What is Carbon Offsetting

July 1, 2024 /

The shipping industry is a significant contributor to global greenhouse gas (GHG) emissions, responsible for approximately 2-3% of the world's total CO2 emissions. As global trade continues to expand, the industry faces increasing pressure to mitigate its environmental impact. Carbon offsetting is one of the strategies employed to address these emissions.

What is Carbon Offsetting?
Carbon offsetting involves compensating for emissions by funding equivalent carbon dioxide savings elsewhere. This can be done through projects such as reforestation, renewable energy installations, or energy efficiency improvements. The main sources of emissions in shipping include fuel combustion from ships' engines, onboard machinery, and auxiliary power units.

What are the Regulatory Frameworks involved?

  1. International Maritime Organization (IMO): The IMO has set regulations to reduce emissions, including the Energy Efficiency Design Index (EEDI) for new ships and the Ship Energy Efficiency Management Plan (SEEMP) for all ships.
  2. Carbon Intensity Indicator (CII): Measures and controls the operational efficiency of vessels.
  3. EU Emissions Trading System (EU ETS): The EU plans to include maritime transport in its carbon market.

What are the
 Carbon Offsetting Mechanisms:

  1. Voluntary Carbon Markets:
    • Shipping companies can purchase carbon credits from certified projects to offset their emissions. Popular standards include the Verified Carbon Standard (VCS) and the Gold Standard.
  2. Emission Reduction Projects:
    • Renewable Energy Projects: Funding solar, wind, or hydroelectric power projects.
    • Reforestation and Afforestation: Planting trees to absorb CO2.
    • Energy Efficiency Projects: Investing in technologies and practices that reduce energy consumption.

What are the
 Challenges and Criticisms?

  1. Accuracy and Verification:
    • Ensuring that carbon offset projects deliver the promised reductions can be difficult. Independent verification is crucial.
  2. Additionality:
    • Projects should result in emissions reductions that would not have occurred without the offset funding.
  3. Permanence:
    • Ensuring that the carbon sequestration or reduction is permanent, especially in the case of forestry projects which could be reversed by natural disasters or deforestation.
  4. Market Volatility:
    • The price and availability of carbon credits can be volatile, affecting the cost and reliability of offsetting strategies.

We are actively engaged in reducing its carbon footprint and promoting sustainable practices in the shipping industry. We have implemented several measures to offset our carbon emissions:

Optimised Transportation Modes: We focus on choosing energy-efficient transportation methods that have a lower carbon impact. This includes utilising sea and rail freight over air transport where possible, as these modes produce fewer emissions per ton-kilometer.

Technological Innovations:
 We incorporate advanced logistics technologies to enhance efficiency and reduce fuel consumption. This includes route optimization software and energy-efficient vehicles.

Sustainability Partnerships:
 We collaborate with other stakeholders in the supply chain to promote and implement sustainable practices. This collective effort helps to amplify their impact on reducing overall emissions.

Compliance with Regulations:
 We ensure adherence to international regulations such as the International Maritime Organization (IMO) standards, which aim to reduce the carbon intensity of shipping.

These efforts reflect our commitment to environmental responsibility and its proactive stance in addressing the challenges posed by climate change within the shipping industry​

Please contact us for advice or further information or help or visit our website.