Charles Dubouix Last update 23/06/2023
Alternative Fuels : the Book and Claim Scheme
Key take-aways
A book-and-claim scheme is a chain-of-custody system (tracking and documentation process) that enables shippers to finance alternative fuels and reduce their indirect carbon emissions (scope 3) without necessarily having their goods shipped on a vehicle powered by the financed alternative fuel.
Shippers receive an environmental certificate in exchange for their funding.
The system is becoming a standard in decarbonizing complex industries that rely on heavy infrastructures, such as air and maritime transportation, as well as in other areas, such as the distribution of green electricity. Note: as road transportation is more flexible, there is currently no Book and Claim system in place. Therefore, to claim a reduction in CO2, the transportation must be carried out on a truck that runs on alternative energies.
Going further
What is a Book-and-claim scheme?
A book-and-claim scheme is an accounting system where sustainable fuels - like maritime biofuels or Sustainable Aviation Fuel (SAF) - can be purchased by an organization without having its cargo physically transported thanks to this fuel. Certificates representing the environmental benefits of these fuels are created. These certificates can be separately purchased by organizations wanting to claim the sustainability benefits, regardless of their physical fuel supply.
By doing it shippers participate in decarbonizing their industry.
How does it work ?
The carrier calculates the energy needed for your shipment (e.g. 14GJ for 1 TEU from Ningbo to Le Havre) and then calculates the volume of biofuel required to produce this energy (e.g. 0.32t Biofuel).
The shipper A is responsible for paying the extra cost of the biofuel.
The biofuel is bunkered on a ship belonging to the carrier, not necessarily the one on which the cargo will be loaded.
The shipper A claims a reduction in CO2 emissions for its scope 3 through a certificate received from the carrier.
A shipper B that travels on the ship/plane accidentally fuelled with biofuel cannot claim emissions reductions from that biofuel.
Why is it interesting ?
Effective for the environment
- immediate impact: trigger actual carbon emission reduction
Straightforward for carriers
- claim a lower Scope 3 (indirect emissions from freight transportation)
- hassle-free: no logistical changes are needed in your supply chain, and there will be no waiting at ports.
Boosting the industry
- foster industry innovation : finance new technologies
- send a market signal to accelerate the transition
- allow forwarders, shippers, and end consumers to claim lower Scope 3
- allow asset owners to claim lower Scope 1 (direct emissions)