Carbon insetting is regarded as an important option for shipowners in emissions management. The German emissions compliance platform Zero44 has launched a new tool for this purpose.
It is “the industry’s first software to combine regulatory compliance and decision-making relating to carbon insetting in a single solution”, the company – founded as a start-up in Berlin in 2022 – announced today.
Carbon insetting enables ship operators to sell emission reductions resulting from the use of low-emission fuels directly to charterers seeking to reduce their own Scope 3 emissions. “This is already common practice in the container and bulk sectors. For ship operators, carbon insetting is the only way to sell the emission reductions achieved through the use of low-emission fuels directly to the customers who benefit from them, thereby offsetting part of the higher fuel costs. This is not possible via FuelEU Maritime,” Zero44 continued, referring to the much-discussed EU regulation.
According to experts, the catch here is what is known as ‘additionality’: emission reductions sold on the voluntary market cannot simultaneously be counted towards FuelEU targets. Until now, shipping companies have had to manage this separation manually in spreadsheets. In doing so, they kept the volumes reserved for insetting separate from those used for FuelEU compliance. And they had to do this across an entire fleet, for which prices and compliance balances change on a daily basis.
Zero44 aims to eliminate this manual work with its module. According to the company, it is based on the same data from Bunker Delivery Notes and Proof of Sustainability that shipping companies already use for their compliance reporting. For each volume of fuel, it displays the value of a potential FuelEU surplus compared with the value of an alternative insetting certificate, based on current prices for surpluses and insets.
As soon as a ship operator allocates a quantity of fuel to insetting, Zero44 automatically deducts it from the vessel’s FuelEU compliance balance. This ensures that the FuelEU surplus, which is to be used for carbon insetting rather than carried forward to a later reporting period via banking, is always correctly reported at the time of reporting. The underlying data can be transferred directly to the carbon insetting registry chosen by the shipping company. This eliminates the need for duplicate data entry between systems.
Friederike Hesse, co-founder and managing director of Zero44, says: “Every tonne of low-emission fuel a shipping company invests in represents money that it can recoup: either through a FuelEU surplus or through carbon insetting. However, the two routes do not usually generate the same level of revenue. Our customers can now see, for each bunkering operation, which route yields the highest return at that particular time and act accordingly. This enables them to convert part of their existing costs for low-emission fuels – costs they would otherwise have had to bear – into revenue that they had previously been unable to realise.”
The carbon insetting module is already in use “at a leading global shipping company”, which manages its insetting programme with 123Carbon. 123Carbon is a widely used, independent carbon insetting registry within the industry and an integration partner of Zero44.
