From Theory to Practice: Adopting the MBM Framework in Maritime in 5 Steps

The maritime industry stands at a critical juncture in its decarbonization journey. The biofuel market is highly competitive—apart from aviation, maritime competes with the steel and cement industry which are in dire need to access and implement such alternative energy sources. IMO and European regulations are providing for a package of decarbonization and carbon efficiency measures, encompassing both economic as well as technological measures, including low carbon fuel qualities. In order to reach the industry’s ambitious climate goals there is still the need of for additional widespread expansion and adoption of voluntary low emission transportation uptake via market-based measures and a flexible chain of custody approach such as Book and Claim.

One of the key challenges lies in establishing accurate accounting mechanisms for sustainable marine fuel (SMF) volumes across both regulatory and voluntary markets. Ensuring that low carbon fuels’ quantities are properly credited in carbon balance sheets requires precise alignment and verification. To avoid double accounting and to define thresholds of additionality, robust and unified guidelines have been developed and need to be adopted by all industry stakeholders.

Smart Freight Centre (SFC) serves as a hub for knowledge sharing and stakeholder exchange, providing essential guidance for the voluntary maritime market. Well-established and widely recognized standards such as ISO 14083 and the GLEC Framework provide a baseline for all decarbonization measures, on top of which voluntary Book and Claim, market-based actions are built. The publication of the Market Based Measures Framework has outlined steps for integrating low emission solutions, like SMF into accounting practices. SFC’s Market-Based Measures Specification reinforces this framework by outlining essential criteria and facilitating claim verification through a robust Conformity Assessment Scheme.

To ensure accurate and secure SMF integration into accounting systems, the following steps must be followed by Scope 1 (carriers) and Scope 3 reporting companies across the transport chain:

Step 1

Identify a transport service based on the mode of transport – here: maritime, vessel type and size, its fuel needs, and the corresponding transport activity performed on a respective tradelane. 

Step 2

Calculate emissions using the fossil emission factor for the fuel replaced and the emission intensity, relating absolute emissions to the transport activity in TEU-kilometres.

Step 3

Create a Low Emission Transport Service (LETS) by implementing a low emission solution—here, low carbon marine fuel (SMF). It is crucial to understand the reduction potential of the low carbon fuel compared to the respective conventional fossil fuel type and the corresponding emission factor of such.

Step 4

Calculate the absolute emissions based on the fuel needs identified in Step 1 and the replacement of conventional fossil marine fuel with low carbon fuel. Relate the emissions again to the performed transport activity to determine the new emission intensity of the LETS.

Step 5

The new absolute and relative emissions are compared to the baseline to determine the delta. The lower emission profile from the LETS can then be included in the overall carbon accounting of the company reporting in Scope 3. The attribute of the transportation had the LETS not been generated is the “reference case” that is provided to non-participants of the decarbonized transport (the LETS).
Meticulous accounting, along with clear guidance and oversight, is required to prevent false claims and to ensure that both absolute and relative emissions reductions from fuel substitution are accurately reflected—especially when claimed by multiple Scope 3 stakeholders across the value chain equally, such as by Freight Forwarders and Shipper.

The SFC Academy offers numerous courses to improve the application of Market-Based Measures (MBM), such as Book and Claim, and provides solutions tailored to specific modes of transportation. Additionally, SFC communities, like Clean Cargo, drive knowledge exchange on the latest developments in this field and foster collaboration with leading industry experts to co-develop and evolve standards.

Ready to deepen your understanding of maritime freight emissions and learn how to apply these critical calculation frameworks? Enroll in our courses below: 

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