ZeroLab, Good Shipping turn to insetting to speed up decarbonization
ZeroLab, Torvald Klaveness’ subsidiary dedicated to the decarbonization of seaborne supply chains, has partnered with Dutch company GoodShipping, to offer all charterers the opportunity to compensate for their shipping-related emissions through insetting.
After Klaveness’ joining a new carbon capture project, CCShip, ZeroLab by Klaveness has moved forward to embracing the company’s sustainability focus on lower CO2 emissions by introducing a new, financially feasible way to tackle shipping decarbonization.
“Insetting refers to the purchase of emission reduction credits within a company’s relevant value chain. It differs from offsetting in that it drives funding towards the technology we need to develop for shipping to decarbonize by 2050”, Martin Prokosch, VP and Head of ZeroLab by Klaveness said.
In contrast to emissions reduction in external climate protection projects (carbon offset projects), climate protection money remains within the company’s value creation cycle.
Even though insetting so far was on the radar, but mostly toe-dipping, the companies have turned to this innovative way to meet the increasingly stringent targets of CO2 reduction. So far, the reduced costs per ton CO2-equivalents for the shipping sector have been higher than other industries.
Prokosch noted that regular offsets blur the real cost of decarbonizing shipping and are not at all contributing to making zero-emission shipping a reality.
IMO’s target of reducing absolute emissions from shipping with 50% by 2050 compared to 2008 implies a reduction in GHG emissions from shipping of ~15 billion tons over the period from 2021 to 2050 compared to the business-as-usual scenario.
Specifically, the costs per ton CO2e will be about $100 per ton or higher, which is in line with the estimates of $1-2 trillion cost of decarbonizing the shipping industry.
According to ZeroLab, if we consider 20% of reduction costs to be achieved through insetting, the total market turnover will be $10 billion per year, or $300 billion in total over the next 30 years.
“To achieve a similar impact on CO2e through regular offsets, for example through carbon sequestration, you would have to plant 50 billion tree seedlings and grow each of them for 10 years. Not a bad word about tree seedlings but as a shipping company, we need to focus on accelerating the transition in shipping,” Prokosch also pointed out.
Insets are believed to encourage further initiatives to tackle actual emissions reduction that can happen anywhere in the world, not just within the physical supply chain of the charterer that wants to contribute.
GoodShipping, the world’s first sustainable shipping initiative will work together with ZeroLab on a comprehensive suite of inset options, to reduce emissions more economically.
Janne Erxleben, Business Development Manager at GoodShipping, explained: “Biofuels decarbonise seaborne supply chains in a cost-effective manner. Our solution is based on the principle of mass-balance, meaning that we facilitate a fuel switch, and the volume of sustainable biofuel that reduces charterers’ emissions will be fuelled into a pre-selected vessel that would have normally run on fossil fuel.“
On May 25, Klaveness Combination Carriers ASA (KCC) took delivery of the MV Balzani from Chinese New Yangzi Shipyard, marking the completion of the CLEANBU newbuilding program. Prokosch noted that they have already bunkered biofuels on the CLEANBU MV Baru and are planning to expand the use to other owned and operated vessels.
“Focusing on projects that support actual emissions reductions within shipping is key to speed up the transition the industry needs to go through,” Prokosch added.