63 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... ABSTRACT When talking about blockchain technology in academia, busi- ness, and society, it is frequently generalized that blockchain tech- nology inherently consumes significant amounts of energy. Such perceptions raise substantial concerns regarding the potential for widespread adoption of blockchain systems, a fact that inhibits rapid uptake of what is widely considered to be a ground-break- ing and disruptive innovation. Nonetheless, blockchain technol- ogy exhibits significant heterogeneity, meaning that blanket state- ments about its energy consumption should be reviewed with care. In order to move to circular economy and to achieve the Sustainable Development Agenda, energy efficiency must see a twofold improvement by the year 2030. Blockchain represents an emerging technological domain capable of addressing these challenges. There has been a lot of research on the topic of block- chain efficiency and circular economy, however this paper ex- amines the intersection of sustainable development, the circular economy, and blockchain technology, analyzing the potential of blockchain to augment circular economic models while advanc- ing sustainability objectives, even amidst concerns about energy efficiency. Keywords: Blockchain, Circular economy, Energy efficiency, Agenda 2030 Blockchain and Sustainability: Examining the Future of a Circular Economy due to New Technologies Gorazd Justinek* * Gorazd Justinek is professorf international relations at the Faculty for Governmental and European Studies, New University and a former diplomat. His research interests include international business, particularly the internationalisation of small businesses, economic and commercial diplomacy and the competitiveness of economies and attracting foreign direct investment. He is the Founder and Editor of the International Journal of Diplomacy and Economy. The author acknowledges the finan- cial support from the Slovenian Research and Innovation Agency (project “Corporate accountability, human rights, and climate change: Towards coherent and just Slovenian and international legal order”, ID JP-50171”). 64 DIGNITAS ■ Sustainability Law Blockchain in trajnost: prihodnost krožnega gospodarstva ter novih tehnolgij POVZETEK Ko govorimo o tehnologiji veriženja blokov (blockchain) v akademskih krogih, poslovnem svetu in družbi, pogosto slišimo splošne trditve, da ta tehnologija že po svoji naravi porabi velike količine energije. Takšna prepričanja povzročajo resne skrbi gle- de možnosti širše uporabe blockchain sistemov, kar zavira hitro sprejemanje te sicer prelomne in disruptivne inovacije. Vendar pa tehnologija veriženja blokov kaže pomembno raznolikost, zato je treba splošne izjave o njeni porabi energije obravnavati previdno. Za prehod na krožno gospodarstvo in doseganje ciljev Agende za trajnostni razvoj je treba energetsko učinkovitost do leta 2030 izboljšati za dvakrat. Blockchain predstavlja nastajajoče tehnolo- ško področje, ki lahko pomaga pri reševanju teh izzivov. Čeprav je bilo izvedenih veliko raziskav o učinkovitosti blockchain teh- nologije in krožnem gospodarstvu, ta prispevek preučuje presek trajnostnega razvoja, krožnega gospodarstva in tehnologije veri- ženja blokov. Analizira potencial blockchaina za krepitev mode- lov krožnega gospodarstva in hkrati napredovanje ciljev trajnosti, kljub skrbem glede energetske učinkovitosti. Ključne besede: Blockchain, Krožno gospodarstvo, Energetska učinkovitost, Agenda 2030 1. Introduction Blockchain, a decentralized digital ledger, has progressed from its origins in cryptocurrencies such as Bitcoin to applications in transparency, traceability, and data integrity across industries. A key question arises: can blockchain foster circular economy principles by enabling closed-loop supply chains, transparent re- source flows, and sustainable business models? With the pressing issues of climate change, resource deple- tion, and unsustainable consumption, industries are increasingly focused on sustainability and circular economy principles. The circular economy framework aims to eliminate waste, maintain the value of products and materials, and regenerate natural sys- 65 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... tems for prolonged usage. Concurrently, blockchain technolo- gy is emerging as a transformative force, offering decentralized, transparent, and immutable record-keeping that could comple- ment circular economy objectives. Unlike the traditional linear economy characterized by a „take, make, dispose“ model, the circular economy emphasizes resource optimization through repair, reuse, recycling, and remanufactur- ing, aiming to establish regenerative systems. Blockchain technol- ogy, on the other hand, is a decentralized ledger system that ena- bles secure, immutable transaction recording through a peer-to- peer network, wherein each transaction is verified by consensus algorithms. Blockchain’s elimination of intermediaries enhances efficiency and cost reduction. One of the most significant challenges to implementing circu- lar economy models lies in achieving comprehensive traceability and transparency of materials throughout their lifecycle. Block- chain offers a solution by enabling the tracking of origin, usage, and end-of-life processing of products, facilitating the monitoring of resource flows. Through blockchain, information can be made available in real time to all stakeholders, reducing inefficiencies and minimizing fraudulent activities. Moreover, blockchain ena- bles smart contracts, self-executing agreements with terms directly embedded in code. Within the circular economy, smart contracts could automate processes such as leasing, sharing, and product returns for recycling, thereby reducing administrative burdens and ensuring compliance with circular practices. While blockchain presents numerous opportunities, it also faces technical challenges, particularly regarding scalability and energy consumption. Additionally, blockchain’s decentralized nature raises regulatory issues; in the context of circular econ- omy models, questions of liability, data privacy, and the juris- dictional scope of smart contracts must be addressed. Neverthe- less, blockchain holds the potential to significantly contribute to the achievement of the United Nations Sustainable Development Goals (SDGs), particularly those related to responsible consump- tion and production, climate action, and partnerships for sustain- able development. However, there is also the other side of the coin. Beyond car- bon emissions, blockchain’s environmental impact includes the electronic waste generated by high-performance mining hard- 66 DIGNITAS ■ Sustainability Law ware. The rapid obsolescence of specialized mining devices con- tributes to an increasing burden of electronic waste, further com- plicating the environmental cost of blockchain networks. Despite these challenges, blockchain technology offers sub- stantial benefits that may justify its application, particularly with advancements in sustainability. In supply chain management, for example, blockchain can enhance traceability, reduce fraud, and increase transparency. In the financial sector, it has the potential to reduce transaction costs and improve service access in un- derbanked regions. Additionally, blockchain has applications in energy trading and management. Blockchain-enabled microgrids, for instance, allow consumers to buy and sell renewable energy directly, facilitating a shift toward decentralized, low-carbon en- ergy markets. This paper presents a literature overview in the field of block chain energy efficiency and its potential application in the cir- cular economy concept. There has been quite some academic research done in the field of energy efficiency of the blockchain technology and an even more in the field of circular economy. However, there has been very little in the field of analysing the use of blockchain technology for a more efficient use in imple- menting the circular economy concept. This paper will present possible concepts how this new technology could be used in the concept of circular economy, consecutively also pushing towards reaching the SDG targets. 2. Blockchain Technology for Better Energy Efficiency Blockchain technology entered public awareness with its first application, the cryptocurrency Bitcoin (Nakamoto, 2008) in 2009. In the last decade, blockchain technology has developed significantly and is now implemented in a wide range of sce- narios, including Ethereum or Hyperledger Fabric, which allow distributed platforms to function with unprecedented versatility (Lockl et al., 2020). Therefore, have many researchers and practi- tioners realized that blockchain technology holds huge potential beyond cryptocurrencies (Beck, 2018). Blockchain technology relies on consensus mechanisms to verify transactions without the need for central authority. The 67 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... most widely used consensus mechanism, Proof of Work (PoW), requires participants (miners) to solve complex computational problems, a process that is highly energy-intensive. For example, Bitcoin’s blockchain network reportedly consumes more elec- tricity than some countries, largely due to its PoW mechanism. However, blockchain systems are evolving, with newer consen- sus mechanisms like Proof of Stake (PoS) requiring significantly less energy. PoS operates by allowing validators who „stake“ their cryptocurrency holdings to confirm transactions, thereby avoid- ing the energy-intensive computations of PoW. Bitcoin, the first application built on blockchain technology, is a decentralized payment system in which all participating com- puters (‘‘nodes’’) store a copy – or, more precisely, a replica, since there is no distinguished master – of the associated ledger (Cros- by et al., 2016). It is, therefore, not suitable for use only and solely with cryptocurrencies, but can be applied to many processes in which the involvement of an intermediary such as a bank, a no- tary, or any (digital) platform owner is not preferred. 2.1. Energy Efficiency The problem of energy efficiency has already been subject of many studies. Among others, M. Schletz et al. (2020) analysed three examples of implementations (peer-to-peer energy trading, white Certificate Scheme and Energy Service Companies). The functionalities and possibilities of using blockchain technology depend on a specific implementation and the adopted manage- ment model, and the versatility of the technology allows it to be used in very diverse areas. Among these, energy efficiency can be noted and developed. According to Shrier et al. (2016), the contemporary world is rapidly undergoing a fundamental change - change that is primarily driven by data and its effective use. The possibility of universal use of blockchain technology can have a wide range of applications, including the broadly understood areas of eco-efficiency. Another study was prepared by Sedlmeier at all (2020), where an estimation is presented by following Vranken (2017) and Krause and Tolaymat (2018). They observe that the expected energy consumption of the 5 most important cryptocurrencies strongly correlates with their market capitalization, which makes 68 DIGNITAS ■ Sustainability Law sense since parameters, such as block reward per time. They con- clude that, although the energy consumption of PoW blockchains is arguably enormous in relation to their technical performance, it does not represent an essential threat to the climate. Moreo- ver, since the area of application of most blockchains – and, in particular, the major cryptocurrencies – is often far beyond pay- ments, plenty of opportunities for new ecosystems and business models arise. As the energy effi ciency market is expected to grow over time, blockchain technology could signifi cantly improve the overall administrative processes, transparency, cost, and trust between diferent stakeholders. Some of the key benefi ts are shown in Fig- ure 1 and explained below (Khatoon et al., 2019). Figure 1: Benefi ts of blockchain in the energy effi ciency sector Source: Khatoon at al. (2019) 69 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... Encryption is a process of converting data or any information into a code to prevent unauthorized access. Encrypting the ener- gy savings and sharing it over the blockchain has the potential to make the market secure. Energy savings could be encrypted and stored over the blockchain platform for balancing the energy bill or purchasing additional energy services. Valuing of energy effi- ciency has been very difficult (Rogers, 2018) as in many cases the benefits of energy efficiency cannot be technically measured or evaluated. Blockchain, along with information and communica- tion technologies and process automation, could help to a certain extent in valuing the energy savings and their associated benefits (Investing News, 2024). Blockchain is a trust less system and each data shared with other blocks is verified by all the blocks on the chain, meaning that all the blocks will have information regarding the energy savings data (T’Serclaes, 2017). 2.2. Public Sector In the area of energy efficiency research, the public sector is a natural entity present on the market, acting both as a leg- islator and administrator of public funds supporting projects reducing media consumption or an active beneficiary of these funds. Overall views taking place indicate the growing impact of business solutions and standards in reforming the operation- al efficiency, functioning and organization of the public sector entities. The initiation of public administration reforms in the 1980s, referred to in the literature as New Public Management, focused the attention of decision-makers on the implementation of public sector organization and management models based on performance measures and being goal-oriented (Dorrel, 1993, Kukovič, Justinek, 2020). A good example of implement- ing business solutions and reducing costs, increasing efficiency and the effectiveness of implemented processes is the creation of Shared Service Centers (SSCs) supporting public sector units (Bergeron, 2003). SSCs operating in both the private and public sectors focus on the provision of shared services, including pri- marily accounting, payroll, tax, IT and legal services (Modrzyn- ski, 2020). The examples of Wodonga City and the Rural City of Wangaratta in Australia, where an SSC providing shared services of energy audits was established, are an excellent case of com- 70 DIGNITAS ■ Sustainability Law bining energy efficiency projects with effective organizational solutions (City of Wodonga, 2020). 2.3. Renewable Energy Sector The renewable energy sector plays a crucial role in address- ing contemporary global challenges (Alsunaidi, Khan, 2022). As the world confronts climate change, environmental degradation, and the urgent need for sustainable development (Ableitner at al., 2020), renewable energy sources such as solar, wind, hydro, geothermal, and biomass offer sustainable solutions. While these sources are replenished naturally on a human timescale, they stand in stark contrast to finite fossil fuels, emitting little to no greenhouse gases and pollutants (Lohani at al., 2023). Statistics reflect the sector’s growing significance. According to the Inter- national Energy Agency, clean energy investment has surged by 40 % since 2020, highlighting a robust commitment to reducing emissions and promoting energy security (IEA, 2023). Furthermore, one in five cars sold in 2023 is electric, which indicates a significant shift towards cleaner transportation tech- nologies (Muir, Campbell, 2023). Despite its significant poten- tials, the renewable energy sector faces numerous challenges, in- cluding the intermittency of energy sources like solar and wind (Guo et al., 2021), high upfront costs (Enescu at al., 2020), and complexities in energy storage and grid integration (Junaidi at al., 2023). According to Badidi (2022), these issues necessitate in- novative solutions (Liu at al.,l 2022), and blockchain technology has emerged as a potential key player in this regard (Aman at al., 2024). As a decentralized ledger technology, blockchain offers se- cure and transparent data storage and exchange without interme- diaries (Barcelo, 2023). Blockchain is known for its immutability and transparency, which are qualities that make it foundational to cryptocurrencies (Wu at al., 2021). The application of blockchain is increasingly expanding to various sectors of the economy (Re- jeb, Zailani, 2023). In the renewable energy sector, blockchain facilitates secure and transparent peer-to-peer energy trading, ef- ficient management of supply and demand, and the tracking and verification of green energy sources (Abdella, 2018). The market value of blockchain in the energy sector was USD 278.0 million in 2019, and it is projected to reach USD 81,205.98 million by 2032, 71 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... growing at a compound annual growth rate (CAGR) of 56.1 % from 2023 to 2032 (Emergen Research, 2023). In another example, Lampropoulos (2024) underscores the pivotal role of blockchain in enhancing the security and digitali- zation of smart grids, which is crucial for achieving sustainability and sustainable development goals. Gawusu et al. (2022) high- light the role of blockchain in the decentralization of renewable energy and underscore its potential to address challenges in the evolution of renewable energy and offer sustainable alternatives to fossil fuels. Andoni et al. (2019) provide a systematic review of blockchain in the energy industry and explore its potential ben- efits and innovations, particularly in peer-to-peer (P2P) energy trading and Internet of Things (IoT) applications. Almutairi et al. (2023) address the application challenges of blockchain in the renewable energy supply chain and emphasize the high invest- ment cost as a significant barrier. In addition, Wang and Su (2020) note an exponential increase in blockchain research within the energy sector, particularly since 2018, indicating a new cross- cutting research area. Yap et al. (2023) highlight the importance of blockchain in distributed generation (DG) and stress its role in enhancing security, enabling P2P energy trading, and provid- ing a decentralized energy management system. Bao et al. (2021) also review blockchain deployment in energy applications, rang- ing from energy management to electric vehicle-related applica- tions, and discuss existing architectures, solutions, and security and privacy challenges. Junaidi et al. (2023) review blockchain applications in electric energy systems, focusing on demand re- sponse, electric vehicles, and decentralized energy management. Ahl et al. (2019) explore blockchain-based P2P microgrids, ana- lysing potential challenges and suggesting practical implications for institutional development. Similarly, Hasankhani et al. (2021) delve into blockchain applications in smart grids. On the topic of bibliometrics, Ante et al. (2021) utilize co-citation analysis to ex- plore blockchain and energy. Cui et al. (2023) use a bibliometric approach to analyse the rapid growth in research topics related to renewable energy and blockchain, focusing on areas such as energy system optimization and renewable energy trading. Based on the literature review, there is an increasing trend to integrate energy efficiency projects and streamline their manage- ment systems to achieve greater economic and environmental 72 DIGNITAS ■ Sustainability Law advantages. Shared Service Centres, which are gaining popularity, offer robust technological support - particularly through the use of blockchain technology to secure processes - thereby enhanc- ing the efficiency of projects and the quality of provided services. 3. Circular Economy and Energy Efficiency The energy crisis stands among the most pressing challenges confronting humanity today. Escalating energy costs and increas- ing reliance on imported resources jeopardize both global secu- rity and economic competitiveness. Urgent and decisive action is required to lower emissions and address the impacts of climate change effectively. In the coming years, the entire dependence of the population on oil and natural gas will grow. Some fos- sil fuels will become more complex and expensive to operate (World experience, 2024). Therefore, one of the most important recent environmental issues is the energy transition. One solu- tion to help accelerate this transition is the circular economy. The whole world has become acutely aware of the environmental problems, especially global warming, climate change, air pollu- tion, freshwater, sea and ocean waters, loss of ecological diversity, shortage of some natural resources, etc. Environmental problems have affected the whole world, both developing and developed countries; therefore, environmental problems are becoming the main concern of the modern world community. It is important to search for new solutions, alternatives in the field of renewable energy using innovative technologies. In contemporary international political discourse, efforts to- wards sustainable development are mainly based on the 2030 Agenda (Korhonen at al., 2018) and the 2015 United Nations Sus- tainable Development Goals (Smithet 2018). One of the newest documents presented by the European Commission is the Green Deal (EC, 2019), which aims to transform the European Union into a just and prosperous society with a modern, resource-ef- ficient, and competitive economy, in which there will be no net greenhouse gas emissions (by 2050) (Skousen, 2007). The Green Deal is aimed at protecting, preserving, and enhancing the natural capital of states, as well as protecting the health and well-being of citizens from risks and impacts associated with the environment. At the same time, the transition must be fair and inclusive. The 73 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... importance of the circular economy model is gaining in impor- tance due to the greater added value of each unit of resources compared to the traditional linear model. The circular economy model is based on many “old” as well as still “new” concepts that aim to minimise the environmental impact of enterprises. The intersection of circular economy principles and energy efficiency forms a cornerstone for sustainable development, ad- dressing resource depletion and climate change in tandem. A cir- cular economy emphasizes the design of systems that minimize waste, maximize resource utilization, and regenerate natural eco- systems. By incorporating energy efficiency into this framework, it becomes possible to significantly reduce the energy inputs re- quired at each stage of the product lifecycle - from manufacturing and distribution to reuse, recycling, and remanufacturing. These synergies contribute to lowering greenhouse gas emissions, re- ducing reliance on finite resources, and fostering a transition to more sustainable production and consumption models. One critical area where these concepts converge is in the op- timization of industrial processes. Energy-efficient recycling tech- nologies, such as advanced material separation and low-energy reprocessing methods, enable the recovery of high-quality materi- als with reduced energy expenditure compared to primary pro- duction. Similarly, extending product lifespans through reuse, re- furbishment, and remanufacturing reduces the frequency of new production cycles, which are often energy-intensive. Innovations like energy-efficient 3D printing and modular product designs further enhance circular systems by enabling resource-efficient manufacturing and easy component replacement. 4. Circular Economy and Blockchain Technology Blockchain technology offers transformative potential for ad- vancing the intersection of circular economy and energy efficien- cy. By providing a secure and transparent platform for tracking materials and energy flows, blockchain enables more effective re- source management and accountability. For example, blockchain- based systems can certify the origin and lifecycle of materials, en- suring compliance with sustainability standards while encourag- ing circular practices. In energy systems, blockchain can facilitate 74 DIGNITAS ■ Sustainability Law peer-to-peer energy trading in microgrids, enabling decentralized renewable energy solutions that complement energy-efficient processes. Additionally, smart contracts powered by blockchain can streamline reverse logistics and recycling systems, reducing inefficiencies and energy waste in material recovery. Moreover, integrating renewable energy into circular economy practices amplifies the benefits of both approaches. For instance, renewable-powered recycling facilities or decentralized energy solutions for community-level material recovery centres can sig- nificantly reduce carbon footprints. Circular strategies like urban mining and bio-based material loops offer opportunities to align resource recovery with clean energy initiatives. By addressing energy, material, and digital flows holistically, the combined im- plementation of circular economy, energy efficiency, and emerg- ing technologies like blockchain can accelerate progress toward net-zero carbon goals while fostering economic resilience and environmental stewardship. The convergence of blockchain and circular economy models presents promising opportunities for developing sustainable, ef- ficient business practices. Blockchain’s potential to provide trans- parency, traceability, and automated processes through smart contracts aligns closely with the core principles of the circular economy. While challenges to integration persist, the potential benefits in terms of environmental sustainability and resource efficiency underscore the value of pursuing these technologies. As global consumption of materials and annual waste genera- tion are expected to double by 2050, the transition to a more sustainable production and economic system is a vital require- ment (European Commission, 2020). The circular economy has been widely recognised as a promising paradigm for decoupling economic growth from resource extraction and environmental destruction (Franzo et al., 2021). It has gained increasing atten- tion from governments, practitioners, and researchers (Korhonen et al., 2018). It addresses the creation of a resource-effective and resource-efficient economic system mainly through intention- ally narrowing, slowing and closing material- and energy- flows (Pieroni et al., 2019). At the same time, emerging digital technol- ogy, such as the internet of things (IoT), big data analytics (BDA), artificial intelligence (AI), and 3D-printing, has been radically changing the way products are made, delivered, sold, and con- 75 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... sumed (Lasi et al., 2014). Known as Industry 4.0, the new industrial stage not only changes the manner of production but also causes versatile organizational transformation (Vaidya et al., 2018). With the emerging technologies, devices can communicate with other devices and services over the internet to achieve a diversity of goals (Whitmore et al., 2015), such as automated manufacturing, home automation, and smart waste management. There is an increasing interest in the potential of digital tech- nology in moving production and consumption towards circular economy (Awan et al., 2021). Implementing digital technology is considered a promising means to overcome barriers to the circu- lar economy transition (Rosa et al., 2020). It can provide circular economy opportunities for the manufacturing industry, such as retrofitting equipment, increasing workers‘ efficiency and mo- tivation, building a smart factory based on resource efficiency, and designing closed-loop manufacturing process chains (Stock, Seliger, 2016). A study by Liu et all (2022) reveals clearly the intensity of the impact which digital technology can have on transitions towards circular economy, as evident in the role they can play in specific circular economy strategies. The research demonstrates how and to what extent the adoption of currently operative digital tech- nology can improve circular economy transformations in a struc- tured and comprehensive way. In a study by Rejeb and Zailani (2023) some new findings indicate that the implementation of the blockchain in the cir- cular economy is still in its infancy. Obviously, the blockchain has become increasingly adopted in several business fields and functional areas, including supply chain management, logistics, transportation, manufacturing and marketing; however, its ap- plications in the circular economy are still in an emerging phase. The main findings in the five research themes can be extrapolated to a broader level. Concerning the first research theme, sufficient knowledge has been produced on the potential of the blockchain for the implementation of the Industry 4.0 vision. The blockchain reduces the barriers towards achieving the objectives of Industry 4.0 in terms of security, automation and transactional efficiencies. Therefore, it is crucial to understand how the technology acts as an enabler or barrier to the successful integration of Industry 4.0 technologies and the accomplishment of circular economy 76 DIGNITAS ■ Sustainability Law objectives. Proposed potential avenues of future research also include examining the potential of the blockchain to hasten the transition from Industry 4.0 to Industry 5.0, which is intended to harmonise the working environment and efficiency of workers and machines in a consistent way. As such, organisations can use blockchains to trace the reuse of materials and products over several life cycles involving various circular economy stakeholders. Whilst several studies have dem- onstrated the potential of the blockchain for circular economy practices, researchers have not investigated how blockchain-ena- bled repairability and maintenance can reduce the environmental impacts of products. As more stakeholders are involved in the circular economy, there is a need to establish sharing economy platforms based on blockchains to simplify information verifica- tion and boost circular economy -friendly business models such as coopetition and prosumerism. The development of more scal- able and cost-efficient blockchain solutions in circular economy activities is another missing point in the literature; hence, future research should focus on modelling blockchain adoption ena- blers and challenges, and suggesting blockchain systems tailored to circular economy practices that provide customised and robust privacy and security attributes. Several studies have demonstrated the importance of the blockchain in promoting sustainable energy consumption. How- ever, the questions of how to integrate smart contracts and de- centralise energy management without raising operational, eco- nomic and security issues remain ambiguous. Studies have also been silent on the ways to incentivise stakeholders to engage in blockchain-enabled energy management under the circular econ- omy context. To promote the blockchain, future studies also need to empirically explore the effects of the technology on energy management practices in circular economy activities. The factors that enable and hamper the successful adoption of blockchains in energy management also deserve more attention from circular economy scholars. Downes and Reed (2018) consequently propose that block- chain technology could disrupt difficulties and time-consuming traditional governance models to improve sustainability out- comes. In the context of energy efficiency, the literature suggests blockchain technology to be relevant in mainly three application 77 DIGNITAS ■ Blockchain and Sustainability: Examining the Future of a Circular ... areas. First, blockchain could enable innovative energy trading systems, such as P2P energy trading, electric vehicle charging and energy market. Second, blockchain could serve as a distributed accounting and trading platform for the energy efficiency White Certificate Schemes (WCS). Third, blockchain could enable de- centralised financing mechanisms for Energy Service Companies (ESCOs) (Khatoon at al., 2019). The integration of blockchain technology into the circular economy offers transformative potential but is also fraught with significant challenges. One primary issue is regulatory uncertain- ty. Blockchain is still a relatively new technology, and regulatory frameworks around its use vary significantly across jurisdictions. For instance, how smart contracts are interpreted and enforced in different legal systems can be ambiguous, creating barriers to adoption. Moreover, as circular economy initiatives often involve global supply chains, ensuring compliance with diverse interna- tional regulations further complicates the implementation pro- cess. Another critical challenge is data privacy. Circular economy solutions often involve tracking materials, products, and their life- cycle stages, requiring the collection and storage of vast amounts of data. Blockchain‘s inherent transparency can conflict with data privacy laws like the General Data Protection Regulation (GDPR) in the European Union. Smart contracts, a cornerstone of block- chain applications in the circular economy, present their own legal concerns. These self-executing contracts are programmed to enforce agreements without human intervention, but their legal status and enforceability remain unclear in many jurisdictions. Interoperability and scalability are also pressing issues that can hinder blockchain‘s role in the circular economy. Circular econ- omy models often require collaboration among various stake- holders, each potentially using different blockchain platforms. Ensuring these systems can communicate effectively is crucial for seamless operation. At the same time, as the volume of transac- tions grows, scalability becomes a significant concern. Current blockchain networks, particularly public ones, often struggle with high transaction volumes, leading to increased costs and slower processing times, which can deter widespread adoption. Finally, there is the issue of trust and stakeholder buy-in. While block- chain is designed to be a trustless system, its successful deploy- 78 DIGNITAS ■ Sustainability Law ment still requires stakeholders to have confidence in its security, functionality, and fairness. Educating stakeholders about block- chain technology and its benefits for the circular economy can be a daunting task, particularly when misconceptions or resistance to change are prevalent. Overcoming these barriers is critical for the widespread adoption of blockchain in this context. 5. Conclusion The analysis reveals that blockchain technology has signifi- cant potential to enhance sustainability initiatives and facilitate the transition to a circular economy. By enabling transparency, traceability, and secure data sharing, blockchain can optimize resource flows, reduce inefficiencies, and promote sustainable production and consumption models. Key applications include peer-to-peer energy trading, material lifecycle tracking, and smart contracts, which streamline circular practices such as recycling and remanufacturing. However, concerns regarding blockchain‘s energy consumption and scalability persist, highlighting the need for continued innovation in consensus mechanisms and system designs to address these issues. Blockchain‘s integration with renewable energy systems dem- onstrates its capability to align energy efficiency with circular economy goals. Applications such as decentralized energy grids, renewable-powered recycling facilities, and urban mining exem- plify how blockchain can reduce carbon footprints while advanc- ing resource regeneration. Furthermore, blockchain‘s role in fos- tering trust and accountability among stakeholders presents op- portunities to drive compliance with sustainability standards and facilitate global efforts to achieve the Sustainable Development Goals (SDGs). Moving forward, overcoming barriers to blockchain adoption in the circular economy will require tailored technological ad- vancements and collaborative frameworks. Addressing challeng- es such as data privacy, regulatory alignment, and stakeholder engagement is critical for leveraging blockchain‘s full potential. 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