Using carbon insetting to accelerate low-carbon fuels adoption

123Carbon partnered with Norden to issue high-quality environmental attribute certificates that enable it to decarbonise its direct customers or connect with customers that, due to operational constraints, are not able to bunker low-carbon fuels but still want to decarbonise their operations.

“Our work with Norden underlines the critical role insetting will play in the maritime sector, to help to drive meaningful emissions reductions,” Mr van Heiningen tells Riviera.

During 2024, 123Carbon supported the Japanese shipping line Tokyo-Mitsui OSK Lines (MOL) with a groundbreaking project which represented its first pilot programme for carbon insetting in the Asia-Pacific region. “This has already transformed how the business tracks and manages greenhouse gas emissions,” he adds.

Carbon insetting is likely to have even greater importance with the introduction of further environmental regulations, such as the European Union’s FuelEU Maritime, which is prepared to encourage cargo owners to adopt low-carbon solutions.

“However, they only provide limited support in recovering the costs of those solutions,” says Mr van Heiningen. “Insetting can ensure a cargo owner can remain [price] competitive by allocating this green premium to customers that are willing to pay. However, there is one restriction to environmental regulations which may narrow the insetting market,” he continues.

Where the adoption of a fuel has been used to comply with an environmental regulation, the ship operator is not allowed to allocate the green premium to a customer located outside its customer base.

“It is even more crucial that these digital technologies are leveraged to support the acceleration of low and zero carbon fuels”

“The development of carbon insetting will help to significantly accelerate the adoption of low-carbon fuels, at scale, by addressing the two key barriers that inhibit its development, namely cost and a fragmented supply chain,” says Mr van Heiningen.

“With IMO’s 2030 targets just around the corner, it is even more crucial these digital technologies are leveraged to support the acceleration of low and zero carbon fuels.”

Revised targets established by IMO have set a clear direction for the industry to reach the future ambitious goal of net zero by 2050.

“Ultimately, the path to achieving net-zero emissions by 2050 will require concerted efforts across the entire value chain,” he continues. “A blend of collaboration, technology and new approaches is critical to ensuring the shipping and transport sector can meet the ambitious targets that have been set.”

Riviera’s Maritime Decarbonisation, Europe: Conference, Awards & Exhibition 2024, will return to Amsterdam, the Netherlands, 24-25 September 2024 to address critical environmental issues head-on. Focused on the industry’s energy transition, the conference offers a comprehensive forum for stakeholders across the maritime sector to explore solutions and strategies for achieving low-carbon shipping and zero-emissions shipping.