Neste, DHL Group pilot new ISCC Credit Transfer System to track SAF transactions, related benefits

Photo: Neste Corp.

Neste Corp., the International Sustainability and Carbon Certification System GmbH and DHL Group have joined forces to pioneer and test a system through which airlines, logistics-service providers and end customers such as corporates can credibly report the emission reduction achieved by using sustainable aviation fuel (SAF) to reduce their carbon footprint from air travel and ​transport. As part of this collaboration, the companies piloted the ISCC Credit Transfer System, developed by ISCC, an independent, multistakeholder-driven nonprofit organization with a long history in supply-chain certification.

In the ISCC Credit Transfer System, SAF use and related sustainability benefits—namely greenhouse-gas (GHG) emission reductions—are tracked and transferred via a registry operated by ISCC.

This newly developed system provides full traceability of SAF transactions and related sustainability benefits.

This ensures that companies purchasing SAF and airlines using the fuel are able to credibly and transparently claim emission reductions and use them towards their climate targets, while reducing the risk of incorrect sustainability claims and double counting of SAF volumes and their GHG-emission reductions. In developing the system, ISCC worked closely with key stakeholders from across the aviation sector.

The system is designed to align closely with the requirements set by the Science Based Targets initiative’s aviation guidance for SAF use in addressing organizations’ value-chain (scope 3) emissions. As a leading producer of SAF, Neste tested the system with ISCC in cooperation with DHL Group, a leading global brand in the logistics industry, earlier this year.

For DHL Group, SAF is one of the key levers to achieve its 2030 SBTi-approved decarbonization target and 2050 net-zero target—DHL group aims for 30 percent SAF use by 2030. The pilot involved processing the first SAF transaction through the system:

• Neste utilized one of its ISCC EU-certified SAF deliveries to DHL Group’s airline European Air Transport Leipzig GmbH (EAT) and registered the environmental attributes of those SAF volumes, such as the emission reductions achieved, as “credits” in the ISCC registry

• This enabled EAT, the airline using the SAF, to claim a reduction in its own direct emissions (scope 1), and the corresponding scope 1 credit was retired on behalf of EAT ensuring the credit cannot be used again. The scope 3 credit for the achieved reduction in indirect emissions was transferred to DHL Group’s account in the registry.

• As part of its GoGreen Plus lower-emission transport services to customers, DHL Group was then able to credibly verify the emission savings achieved in the customers’ value-chain scope 3 emissions and the corresponding SAF credit was subsequently retired

Processing this transaction through the registry in line with the rules defined by ISCC helps Neste as well as DHL Group and its customers to ensure full traceability of their SAF transactions and SAF use-related environmental benefits, while avoiding erroneous double counting of emissions reductions along the value chain.

“ISCC has developed the ISCC Credit Transfer System as a natural continuation of our established and globally used supply-chain certification systems,” said Gernot Klepper, chairman of ISCC. “With the ISCC Credit Transfer System, we provide a solution for traceable and credible scopes 1 and 3 emission-reduction claims related to SAF use.”

Jonathan Wood, an executive with Neste, added, “SAF is a key solution to reduce aviation-related GHG emissions but it’s also critical for airlines, freight forwarders and shippers, and corporate end-customers to be able to credibly and transparently report their SAF use and related emission reductions. The new ISCC Credit Transfer System is a big step forward as it also integrates with existing sustainability certification systems.”

Klaus Hufschlag, DHL Group’s senior vice president of sustainability reporting and controlling, said, “At DHL Group, we are already using significant amounts of sustainable aviation fuel to replace kerosine. It is very important for us that there is a registry that ensures transparency and reliability of sustainability claims related to the use of SAF. A registry that regulates all necessary information from fuel suppliers as well as producers and provides traceability along the value chain is key for credible transactions and builds the basis for a trustworthy book-and-claim mechanism.”

Following the successful piloting of the ISCC Credit Transfer System, the system is now ready for public consultation and can afterwards be used by all companies—airlines, logistics-service providers and corporate end-customers—wishing to ensure credible and transparent reporting of emission reductions from the use of SAF.

SAF is widely recognized as a key solution to achieve the aviation industry’s goal of net-zero carbon emissions by 2050.

By purchasing SAF for their business flights or transports, businesses can reduce their aviation-related GHG emissions.

This additional demand beyond regulatory requirements mandating SAF use can also stimulate acceleration of scale-up in SAF production.