[Paper Review] A Systematic Literature Review on the Use of Blockchain Technology in Transition to a Circular Economy

Ishmam Abid, S. M. Zuhayer Anzum Fuad+3 more|arXiv (Cornell University)|Aug 21, 2024

Impact of AI and Big Data on Business and Society6 citations

TL;DR

This systematic literature review analyzes how blockchain supports the circular economy through the 4R framework (reduce, reuse, recycle, recover), identifies industry use cases, architectures, and key challenges, and calls for more research and stakeholder participation.

ABSTRACT

The circular economy has the potential to increase resource efficiency and minimize waste through the 4R framework of reducing, reusing, recycling, and recovering. Blockchain technology is currently considered a valuable aid in the transition to a circular economy. Its decentralized and tamper-resistant nature enables the construction of transparent and secure supply chain management systems, thereby improving product accountability and traceability. However, the full potential of blockchain technology in circular economy models will not be realized until a number of concerns, including scalability, interoperability, data protection, and regulatory and legal issues, are addressed. More research and stakeholder participation are required to overcome these limitations and achieve the benefits of blockchain technology in promoting a circular economy. This article presents a systematic literature review (SLR) that identified industry use cases for blockchain-driven circular economy models and offered architectures to minimize resource consumption, prices, and inefficiencies while encouraging the reuse, recycling, and recovery of end-of-life products. Three main outcomes emerged from our review of 41 documents, which included scholarly publications, Twitter-linked information, and Google results. The relationship between blockchain and the 4R framework for circular economy; discussion the terminology and various forms of blockchain and circular economy; and identification of the challenges and obstacles that blockchain technology may face in enabling a circular economy. This research shows how blockchain technology can help with the transition to a circular economy. Yet, it emphasizes the importance of additional study and stakeholder participation to overcome potential hurdles and obstacles in implementing blockchain-driven circular economy models.

Motivation & Objective

• Assess how blockchain can facilitate each of the 4Rs (Reduce, Reuse, Recycle, Recover) in circular economy transitions.
• Identify industry use cases and architectures that apply blockchain to circular economy models.
• Synthesize the main challenges and limitations of applying blockchain to circular economy initiatives.
• Evaluate the alignment of blockchain-based CE solutions with R-frameworks (3R, 4R, 6R, 9R) and industry practices.
• Highlight research gaps and stakeholder considerations to advance blockchain-enabled CE.

Proposed method

• Conduct a systematic literature review (SLR) following PRISMA guidelines.
• Search seven databases with keywords related to blockchain, circular economy, and 4R/R-frameworks.
• Screen and select studies based on inclusion/exclusion criteria and quality assessment questions (QAQs).
• Classify selected studies into Reduce, Reuse, Recycle, Recover, and Others categories for analysis.
• Synthesize findings to map blockchain-enabled CE solutions to the 4R framework and identify challenges.

Experimental results

Research questions

• RQ1 RQ1: How can blockchain technology facilitate Reduce in the circular economy?
• RQ2 RQ2: How can blockchain technology facilitate Reuse in the circular economy?
• RQ3 RQ3: How can blockchain technology facilitate Recycle in the circular economy?
• RQ4 RQ4: How can blockchain technology facilitate Recover in the circular economy?
• RQ5 RQ5: What potential drawbacks could a blockchain-based circular economy pose?

Key findings

• Blockchain’s distributed, immutable ledger supports transparent and traceable supply chains, aiding reductions in resource use and waste.
• Blockchain enables decentralized marketplaces and provenance verification to promote reuse and extend product lifecycles.
• Smart contracts and IoT integration under blockchain can track and incentivize recycling and material recovery across networks.
• Case studies show blockchain-based platforms and tokens incentivizing waste reduction, reuse, and recycling in various sectors (e.g., food, plastics, electronics, medical waste).
• Multiple studies identify scalability, interoperability, data privacy, regulatory, and governance challenges as barriers to widespread blockchain-enabled CE adoption.
• The literature emphasizes need for stakeholder involvement and careful alignment with established 4R/R-frameworks to realize CE benefits.