Doing so would allow the global shipping industry to cut the emissions and costs arising from the shipping of biofuels, said Jeroen van Heiningen, managing director and co-founder of the transport carbon emissions reduction registry operator. Cargo owners could use digital technology to account and pay for carbon emission reduction benefits, he added.
The company, formed in 2021, launched a digital registry in January for marine, air and road transport carbon reduction initiatives. Its platform aims to allow low-carbon fuel suppliers and shipping companies to issue, manage and sell externally verified emissions reduction certificates, which can be used by cargo owners and freight forwarders to make reduction claims on their supply-chain emissions.
“We are working on appointing an agent to bring knowledge to the China market, because we see strong opportunities here,” van Heiningen told the Post. “China has strong capacity in biofuel production, and it can deliver biomethanol.”
China’s biodiesel production rose by a third to 2.4 billion litres last year from 2021, according to the US Department of Agriculture. It was almost entirely exported to the European Union, especially Holland, which imposed an emissions cap-and-trade system on its road transport sector.
Last Thursday, 123Carbon beat five other finalists and won the top prize at this year’s Captain’s Table shipping and logistics innovation ideas pitching competition, held as part of last week’s Hong Kong Maritime Week event.
Last September, a coalition of more than 20 companies, including big consumer goods brands Idea, Philips, Levi’s and Amazon, made requests for proposals to decarbonise sea-freight containers equivalent to about 600,000 twenty-foot equivalent units from 2025.
Lack of infrastructure ‘hindering projects to cut ships’ carbon emissions’
Lack of infrastructure ‘hindering projects to cut ships’ carbon emissions’
They will pay a “green premium” on shipping costs and contribute towards the higher costs of low-carbon fuels.
It is often impossible to physically trace how much carbon reduction was achieved by using biofuel to move a particular cargo in a vessel, Van Heiningen said.
Shipping: unregulated contracts, fuel transition among biggest decarbonisation hurdles
Shipping: unregulated contracts, fuel transition among biggest decarbonisation hurdles
Even if a cargo owner wants to pay extra for its cargo to be shipped by a biofuel-fuelled vessel, it is not always possible due to the unavailability of biofuel, he added.
“The vast majority of cargo owners are reluctant to pay for biofuel, so we need an allocation mechanism for the climate mitigation benefit from biofuels to be passed on to cargo owners,” he said.
123Carbon’s platform uses blockchain technology to collect and store verifiable, auditable and immutable information related to greenhouse gas emissions reduction activities in the logistics sector. The information is assured by verification, auditing and certification providers Verifavia and Bureau Veritas.
China’s carbon emissions can be used to make green fuel, says CMA CGM exec
China’s carbon emissions can be used to make green fuel, says CMA CGM exec
However, this method of tracking, accounting and trading of emissions mitigation benefits has not yet been endorsed by Greenhouse Gas Protocol and Science Based Targets initiative (SBTi), which are key international standard setters for tracking corporate decarbonisation initiatives.
Such so-called book-and-claim instruments are a topic that requires further research and clarification from greenhouse gas accounting standards, according to SBTi.
“SBTi acknowledges that book-and-claim instruments are not well-defined in the market … SBTi is following up and participating in multiple discussion groups working on this topic,” it said in May.