Book and claim explained

It’s no secret that transportation has a giant carbon footprint – and that reducing emissions in the sector is fundamental to the fight against climate change. While it’s going to take technologies like electric and hydrogen to fully decarbonize the movement of people and goods, we do have options to reduce emissions now.

Sustainable fuels are available, and the supply is increasing rapidly. The production of sustainable aviation fuel (SAF) increased by 200% in 2022 alone.

But here’s the problem: you can’t pull up to any pump and fill your truck or plane with sustainable fuels. They are transported along existing supply chains and blended with fossil-based fuels. So there’s no way to track how much of it goes into one vehicle.

The energy industry faced a similar challenge. Most of us don’t live near a wind or solar farm, and we can’t control the source of the energy piped into our homes. But if we want to buy renewable energy, we can. It might not end up in our electrical outlets, but the money we spend pays for renewable energy production elsewhere.

The same concept now exists for sustainable fuels: a chain-of-custody model that tracks and documents environmental benefits of sustainable fuels – an accounting system now commonly referred to as “book and claim”.

It’s a virtual solution to a physical problem based on a one-atmosphere approach. All GHG emissions enter the same atmosphere, so as far as Mother Earth is concerned, it doesn’t matter which vehicle, vessel, or aircraft is burning sustainable fuels instead of fossil fuels.

The book and claim system is essentially a way to de-couple specific attributes from the physical product, such as reduced GHG emissions, and transfer them separately to another party via a dedicated registry. The buyer and seller must not be connected with a physical supply chain. The buyer ‘books’ a specific quantity of sustainable fuel at the time of purchase and then ‘claim’ the emissions reduction toward their sustainability targets. As a result, the buyer own the environmental benefits without physically possessing the fuel. They receive an independently verified certificate to certify their claim (more on that below).

Book and claim is based on the concept of carbon insetting, which is about funding projects aimed at reducing carbon emissions within the same sector or industry. Carbon insets are different from traditional carbon offsetting, which aims to fund projects like tree planting to offset carbon emission. If done right and industry-wide, book and claim systems have the potential to sharply reduce the climate footprint of the transportation sector.

The book and claim system is modeled after energy attribute certificates, which helped enable the power of markets to drive change and accelerate demand for renewable energy. When a sustainable fuel supplier produces the product, they generate a certificate based on a certain quantity of sustainable fuel (e.g., one metric ton) they make from sustainable feedstock. You receive that independently verified certificate when you purchase sustainable fuels through a book and claim system. So, even though your package or freight might not have been shipped in a plane or ship powered by sustainable fuel, somewhere in the world someone else’s shipment did. Your purchase has replaced fossil-based fuel and reduced overall transport emissions – and you get the credit for that.

It’s important to note that everyone benefits from the book and claim system. When fuel producers sell the physical fuel, the aircraft and ship operators who purchase sustainable fuel and receive certificates can claim the environmental benefits in their direct GHG emissions footprint (Scope 1). Logistics companies like express delivery services and freight forwarders can buy by the value of the indirect emission reductions (Scope 3). And they can pass the Scope 3 reductions on to customers. Scope 1 and 3 benefits can be purchased separately.

The book and claim system may be a relatively straightforward accounting model, but it’s really an innovative solution to a complex problem. It enables anyone to contribute to sustainable logistics. Whether shipping a parcel or a pallet, any individual or company can participate in the market for sustainable fuels – and claim the emissions reductions toward their sustainability targets. Their goods may not technically fly or ship using sustainable fuels, but their purchase shows market demand and can incentivize suppliers globally to boost production. And we – which need to scale up the supply of sustainable fuels rapidly if we are to reduce the carbon footprint of the transportation sector and help meet the world’s climate goals.

A sustainable economy is unthinkable without sustainable logistics. The book and claim system helps us move one step closer to both.