Carbon ‘insetting’ can support the maritime shipping industry’s energy transition

July 21, 2025 by University College London

Collected at: https://techxplore.com/news/2025-07-carbon-insetting-maritime-shipping-industry.html

The maritime shipping industry can promote the uptake of zero-emission fuels through voluntary schemes but needs strong verification of these schemes to ensure that efforts to decarbonize lead to long-term solutions, according to a new report by UCL researchers.

The report, published by the UCL Energy Institute in collaboration with the consultancy UMAS, lays out recommended guidelines for the international maritime shipping industry to ensure that voluntary private “insetting” schemes effectively support the shipping industry’s energy transition away from fossil fuels.

Insetting is when a company changes practices or technology to reduce carbon emissions in parts of its business operations to counterbalance areas where carbon emissions are harder to reduce. For the shipping industry, this could mean switching to low-emissions fuels, renewable energy at ports or other changes.

This is in contrast to carbon offsetting, where a company aims to make up for any emissions it makes by doing an activity outside of its typical business operations that draws carbon out of the atmosphere, typically by planting trees.

Maritime shipping companies that inset would be able to bank carbon savings in one area, perhaps converting one ship to use zero-emission fuel, and use those savings against other more difficult to decarbonize areas, such as ships that can’t be converted—a system called “book and claim.”

The report highlights that maritime insetting schemes, such as book and claim, can encourage private investment in low and zero-emission solutions, before regulators require compliance through potential regulation. But for these schemes to work, such private solutions require transparent and independent verification of their carbon reductions.

In addition, the report—called “The role of insetting in supporting shipping’s energy transition”—advocates for the standardized adoption of the established GHG Protocol for Project Accounting tools to fully certify and verify greenhouse gas reduction claims, and the Smart Freight Center’s Book & Claim Methodology to standardize what aspects of the industry should be focused on.

The report also urges that industry-led emission reduction efforts exceed minimum regulatory requirements and follow the latest science standards to avoid risks of more stringent future policies.

Collectively, the maritime shipping industry is one of the largest carbon emitters in the world, contributing about 3% of global emissions. The industry is making efforts to enact its own reforms to reduce carbon emissions, such as replacing fossil fuels with lower emission fuels and using renewable energy at ports.

However, if not implemented correctly, these industry-led efforts could lead to little meaningful carbon reductions, and the possibility of more stringent regulation.

Dr. Nishatabbas Rehmatulla (UCL Energy Institute) said, “The emergence phase of shipping’s energy transition requires ambitious voluntary action, and insetting schemes offer one mechanism to deliver this—particularly through book and claim systems that effectively match supply with demand. To realize this potential, schemes must be grounded in the latest available science, governed by reliable third parties, and designed to promote scalable, long-term decarbonization solutions.”

In October the UN’s International Maritime Organization is expected to meet and formally adopt new regulatory standards aimed at reducing the industry’s carbon emissions. Known as the IMO Net-Zero Framework, the standards will impose mandatory emissions reduction requirements on the marine shipping industry to ensure the industry reaches net zero carbon emissions by 2050.

Lead author Professor Tristan Smith (UCL Energy Institute) said, “With the approval of the International Maritime Organization’s (IMO’s) Net Zero Framework, there’s now greater, if not perfect, clarity on the role regulation will play in shipping’s energy transition and therefore key gaps for voluntary action to assist with.

“One key risk discussed in this report relates to how greenhouse gas emission reduction efforts are recognized in both regulation and voluntary initiatives, and therefore the benefit of voluntary actions can increasingly align with the likely form IMO greenhouse gas emissions accountancy will take.”