GREENER INSIDE: ‘BOOK & CLAIM’ CARBON INSETTING FOR YOUR SUPPLY CHAIN
Companies across every industry are working towards global climate targets and corporate sustainability goals. Carbon offsetting is an established way of indirectly compensating for transport-related CO2 emissions outside the supply chain, but there’s growing interest in greening from the ‘inside’ too. Discover how insetting can advance the decarbonization of global freight.
When shippers, carriers, and logistics service providers use carbon offsets to reach climate targets by compensating for freight emissions, their investments usually go into projects outside the transport sector such as reforestation and land reclamation and others. In fact, only a very small number of today’s offsetting projects are in the transport sector – as low as just 0.2% of the US$269 million voluntary carbon offset marketplace.
To advance the decarbonization of the global freight transportation network itself, companies can now turn to carbon insetting, which means investing in initiatives that directly green the ‘inside’ of the transport chain. These projects involve the use of sustainable fuels for transportation and the renewal of fleets with more environment-friendly ocean vessels, aircraft, trains, and trucks.
- Carbon offsetting: Indirect compensation for greenhouse gases by reducing emissions outside the organization’s supply chain.
- Carbon insetting: Direct compensation for greenhouse gases by reducing emissions inside the organization’s supply chain.
Many insetting solutions already exist, including the use of sustainable fuel, fleet renewal, engine retrofitting, and efficiency projects. And each of these helps to decarbonize logistics and reach climate protection goals while also delivering structural improvements to the supply chain.
However, despite the vast potential of insetting, an industry-wide initiative is needed to further develop, advance, and standardize the concept so it can be used by all stakeholders.
Putting Concept Into Practice
A practical way for shippers and forwarders to put insetting into practice is to replace fossil fuels with sustainable fuels using the ‘book & claim’ model. Using a one-atmosphere approach allows companies to separate the physical flow of goods from the actual fuel used to transport them. It doesn’t matter where in the world the sustainable fuel is used, just as long as the fuel switch occurs somewhere in the industry on the same mode of transport.
The stakeholder initiating the sustainable fuels usage is also the stakeholder owning the achieved emissions reduction. With a book & claim mechanism, the company must first book the CO2 reduction for a specific cargo volume and then it can claim the achieved CO2 reduction for that cargo volume.
Managing the Process
While conceptually this is a very straightforward exercise, each process step needs to be managed closely to ensure emissions reductions are verified before being claimed.
The Smart Freight Centre (SFC) and Massachusetts Institute of Technology’s Center for Transportation & Logistics (CTL) have developed guidelines for this insetting approach in air transportation. Next to guidelines for sustainable aviation fuel (SAF) accounting, they provide principles of a book & claim chain for clear and transparent tracking and disclosure of the emissions reduction benefits of a fuel switch with SAF.
A sustainable economy is unthinkable without sustainable logistics, and insetting represents a big step on the journey towards industry decarbonization.
Along with the entire DHL Group, DHL Global Forwarding is committed to zero emissions. We offer simplified access to book & claim processes through the GoGreen Plus solutions portfolio:
- LCL GoGreen Plus: Since January 2021, all less-than-container load (LCL) ocean freight shipment emissions are reduced with sustainable marine fuel by default – at no extra cost to the customer
- FCL GoGreen Plus: This service is also provided for full-container load (FCL) ocean freight customers at a price premium, available since June 2021
- AFR GoGreen Plus: The same service is in pilot phase for airfreight (AFR) customers
To find out more about these book & claim solutions, please get in touch with your key account manager today or contact our Central GoGreen Team.