Book and claim explained

Transportation is responsible for significant global carbon emissions, so reducing the industry’s carbon footprint is critical. Sustainable aviation fuels (SAFs) and sustainable marine fuels (SMFs) are currently the best options for reducing air and ocean transport emissions, and demand is rising. Thankfully, the supply is up too. SAF production, for example, increased by 200% in 2022 alone.

Here’s the problem: tracking the journey of sustainable fuels from production to vessel is virtually impossible. It is transported along existing supply chains and blended with fossil-based fuels. There’s no way to know how much of it goes into one plane or ship. And separate transports of sustainable fuels to buyers (e.g., specific airports or airlines) would only generate more greenhouse gas (GHG) emissions.

The energy industry faced a similar challenge. We can’t control the source of the energy piped into our homes, and most of us don’t live near a wind or solar farm. 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.

So, how can we ensure that the money spent goes toward sustainable fuels – and get credit for lowering carbon emissions? By using a digital accounting system called “book and claim” to track and transfer the environmental benefits from sustainable fuels across the value chain. 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 allows us to book, manage, verify, and claim the environmental benefits associated with using sustainable fuels. It’s essentially a way to de-couple specific attributes from the physical product, such as reduced GHG emissions, and transfer them to another party. You ‘book’ a specific quantity of sustainable fuel in one location and then ‘claim’ it at another that is not physically linked to the original one. This allows you to own the environmental benefits without physically tracing the fuel through the supply chain. You receive an independently verified certificate to claim these benefits (more on that below).

The process is also known as carbon insetting and offers so much untapped potential. If done right and industry-wide, it could result in a significant shift toward greener logistics that could sharply reduce the climate footprint of the transportation sector.

While a book and claim accounting system is conceptually a very straightforward exercise, each step in the process needs to be managed closely to ensure emissions reductions are verified before being claimed.

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 – which needs to be scaled up 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.