Dutch low-emission fuel supplier Titan and independent blockchain-based carbon insetting platform 123Carbon have issued the first LNG-based maritime carbon insets.
Carbon insetting enables fuel suppliers and vessel operators to transfer the environmental benefits of clean, lower carbon intensity fuels throughout the maritime value chain to freight forwarders and shippers. The scheme allows carriers to share the carbon reductions of their low carbon activities with freight forwarders and shippers across the global value chain, enabling decarbonisation within their own supply chains. There are, however, strict requirements on the generation and allocation of these insets. These requirements have been defined on a global level by the Smart Freight Centre (SFC), a Netherlands based NGO, which was involved in the development of the ISO14083-norm for transport carbon accounting earlier in 2023. In June, the SFC published its multi-modal ‘Book & Claim’ methodology, which deals with topics like calculation rules, additionality, allocation and reporting of insetting.
Based on this global methodology, 123Carbon will issue insets to Titan on its registry, providing the company with immutable and transferable tokens, which Titan can manage using a blockchain wallet and transfer to its customers. Every token issued on the 123Carbon platform contains all information on the emissions reduction project, including the emissions factors used, risk mitigation actions and external assurance – providing a unique level of transparency to the market. 123Carbon also partners with AllChiefs and Verifavia and will provide Titan with a robust, standardised implementation process and assurance protocol.
Titan, 123Carbon and AllChiefs have collaborated to develop a bespoke approach for (bio-)LNG ship operators and ensure that transparency and inset integrity are guaranteed throughout the entire value chain. One of the results of this approach is that the generated LNG-insets are considered fully additional – one of the most important elements that defines the integrity of an inset. This means that these specific insets were not derived by making use of local incentive schemes such as the Dutch HBE-system, they can be purchased by any party, without any concern of double counting or claiming such reductions.
Titan was the first marine company to hold a wallet on the 123Carbon insetting platform and, as a result of this partnership has now issued its first tokens for ship operators bunkering lower emission or net zero fuels like LNG or LBM (liquified biomethane/bio-LNG), in line with FuelEU Maritime standards. Titan is actively engaging carriers with an LNG-fleet to tokenise their activities and scale this solution across the market. It is also in active discussions with shippers that are seeking high quality and affordable insets that provide transparency and integrity.
Caspar Gooren, Director Zero-Carbon, Titan, said: “Insetting can be an effective means of expediting the energy transition in shipping, which is currently blocked by price levels; fossil fuels remain cheaper than renewable fuels. The insetting system helps to finance this price gap. It forms a new carbon economy: a new system that can incentivise the use of cleaner fuel alternatives. We are delighted to be working with 123Carbon to help bring this nascent tool for sustainable shipping into the mainstream marine operating environment. Through the leading 123Carbon platform, all partners within its ecosystem can have a significantly positive influence on the decarbonisation of marine supply chains. Titan wants to support and embrace initiatives that improve transparency and allow it to put a better price on carbon reductions as this will trigger vessel owners to further invest in more eco-friendly ships; the upcoming regulations from Europe will further stimulate this as well.”
Jeroen van Heiningen, Co-Founder and MD 123Carbon added: “The need for carbon insetting is clear. We now need the right tools to generate and transfer these insets safely and transparently. Our platform provides just that. We are pleased to be working with Titan and expand the scope of insets that have been generated on our platform to include LNG and LBM. We are proud to play a part in accelerating the decarbonisation of transportation through our trusted solution and are convinced many other fuel providers and carriers will join our platform in order to share their impact.”
Nicolas Duchêne, Verifavia president, said: “Transparency stands as a cornerstone advantage of insetting, ensuring financial resources remain within the sector to drive enhancements. Crucially, the accountability and validation of insetting tokens and their value are prioritised, underscoring the need for precise calculations. It remains imperative that the purchase of a token signifies a legitimate reduction of carbon emissions within the sector, aligning fully with greenhouse gas protocols.”
AllChiefs, a sustainability-centric consultancy, has been advising the partners on how carbon insetting fits, and will fit, within regulations such as FuelEU Maritime and the Global Logistics Emissions Council (GLEC) framework.