Voluntary carbon offsetting a challenge in shipping industry

As things stand, there are very few options for stakeholders in the shipping industry to engage in voluntary carbon offsetting. The maritime market has not reached the same levels of maturity to that of other industries, reported Alvin Forster, loss prevention executive at North, and Helen Barden, Senior Solicitor (FD&D) at North, in an article on the voluntary carbon markets.

One early example of voluntary carbon trading in the sector was the issuance of carbon credits by the Gold Standard Foundation to those shipowners using AkzoNobel’s Intersleek hull coating, which is claimed to have been proven to reduce fuel consumption and, as a result, CO2 emissions.

In the US the maritime investment, chartering and financing consultancy Marsoft has launched their GreenScreen programme, which enables shipowners to earn carbon credits through retrofitting their vessels. Similar to the AkzoNobel program, this has been recognized by the global carbon registry Gold Standard.

The writers said that North had started seeing clauses introduced into charterparties to capture emissions data and share such data between the parties, which would be considered essential to gain understanding of the emission impact of their chartering activities and to enable efficiencies to be made. “However, we are yet to see much in the way of agreements or clauses in charterparties between shipowners and charters whereby a voyage is to be carbon neutral”, they wrote.

One reason for this could be that individual companies deal with such carbon off-setting at company level, depending on their company’s net-zero goal and strategy.

“As the pressure to achieve net-zero as soon as possible continues to increase, we may start seeing agreements between owners and charterers which aim to achieve a carbon neutral voyage. An example being the purchase of certain carbon credits, although how this would interplay with freight and hire rates would remain to be seen”, the writers said.