Digital Credentials for Sovereign and Secure Data Collaboration in Decentralized Trading Networks

In the digital age, where data is the currency of innovation and growth, the need for a secure and trustworthy system of data sharing is paramount—particularly within expansive and interconnected industries such as the global supplier network. Within this context, the advent of decentralized identity (DID ) and self-sovereign identity (SSI ) principles marks a significant leap forward in enabling secure, private, and reliable interactions across the digital landscape.

Decentralized identity refers to a user-centric model where individuals or organizations have control over the creation, management, and usage of their digital identifiers without reliance on a centralized authority. This approach empowers users with the flexibility and independence to present their credentials across various platforms while maintaining security and privacy.

Self-sovereign identity takes the concept further, positing that individuals and entities should own and control their digital identities without the intervention of any intermediary. This philosophy supports the creation of a digital identity that is portable, persistent, and protected against unauthorized access and usage. In the sphere of data sharing among global suppliers, SSI provides the foundation for a trust framework where each participant has an unambiguous and verifiable digital identity.

By combining the principles of decentralized identity with the technological mechanisms of self-sovereign identity, organizations can ensure that their data sharing processes are both secure and efficient. Credentials established under this framework, therefore, play a vital role — they serve as attestations of identity, qualifications, or membership, which can be seamlessly shared and verified. Such credentials foster an environment where data sharing is based on mutual trust, consent, and adherence to agreed-upon standards, thereby streamlining cooperation within the global supplier network and catalyzing the harmonious exchange of valuable data.

SSI and DID are concepts that have been adapted not only for individuals but also for legal entities such as businesses, organizations, and institutions. When applied to legal entities, these concepts are instrumental in creating a secure and independent framework for digital interactions and transactions.

Self-Sovereign Identity (SSI) for Legal Entities

Self-Sovereign Identity allows legal entities to have full control over their identity without depending on a centralized registry or authority. In this model, a legal entity manages its own identity data, can present itself digitally in interactions with others, and can establish trust relationships while maintaining privacy and security.

The SSI model for legal entities typically involves:

1. Identity Creation: The legal entity generates its own identity, which includes various credentials that are relevant to its operations and interactions.
2. Data Control: The entity stores and controls its identity data, possibly using decentralized storage solutions to avoid single points of failure.
3. Identity Verification: Credentials can be verified using public-key cryptography, where entities can prove they hold the corresponding private keys without revealing sensitive information.
4. Selective Disclosure: Legal entities can disclose only the necessary information required for a specific transaction, protecting their privacy and sensitive corporate data.
5. Interoperability: The SSI framework allows for cross-industry and cross-border recognition and compatibility, which is crucial for legal entities operating on a global scale.

Decentralized Identifiers (DID) for Legal Entities

Decentralized Identifiers are a key part of the SSI framework. For legal entities, DIDs serve as the unique, persistent identifiers that are completely under the control of the entity itself. They are not issued by any central authority and are typically registered on a decentralized system.

The DID for a legal entity:

1. Unique Identifier: Acts as a unique reference point for all interactions and transactions the legal entity engages in.
2. Control and Autonomy: The entity has full control over its DID and can update, add, or revoke credentials associated with it.
3. Verifiable Credentials: Associated with the DID, these credentials can be instantly verified by any party in a transaction without the need for an intermediary.
4. Public Key Infrastructure: The DID document includes public keys and service endpoints that allow secure communication and verification of the legal entity.
5. Compliance and Trust: By using DIDs and verifiable credentials, legal entities can comply with regulatory requirements and build a foundation of trust with partners and customers.

SSI and DID for legal entities are transformative, enabling more agile, secure, and direct interactions and transactions in the digital realm. This enhanced control and flexibility are particularly valuable in the increasingly complex and interconnected global marketplace.

Trust Frameworks

In a decentralized identity system, the validity of a legal entity and its associated digital representation is established through a combination of cryptographic techniques and trust frameworks that involve multiple stakeholders. Entities that comply with these frameworks offer additional assurance that they are conducting identity verification practices adequately. To achieve this, Trust frameworks may leverage various mechanisms, including:

Digital identity verification processes that legal entities to provide digital proof of their identity and their legal status, such as through digital certificates or e-ID verification systems recognized by the European Union.

Legal entities may be required to provide official documentation that can be verified against public or private registers (e.g., commercial registers e.g. Handelsregister , VAT validation , Verifiable Legal Entity Identifier vLEI, PSD2 finance checks, Northdata ) to ensure the legitimacy of the entity.

Trusted third-party verification services that specialize in verifying the identity and authenticity of legal entities, such as notaries, or accredited verification service providers.

Cross-border data sharing agreements are important for facilitating the international exchange of data while ensuring compliance with various national regulations like GDPR , Standard Contractual Clauses (SCC ), UK-EU Trade and Cooperation Agreement (TCA ), APEC Cross-Border Privacy Rules (CBPR ) System, EU-JP cross-boarder data flow agreement .

Gaia-X as a European initiative aimed at creating a federated data infrastructure that promotes data sovereignty and interoperability across various services and providers. One of the key aspects of such an infrastructure is ensuring that participants, such as legal entities that provide or use services within the Gaia-X ecosystem, are valid and verified by a legal authority. The Gaia-X Digital Clearing Houses (GXDCH ) as crucial part of the GAIA-X trust framework architecture and enables the issuing of Gaia-X Credentials.

It is important to note that the actual implementation details would depend on the policies and technical specifications of the Gaia-X framework and components. These mechanisms would likely evolve over time as the framework matures and as legal requirements and technological solutions develop.

Verifiable Presentations

Verifiable presentations are foundational to decentralized and secure digital interactions, forming a bridge between holders and verifiers that maintains trust, privacy, and user autonomy, which are all integral to the principles of SSI and DID. This system greatly reduces the risks associated with centralized identity repositories and paves the way for more dynamic and resilient digital economies and ecosystems.

• Credential Issuance: A trusted issuer provides a verifiable credential to a holder after verifying their claims. This credential is linked to the holder's DID and signed by the issuer's private key.
• Creating Presentations: When a holder wishes to engage in a transaction or prove a certain piece of information, they compile one or more of their verifiable credentials into a verifiable presentation. This is often digitally signed by the holder's private key associated with their DID to ensure authenticity.
• Presenting to Verifiers: The holder provides the verifiable presentation to a verifier, who then checks the validity of the signatures and the integrity of the credentials within by using the corresponding public keys available on the public ledger or DID document.
• Verification and Acceptance: Once the verifier confirms that the presentation is authentic and the information within is accurate, they proceed with the interaction, transaction, or service engagement.

W3C Verifiable Credential data model v2.0 describes credentials on the Web in a way that is cryptographically secure, privacy respecting, and machine-verifiable.

Example Scenario with Verifiable Presentation

Let's take an example scenario where an Original Equipment Manufacturer (OEM) car manufacturer needs to verify the authenticity and qualifications of a car dismantler before entering into a business relationship, such as agreeing to supply used car parts. In this context, a verifiable presentation enables the dismantler to prove its credentials to the car manufacturer in a secure and trustworthy manner.

1. Credential Issuance: The dismantler has previously received verifiable credentials from the Catena-X authority and certification body. For instance:A credential confirming they are licensed to operate as a vehicle dismantler. A credential evidencing compliance with environmental safety standards. A credential proving they have the necessary equipment and trained staff for dismantling.These credentials are linked to the dismantler's DID and are secured by cryptographic signatures from the credential issuers.
2. Creating the Presentation: The car manufacturer requests the dismantler to provide evidence of their qualifications. In response, the dismantler creates a verifiable presentation that includes the required credentials. This presentation is signed with the dismantler's private key to ensure authenticity.
3. Presenting to the Car Manufacturer: The dismantler sends the verifiable presentation to the OEM car manufacturer, who acts as the verifier in this process.
4. Verification by the Car Manufacturer: The car manufacturer, upon receipt of the verifiable presentation, uses the dismantler's public key (accessible through the dismantler's DID document on a public ledger) to verify the signatures on the presentation. The car manufacturer also verifies the integrity and authenticity of the individual credentials contained within the presentation.
5. Acceptance and Collaboration: Once satisfied that the verifiable presentation is valid and that the credentials meet their due diligence requirements, the car manufacturer can proceed to collaborate with the dismantler, such as sending them vehicles for parts recovery, secure in the knowledge that they are dealing with a qualified and compliant entity.

OpenID for Verifiable Presentations

OpenID for VP, as described by the specification , is a protocol designed to allow holders to present Verifiable Presentations to a verifier in a secure and standardized manner. While it is generally associated with the authentication of individuals, the same protocol can be adapted for use by legal entities such as corporations, organizations, or even services and devices.

The key to this adaptability lies in the fact that legal entities can also possess digital identities that are represented by decentralized identifiers (DIDs) and can be issued Verifiable Credentials (VCs) by authorized issuers and can be applicable for legal entities.

Utilizing OpenID for Verifiable Presentations can thus offer legal entities a secure, private, and interoperable method for establishing their credentials in a variety of digital interactions and transactions. It can be particularly beneficial for legal entities navigating the complex web of regulations and partnerships in the global business environment, where establishing trust and authenticity is key.

OpenID for Verifiable Presentation is a protocol that can be used alongside DIDs for authentication purposes. While DID is a unique identifier associated with a DID document that contains cryptographic material, service endpoints, and other information that can be used to establish a digital identity, OpenID for Verifiable Presentation is a way to share that identity information securely with a verifier.

OpenID for Verifiable Presentation can be implemented using a specific DID method:

1. DID Creation: First, implement a specific DID method to create and manage the DIDs, which involves choosing a DID method that suits your requirements (e.g., did:web, did:core, did:ebsi) and using it to generate a unique DID and corresponding DID document.
2. DID Document Update: Ensure that the DID document includes authentication methods and service endpoints that support interaction with OpenID providers and verifiable credentials.
3. Issuer and Verifiable Credentials: Work with an issuer who uses the chosen DID method to issue verifiable credentials associated with the DIDs. The credentials must conform to the standards set out by the W3C for verifiable credentials.
4. OpenID Provider Configuration: Set up an OpenID provider that supports DID-based authentication. This OpenID provider should be able to interpret the DID and the associated verifiable credentials.
5. Authentication Flow: When a user needs to authenticate with a service that supports OpenID for Verifiable Presentation, they initiate an authentication request using their DID. The OpenID provider verifies the DID against the DID document, and if the service requests it, the user presents their verifiable credentials.
6. Verifiable Presentation: The credentials are presented as a verifiable presentation, which includes the proofs that the OpenID provider or the service can check to verify the user's identity.

By implementing OpenID with a specific DID method, you are combining the self-sovereign identity capability of DIDs with the widespread acceptance and security of the OpenID authentication framework. This allows for a user-centric identity model which enhances privacy and gives users control over their personal data when authenticating with various online services.

In the context of Self-Issued OpenID Provider draft specification the DID is self-issued, meaning it is generated by the entity that will control it, rather than being issued by a third-party authority. The process typically involves creating a new public/private key pair and registering the DID on a decentralized network where the DID and associated DID Document (containing the public key and other metadata) can be stored.

Data Collaboration in Automotive Sector

The use of a verifiable presentation in this example showcases how such a mechanism can streamline the process of establishing trust between legal entities in different parts of the automotive value chain. It reduces the need for lengthy due diligence processes, enables real-time verification of claims, helps to maintain data privacy by sharing only what's necessary, and builds a foundation for secure and efficient business transactions and collaborations.

The trust established through verifiable presentations is fundamental for secure and sovereign data exchange between entities such as an OEM car manufacturer and a dismantler. This trust enables the assurance that both parties are who they claim to be, possess the credentials they present, and have the authority to engage in data exchanges. Here’s how this established trust can aid in secure and sovereign data exchange:

1. Authenticated Identities: Verifiable presentations provide a cryptographic proof of identity and qualifications. When an entity is able to demonstrate its identity reliably, it lays the groundwork for secure interactions.
2. Authority and Permission: Entities that have established trust can confidently engage in exchanges of data, knowing the other party is authorized to handle such data. For example, a dismantler may have access to sensitive information regarding the OEM's car parts or proprietary processes, which the OEM must ensure is handled responsibly.
3. Data Integrity: Trust established through verifiable credentials ensures that the data exchanged between parties remains intact and unaltered during transmission, as both parties can detect any tampering through cryptographic means.
4. Compliance: Trustworthy credentials and presentations can help organizations ensure compliance with industry regulations and standards. The OEM, for instance, needs to be assured that the dismantler conforms to environmental regulations to avoid any compliance risk like money laundry, terrorist finance, and sanction lists.
5. Access Control: With sovereign control over data, entities can use verifiable credentials to manage access permissions to sensitive information. An entity can demonstrate it has permission to access certain data based on its verifiable credentials without exposing other unrelated aspects of its identity or operation.
6. Data Minimization: By facilitating selective disclosure of information, a verifiable presentation allows entities to share only what is necessary, thus adhering to privacy principles and minimizing exposure to data breaches or misuse.
7. Auditability: The immutability and traceability of DID transactions provide a clear audit trail, enhancing accountability in data exchanges. A record of the verifiable presentations and their associated credentials can be recorded, allowing for traceability of the interactions and the data shared.
8. Enhanced Security: Traditional centralized identity systems create a single point of failure that can be a target for cyber-attacks. Decentralized identity models distribute risks and help maintain security even if parts of the system are compromised.
9. Interoperability: With standards-based frameworks for DIDs and verifiable credentials, there is a higher level of interoperability between different systems and organizations. This allows for a more comprehensive and inclusive approach to data exchange across borders and industries.

Data Spaces

A data space is a structured environment where data exchange occurs securely and efficiently among participating entities, such as businesses, organizations, or systems. A robust data space typically encompasses three foundational components: identity, metadata, and data connectors. Each of these components plays a critical role in managing and facilitating the flow of information within the data space.

1. Identity: Identity is at the core of any data space, ensuring that all participants can be authenticated and authorized securely. In a decentralized system, identity is often managed through Decentralized Identifiers (DIDs) and corresponding Verifiable Credentials (VCs). The secure management of identities is essential for building trust within the data space and ensuring that only legitimate and authorized entities can interact and exchange data.
2. Metadata: Metadata refers to data about data. It provides context and describes the characteristics, content, quality, condition, and other attributes of the data being shared within the data space. Metadata facilitate discovery by allowing entities to find and understand the data without accessing the actual data itself. Enable interoperability by providing standardized descriptions that allow different systems to understand and use the data. The W3C Data Catalog Vocabulary (DCAT) is a standard designed to facilitate interoperability between web-based data catalogs. W3C DCAT is widely recognized as a key metadata catalog for data spaces where datasets are described and shared. Enhance security by detailing the access policies, data provenance, and lineage, thereby ensuring that data usage complies with governance policies and regulations. The W3C Open Digital Rights Language (ODRL) represent statements about the usage of content and services. It's a flexible and interoperable framework that can be used to create machine-readable and enforceable rules governing the access and use of resources, which makes it particularly well-suited for defining access policies in data spaces.
3. Data Connectors: Data connectors are the technical components that enable the secure transmission of data between different parties within the data space. They serve as the infrastructure that links different data sources and destinations, allowing for the integration of diverse data sets and systems. They can support various communication protocols, data formats, and enable real-time (Push method) or batch data exchange (Pull method). They often include features for data transformation, validation, and encryption to facilitate seamless and secure data transfer. They play a crucial role in enforcing access controls, ensuring that data flows adhere to specified accesss and usage policies and only authorized participants can share and access data. Data connectors provide the functional capability to move and process data across the data space, ensuring that it remains usable and secure throughout its contractural lifecycle with state machines.

Together, these three components form the backbone of a data space, orchestrating the interactions and governance required for trusted data exchange in today's interconnected digital ecosystems.

International Data Spaces Association (IDSA) defined functional components in the rule book and the data space protocol . Identity is not part of the specification yet, but it's planned.

Catena-X an open-source reference implementation

In the context of automotive value chain network Catena-X , the three sovereign components make up the essential building blocks of a secure and trusted data space. Here's how each component is being defined and used within Catena-X, considering the integration of technologies:

1. DID:web : The identity component of Catena-X is built around decentralized identities, with DID:web being a particularly relevant method. Organizations within the Catena-X network can use their web domains to create and manage their DIDs, making it simpler and more intuitive to handle digital identities linked to already established domain names and services. This utilizes dominant web protocols while embracing the principles of decentralized identity. eIDAS 2.0 : With evolving regulations around electronic identification in Europe, Catena-X is poised to use updates in eIDAS 2.0 to ensure compliance and enhance trust. This may include support for legal recognition of decentralized identities within the European Digital Single Market. EBSI : As a prospective future development, Catena-X might integrate EBSI as a trust anchor, leveraging its blockchain infrastructure for recording transactions and verifying the authenticity of digital identities in a tamper-proof way. This would add a layer of assurance for data spaces that extend across European borders. Catena-X is developing an open-source reference implementation of DID:web with the Managed Identity Wallet and specify the identity and trust within the Eclipse Tractus-X project.
2. Eclipse Dataspace Connector: The EDC is an open-source initiative used by Catena-X to serve as the data connector, managing the secure exchange of information across different participants' systems. It enables controlled data sharing, ensures data sovereignty by enforcing granular policies over data usage, and facilitates the connection between heterogeneous data sources and consumers within the network. Contracts and Policies: Through the use of connectors, Catena-X ensures that data exchanges are secure, comply with pre-agreed contracts and access and usage policies, and are conducted in a manner that respects each participant's data governance policies.
3. Metadata Catalogs:Catena-X define Semantic Aspect Meta Models of Digital Twins, also known as the Asset Administration Shell (AAS), as its metadata catalog. This provides a standardized and semantic way to describe manufacturer equipment by the IDSA with 80+ submodes. By representing physical entities with their corresponding digital twins, and defining the necessary metadata for each asset, the network ensures interoperability and a unified understanding of data semantics, paving the way for machine-readable and AI-driven use cases. Semantic Interoperability: The AAS not only provides structure to asset-related metadata but also promotes semantic interoperability, which is crucial for ensuring that different systems and stakeholders within Catena-X can meaningfully use the data via Eclipse Tractus-X KITs.

By integrating these three sovereign components, Catena-X is shaping an ecosystem where participants can securely share data with assured identity verification, unified semantic understanding, and robust data exchange mechanisms. This foundation supports the automotive industry's movement towards improved sustainability, efficiency, and innovation within the global value chain. Additionally, the outlook for integrating with future European frameworks like EBSI and eIDAS 2.0 positions Catena-X to be at the forefront of leveraging cutting-edge trust services and regulatory compliance standards.

The role of VC and VP for EDC

Verifiable Credentials and Verifiable Presentations are central to the governance of the Eclipse Dataspace Connector (EDC) as they directly impact usage and access policies within a data space. These elements work together to afford entities control over their data while enabling secure and trustworthy data exchange. Let's delve into their roles:

• Verifiable Credentials in the context of the EDC are digital forms of identity and authorization tokens. They confirm the identity of a participant in the dataspace and the veracity of their qualifications, permissions, or other attributes. In practice, credentials could attest to a participant’s role, organizational membership, data sharing agreements, or compliance with regulatory requirements. Enforcement of Access Policies: Credentials facilitate the EDC's ability to enforce access policies effectively. When a participant requests data, the EDC can reference their credentials to determine if they have the appropriate permissions and agreement terms to access that data. Negotiation of Data Sharing Agreements: Credentials can also be used to automatically negotiate and enforce data sharing agreements between different parties, ensuring that data usage aligns with the prescribed terms.
• Verifiable Presentations: Verifiable Presentations enable participants to demonstrate possession of one or more credentials without revealing all of their information unnecessarily. This aligns with the principle of data minimization, enhancing privacy and control over data disclosure. Selective Disclosure: Through Verifiable Presentations, participants can share just enough credentials to satisfy the EDC's policy requirements for a given transaction. This process retains the privacy of the data provider and the integrity of the data consumer, fostering trust in the ecosystem. The Selective Disclosure for JWTs draft specification defines a mechanism for selective disclosure of individual elements of a JSON object used as the payload of a JSON Web Signature (JWS) structure.

Digital certifications

For car manufacturers, there are several certifications that are relevant for equipment, whether it's manufacturing machinery, tools, software, or safety gear. The certifications ensure that the equipment meets specific quality, safety, and industry standards. Some of these certifications and standards include:

1. ISO 9001: General quality management system standard that applies to the processes that create and control the products and services an organization supplies.
2. ISO/TS 16949: Specific to the automotive sector, this is a technical specification aimed at the development of a quality management system that provides for continual improvement, emphasizing defect prevention, and the reduction of variation and waste in the automotive industry supply chain.
3. ISO 14001: Environmental management systems standard that helps organizations improve their environmental performance through more efficient use of resources and reduction of waste.
4. ISO 26262: An international standard for functional safety of electrical and/or electronic systems in production automobiles defined by the International Electrotechnical Commission (IEC).
5. ISO 45001: An international standard for occupational health and safety management systems, it provides a framework to improve employee safety, reduce workplace risks, and create better, safer working conditions.
6. TISAX (Trusted Information Security Assessment Exchange): A standard for information security tailored to the automotive industry, based on the information security requirements of the German automotive industry, often enforced by major OEMs (Original Equipment Manufacturers).
7. IATF 16949: An Automotive Quality Management System Standard that provides guidance and tools for companies who want to ensure that their products consistently meet customer requirements and that quality and customer satisfaction are consistently improved.
8. VDA 6.x: A set of quality management standards developed by the German automotive industry, VDA 6.x includes different parts that apply to various players in the automotive supply chain, including equipment manufacturers.
9. EICHER or TüV Certifications: Certifications from independent bodies like EICHER or TüV, which certify the safety of equipment and systems, are also well-regarded in the automotive industry.
10. CE Marking: Indicates that equipment meets EU safety, health, and environmental protection requirements, which is crucial for equipment sold in the European market.
11. UL Certification: Provided by Underwriters Laboratories, this certification assures that equipment has been tested to determine that it is safe to use in the workplace.
12. FCC Compliance: For equipment that may interfere with radio frequency communication, the Federal Communications Commission (FCC) certification indicates that the electromagnetic interference from the equipment is within limits approved by the federal agency.

Operational Companies

Operational companies play a crucial role in building trust between automotive suppliers within the Catena-X network by acting as intermediaries that facilitate the establishment, operation, and joint use of end-to-end data chains along the entire automotive value chain. Catena-X describe a white paper to outline how operational companies, characterized as Core Service Providers can foster this trust:

1. Standardizing Processes: Operational companies aid in defining and implementing common standards that ensure technology components, processes, and data exchanges are developed and operated uniformly. This standardization mitigates miscommunication and mismatched expectations, a frequent source of distrust in supply chain relationships.
2. Certification and Compliance: By acting as trusted authorities, operational companies can issue certifications or confirm compliance with industry standards and regulations (e.g., ISO standards, TISAX). Suppliers with verified certifications can use these credentials as evidence of their adherence to quality, security, and safety standards, reinforcing trust among OEMs and other suppliers.
3. Data Integration and Management: Implementing technologies like the Eclipse Dataspace Connector for secure data exchange and the Semantic Aspect Model for metadata cataloging, operational companies provide an infrastructure that ensures seamless data integration and management. Trust is built when suppliers know their data is accurately represented, managed, and protected.
4. Secure and Sovereign Data Exchange: Through the use of digital identities and verifiable credentials, operational companies facilitate sovereign data exchanges where suppliers maintain control over their data. The certainty that sensitive data is only shared with verified and authorized parties fosters trust in the network’s data-sharing mechanisms.
5. Transparency and Visibility: Providing dashboards and visualization tools, operational companies offer suppliers and OEMs the ability to track data and transactions. This transparency allows all parties to monitor compliance and performance, which can help build trust and identify areas for improvement more quickly.
6. Facilitating Collaboration: By offering platforms that encourage collaborative development and sharing of applications, operational companies help to establish a cooperative environment that is based on mutual benefit and shared goals. Trust is enhanced when partners work together to solve common industry challenges.
7. Risk Management: Monitoring tools that operational companies could offer, such as for sanction party watchlists, help suppliers and OEMs mitigate risks by identifying potential issues with business partners early. By proactively managing risk, entities in the Catena-X network can establish a reputation for reliability and responsibility.
8. Audit and Incident Reporting: Operational companies may provide mechanisms for reporting and auditing transactions within the network, which adds a layer of accountability. This can help reassure all parties that any disputes or issues will be handled with transparency and fairness.
9. Cost Reduction and Efficiency Improvement: With the Catena-X network aiming to reduce IT costs by avoiding cumbersome individual solutions and facilitating cross-company data collection, operational companies support cost-saving measures which, in return, can build financial trust among participants.

Operational companies facilitate a secure, standardized, and transparent environment within Catena-X that enhances collaboration and trust between automotive suppliers and OEMs. By demonstrating reliable performance, maintaining high compliance standards, and providing clear insights into supply chain data, operational companies can significantly contribute to a more trustworthy and efficient global automotive network.

Business Partner Number (BPN)

A globally unique Business Partner Number (BPN) in Catena-X ensures precise identification of each participant in the automotive supply chain, crucial for managing transactions, compliances, and relationships. The BPN's relation to digital credentials is fundamental; it allows businesses to securely associate their digital identities with verified company information, enhancing trust. By linking the BPN to digital credentials, entities can streamline operations and data exchange, leveraging this identifier as a trust anchor in digital interactions. These credentials can be used for automated validation, reducing errors and enhancing the efficiency of Catena-X's decentralized network. Consequently, a unique BPN tied to digital credentials establishes a reliable foundation for transparent and secure business processes across the Catena-X ecosystem. More information you find in the Catena-X Standard document for BPN v2 .

The standard defines multiple types of BPNs for these different roles, for instance:

• BPNL (Legal): Identifies a legal entity, such as a company or organization that is a distinct legal entity under the law.
• BPNS (Site): Identifies an individual site or physical location of an entity, which might be a factory, office, or other types of premise.
• BPNA (Address): Designates a specific address, which might be used for different purposes such as delivery, invoicing, or legal registration.

By supporting the Legal Entity Identifier (LEI) defined by gleif.org as an unique identifier, Catena-X ensures a globally recognized and verifiable standard is used during onboarding , enhancing trust and simplifying interactions across the global automotive supply chain.

GLEIF LEI and D-U-N-S? Number are widely recognized and established standards for identifying legal entities and businesses globally, they may not offer the same level of integration with digital twin technology, decentralized identity management, and data sovereignty that are provided by the enablement services of Catena-X. These components make Catena-X particularly suitable for the automotive industry and the specific use cases it seeks to address through its data space. Catena-X are working with both numbers and using them as trust factor.

The Catena-X data space is designed to support various identifiers as specified by the Gaia-X Trust Framework. By supporting the LEI Code, Catena-X enables companies that are already identified under this globally recognized standard to use their existing identifier for onboarding into the Catena-X data space. This help to streamline the onboarding process and build trust by utilizing an identifier that is already well established for legal entity identification. The use of existing identifiers can provide several advantages during the onboarding process:

1. Proof of Identity: Simplify the verification process within Catena-X, as the existence of these identifiers indicates that the company has gone through a rigorous verification process by the issuing authorities.
2. Established Trust: Since both GLEIF and Dun & Bradstreet are trusted entities in the global financial and business communities, their identifiers carry a certain level of built-in trust.
3. Reduced Duplication: Catena-X can prevent duplication of entity records within its ecosystem, ensuring each supplier has a unique and singular identity within the data space.
4. Accelerated Onboarding: With these identifiers, companies can often bypass or expedite certain parts of the onboarding process since part of their necessary information has been validated by another recognized entity.
5. Global Reach: Both GLEIF LEI and D-U-N-S Numbers have a global scope, which aligns well with the international and cross-border nature of Catena-X, facilitating the onboarding of international suppliers.

Regulations as Business Driver

Considering the evolving European regulatory landscape and the need to optimize costs and reduce risks in a global supply chain, operational companies within data spaces have the potential to offer a range of services geared towards compliance, efficiency, and risk management. Operational companies can adopt in light of new European regulations like the Supply Chain Due Diligence Directive , Data Act , Digital Market Act and the Data Governance Act:

1. Compliance as a Service: The automotive industry participants need to navigate and comply with new regulations. This includes due diligence assessments, risk analysis, and implementation of compliant data management practices. Companies can charge for consultancy, subscription-based access to compliance management tools, or audit services.
2. Supply Chain Transparency Solutions: Businesses can offer platforms that provide real-time tracking of materials and parts across the supply chain, satisfying the requirements of the supply chain due diligence directive. By using distributed ledger technologies and integrating Digital Twins, these platforms can offer granular traceability and evidence of ethical and sustainable practices in a secure manner.
3. Data Sharing Intermediaries: Under the Data Governance Act, operational companies may act as neutral data intermediaries, facilitating the sharing of data between entities while ensuring compliance with data protection and privacy regulations. They could monetize this role by charging service fees or through premium memberships.
4. Data Sovereignty and Portability: To align with the Data Act's focus on data access and portability, businesses can provide tools and services that empower customers to easily move their data between different services and platforms, ensuring they retain control over their data at all times.
5. Data Marketplaces: Operational companies can create and manage data marketplaces that support the secure buying, selling, or sharing of data. These marketplaces would enforce compliance with European regulations through automated contractual agreements and credential-based access mechanisms.
6. Risk Management Services: These would analyze supply chain data for potential risks, like delays, shortages, or regulatory non-compliances, and offer predictive insights and mitigation strategies. Clients could be charged on a subscription or service basis.
7. Credential Verification: Businesses can offer services to validate the credentials of suppliers and other supply chain stakeholders, offering assurances that they meet European regulatory standards. This could involve a transaction-based pricing model or ongoing validation and monitoring services for a subscription fee.
8. Data Lifecycle Management: Operational companies can provide services to manage the full lifecycle of data, ensuring that end-to-end processes in the supply chain are compliant with regulations related to data creation, storage, processing, and deletion.
9. Audit Trail and Reporting Services: With European regulations demanding a higher level of reporting and documentation, businesses can offer services that compile comprehensive audit trails and facilitate easy reporting for regulatory compliance purposes.

Calculation of the Product Carbon Footprint

The automotive industry is a customer-facing industry with high visibility at the cutting-edge of climate action and is a solution provider in the current climate crisis driving the transition towards low-emission mobility. Nevertheless, the global challenge to reduce GHG emissions also requires the automotive industry to measure its GHG emissions on the product level for the status-quo as well as any emissions reductions.

Measuring the product carbon footprint for vehicles is a challenge, due to the enormous complexity of the international automotive supply chain. A vast number of materials and parts are used for vehicles. Even identical materials and parts are usually produced by different companies in different locations to ensure supply chain resilience and risk management.

The Product Carbon Footprint (PCF) Rulebook developed by Catena-X aims to standardize the calculation of PCFs across the automotive industry and its supply chains.

1. PCF Standardization
2. Scope of Emissions
3. Lifecycle Stages
4. Data Sources and Quality
5. Calculation Tools and Methodologies
6. Reporting and Communication

Credentials can support the PCF calculation by providing a structured and trustworthy mechanism for sharing and validating the required information throughout the automotive supply chain. Credentials could be beneficial in this context:

1. Verifiable Proof of Compliance: Credentials can serve as verifiable digital certificates for suppliers to prove they adhere to the PCF Rulebook’s guidelines. These credentials can be issued by authorized entities, indicating the organization’s competence in accurately calculating and reporting PCFs.
2. Automating Trust: With the Catena-X approach of using the Eclipse Dataspace Connector (EDC) for data sharing, credentials can be embedded in automated contract negotiations and data exchange protocols. This enables seamless validation that all involved parties follow the same PCF calculation standards.
3. Reducing Risk of Errors: Credentials can include cryptographic validation of the data, reducing the risks of errors or fraud in PCF reporting. This ensures that OEMs and other participants in Catena-X can rely on the integrity and accuracy of critical environmental information.
4. Streamlining Audits and Certifications: By sharing verifiable credentials related to PCF certifications and audit results, organizations can streamline the validation process. This simplifies compliance checks, which are especially important in a network aiming for a standardized calculation and reporting method as detailed in the PCF Rulebook.

By integrating such credentialing mechanisms within the data-sharing policies and guidelines of the Catena-X framework, all participants, including Core Service Providers (CSPs), Business Application Providers, Data Providers, and Consumers, can contribute to and benefit from an efficient, trust-based ecosystem that underscores reliable PCF calculations. This harmonization of processes is key to driving industry-wide transparency and sustainability efforts in line with the European Green Deal and other environmental objectives.

Business Models for Operational Companies

Considering the evolving European regulatory landscape and the need to optimize costs and reduce risks in a global supply chain, operational companies within data spaces have the potential to offer a range of services geared towards compliance, efficiency, and risk management. Operational companies can adopt in light of new European regulations like the Supply Chain Due Diligence Directive , Data Act , Digital Market Act and the Data Governance Act.

It is worth noting that the relevance of each certification can vary based on the role the equipment plays in car manufacturing, the location of the manufacturing facilities, the markets where the cars will be sold, and specific OEM requirements. Regularly updating and maintaining these certifications is essential for equipment suppliers to remain competitive and compliant within the automotive industry.

VCs and VPs can significantly enhance trust, efficiency, and transparency within the global automotive supply chain, involving both suppliers and Original Equipment Manufacturers (OEMs). Here’s how these digital mechanisms can be advantageous:

1. Streamlined Supplier Onboarding:VCs can contain pre-verified information about a supplier's qualifications, certifications (like ISO 9001, ISO/TS 16949), and compliance status. When a supplier presents these credentials in a VP during the onboarding process with an OEM, it can accelerate the verification and due diligence process, reducing the time and resources spent on audits.
2. Enhanced Trust and Compliance:As compliance with various standards is critical in the automotive industry, suppliers can use VCs to provide tamper-proof evidence of their adherence to relevant regulations and standards, such as environmental compliance (ISO 14001), occupational health and safety (ISO 45001), or information security (TISAX, ISO 27001).OEMs can have greater confidence in the compliance of their supply chain, contributing to the brand's reputation for quality and reliability.
3. Flexibility in Data Disclosure:VPs allow suppliers to disclose only the necessary information for a specific transaction or engagement with OEMs. This selective disclosure respects privacy concerns and limits the unnecessary sharing of sensitive data.
4. Real-time Validation:OEMs can verify the authenticity of a supplier's VCs in real-time without contacting the issuing body directly. This instant verification is possible because VCs are cryptographically protected and can be checked against public directories or ledger systems.
5. Reducing Risk in the Supply Chain:With VCs confirming the supplier's qualifications and track record, OEMs can mitigate risks associated with supplier reliability and product quality. This risk reduction can lead to fewer recalls, reduced liability, and increased customer satisfaction.
6. Cost Savings:By reducing the administrative burden and the need for multiple, costly audits of suppliers, VCs and VPs can save resources for OEMs. For suppliers, maintaining digital credentials can be more cost-effective than traditional certification processes.
7. Global Interoperability:The standardized format of VCs and VPs allows for global interoperability across supply chains. This means suppliers can use the same set of credentials to work with OEMs in different regions without needing separate validations for each market.
8. Dynamic Supplier Relationships:As market demands shift, OEMs can quickly validate the credentials of potential new suppliers, enabling them to respond to changes in the supply chain dynamically.
9. Building a Resilient Supply Chain:In times of disruption, such as during a pandemic, VCs and VPs can facilitate the secure and speedy identification of alternative suppliers and confirm their capabilities through digital means, bolstering supply chain resilience.
10. Facilitating Secure Data Exchange:VCs and VPs can be part of secure data-sharing protocols within the supply chain, ensuring that only verified and authorized entities have access to sensitive information and intellectual property.

The adoption of VCs and VPs by automotive suppliers and OEMs can revolutionize the way trust is established and maintained in a global and increasingly digital supply chain. By leveraging these technologies, the automotive industry can ensure more secure, efficient, and reliable interactions between suppliers and manufacturers.

eIDAS 2.0 and EBSI in Europe

eIDAS 2.0 and the European Blockchain Services Infrastructure (EBSI) are initiatives by the European Union aimed at enhancing trust among legal entities, not just within Europe but also globally. These initiatives can help build trust in the supply chain by improving identity management, transaction verification, and data integrity. Here's how they can contribute:

• eIDAS 2.0 establish a framework for secure electronic identification and trust services for electronic transactions that enhance the digital single market. The updated regulation is expected to directly address the recognition and interoperability of electronic identities (eIDs) and trust services such as electronic signatures, electronic seals, time stamps, and other proofing services across EU member states, making them more user-friendly and widely accepted. eIDAS 2.0 will likely include provisions for decentralized identity models, which could help in the creation of self-sovereign identities for legal entities. This would allow entities to control their own identity data, increasing privacy and trust. By providing a universal and legally-recognized identity standard, eIDAS 2.0 facilitates smoother, more trustworthy interactions in cross-border supply chain operations.
• EU Digital Identity Wallet Consortium - The EUDI project aims to drive digital transformation is by improving citizens’ access to a trusted and secure electronic identity that safeguards privacy and affords users control over their identity data will drive digital transformation is by supporting the digital transformation of the European industrial sector. For The European Union funded a reference implementation for mobile wallets for their citizens. You find it on Github .
• EBSI aims to leverage blockchain technology to deliver cross-border public services in a trusted, secure, and efficient manner. As part of this, it focuses on creating a reliable and verifiable ledger of transactions and identities. The use of blockchain provides a tamper-proof, immutable record of transactions and agreements. This greatly enhances trust as legal entities in the supply chain can confidently rely on the accuracy and integrity of the recorded information. EBSI could provide a platform for issuing, storing, and managing digital product passports and verifiable credentials, which could prove vital for tracking and authenticating goods in the supply chain. Traceability and provenance of goods are improved with EBSI, as each step in the supply chain can be verified, and authenticity checks can be performed with ease and transparency, substantially reducing fraud and counterfeiting.

Both eIDAS 2.0 and EBSI can address some key trust issues typically present in international supply chains by creating a standardized, secure, and interoperable framework for identity management, transaction verification, and reliable information exchange. By adopting these frameworks, entities across the supply chain can ensure that their partners are verified legal entities and that their transactions are secure, thus fostering a trusted trading environment not just within Europe, but also in connections with worldwide partners.

Similar initiatives in other economic regions

There are initiatives similar to EBSI and eIDAS in other economic regions like Japan and the United States, aiming to enhance digital identity, trust services, and blockchain integration for improved transaction security and interoperability.

While many regions are still working on integrating these concepts into their legal and infrastructural frameworks, some initiatives are already beginning to support the principles of DID and SSI.

United States

• Though not an official government initiative, numerous projects and companies in the U.S. are heavily involved in the development and promotion of DID and SSI concepts. These often work in a complementary way to the existing identity frameworks, potentially interfacing with governmental initiatives like NSTIC in the future.
• National Strategy for Trusted Identities in Cyberspace (NSTIC):NSTIC was an initiative launched by the United States government to promote the creation of secure and interoperable online identities. The goal was to enable individuals and organizations to securely authenticate in cyberspace while maintaining privacy.
• Trusted Framework Providers:In line with NSTIC, various third-party organizations operate as Trusted Framework Providers. They establish identity frameworks and provide certification programs for digital identity products and services.
• Cybersecurity Framework by NIST:The National Institute of Standards and Technology (NIST) has developed the Cybersecurity Framework, which includes standards, guidelines, and practices to manage cybersecurity-related risks, and this framework is widely adopted by various sectors, including supply chains.

Japan

• My Number System : While DIDs and SSIs are not yet integrated into the My Number system, the incorporation of individual ID numbers into digital transactions could provide a groundwork that future DID/SSI initiatives could leverage. The Japanese government implemented the My Number system, which provides a national identification number to citizens and residents for use across various government and private sector services. It is part of an effort to streamline digital transactions and improve secure data management.
• Data-Ex (Data Society Alliance) Infrastructure for Cross-Domain Data Exchange Based on Federated Architecture (Society 5.0 PDF ).
• Japan Certification Authority (JPCA):The JPCA offers digital certificate services similar to trust services described in eIDAS for secure electronic transactions and authentications.

China

• Electronic ID (eID) Initiatives: China has been developing digital ID systems, primarily through state-issued electronic IDs, which are linked to citizens’ national ID numbers and can be used for various online and offline services. While this centralized model currently differs from the decentralized DID concept, there is room for future integration as the technology and policy landscape evolves.
• Blockchain Service Network (BSN): The BSN is an ambitious initiative by the Chinese government to build a global infrastructure that provides blockchain services. While its primary intent is not focused on DIDs and SSI, the infrastructure could potentially support these technologies because of its underlying blockchain capabilities.
• Cybersecurity Law and Personal Information Protection Law (PIPL): Under the recent PIPL, China has increased the focus on data protection and securing personal information. While it does not explicitly address DID and SSI, any future move towards decentralized digital identity approaches will need to align with these regulations.

Brazil

• In Brazil, the CNPJ serves as the national registry of legal entities, which is a federal database managed by the Secretariat of the Federal Revenue of Brazil. It identifies Brazilian companies and other legal entities. As a leading provider of digital certificates, Certisign enables electronic signatures and secure online transactions, primarily through the use of traditional digital certificate technologies that comply with national regulations. ICP-Brazil enables the issuance of digital certificates with Brazilian Public Key Infrastructure (ICP Brazil) and with validation by law. Integrating CNPJ and Certisign with SSI and DID would be a significant step towards providing electronic identities for legal entities.
• B3 (Brazilian stock exchange) has undertaken several digital transformation initiatives under the banner of "B3 Digital." These initiatives often revolve around improving trading platforms, implementing advanced market analysis tools, and enhancing overall market infrastructure to better serve investors and companies. These initiatives may involve the use of blockchain, digital assets, and possibly exploring advanced technologies for identity verification and transaction security. While B3's digital initiatives are primarily focused on financial markets, there are ways in which such efforts could indirectly help establish trust for the automotive network.

Outlook of Data Spaces

Each business model invests in supporting clients to handle regulatory changes effectively, reducing the risk of non-compliance, and positioning themselves as indispensable partners in maintaining an efficient, compliant, and resilient global supply and value chain. As these regulations continue to evolve, operational companies will help their participants to stay ahead of the curve in offering innovative and compliant services. That's the main driver for open communities like Catena-X or Manufacturing-X .

The European Commission is also actively working on a data strategy to create an environment that fosters the development of common European data spaces in various sectors. As part of the European strategy for data and the Digital Single Market, the Commission has identified several key data spaces that are expected to start and evolve in the near future. These include:

1. Industrial (Manufacturing) Data Spaces: To support the optimization of manufacturing processes and the introduction of new business models in the industrial sector.
2. Green Deal Data Spaces: Aimed at contributing to the EU’s ambitious climate goals and supporting the transition to a green, sustainable economy.
3. Mobility Data Spaces: To improve traffic management, mobility services, and the development of connected and autonomous vehicles.
4. Health Data Spaces: Focused on improving healthcare delivery, personalized medicine, and the management of health data for research and policy-making.
5. Financial Data Spaces: To enhance the access to, and sharing of, financial information while ensuring the privacy and security of financial transactions.
6. Energy Data Spaces: Aimed at facilitating the transition to a more efficient and renewable energy system by improving grid management and fostering innovative energy services.
7. Agricultural Data Spaces: To support precision farming, sustainable agriculture practices, and efficient supply chain management.
8. Public Administration Data Spaces: To simplify and digitize cross-border interactions between European citizens and administrations, making public services more accessible.
9. Skills Data Spaces: To help develop the European labor market by improving the visibility of skills and facilitating job matching.
10. Cultural Heritage Data Spaces: To facilitate the preservation and dissemination of Europe's cultural heritage through digital technologies.

Each of these data spaces will be designed to promote secure data sharing and create value by connecting different stakeholders and facilitating access to large pools of valuable data. Additionally, implementations like the European Data Governance Act and the upcoming Data Act are expected to establish the legislative framework that governs these spaces, promoting trust and enabling the EU to take a leading role in the global data economy. Aiming at supporting the data spaces deployment, the Data Space Support Center (DSSC) is creating numerous assets in cooperation with the network of stakeholders.