The shipping industry has long been facing the challenge of reducing its carbon emissions. In a bid to address this issue, Japanese shipping carrier Mitsui O.S.K. Lines (MOL) has embarked on a blockchain pilot for carbon insets. Unlike traditional carbon credits, these insets are achieved through tokenization and involve the use of biofuels instead of conventional marine fuels.
One of the key advantages of carbon insets is the ability for shipping lines to recover some of the costs associated with using more expensive biofuels. By passing on some of the inset benefits to freight forwarders and clients shipping goods, MOL can incentivize the adoption of sustainable practices throughout the supply chain.
In contrast to carbon offsets, which involve one party engaging in a clean activity and selling the carbon credit to another party, carbon insets require the buyer to incorporate clean activities directly into their processes. This means ensuring that the entire logistics process is relatively sustainable, contributing to a greener shipping industry.
Utilizing blockchain technology not only tokenizes the benefits of carbon insets but also provides transparency. This transparency enables manufacturers to include important details regarding the carbon reductions achieved through the use of biofuels in a product’s passport. This not only helps in meeting global climate goals but also provides consumers with visibility into the environmental impact of the products they purchase.
The allocation of these carbon insets along the supply chain follows a ‘book and claim’ methodology. This means that the goods being shipped may not necessarily travel on a vessel that uses biofuels. However, purchasing the insets contributes to the industry’s overall use of cleaner marine fuel. It’s a way for companies to offset their carbon emissions as if their goods were transported on a ship that utilized biofuel, even if that specific ship did not.
This groundbreaking initiative is not limited to MOL alone. 123Carbon, the company behind the blockchain solution, is also collaborating with Denmark’s Norden, another prominent shipping carrier. Together, they are spearheading the adoption of carbon insets and promoting sustainability in the shipping industry.
By embracing tokenized carbon insets, the shipping industry is taking a significant step towards reducing its carbon footprint and meeting climate goals. With transparent carbon accounting and incentives for cleaner practices, this innovative solution has the potential to transform the industry and drive sustainable change.
FAQ:
1. What is the purpose of the blockchain pilot for carbon insets?
– The purpose is to address the challenge of reducing carbon emissions in the shipping industry by incentivizing the use of biofuels through tokenization.
2. How do carbon insets differ from carbon offsets?
– Carbon insets require buyers to directly incorporate clean activities into their processes, whereas carbon offsets involve one party engaging in a clean activity and selling the carbon credit to another party.
3. What advantages do carbon insets offer to shipping lines?
– Carbon insets allow shipping lines to recover some of the costs associated with using more expensive biofuels. They can pass on some of the benefits to freight forwarders and clients to incentivize the adoption of sustainable practices.
4. How does blockchain technology contribute to carbon insets?
– Blockchain technology tokenizes the benefits of carbon insets and provides transparency. It enables manufacturers to include details about carbon reductions achieved through biofuel use in a product’s passport, helping to meet climate goals and provide consumers with visibility into the environmental impact of products.
5. How are carbon insets allocated along the supply chain?
– The allocation follows a ‘book and claim’ methodology, which means the goods being shipped may not necessarily travel on a vessel that uses biofuels. However, purchasing the insets contributes to the industry’s overall use of cleaner marine fuel.
Definitions:
– Carbon Insets: Achieving carbon insets involves tokenizing the use of biofuels in the shipping industry instead of conventional marine fuels. It incentivizes the adoption of sustainable practices throughout the supply chain by allowing shipping lines to recover costs and provide benefits to freight forwarders and clients.
– Tokenization: The process of converting a real-world asset, such as carbon insets, into a digital token on a blockchain. It enables the secure transfer, tracking, and ownership of the asset.
– Biofuels: Fuels derived from renewable sources, such as plants or algae, that can be used as an alternative to conventional fossil fuels.
Suggested related links:
– MOL: Mitsui O.S.K. Lines, the Japanese shipping carrier mentioned in the article.
– Norden: Denmark’s Norden, another prominent shipping carrier collaborating with 123Carbon on the blockchain solution.
The source of the article is from the blog zaman.co.at