Danish shipping company NORDEN has partnered with 123Carbon to start issuing CO2 inset tokens to help customers decarbonize their supply chains.
The tokens will be issued through 123Carbon’s new platform, which will enable NORDEN to ‘tokenize’ CO2 equivalent reductions from biofuel voyages and allocate them to industrial customers looking to reduce their maritime Scope 3 emissions.
Carbon insetting is a mechanism that enables companies to reduce their carbon footprint by investing in emission reduction projects within their own value chain, rather than elsewhere or outside the industry. While coal inserts are not new to the market, they are still in their infancy in the marine industry.
However, NORDEN believes that carbon inclusion will play an important role in accelerating the adoption of low-carbon fuels by matching demand for green cargo with supply while bridging availability constraints.
Currently, the supply of low-carbon fuels such as biofuel is limited in terms of both production and geographical availability. The new platform aims to connect NORDEN’s emission reductions to customers who are unable to bunker low-carbon fuels due to trade routes or other restrictions, but still want to decarbonize their operations or supply chains.
According to Adam Nielsen, Head of Logistics and Climate Solutions at NORDEN, “Carbon inlays are not new to the market and are still in their infancy in the shipping industry. However, we believe carbon insetting will play an important role in accelerating the adoption of low-carbon fuels by matching demand for green cargo with supply while bridging availability constraints.”
The new platform offers full transparency and traceability, with the support of accountancy firms such as Verifavia, a global verification body specializing in transport, to thoroughly verify all underlying documents online. After verification, immutable tokens are issued on the blockchain.
Nicolas Duchêne, General Manager of Verifavia, explains that carbon insetting differs from carbon offsetting in that carbon emissions are reduced directly within the shipping value chain and not somewhere outside the shipping value chain or independently of the industry.
“Unlike carbon offsetting, the entire chain of custody for the insetting process is independently verified – as are the reductions corresponding to an intervention – allowing for true transparency on carbon reductions, backed by reliable certification,” said Duchêne.
This new platform is expected to bring full ownership to the buyer and provide full transparency and chain of custody regarding the biofuel interventions, emissions calculations, safety and risk mitigation.