A Playbook for Solving the Scope 3 Puzzle with Insets
Our new guide to understanding and using carbon insets is a powerful and engaging resource for anyone interested in learning about insets. Download From Talk to Transformation, Meeting Sustainability Goals with Carbon Insets here.
Managing Scope 3 emissions can seem like an imposing — or even impossible — task. There’s a lot you can’t control during day-to-day operations. Consider a few questions that don’t have easy answers:
- Are our employees flying on planes that use sustainable aviation fuel (SAF)?
- Are our goods being shipped using biofuels?
- Are our facilities built with green steel and cement?
Clean fuels need to be used in the real world to make an impact. But how can a company benefit from the environmental attributes of a fuel like SAF if it has little control over the downstream energy and fuel sources in its supply chain? You might think that any viable solution for meaningful decarbonization would be too complex to pursue, or impractical to put into wide use.
But there is an approach to managing Scope 3 emissions that is both simple and practical — carbon “insets.”
Insets and the Stand-Alone Value of Environmental Attributes
Insets are emissions reductions that occur within the same sector where the emissions are produced, even if they don’t reduce the specific emissions of the customer that buys them. This enables businesses to purchase insets that mirror their operations, such as a firm using sustainable aviation fuel certificates (SAFc) to compensate for its business travel or cargo flight emissions, or a construction company using insets that support more responsible cement manufacturing.
Insets help solve an important logistical reality: shipping clean fuel around the world can add to the carbon intensity of the fuel — while increasing operational complexity and costs. Ultimately, it makes the most sense for clean fuels to be used as close as possible to where they’re made, since this reduces logistics complexity, costs, and transportation emissions.
Emissions Saved Anywhere are Emissions Saved Everywhere
Here’s real-world example that illustrates how the SAFc mechanism works. A few miles east of Los Angeles International Airport (LAX) is a SAF facility that was the first plant in the world to produce SAF at commercial scale. The bustling 65-acre facility can produce advanced biofuel with a similar chemical makeup to conventional jet fuel and that meets ASTM standards for commercial aviation.
The facility receives tanks of inedible agricultural waste, such as vegetable oils and waste tallow, from farmers and ranchers. The waste products are melted down into a liquid that can be used as a “feedstock” for SAF, which is then pumped into a processing unit that uses hydrotreating to strip out contaminants. The first-stage material, known as paraffinic diesel, is then cracked and isomerized into clean, renewable fuels. Most of the SAF then enters the same local airport fuel system as conventional jet fuel, rather than being shipped off to specific customers around the world.
Using the SAF in Southern California benefits the local environment and air quality by reducing pollution from sulfur oxides (SOx), nitrogen oxides (NOx), and particulate matter. But on a broader level, emissions saved anywhere are emissions saved everywhere. The companies that purchase SAFc make it possible to produce a clean product that delivers environmental benefits regardless of where the fuel is delivered or which aircraft burn it. And the demand they demonstrate encourages investment in new infrastructure to produce more SAF in more locations worldwide.
This process — whether applied to aviation or to other hard-to-abate industries — illustrates a growing approach for the clean fuels market, where the environmental attributes are separated from the physical product and sold separately as carbon insets.
This is not an entirely new economic concept. For example, utility customers who sign up for a community solar farm usually don’t consume solar power generated on their own rooftops. Instead, they pay to ensure that a certain amount of solar energy is generated — and that it supplants electricity that might otherwise come from a more polluting source. But, more than likely, the clean energy that is generated will go into the grid to be used close to the source.
Ensuring Trust with a Digital Chain of Custody
Customers need a practical tool to make insets easy to calculate and trace. That’s where Book & Claim comes in. Book & Claim is a transparent and flexible chain-of-custody model that allows companies to purchase carbon insets, claim the environmental benefits of biofuels, and reduce supply-chain emissions in the most efficient and cost-effective way.
The diagram below provides a high-level snapshot of how Book & Claim works — and how it creates a digital chain of custody to track environmental attributes as the physical fuel moves through the supply chain.
Why it Matters
With the innovation of insets delivered using a Book & Claim system, companies can mitigate their Scope 3 aviation emissions, even when they lack control over the fuel being used in the planes that fly their people or goods around the world. This ability to separate environmental attributes from a physical fuel removes fundamental barriers that otherwise put supply-chain decarbonization out of reach for most companies.
Whether your organization is already investing in biofuels like SAF or you are just coming on board, new technology and economic forces have leveled the playing field. With insets, responsible businesses can more easily turn sustainability goals that once seemed hard to attain into achievable decarbonization solutions.
Download From Talk to Transformation, Meeting Sustainability Goals with Carbon Insets here.
