Have you ever reflected on the vital role the maritime industry plays in transporting 90% of the world's trade?
While the industry is undeniably crucial, the question remains pressing: how can it become more environmentally sustainable?
An innovative solution, known as maritime insetting, has the potential to significantly reduce or eliminate the additional costs associated with low-carbon fuels for shippers. It also offers a compelling avenue for global cargo owners, including industry giants such as Amazon and IKEA, to effectively address the intricate carbon footprints associated with their extensive global shipping operations. As the world grapples with growing concerns over decarbonization, the introduction of stricter regulations and an ever-increasing need for sustainable practices, it is no wonder that this innovative concept is generating widespread interest.
What are Marine Insets?
Shipping, responsible for 2-3% of global emissions, faces a formidable challenge in reducing its carbon footprint. As regulations and societal expectations continue to tighten around emissions, the industry seeks innovative solutions.
Marine insetting is as a key mechanism to accelerate the decarbonization of the shipping sector. Companies like Strive By STX are leading the way by supplying physical biofuels and verified emission reduction rights through marine insetting. Unlike carbon offsetting, which involves verified emission reductions through projects that are unrelated to a company’s own operations and footprint (e.g. afforestation), insetting focuses on reducing emissions within the a company’s extended supply chain. Therefore insets contribute more directly to the decarbonization a company’s scope 3 footprint. Biofuels (e.g. FAME, HVO, bioLNG) are a practical way, and the only short-term lever, to reduce emissions in shipping at scale. But they come at a cost. Insetting allows these costs to be shared or transferred to organizations willing to invest in verified emissions reduction that are related to their supply chains.
Key terms associated with marine insetting include:
- De-coupling: Separating the physical fuel used in vessels from the emission reductions generated.
- Mass Balanced: Accounting for all molecules entering the system that are auditable and managing emissions claims.
- Verification: Third-party auditors confirm the validity of physical activities and emission reductions.
- Book and Claim: Systems developed to standardize and improve transparency in reduction credits, allowing for easier transfer of emission reduction rights from insets.
So, Why Buy Marine Insets?
Whether you're a carrier, forwarder, shipper, or cargo-owner, there are compelling reasons to buy marine insets. It accelerates a shift to low carbon marine fuels, effectively making it possible to transport goods in a carbon-neutral way. This approach allows organizations to address their environmental impact and support the goal of decarbonizing the shipping industry.
By investing in carbon insetting, businesses can gain strategic advantage by securing limited emissions reductions, given the limited availability of biofuels within the marine sector. This lowers indirect emission footprints, while opening opportunities to develop green business opportunities. For example, many forwarders are using insets as part of their green delivery programs, which are charged at a premium. Moreover, cargo-owners can leverage insets to further strengthen the brand of green product lines.
When marine insetting emerged, it aimed to address a significant challenge in the transport sector—enabling the adoption of low-emission fuels by cargo owners and freight forwarders. Today, the landscape has evolved, with multiple stakeholders laying the foundation. The practice now adheres to greenhouse gas emissions accounting principles, frameworks like SFC's GLEC, SBTI, and ISO standards.
Lastly, the methodology of marine insetting also helps lower the emission footprint, improve the efficiency, and enhance the cost competitiveness of the low carbon fuels. In absence of insets, we would need to facilitate tiny amounts of biofuels across the world, to comply with customer demands, removing any economies of scales and hampering adoption. Through the inset instrument you enable creating scale in a couple of shipping corridors and distributing the emission reduction rights to interested buyers globally.
Marine Insetting vs. Nature-Based Offsets
While all CO2 emissions are equal in quantity, marine insets differ significantly from traditional offsets. One key advantage is that marine insets offer high-quality, supply chain-specific emission reductions that help to address your hard-to-abate scope 3 emissions, and support scaling technologies that will lower such scope 3 emissions in the future. Nature-based offset projects, on the other hand, absorb carbon emissions and offer broader climate benefits, such as increasing resilience, preventing deforestation, and supporting sustainability.
In conclusion, marine insetting is a promising approach to decarbonizing the shipping industry. It offers tailored, high-quality emissions reductions, making it a valuable tool in the fight against climate change.
If you'd like to learn more about marine insets, don't hesitate to reach out to us at marketing@stxgroup.com or fill out our contact form. Our Strive by STX experts are ready to answer your questions and explore how marine insetting can benefit your organization. Together, we can strive for a more sustainable future.
