characteristics of a transaction determine the magnitude of exchange hazards, which determine the magnitude of direct TCs of crafting safeguards, monitoring and enforcing the agreement and the indirect TCs of failure to invest in productive assets, which in turn determine the efficiency of a particular governance structure (Williamson, 1996).

The organization mode depends on asset specificity, transaction frequency and uncertainty but also on difficulties in measuring attributes of goods being transacted (Barzel, 1982). According to this measurement costs perspective, transactions can be decomposed into different dimensions and attributes. Acquisition of an agricultural product is not a simple transaction because of its different attributes: specific nutrient content, flavor, organic or not, etc. Given that several different attributes characterize products, it is essential to know and collect information about each of them (Cunha, Saes, & Mainville, 2013).

To guarantee net benefits to parties in a contract, they need to measure attributes of goods and their values, a complex task due to the high costs (Barzel, 1982, 2000). High measurement costs open room for inefficiency and will affect the choice of the most efficient form of governance. Attributes that are difficult to measure remain within the firm or are subject to higher contractual authority due to the risk of value expropriation and dissipation (Zylbersztajn & Nadalini, 2007). However, both measurement technology and standardization can change measurement costs (Cunha et al., 2013).

In the agrifood sector, the value chain relates to the concept of “Agribusiness” as it refers to the sum of operations involved in manufacturing and distributing farm products, their production, storage, processing and distribution (Zylbersztajn, 2017). Particularly in this sector, additional factors such as time, location and technological specificity (Zylbersztajn & Nadalini, 2007) also impact TCs and can be caused by product deterioration after harvest, logistics, monitoring costs and product exposure to uncontrolled conditions.

The governance of transactions in agrifood value chains can be done through markets, vertical integration or outsourcing, which, in turn, can be done through markets or contracts. Vertical integration happens when the agribusiness processing unit itself is the one that produces and supplies the agrifood input for processing it (Dias, Silva, & Nunes, 2021). Outsourcing is when processing units purchase necessary material from independent suppliers through the market or formal, detailed contracts that allow buyers and sellers to make price and quantity adjustments in response to changing circumstances or more informal relational contracts representing long-term agreements involving trust and substantial mutual commitment.

The central proposition of Transaction Costs Economics applied to the agrifood sector is that as assets become more specialized and costs of measuring quality attributes increase, there will be incentives for vertical integration and authority mechanisms in contracts regarding the production and supply of agrifood inputs, replacing price as the only coordination mechanism (Zylbersztajn & Nadalini, 2007).

^2.3

Blockchain

The fundamental elements of blockchain are cryptography, consensus and distributed ledger: cryptography concerns security properties, consensus allows distributed participants to coordinate their actions to reach shared decisions without an intermediary (peer-to-peer), whereas ledger is the immutable data structure in which transactions are recorded (Greve et al., 2018).

With smart contracts (SCs), BT automatically carries out terms of agreements between two or more parties in a decentralized setting once necessary circumstances have been satisfied (Sklaroff, 2017). SCs have potential in supply chain management, as its diverse applications promise to decrease TCs (Taherdoost, 2023; Schmidt & Wagner, 2019).

BT can be characterized as public, private or permissioned. Only private or permissioned modalities fit into the context of supply chains, as they are adequate to corporate interests and require authentication of participants in the network. A permissioned blockchain effectively works like a traditional enterprise system, offering a combination of business features such as membership service and channel-based privacy, besides displaying blockchain-specific features such as immutability, enabling SCs and performance features such as increased release of transactions (Greve et al., 2018). Consequently, a permissioned blockchain has attributes that can meet a firm’s needs (Chou, Richard Hwang, Li, Wang, & Wang, 2023).

The Hyperledger Fabric has facilitated a paradigm that fundamentally differs from most blockchains, offering improved performance, flexibility and privacy features (Kolb, AbdelBaky, Katz, & Culler, 2020). The system features exclusive participation for authorized users, the possibility of using SCs, verifying participants before they enter a permissioned channel and assigning designated permissions to participants (Ravi, Ramachandran, Vignesh, Falmari, & Brindha, 2022; Chou et al., 2023). It is considered more user-efficient and more relevant than any firm’s other solutions for supply chain coordination (Ravi et al., 2022). As the CE proposes product design as distributed networks rather than a unitary product (Upadhyay, Mukhuty, Kumar, & Kazancoglu, 2021), blockchain’s main attributes may foster trust and contracts among firms in these “netchains” (Lazzarini, Chaddad, & Cook, 2001).

Finally, blockchain has considerable potential for turning agrifood “net chains” more circular through:

• preventive effects, such as alleviating asymmetric information, reducing demand-supply imbalances and using SCs for automation in the supply chain;

• valorization of waste and by-products and ex post traceability; and

• enabling regenerative strategies, facilitating ex ante traceability, improving trust, communication and cooperation in the food chain and enabling monitoring size and location of emissions (Pakseresht, Yavari, Kaliji, & Hakelius, 2023).

^3.

Empirical strategy

^3.1

Case study

According to Eisenhardt (1989) and Yin (2005), and as described in Toledo and Shiaishi (2009), some criteria for choosing case studies as a research methodology are:

• a desire to deeply understand the phenomenon;

• a complex dissociation of the phenomenon and its context;

• the nonrequirement of control over behavioral effects by the research; and

• having research questions specific to the case study.

This study’s primary method is a holistic single case study, which has potential to provide detailed explanations of processes (Yin, 2005; Nair, Gibbert, & Hoorani, 2023). One Brazilian firm was investigated and transactions with second-generation bioplastics value chains were selected as units of analysis. This firm has a unique profile in the Brazilian bioplastics industry, with no competitor that uses a similar raw material (agro-industrial residue). It is the only industry-level production site of second-generation bioplastics in Brazil. Competitors use algae, first-generation biomass or biotechnological routes to produce bioplastics, as stated by the firm’s commercial director.

^3.2

Data collection

The firm was created in June 2018 and is considered a small start-up. By the time this study was conducted, it was composed of four directors (Executive, Research and Development – R&D, Sales, and Processes Director) and had generated R$150.000 in billing, with hopes to reach R$1 million by the end of 2023. Its production capacity is 120 tons a month, and its core business is selling bioplastic resin, obtained by chemical and physical synthesis, produced in an outsourced factory.

The case study was carried out through online interviews with all firm directors, based on a preestablished script, containing 41 questions, divided into six subsections: demographic questions, producer to manufacturer; from in-house handling to production steps; B2B transactions and customer interaction, end of life features and institutional environment. Questions were elaborated according to the literature on TCs and bioplastics production and biodegradability, as shown in the supplementary material (questionnaire items and the corresponding theoretical construct). Interviews were recorded (Microsoft Teams) and reviewed during the results documentation.

Preparatory measures include sending an invitation letter, holding a diagnosis/presentation meeting and sending the case study protocol, including all respondents’ signatures on informed consent terms. An ethical review letter, a study execution schedule and data collection instruments were prepared.

This empirical strategy aimed to identify and explain the main TCs in the second-generation bioplastics value chain through pattern adequation. The second objective was to identify where blockchain’s insertion in this value chain would be valuable and how.

^3.3

Analysis

The method for data analysis was pattern adequation, which compares empirically-based patterns with predicted ones. If patterns match, results help increase their internal validity (Toledo & Shiaishi, 2009).

Analytical procedures were:

• grouping the sources of evidence in individual cases, following the order of the study topic, through data reduction and data representation in a format that allows them to be organized, summarized, and related;

• comparison of cases presented with literature review;

• grouping obtained information, following the order of study topics; and

• verification of results and conclusions: identify meaning, regularities, patterns and explanations that emerge from the data (Lukosevicius, Marchisotti, & Soares, 2017).

The format used was a four-column table, one column for each interviewee, with 33 lines, aggregating answers to similar questions for comparison. Validation for reliability was carried out through operational definitions of the construct, a survey of multiple sources of evidence to allow triangulation, chaining of evidence and draft report submission for review by the informants.

^4.

Results and discussion

Açaí is of great importance in the context of agro-industrial waste, as 80% of the fruit mass corresponds to the seed, which is discarded, becoming a source of local waste problems (Serrapilheira, 2019).

The great volume of açaí produced is due to a significant demand for the fruit worldwide: in the past decade, açaí exports have increased by almost 15.000%, with the state of Pará holding 95% of national production (Mongabay, 2021). Hence, using açaí seeds as an input to produce bioplastics can be seen as an economical solution to a local environmental problem.

Açaí extractivists are widely spread across the central producing region, the state of Pará, in the Brazilian Amazon. Hence, a cooperative centralizes the production of several small dispersed extractivists and supplies raw materials to the bioplastic factory.

Figure 1 and the following section describe the value chain and observed TCs.

Figure 1.
Inner circle – schematic representation of second-generation bioplastics value chain, beginning at collection and pretreatment of açaí waste (input) until its disposal and composting. Outer circle – representation of transaction costs empirically observed at each link in the chain, in its corresponding position. Unlabeled costs could not be observed empirically in this paper

^4.1

Cooperative

^4.1.1

Green supply chain management and screening costs.

The main ex ante costs relevant to bioplastic production are screening costs (Figure 1), which concern uncertainty regarding the trustworthiness of potential suppliers and the actual quality of inputs, as in the Biomass-to-Energy Sector (Dias et al., 2021). Such screening costs are even higher when environmental criteria are introduced in purchasing decisions (Campos & Mello, 2017). Environmental sourcing refers to the procurement of products and services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose and is directly related to green supply chain management (GSCM).

Respondents from the bioplastic firm reported that it took up to three years to develop relationships and contractual negotiations and one month until the final contract with the current supplier was established. According to the Executive and R&D Directors, the leading factors affecting the chosen cooperative were social responsibility, volume, delivery and economic factors. “Delivery” corresponds to distributing raw material within contract-provided specifications necessary for complete input use during production processes. “Economic factors” correspond to price and delivery capacity/logistics. The bioplastic firm considered the input’s biodegradability and suppliers’ social and environmental responsibility. They also prioritized a cooperative that worked with a type of local producers called “ribeirinhos”, riverside communities, as stated by the Executive Director: “We specifically wanted a cooperative that worked with riverside communities, because it would be possible to return social benefits to them”. Searching for this information when engaging in environmental sourcing increases ex ante TCs.

The role of the cooperative is to pre-treat açaí seeds (Figure 1). This pretreatment process is very cheap and is done through drying, crushing and grinding. Pretreatment must adapt the açaí seed to a predetermined particle size and comply with humidity standards.

^4.1.2

Renegotiation costs.

Another cost during the transaction are renegotiation costs. Simple, short-term contracts are used in agribusiness due to their good information, relatively low TCs and the desire to maintain long-term relationships (Dias et al., 2021). They seek to avoid opportunistic behavior, which can result from incomplete contracts (Zylbersztajn & Nadalini, 2007). Transactions with the cooperative are governed by simple supply contracts with product specifications, delivery times and volumes. These contracts have been successfully fulfilled and the cooperative has shown great willingness and responsibility in giving this new destination to açaí waste, “since this diminishes a local problem for them (the cooperative), they are highly invested”. This statement from the Executive Director suggests a low potential for opportunistic behavior in this transaction.

The bioplastics firm expects increased transaction frequency by placing monthly orders for inputs throughout 2023. This may increase negotiation costs, as they are short-term contracts, and the cooperative can ask for higher prices in future contracts. As contract renegotiation has not occurred yet, the Executive Director stated that “if the supplying cooperative increases the price, we will have higher renegotiation costs, whereas, if the current price is maintained, renegotiation costs will be low”. According to the Processes Director, “annual price updates would not be a problem”. Therefore, the firm reports a high willingness of the cooperative to exchange and enforce contracts, thus renegotiation costs are not high enough to justify vertical integration or long-term contracts with the same or other suppliers.

^4.2

Transport

^4.2.1

Time and place specificity; monitoring and transportation costs.

According to the Processes Director, “the flow of açaí residue from Pará state to the factory, in São Paulo, is considered easy and occurs quickly, due to the established logistics of transporting açaí fruit products”. However, “contamination by fungi would greatly impact the resin production process”. Thus, according to the sales Director, “the transport phase must meet requirements of low humidity and shelter from the sun, which aim to prevent product deterioration during long-distance transportation”. Those are considered time and place specificity costs related to product exposure to uncontrolled conditions.

Therefore, when açaí seeds arrive at the outsourced factory hired by the firm, they are stored according to quality specifications. Then, the seeds go through a check and classification of particles to ensure their suitability for processing requirements by the machinery (Figure 1). These checks and classifications entail ex post monitoring costs, as they relate to uncertainty of possible variations in product quality and quality assurance (Cunha et al., 2013; Dias et al., 2021).

^4.3

Plastic resin factory

^4.3.1

Technological specificity.

After checking for specific quality, the next steps are extrusion with other biopolymers, cooling, drying, pelletizing and packaging. There is a risk of a hold-up at this stage: after equipment installment, a supply decrease causes losses due to idle capacity (Zylbersztajn & Nadalini, 2007).

The cooperative supplier must deliver pretreated açaí seeds within contract-established deadlines. Breaching these specifications means that the resin factory will bear production inefficiencies.

^4.3.2

Quality control management.

According to the Executive Director, quality is measured in data sheets, which is “a board with seven analyses, for each batch”. Some of the measured parameters are visual quality control and porosity. The client also receives a guide for adapting machinery to the new bioplastic resin, which aims to facilitate its use.

^4.4

Transformation industry

^4.4.1

Green supply chain management and screening costs.

The directors’ perspective is that the customer’s value chain perception and interest in understanding its practices is not uniform. Some focus more on price, whereas others focus on certifications, production practices, composting capacity and biodegradability, carbon emissions or life cycle assessment. Screening costs and GSCM are higher for the latter due to environmental purchasing criteria.

According to all directors, it is challenging to demonstrate product value and make it competitive against slightly cheaper petroleum-based plastics. Consequently, adding value by displaying a sustainable value chain from cradle to cradle is an advantage, as suggested by the Executive Director:

Clients can be quite annoying when asking for all types of certification, regarding every step of the process. We are asked about the cooperative, where the açaí residues come from, and product biodegradability certifications obtained in a laboratory.

Hence, at this stage of the chain, the same perceived cost is observed between the cooperative and the bioplastic resin factory during the supplier selection process.

^4.4.2

Technological specificity.

There is also a cost associated with technological specificity resulting from machinery parameter adjustments (Campos & Mello, 2017) for using the biopolymer (Figure 1). According to the Sales Director, the resistance from many customers to this change is a dominant challenge related to selling bioplastic resin: “The plastics industry market is still quite conservative and, in Brazil, changes are starting to happen”. This occurs even though the polymer is “drop-in” and can be used in traditional machinery with minor adjustments. Thus, the sales process includes a tryout phase (testing the drop-in biopolymer in the customer’s machinery), essential for adapting to the new material.

As shown above, there are some important costs in both transactions. The next subsection will consider the insertion of blockchain and other 4.0 technologies to reduce some of these costs.

^5.

Technologies potential to reduce transaction costs

Tables 1 and 2 describe the possible insertion of 4.0 technologies in the value chain to reduce every TC mapped in the empirical strategy and first discussion section. It also estimates their observed relevance for this specific value chain according to case study responses.

It is estimated that blockchain has a high relevance in reducing screening, environmental sourcing, ex post monitoring, transportation and technological specificity costs due to characteristics such as acting as a distributed ledger, value chain monitoring throughout the product journey, ensuring trust, product quality, safe humanitarian/environmental practices and through Hyperledger Fabric (Table 1). On the other hand, blockchain has medium relevance in reducing time/place specificity, renegotiation and quality control management costs when acting with sensing technologies, through cryptographic and auditable resources, SCs and as a storage bank for quality tests (Table 2). Finally, blockchain has a low relevance in reducing transfer costs, as determined by Law 13.123 / 2015, on access to Brazilian genetic resources.

Table 1.
Description of transaction costs observed in the chain, factors that generate them and the possibility of insertion of 4.0 technologies with high relevance

TC construct	Source of TC	Reduction of TC using 4.0 technologies	Relevance
Screening cost	Uncertainty about the reliability of potential suppliers	Blockchain to centralize information about the value chain (distributed ledger) (Upadhyay et al., 2021). Blockchain to detect unethical suppliers: information recorded only by authorized sources (Saberi et al., 2019). SCs as a way to define interaction between actors and digital verification (Saberi et al., 2019)	High
Environmental sourcing and GSCM	Selection of suppliers: stability, profitability, technological compatibility, volume to be purchased, reputation, safety and environment	Blockchain monitoring of the value chain during the product journey, with key data recording to ensure product quality (Upadhyay et al., 2021), uphold human rights, labor practices (Saberi et al., 2019) and tracking sustainable supply chains (Böckel et al., Böckel et al., 2021; Schmidt & Wagner, 2019). Blockchain as a source of ex ante and ex post traceability (Pakseresht et al., 2023)	High
Ex post monitoring and transportation costs	Uncertainty of product quality variations and quality assurance, inspection costs and quality measurement methods	Blockchain as a digital record of decentralized data (Raimondi, 2022) and as a link to distributed ledgers, databases, and stakeholders (Upadhyay et al., 2021); RFID sensing: sharing data on production, processing, storage and distribution (Putri et al., 2020)	High
Technological specificity	Possible losses due to idle capacity after equipment installation	Framework for using permissioned blockchain (Hyperledger Fabric) for firms to share information privately and confidentially with partners and competitors in a value chain. (Chou et al., 2023; Ravi et al., 2022)	High

Table 2.
Description of transaction costs observed in the chain, factors that generate them and the possibility of insertion of 4.0 technologies with medium relevance

TC construct	Source of TC	Reduction of TC using 4.0 technologies	Relevance
Time/place specificity	Postharvest spoilage; monitoring costs, product exposure to uncontrolled conditions	Blockchain and RFID Sensing (Putri et al., 2020): monitoring and real-time update on Blockchain networks. Shared databases with auditable resources to control mobility of inputs (Greve et al., 2018)	Medium
Renegotiation costs	Update contracts and define new clauses, legal fees and new prices	SCs with automatic correction of taxes (Raimondi, 2022); minimize malicious and accidental exceptions (Greve et al., 2018); facilitate assembly and self-execution of complex contracts, terms open to everyone in the network; contribute to social responsibility by preventing fraudulent transactions (Upadhyay et al., 2021)	Medium
Quality control management (final product)	Inspection costs and investment in quality measurement methods	Blockchain as a storage bank for quality tests. Data available on the blockchain network worldwide prevents data falsification and theft (Raimondi, 2022)	Medium

A few remarkable aspects of blockchain insertion were highlighted in the section below, as they could not be fully discussed in Tables 1 and 2.

^5.1

Renegotiation costs

Given the low odds of vertical integration of açaí production, the high frequency of transactions and potential costs of renegotiating price, delivery and quality terms, as suggested by the respondents’ statements, self-executing contracts, open terms and automated cross-border payments (Upadhyay et al., 2021; Raimondi, 2022; Greve et al., 2018) can facilitate the process (Tables 1 and 2).

^5.2

Transportation and quality measurement costs

Considering distances between the production site and the factory, questions may arise about carbon emissions and the firm’s life cycle analysis, which may consider carbon emissions resulting from the input transport and their relevance to the product’s final carbon footprint. This is a strategic issue since, according to the Commercial Director, the firm intends to acquire carbon certifications. In a carbon tax scenario, tracking a particular firm’s product footprint becomes more manageable with blockchain and can help determine the amount of carbon taxation to be charged (Kim & Huh, 2020). Sensing technologies can be used in monitoring inputs along the route (Greve et al., 2018) and blockchain can be useful as a test storage bank throughout the processing of inputs in the factory (Raimondi, 2022), to diminish the uncertainty of product quality variations and store results of quality measurement procedures (Tables 1 and 2).

^5.3

Technological specificity and customer adoption

Customer adoption in the plastics transformation industry also depends on bioplastics’ characteristics. The bioplastic in question is considered a “drop-in”, a market differentiator for the firm. As there is resistance from many customers, the tryout process is of great importance for market adoption, as it aims to facilitate customer’s adaptation to the bioplastic resin. Using Hyperledger Fabric as a shared database between firms (Chou et al., 2023) could strengthen the trustworthiness of the resin firm with other potential clients (Table 1). A shared Hyperledger Fabric database could follow the tryout, offering transparency. Furthermore, the role of data stored in this distributed network can be discussed as a form of communication between the firm and customers in the plastics transformation industry. This factor has been directly related to market adherence (Chou et al., 2023).

^5.4

Environmental sourcing and green supply chain management

The following statement from the Sales Director illustrates the importance of an efficient and trustworthy information chain when complex quality attributes (e.g. environmental) are part of the purchasing criteria:

The product competes with paper, bamboo fiber, and polylactic acid. In terms of LCA, it uses less water and has lower carbon emissions while maintaining the thermomechanical properties of plastics. Some customers understand the importance of considering these environmental criteria and purchasing bioplastic resins. For them, value chain transparency is crucial.

A transparent product history helps customers to have confidence that the goods purchased are from ethical sources (Putri, Hariadi, & Wibawa, 2020). Blockchain records can monitor and significantly reduce measurement costs related to the sustainability of manufactured products (Schmidt & Wagner, 2019) for consumers (Table 1). Thus, it can minimize fraud, human exploitation and pollution (Raimondi, 2022). Specifying quality standards and ensuring compliance with a set of rules affect how transactions are organized; therefore, certification would reduce the costs of measuring a very relevant attribute in the bioplastics chain: its biodegradable characteristic.

The studied firm produces a 100% compostable product in a home or industrial compost bin between 70 and 154 days, with testing carried out in a certified laboratory and using 100% renewable sources. However, respondents reported disagreement between Brazilian and European legislation, which hinders market consensus on the real biodegradability of bioplastic compounds. It is highly relevant to have a consensus on the real biodegradability or compostability of materials, as this directly influences the final treatment of waste and its environmental impact. Many companies use false claims to increase their sales as some consumers are willing to pay more for products that offer environmental benefits. Hence, the importance of a favorable institutional environment for developing bioplastics value chains should not be undermined. In this regard, the European Commission adopted a policy framework on sourcing, labeling, and use of BBCP, which may serve as a basis for developing countries to combat “greenwashing” and support the development and commercialization of genuine bioplastics (Moreno et al., 2023).

Finally, we propose blockchain as the distributed data storage platform to be used in this context to increase traceability and disclosure, thorough mechanisms such as value chain monitoring during product journey, key data recording and detection of unethical suppliers, as shown in Tables 1 and 2.

^5.5

Implementation challenges and perspectives

Despite countless possibilities for applying blockchain to increase efficiency and transparency in the value chain (Chauhan, Parida, & Dhir, 2022; Saberi, Kouhizadeh, Sarkis, & Shen, 2019), implementing it has technical difficulties. Among them are few scalable platforms, high energy consumption (Khadke et al., 2021), performance, adaptability, storage, security, privacy, regulation and ordering of transactions (Saberi et al., 2019; Greve et al., 2018). Liability in relation to fraudulent relationships also needs to be discussed in peer-to-peer transactions (Raimondi, 2022), as it relates to possible attacks, data and money theft from contracts and the lack of predictability of new technologies (Greve et al., 2018; Chauhan et al., 2022). In addition to technological difficulties of implementation, Saberi et al. (2019) mention inter and intra-organizational and external implementation barriers, such as financial limits, low management support, lack of organizational policies, customer awareness, lack of industry involvement in ethical practices and deficient government policies.

^6.

Conclusion

Throughout this case study, two transactions of the bioplastics value chain were analyzed: between input supplier (cooperative) and resin factory and between resin factory and transformation industry. Dominant perceived TCs were related to monitoring specific attributes both of pretreated açaí seeds and biopolymers, supplier selection, environmental purchasing, time and place specificity, quality control management and technological specificity for processing biopolymers into plastic materials.

Blockchain’s characteristics of centralizing information about the value chain, acting as a digital record of decentralized data and executing SCs, can lower these TCs. The shared database between firms could strengthen the trustworthiness of the resin firm with other potential clients. Most importantly, as the legislation regarding biodegradability in Brazil is not fully effective in determining the biodegradability of plastics, blockchain could help ensure that supposedly “biodegradable” products are trustworthy.

Blockchain, however, should not be considered an ultimate techno-fix as it will not substitute a favorable institutional environment for developing bioplastics value chains. Even so, when combined with adequate political institutions, it can potentially minimize a specific type of opportunism: “greenwashing”.

Finally, beyond lowering perceived costs related to screening, monitoring, idle capacity and technological specificity, blockchain can be considered strategic if bioplastics are marketed as “sustainable” as this technology is related to supply chain traceability.

Data availability statement

Data are available upon reasonable request.

• Funding: Scientific Initiation program of the University of Brasília (2022-2023). Scholarship from the National Council of Scientific and Technological Development (CNPq). Work plan code 7688A.

References

• Ali, S. S., Elsamahy, T., Abdelkarim, E. A., Al-Tohamy, R., Kornaros, M., Ruiz, H. A., Zhao, T., Li, F., & Sun, J. (2022). Biowastes for biodegradable bioplastics production and end-of-life scenarios in circular bioeconomy and biorefinery concept. Bio-Resource. Technology, 363, 127869. doi: 10.1016/j.biortech.2022.127869.
  » https://doi.org/10.1016/j.biortech.2022.127869
• Ali, S. S., Abdelkarim, E. A., Elsamahy, T., Al-Tohamy, R., Li, F., Kornaros, M., Zuorro, A., Zhu, D., & Sun, J. (2023). Bioplastic production in terms of life cycle assessment: A state-of-the-art review. Environmental Science and Ecotechnology, 15, 100254, 10.1016/j.ese.2023.100254.
  » https://doi.org/10.1016/j.ese.2023.100254
• Bachmann, M., Zibunas, C., & Hartmann, J. (2023). Towards circular plastics within planetary boundaries. Nature Sustainability, 6(5), 599–610, 10.1038/s41893-022-01054-9.
  » https://doi.org/10.1038/s41893-022-01054-9
• Barbato, A. G., & Pamplona, J. P. (2022). Os desafios para a difusão dos bioplásticos no Brasil. Revista Gestão & Sustentabilidade Ambiental, 11(3), 365–390. doi: 10.59306/rgsa.v11e32022365-390.
  » https://doi.org/10.59306/rgsa.v11e32022365-390
• Barzel, Y. (1982). Measurement cost and the organization of markets. The Journal of Law and Economics, 25(1), 27–48. doi: 10.1086/467005.
  » https://doi.org/10.1086/467005
• Barzel, Y. (2000). The role of contract in quality assurance. CAFRI: Current agriculture, food and resource issues. Canadian Agricultural Economics Society, 1, 1–10.
• Bishop, G., Styles, D., & Lens, P. N. L. (2022). Land-use change and valorisation of feedstock side – Streams determine the climate mitigation potential of bioplastics. Resources, Conservation and Recycling, 180, 106185, 10.1016/j.resconrec.2022.106185.
  » https://doi.org/10.1016/j.resconrec.2022.106185
• Böckel, A., Nuzum, A.-K., & Weissbrod, I. (2021). Blockchain for the circular economy: Analysis of the research-practice gap. Sustainable Production and Consumption, 25, 525–539, 10.1016/j.spc.2020.12.006.
  » https://doi.org/10.1016/j.spc.2020.12.006
• Broeren, M. L., Kuling, L., Worrell, E., & Shen, L. (2017). Environmental impact assessment of six starch plastics focusing on wastewater-derived starch and additives. Resources, Conservation and Recycling, 127, 246–255. doi: 10.1016/j.resconrec.2017.09.001.
  » https://doi.org/10.1016/j.resconrec.2017.09.001
• Campos, J. G. F. D., & Mello, A. M. D. (2017). Transaction costs in environmental purchasing: analysis through two case studies. Journal of Operations and Supply Chain Management, 10(1), 87–102, 10.12660/joscmv10n1p87-102.
  » https://doi.org/10.12660/joscmv10n1p87-102
• Chauhan, C., Parida, V., & Dhir, A. (2022). Linking circular economy and digitalisation technologies: A systematic literature review of past achievements and future promises. Technological Forecasting and Social Change, 177, 121508, 10.1016/j.techfore.2022.121508.
  » https://doi.org/10.1016/j.techfore.2022.121508
• Chou, C.-C., Richard Hwang, N.-C., Li, C.-W., Wang, T., & Wang, Y.-Y. (2023). Implementing a multichain framework using hyperledger for supply chain transparency in a dynamic partnership: A feasibility study. Computers & Industrial Engineering, 175, 108906, 10.1016/j.cie.2022.108906.
  » https://doi.org/10.1016/j.cie.2022.108906
• Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386–405. doi: 10.2307/2626876.
  » https://doi.org/10.2307/2626876
• Cunha, C. F. D., Saes, M. S. M., & Mainville, D. Y. (2013). Análise de complexidade nas estruturas de governança entre supermercados e produtores agrícolas convencionais e orgânicos no Brasil e nos Estados Unidos: A influência do custo de transação e de mensuração. Revista De Administração, 341–358, 10.5700/rausp1092.
  » https://doi.org/10.5700/rausp1092
• Derigent, W., & Thomas, A. (2016). End-of-life information sharing for a circular economy: Existing literature and research opportunities. In T., Borangiu, D., Trentesaux, A., Thomas, & D., McFarlane (Eds), Service orientation in holonic and multi-agent manufacturing, Springer, 640, 41–50, 10.1007/978-3-319-30337-6_4.
  » https://doi.org/10.1007/978-3-319-30337-6_4
• Dias, M. F., Silva, A. C., & Nunes, L. J. R. (2021). Transaction cost theory: A case study in the biomass-to-energy sector. Current Sustainable/Renewable Energy Reports, 8(1), 57–69, 10.1007/s40518-020-00174-0.
  » https://doi.org/10.1007/s40518-020-00174-0
• Eisenhardt, K. (1989). Building theories from case study research. The Academy of Management Review, 14(4), 532–550. doi: 10.2307/258557.
  » https://doi.org/10.2307/258557
• Greve, F., Sampaio, L., Abijaude, J., Coutinho, A., Valcy, I., & Queiroz, S. (2018). Blockchain e a revolução do consenso sob demanda. Minicursos do simpósio brasileiro de redes de computadores e sistemas distribuídos (36th ed.), Sociedade Brasileira de Computação, Capítulo 5.
• Gulati, R., & Singh, H. (1998). The architecture of cooperation: Managing coordination costs and appropriation concerns in strategic alliances. Administrative Science Quarterly, 43(4), 781–814. doi: 10.2307/2393616.
  » https://doi.org/10.2307/2393616
• Hobbs, J. E., & Young, L. M. (2000). Closer vertical coordination in agrifood supply chains: A conceptual framework and some preliminary evidence. Supply Chain Management: An International Journal, 5(3), 131–143, 10.1108/13598540010338884.
  » https://doi.org/10.1108/13598540010338884
• Iles, A., & Martin, A. N. (2013). Expanding bioplastics production: Sustainable business innovation in the chemical industry. Journal of Cleaner Production, 45, 38–49, 10.1016/j.jclepro.2012.05.008.
  » https://doi.org/10.1016/j.jclepro.2012.05.008
• Jayakumar, A., Radoor, S., Siengchin, S., Shin, G. H., & Kim, J. T. (2023). Recent progress of bioplastics in their properties, standards, certifications and regulations: A review. Science of the Total Environment, 878, 163156, 10.1016/j.scitotenv.2023.163156.
  » https://doi.org/10.1016/j.scitotenv.2023.163156
• Kawashima, N., Yagi, T., & Kojima, K. (2021). Pilot-scale composting test of polylactic acid for social implementation. Sustainability, 13(4), 1654, 10.3390/su13041654.
  » https://doi.org/10.3390/su13041654
• Khadke, S., Gupta, P., Rachakunta, S., Mahata, C., Dawn, S., Sharma, M., …& Dalapati, G. K. (2021). Efficient plastic recycling and remolding circular economy using the technology of trust–blockchain. Sustainability, 13(16), 9142, 10.3390/su13169142.
  » https://doi.org/10.3390/su13169142
• Kim, S.-K., & Huh, J.-H. (2020). Blockchain of carbon trading for UN sustainable development goals. Sustainability, 12(10), 4021, 10.3390/su12104021.
  » https://doi.org/10.3390/su12104021
• Kolb, J., AbdelBaky, M., Katz, R. H., & Culler, D. E. (2020). Core concepts, challenges, and future directions in blockchain: A centralized tutorial. ACM Computing Surveys, 53(1), 1–39. doi: 10.1145/3366370.
  » https://doi.org/10.1145/3366370
• Lazzarini, S., Chaddad, F., & Cook, M. (2001). Integrating supply chain and network analyses: The study of netchains. Journal on Chain and Network Science, 1(1), 7–22, 10.3920/JCNS2001.x002.
  » https://doi.org/10.3920/JCNS2001.x002
• Lukosevicius, A. P., Marchisotti, G. G., & Soares, C. A. P. (2017). Revista eletrônica de administração (online). ISSN: 1679-9127, v. 16, n.2, ed. 31.
• Mongabay (2021). Global demand for açaí is destroying Amazon floodplain forests. Retrieved from https://brasil.mongabay.com/2021/09/demanda-global-por-acai-esta-destruindo-as-florestas-de-varzea-da-amazonia/ (accessed 17 November 2023).
  » https://brasil.mongabay.com/2021/09/demanda-global-por-acai-esta-destruindo-as-florestas-de-varzea-da-amazonia/
• Moreno, B. B., Rodrigues, B. V., Afonso, L. R., Jimenez, P. C., & Castro, Í. B. (2023). High incidence of false biodegradability claims related to single-use plastic utensils sold in Brazil. Sustainable Production and Consumption, 41, 1–8, 10.1016/j.spc.2023.07.024.
  » https://doi.org/10.1016/j.spc.2023.07.024
• Nair, L., Gibbert, M., & Hoorani, B. (2023). Of talking pigs and black swans: Single holistic case study design. Combining case study designs for theory building: a new sourcebook for rigorous social science researchers (pp. 31–49), Cambridge: Cambridge University Press. 10.1017/9781009023283.003.
  » https://doi.org/10.1017/9781009023283.003
• Napper, I. E., & Thompson, R. C. (2019). Environmental deterioration of biodegradable, oxobiodegradable, compostable, and conventional plastic carrier bags in the sea, soil, and open-air over a 3-year period. Environmental Science & Technology, 53(9), 4775–4783, 10.1021/acs.est.8b06984.
  » https://doi.org/10.1021/acs.est.8b06984
• Nazareth, M., Marques, M. R. C., Leite, M. C. A., & Castro, T. B. (2019). Commercial plastics claiming biodegradable status: Is this also accurate for marine environments? J. Hazard. Mater, 366, 714–722, 10.1016/j.jhazmat.2018.12.052.
  » https://doi.org/10.1016/j.jhazmat.2018.12.052
• Pakseresht, A., Yavari, A., Kaliji, S. A., & Hakelius, K. (2023). The intersection of blockchain technology and circular economy in the agrifood sector. Sustainable Production and Consumption, 35, 260–274, 10.1016/j.spc.2022.11.002.
  » https://doi.org/10.1016/j.spc.2022.11.002
• Persson, L., Carney Almroth, B. M., Collins, C. D., Cornell, S., de Wit, C. A., Diamond, M. L., … Hauschild, M. Z. (2022). Outside the safe operating space of the planetary boundary for novel entities. Environmental Science & Technology, 56(3), 1510–1521, 10.1021/acs.est.1c04158.
  » https://doi.org/10.1021/acs.est.1c04158
• Putri, A. N., Hariadi, M., & Wibawa, A. D. (2020). Smart agriculture using supply chain management based on hyperledger blockchain. IOP Conference Series: Earth and Environmental Science, 466(1), 12007, 10.1088/1755-1315/466/1/012007.
  » https://doi.org/10.1088/1755-1315/466/1/012007
• Raimondi, V. (2022). Blockchain technology & CSR compliance: How to build a system based on cooperation among stakeholders and save important resources. Strategica. Shaping the Future of Business and Economy, Retrieved from https://strategica-conference.ro/wp-content/uploads/2022/04/54-2.pdf
  » https://strategica-conference.ro/wp-content/uploads/2022/04/54-2.pdf
• Rangel-Buitrago, N., & Neal, W. J. (2023). A geological perspective of plastic pollution. Science of the Total Environment, 893, 164867, 10.1016/j.scitotenv.2023.164867.
  » https://doi.org/10.1016/j.scitotenv.2023.164867
• Ravi, D., Ramachandran, S., Vignesh, R., Falmari, V. R., & Brindha, M. (2022). Privacy preserving transparent supply chain management through hyperledger fabric. Blockchain: Research and Applications, 3(2), 100072, 10.1016/j.bcra.2022.100072.
  » https://doi.org/10.1016/j.bcra.2022.100072
• Rindfleisch, A. (2020). Transaction cost theory: Past, present and future. AMS Review, 10(1-2), 85–97, doi: 10.1007/s13162-019-00151-x.
  » https://doi.org/10.1007/s13162-019-00151-x
• Riordan, M. H., & Williamson, O. E. (1985). Asset specificity and economic organization. International Journal of Industrial Organization, 3(4), 365–378, 10.1016/0167-7187(85)90030-X.
  » https://doi.org/10.1016/0167-7187(85)90030-X
• Saberi, S., Kouhizadeh, M., Sarkis, J., & Shen, L. (2019). Blockchain technology and its relationships to sustainable supply chain management. International Journal of Production Research, 57(7), 2117–2135, 10.1080/00207543.2018.1533261.
  » https://doi.org/10.1080/00207543.2018.1533261
• Scheiterle, L., Ulmer, A., Birner, R., & Pyka, A. (2018). From commodity-based value chains to biomass-based value webs: the case of sugarcane in Brazil’s bioeconomy. Journal of Cleaner Production, 172, 3851–3863, 10.1016/j.jclepro.2017.05.150.
  » https://doi.org/10.1016/j.jclepro.2017.05.150
• Schmidt, C. G., & Wagner, S. M. (2019). Blockchain and supply chain relations: A transaction cost theory perspective. Journal of Purchasing and Supply Management, 25(4), 100552, 10.1016/j.pursup.2019.100552.
  » https://doi.org/10.1016/j.pursup.2019.100552
• Serrapilheira. (2019). Basic research on açaí seeds yields green patent to biologist. Retrieved from https://serrapilheira.org/pesquisa-basica-sobre-semente-do-acai-rende-patente-verde-a-biologa/ (accessed 17 November 2023).
  » https://serrapilheira.org/pesquisa-basica-sobre-semente-do-acai-rende-patente-verde-a-biologa/
• Sklaroff, J. M. (2017). Smart contracts and the cost of inflexibility. University of Pennsylvania Law Review, 166, 263.
• Taherdoost, H. (2023). Smart contracts in blockchain technology: A critical review. Information, 14(2), 117, 10.3390/info14020117.
  » https://doi.org/10.3390/info14020117
• Toledo, L. A., & Shiaishi, G. F. D. (2009). Estudo de caso em pesquisas exploratórias qualitativas: Um ensaio para a proposta de protocolo de estudo de caso. Revista Da FAE, 12(1), 103–119.
• Upadhyay, A., Mukhuty, S., Kumar, V., & Kazancoglu, Y. (2021). Blockchain technology and the circular economy: Implications for sustainability and social responsibility. Journal of Cleaner Production, 293, 126130, 10.1016/j.jclepro.2021.126130.
  » https://doi.org/10.1016/j.jclepro.2021.126130
• Williams, A. T., & Rangel-Buitrago, N. (2022). The past, present, and future of plastic pollution. Marine Pollution Bulletin, 176, 113429. doi: 10.1016/j.marpolbul.2022.113429.
  » https://doi.org/10.1016/j.marpolbul.2022.113429
• Williamson, O. (1985). The economics institution of capitalism (p. 449), New York, NY: The Free Press.
• Williamson, O. (1991). Comparative economic organisation: The analysis of discrete structural alternatives. Administrative Science Quarterly, 36(2), 269–296. doi: 10.2307/2393356.
  » https://doi.org/10.2307/2393356
• Williamson, O. E. (1996). Mechanisms of governance, New York, NY: Oxford University Press.
• Yin, R. K. (2005). Estudo de caso: planejamento e métodos (3rd ed.), Porto Alegre: Bookman.
• Zylbersztajn, D. (2017). Agribusiness systems analysis: Origin, evolution and research perspectives. Revista De Administração, 52(1), 114–117, 10.1016/j.rausp.2016.10.004.
  » https://doi.org/10.1016/j.rausp.2016.10.004
• Zylbersztajn, D., & Nadalini, L. B. (2007). Explaining agro-industrial contract breaches: The case of Brazilian Tomatoes Processing Industry. RER, Rio de Janeiro, 45(4), 899–920.

Further reading

• Allen, D. W. (1991). What are transaction costs? Research In Law and Economics, 14, 1–18.
• Langois, R. N. (1992). Transaction-cost economics in real time. Industrial and Corporate Change, 1(1), 99–127, 10.1093/icc/1.1.99.
  » https://doi.org/10.1093/icc/1.1.99

Supplementary material

The supplementary material for this article can be found online.

Edited by

• Associate editor:
  Albergaria Matheus

Data availability

Publication Dates

• Publication in this collection
  26 May 2025
• Date of issue
  2025

History

• Received
  31 Jan 2024
• Reviewed
  28 May 2024
• Reviewed
  03 Sept 2024
• Reviewed
  30 Dec 2024
• Accepted
  09 Mar 2025