As part of a growing effort to decarbonize the maritime industry, a new position paper titled Defining Additionality in the Voluntary Book-and-Claim Market in Deep-Sea Shipping has been released through a collaboration between the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping and the Global Maritime Forum. This document proposes a standardized framework for “additionality” in deep-sea shipping, focusing on how low-emission fuels and other carbon reduction strategies can be verified and marketed in ways that exceed baseline regulatory requirements.
The concept of additionality, often used in carbon markets, plays a crucial role in ensuring that voluntary emissions reductions genuinely contribute to environmental goals rather than merely fulfilling obligations set by existing regulations. The aim of this paper is to clarify the criteria that define additionality in the context of deep-sea shipping, thereby building confidence among stakeholders while enabling a reliable, transparent voluntary market.
Additionality in the Maritime Sector: Understanding the Concept
In carbon markets, additionality refers to actions or measures that result in emissions reductions beyond those mandated by law. Only emissions cuts that exceed these minimum regulatory requirements can qualify for voluntary carbon markets. This distinction ensures that companies paying a premium for emissions reductions are genuinely contributing to the reduction of greenhouse gas (GHG) emissions.
In deep-sea shipping, where regulatory frameworks are rapidly evolving, additionality becomes complex yet critical. Regulations such as the EU Emissions Trading System (ETS) and the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) impose standards for emissions reductions, yet they do not necessarily mandate specific actions or technologies. Thus, additionality in this sector demands a nuanced approach, where only voluntary efforts not compelled by regulations qualify as contributing to GHG reductions.
The Role of Book-and-Claim Systems in Maritime Carbon Markets
A significant part of this framework for additionality focuses on book-and-claim systems, which offer a means of tracking and monetizing carbon reductions within a complex, globalized shipping value chain. Book-and-claim allows companies to separate the environmental attributes of sustainable fuel use from its physical application, meaning that low-emission fuel used in one part of the world can have its environmental benefits credited elsewhere in the chain.
For example, a company could purchase and claim the environmental benefits of low-carbon fuel used on a voyage that it does not directly control. This flexibility is essential for shipping, where vessels often change routes, carriers, and owners. Book-and-claim thus enables emissions reductions to be tracked and credited in ways that directly contribute to voluntary carbon markets, helping to bridge the gap between supply chain complexities and decarbonization goals.
Principles for a Robust Voluntary Carbon Market
The new position paper outlines five high-level principles to guide additionality in maritime book-and-claim markets. These principles include environmental credibility, transparency, fair commercial practices, pragmatism, and consistency. Together, they form the foundation of a trustworthy system that prioritizes genuine emissions reductions and creates an environment conducive to meaningful decarbonization efforts.
- Environmental Credibility: For a voluntary market to function effectively, the emissions reductions claimed must represent actual, additional GHG reductions. This means that only actions going beyond regulatory mandates, such as the switch from conventional fuels to certified low-carbon alternatives, qualify. This principle emphasizes the need for rigor in how book-and-claim systems are structured to prevent the inadvertent double-counting of reductions or reliance on reductions that would have occurred without voluntary action.
- Transparency: Clear information-sharing between buyers and sellers is crucial. Stakeholders in these transactions must understand the regulatory landscape and the specific emissions reductions tied to their book-and-claim purchases. Transparency not only enhances trust but also supports informed decision-making among all parties involved.
- Fair Commercial Practices: The principle of fairness aims to create a level playing field, where the environmental attributes of low-carbon actions are accurately priced and available equitably to market participants. Fairness helps ensure that pricing reflects the real value of additional emissions reductions, encouraging companies to invest in low-carbon solutions.
- Pragmatism: Data documentation and verification should be achievable without imposing excessive administrative burdens on participants. This pragmatism ensures that companies of all sizes can engage with the voluntary market while maintaining the necessary rigor and reliability in reporting additional emissions reductions.
- Consistency: The principle of consistency calls for alignment within the maritime industry and, ideally, across the logistics value chain. By standardizing the treatment of additionality, the market can operate with a shared understanding, reducing confusion and promoting greater uptake of sustainable practices.
How Existing Maritime Regulations Interact with Additionality
To provide further clarity on additionality, the paper discusses the major regulatory frameworks affecting emissions in deep-sea shipping, including the EU ETS, FuelEU Maritime, and the IMO’s CII. Each of these frameworks has unique criteria for emissions reductions, creating a complex environment for determining additionality. The paper underscores the importance of voluntary actions that go beyond compliance to uphold the credibility of the book-and-claim market.
- EU Emissions Trading System (ETS): Under the EU ETS, emissions are capped, and companies are required to purchase allowances to cover their GHG output. However, the ETS does not specify particular fuel types or reduction methods, allowing shipping companies to choose low-carbon options that can reduce their need for allowances. Additionality within the EU ETS framework is achieved when companies use low-carbon fuels beyond what is required by their purchased allowances. By transparently documenting emissions reductions, companies can participate in the voluntary market without undermining ETS compliance.
- FuelEU Maritime: Part of the EU’s “Fit for 55” package, FuelEU Maritime mandates progressive reductions in GHG intensity for ships starting in 2025. The regulation allows companies to meet targets through a mix of fuels and technologies but emphasizes compliance rather than voluntary reduction. Consequently, only low-carbon fuel that remains unallocated for FuelEU compliance can be considered additional. This provision ensures that emissions reductions in the voluntary market truly extend beyond regulatory compliance.
- IMO Carbon Intensity Indicator (CII): The CII measures a vessel’s operational efficiency and rates its performance annually. While the CII influences operational efficiency improvements, it lacks strong enforcement mechanisms and does not mandate fuel switching. Consequently, CII-related efforts do not typically qualify for additionality. However, future revisions to the CII in 2025 may provide a clearer framework for how it could support voluntary reductions, potentially enhancing its role in the carbon market.
Moving Toward a Unified Additionality Standard
As the maritime sector intensifies its efforts to decarbonize, the need for a consistent approach to additionality has become increasingly apparent. This position paper acknowledges the evolving regulatory landscape and the importance of harmonizing additionality criteria across frameworks. Such harmonization allows companies to engage with voluntary carbon markets confidently, knowing that the standards align with both regulatory requirements and broader sustainability goals.
The proposed additionality framework reflects a flexible and adaptable approach designed to evolve with future regulatory changes. By establishing these principles now, the paper’s authors hope to set a foundation for a market that balances environmental ambition with practicality, allowing companies to reduce their carbon footprints while upholding market credibility.
Looking Forward: Building Confidence in the Voluntary Maritime Market
Ultimately, the success of this additionality framework depends on its adoption and integration across the maritime industry. By creating a trustworthy, transparent market for emissions reductions, this paper lays the groundwork for further decarbonization and the increased use of low-carbon fuels in deep-sea shipping. The proposed framework encourages stakeholders to exceed regulatory mandates, driving innovation and investment in cleaner technologies while ensuring that voluntary actions have a measurable impact on climate goals.
This unified approach to additionality stands as a vital step toward achieving maritime decarbonization at a scale that aligns with global climate commitments. As the regulatory landscape continues to evolve, the flexibility built into this framework will allow it to adapt, creating a lasting positive impact on both the industry and the environment.
Read the report here.