Shipping borrows from aviation with new tool for counting emissions reductions

Companies such as Ikea and Amazon that have pledged to reduce emissions from maritime shipping can now use a new registry to financially support ships using low-emissions fuels — even if their cargo isn’t actually on board.

Both the European Union and the International Maritime Organization are developing regulations that would require the use of near zero-emissions technologies to phase out bunker fuels, the tar-like oil used to operate maritime ships. The maritime industry is responsible for approximately 1 billion metric tons of emissions annually, but bunker fuel alternatives are in short supply. That’s where the registry, Katalist, comes in.

Katalist, launched in November by RMI and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (not affiliated with the shipping company), offers a type of environmental attribute credit that can be used to offset emission. The registry uses a concept called “book and claim,” the same approach being used to encourage adoption of sustainable aviation fuel and to support trading of renewable energy certificates. Companies get credit for the emissions reductions made possible through projects they support, even though they haven’t physically taken delivery of that energy.  

“The ability to decouple physical freight movement from willingness to pay a premium for transparent, verified emissions reduction is essential to accelerate the transition in this sector,” said Ingrid Irigoyen, president and CEO of the Zero Emission Maritime Buyers Alliance (ZEMBA). 

How it works

Pool demand to create a market

The ZEMBA buyers group, managed by Aspen Institute, represents 40 multinational companies that have pledged to reduce maritime shipping emissions, including Amazon, Ikea, Levi Strauss & Co., Mondelez International and Patagonia.

ZEMBA is coordinating requests for proposals from shipping companies that use alternative fuels. Under the first one, completed in April, 17 members of the group signed bilateral contracts with Hapag-Llyod that will abate an estimated 82,000 metric tons of greenhouse gas emissions. The German cargo ship owner offers a Ship Green service that lets companies offset emissions from the maritime portion of a product’s logistics journey.

“The progress we have made in the past year is nothing short of remarkable,” said Maro Enoka, a supply chain and logistics manager for Amazon, who’s on the ZEMBA board. 

Shipping represents a “significant” portion of the retailer’s footprint, and the buyers’ group is currently the most viable path for Amazon to reduce that footprint, Enoka said during a recent ZEMBA presentation. “We believe by consolidating demand, we can accelerate decarbonization efforts and address the pricing challenges we’ve seen in this sector.”   

Wanted: Container ships that use e-fuels

ZEMBA’s next request for proposals will solicit bids from shipping companies using “e-fuels” produced with emerging electrolysis approaches, including ammonia or methanol. (The fuel used for the first contracts was liquified biomethane.) ZEMBA expects to release details for that tender in January, seeking fuels for delivery starting in 2027.

ZEMBA was among the two dozen organizations involved in developing and testing the Katalist system, which borrowed from the approach being used for claiming use of sustainable aviation fuel, over the past two years. “While the individual members will be the first ones engaging with the Katalist system to claim the environmental attributes they purchased through the first tender, ZEMBA is looking forward to continuing to work with the Katalist team and to being among the first stakeholders to put the system to test in 2025,” Irigoyen said.

Here’s how the registry works:

• Shipping companies using low-emission fuels record that information on the registry.
• Retailers, manufacturers and other cargo owners pay a green premium for their shipping and logistics contracts. 
• That extra amount funds the use of low-emissions alternatives to bunker fuels on ships that have been equipped to run them. 
• The buyer receives emissions reduction certificates (also called tokens) for using that fuel, even if its cargo isn’t actually being transported by that vessel.

A short-term solution

Katalist is a mechanism for voluntary markets and for early adopters hoping to stimulate commercialization. “We need to pull where there isn’t a push,” said Frederik Jacobsen, project manager for Mærsk Mc-Kinney Møller Center and head of Katalist. 

As maritime regulations requiring near-zero emissions fuels emerge, the registry will become less relevant. Both Katalist and ZEMBA are pushing for more stringent regulation. “Hopefully this won’t be needed in 15 years,” said Jacobsen. “If the regulation comes into place, then we’re not needed, and that is great.”

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