Decarbonizing shipping: The role of low-carbon fuels
Shipping is a major source of global greenhouse gas emissions, responsible for nearly 3% of global CO2 emissions in 2018 and about 11% of life-cycle transport CO2 emissions in 20201. According to the International Council on Clean Transportation, emissions from the maritime sector are expected to increase 16% by 2030 and as much as 50% by 2050 unless policies and regulations are implemented2.
A boost from regulation and market forces
Stringent regulations are being introduced and implemented to reduce carbon emissions and meet the temperature targets of the Paris Agreement. The European Union Emissions Trading Scheme (EU ETS) is being extended to maritime emissions and the FuelEU Maritime Directive mandates the use of low-carbon fuels. These regulatory measures, combined with growing consumer and investor demand for sustainable shipping, encourage the adoption of cleaner technologies and fuels.
The promise of low-carbon fuels
The shipping industry is exploring several strategies to reduce its carbon footprint. Two major approaches are equipping existing ships with energy-efficient technologies and switching to low-carbon fuels. While both methods offer significant emission reduction potential, switching to low-carbon alternatives, such as biofuels and synthetic fuels, is a more direct and quantifiable solution.
Approved methods exist to calculate emission reductions achieved by switching fuels. This allows for accurate measurement, transfer and verification of environmental benefits throughout the transportation chain. While retrofitting can also lead to significant emissions reductions, quantifying these benefits can be more challenging due to the lack of widely accepted methodologies.
Understanding book-and-claim systems
A book-and-claim system is a mechanism by which companies can track and claim the environmental benefits of low-carbon fuels used in transportation. This system helps ensure the transparency and integrity of environmental claims for the use of low-carbon fuels. By purchasing and using low carbon fuels, companies can reduce their emissions and demonstrate their commitment to environmental responsibility, and other stakeholders further down the transportation chain can claim the environmental attributes of the low carbon fuel consumed.
Best practices for accounting and claims systems
To ensure the integrity and transparency of accounting and claims systems, it is essential to adhere to best practices, including:
- Clear and consistent standards: Establishing clear and consistent standards for the production, certification and tracking of low-carbon fuels.
- Robust verification and certification: Implementing rigorous verification and certification processes to validate environmental claims associated with low-carbon fuels.
- Transparent and accessible data: Ensure transparency and accessibility of data on fuel production, fuel consumption and emission reductions.
- Effective monitoring and reporting: Implement robust monitoring and reporting systems to track the performance of low carbon fuels programs and identify areas for improvement.
The importance of additionality
Additionality is a crucial concept in the context of low-carbon fuels programs. It refers to the additional environmental benefits of using low-carbon fuels over what would have happened under business-as-usual conditions. In other words, it ensures that the use of low-carbon fuels is truly incremental and does not simply replace fuels that would have been used anyway because of regulatory requirements.
Upcoming regulations such as the EU ETS and FuelEU Maritime may affect the additionality of low-carbon fuels. The EU ETS imposes an emissions cap, while FuelEU Maritime mandates the use of specific amounts of low-carbon fuels. While these regulations will encourage the switch to cleaner fuels, it is essential to carefully consider the potential impact on the voluntary market for low-carbon fuel credits.
Partner with Normec Verifavia
With evolving regulations such as FuelEU Maritime and EU ETS, adopting low-carbon fuel programs ensures compliance while also delivering clear, quantifiable environmental benefits. Accurate verification of low-carbon fuel supports transparent reporting, validates emission reductions and improves the credibility of sustainability claims.
With more than 10 years of experience in environmental verification, Normec Verifavia ensures that your claims meet regulatory standards and reflect real decarbonization efforts.