MOL, Shell collaborate for 1st time on book-and-claim initiative for marine decarbonization

Mitsui O.S.K. Lines Ltd. announced April 9 that it has collaborated with Shell Trading Rotterdam B.V. to implement a book-and-claim model that enables the indirect generation of environmental-attribute certificates (EACs) derived from the use of low-carbon fuel on vessels operated by third parties.

This initiative applies the theory of the market-based measures accounting framework (MBM framework) published by the international nonprofit organization Smart Freight Centre and utilizes the registry provided by 123Carbon.

Shell facilitated the fuel switch from very-low sulfur fuel oil (VLSFO) to fatty acid methyl esters (FAME), also known as biodiesel, on a vessel not operated by MOL.

The vessel operator received the lifecycle greenhouse-gas (GHG) emission-reduction value attributable to its own operations (typically recognized under scope 1 of the vessel operator) generated by this fuel switch.

At the same time, the vessel operator waived their rights to the lifecycle-GHG emissions-reduction value for their cargo owners (typically recognized under scope 3 of the cargo owners) generated by this fuel switch.

Shell recorded the lifecycle-GHG emission-reductions value for the cargo owners into the 123Carbon registry and allocated it to MOL in accordance with the MBM framework.

MOL received the lifecycle-GHG emission-reduction value for the cargo owners allocated by Shell and, following verification in line with the MBM framework, converted it into EACs.

These EACs are made available to MOL’s customers as part of low-carbon maritime-transport services through MOL’s carbon-insetting and book-and-claim program, “Blue Action Net Zero Alliance.”

Significance of this initiative

MOL and Shell, both of which serve on the governing board of the Book and Claim Community, share a vision of accelerating the decarbonization of transportation through the sound operation of book-and-claim mechanisms.

MOL said it considers this initiative to be significant in the following respects:

• It reaffirmed that the lifecycle-GHG emission-reduction value for the cargo owners generated from a low-carbon fuel switch on a third-party vessel can be credibly allocated to MOL and converted into EACs for its customers, when implemented in line with SFC’s MBM framework.

• It demonstrated the potential for shipping companies to address the varying needs and operational realities of cargo-owning customers pursuing low-carbon maritime-transport services. By utilizing book-and-claim models, stakeholders across the maritime ecosystem can collaborate to create a wider range of credible low-carbon transport solutions.

Since launching its carbon-insetting and book-and-claim program, MOL has engaged in extensive dialogue with cargo owners and freight forwarders.

Through these discussions, MOL has received expectations not only for maritime transport, but also for the provision of EACs across other transport modes such as air and land transport.

MOL said it intends to explore further collaborative opportunities with Shell, a provider of low-carbon fuels and book-and-claim solutions across aviation, marine and land transport, to expand the low-carbon transport options MOL can offer customers.