World News
Carbon Insetting Can Bridge Pre-2028 IMO Gap, But Biofuel Reliance Could Backfire
A new report from the UCL Energy Institute and maritime consultancy UMAS highlights the potential of voluntary insetting schemes to support shipping's decarbonisation.
Yet it warns that leaning too heavily on biofuels could stall the shift to scalable zero-emission fuels.
With the IMO expected to formally adopt its Net-Zero Framework (NZF) in October, and the first monitoring year set for 2028, the regulatory pathway is becoming clearer - but the transition will take time, the report released on Friday said.
In the meantime, insetting offers shipowners and cargo owners a way to fund emissions reductions within their own value chains.
The report notes that most current schemes favour biofuels due to their drop-in compatibility and cost-effectiveness.
While helpful in the short term, biofuels face scalability constraints and rising competition from other hard-to-abate sectors. Overdependence could lock the industry into transitional fuels and divert investment from long-term options like green hydrogen and ammonia.
"With the approval of IMO's NZF, there's now greater, if not perfect, clarity on the role regulation will play in shipping's energy transition and therefore key gaps for voluntary action to assist with," Professor Tristan Smith of UCL Energy Institute said.
The study concludes that insetting's true value lies in how effectively it accelerates shipping's shift to zero emissions -- not in the emissions credits it generates.