Decarbonisation is posing a real prisoner’s dilemma* for shipping: how can we overcome individual company incentives in favour of the common good? Economic theory teaches us that regulation is one way out of the prison: by altering present-day incentives, behaviour can shift rapidly.
Business models that incentivise collaboration should allow the participants to move ahead with decarbonisation even as the regulatory framework is lacking, and they must efficiently reduce the risks of being a frontrunner.
Carbon credits from insetting can do exactly that: insetting refers to projects within the relevant value chain as opposed to offsetting, which refers to carbon reduction or removal projects anywhere and most often outside of the sector where the emissions originated.
Carbon credits from insetting spread the cost of emission reductions throughout the supply chain and allows the purchasing entity, for example a cargo owner, to legitimately claim supply chain emissions reductions in their Scope 3** emission inventory even if their cargo was not carried on the ship that realised the emission benefits.
Another possibility is to include a carbon-emission adjustment factor , and equally result in reduced freight if the emissions are higher.
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