German freight forwarder DB Schenker and MSC Mediterranean Shipping Company have announced a first-of-its-kind biofuel purchase agreement that will to help reduce supply chain emissions via carbon-insetting.
The purchase agreement represents one of the largest carbon-insetting biofuel deals between a freight forwarder and a shipping company, setting out the use of certified sustainable, second-generation biofuels, derived from used cooking oil, instead of conventional fossil-based marine fuel. Second-generation biofuel, also known as advanced biofuel, ensures at least 80% reduction in CO2 equivalents emissions from well-to-wake.
Under the agreement, DB Schenker has committed to using 12,000 metric tons of biofuel component for all of its own consolidated cargo, less-than-container load (LCL), full-container-load (FCL) and refrigerated containers (reefer containers), from MSC Mediterranean Shipping Company.
The amount of biofuel purchased is enough to save an additional 35,000 metric tons of CO2 equivalents (CO2e) along the entire production chain and is the equivalent of around 30,000 standard containers (TEU) shipped with net-zero CO2 emissions, the companies said in a press release. The 12,000 mt of biofuel component will be blended between 20% and 30% with standard bunker fuel, resulting in approximately 50,000 mt of blended biofuel to be used in MSC ships.
Carbon insetting differs from carbon offsetting in that carbon emissions are reduced directly within the shipping value chain, rather than somewhere in the future outside the shipping industry.
DB Schenker said the agreement will allow it to offer its customers an off-the-shelf product for net-zero ocean transport. The entire chain of custody for the carbon insetting process will be independently verified, with the carbon savings certified by external certification organizations. Customers will be able to book regular net-zero ocean transport and receive an annual certificate of their emission reduction for their carbon footprint.
“Together with MSC, we are offering our customers a convenient and clean solution using the latest generation of marine biofuel to help them achieve a real additional reduction in their emissions,” said Thorsten Meincke, Global Board Member for Air & Ocean Freight at DB Schenker. “We are doing this because we firmly believe it is the right thing to do and are therefore paying for biofuel purchases in advance. One thing is certain: the more customers demand climate neutrality throughout supply chains, the faster we achieve clean container ocean freight.”
The offsetting program is part of what MSC is calling its “MSC Biofuel Solution”, where MSC bunkers sustainable biofuel and clients benefit from the CO2 savings.
“Decarbonizing ocean freight cannot be achieved by a single player and requires collaboration between shipping and logistics companies and their customers,” added Caroline Becquart, Senior Vice President of MSC. “MSC Biofuel Solution is our first certified carbon insetting program that reduces emissions in our customers’ supply chains, accelerating the energy transition by creating demand for net-zero-carbon shipping and delivering direct CO2 savings. We’re delighted to partner with DB Schenker, with whom we share similar climate ambitions along our collective journey to net zero.”
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