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Voluntary Carbon Credits in Shipping

Voluntary carbon credits in shipping describes the use of credits from the Voluntary Carbon Market (VCM) by shipping companies and cargo buyers to claim climate action beyond their regulatory compliance obligations under MARPOL Annex VI, the IMO Net-Zero Framework, EU ETS Maritime and FuelEU Maritime. Each credit represents one tonne of CO₂-equivalent reduced or removed by a project verified under an independent voluntary standard such as Verra (the Verified Carbon Standard, VCS), the Gold Standard, the American Carbon Registry (ACR) or the Climate Action Reserve (CAR). The voluntary market grew rapidly through 2018 to 2022 as shipping companies and cargo buyers used credits to support marketing claims of carbon-neutral shipping or climate-neutral cargo; by 2022 the global voluntary market reached approximately USD 2 billion in transaction value with maritime-related credits accounting for approximately 5% of the total. The 2022 to 2024 period saw substantial reform of the voluntary market following high-profile credibility crises (notably the 2022 to 2023 investigations into REDD+ forest credits issued by Verra), culminating in the Integrity Council for the Voluntary Carbon Market (ICVCM) publishing its Core Carbon Principles (CCPs) in March 2023 and the Science Based Targets initiative (SBTi) issuing a 2024 position paper that significantly tightened the conditions under which voluntary credits can be used in maritime decarbonisation claims. As of end-2024, voluntary credits remain a secondary tool in shipping decarbonisation: most major shipping companies and Sea Cargo Charter signatories prefer regulatory compliance, fuel switching and operational efficiency over credit-based offsets, with credits used principally for the residual emissions that cannot economically be eliminated through other means. Maritime-specific voluntary credit projects include shore power infrastructure at developing-country ports, alternative-fuel bunkering infrastructure (green methanol, green ammonia, bio-LNG), book-and-claim arrangements for low-carbon fuels (where the cargo buyer pays a premium that subsidises the use of low-carbon fuel on a different ship), and cargo-buyer-attributed credits for emissions reductions on chartered voyages. ShipCalculators.com hosts the principal computational tools that bridge the voluntary credit framework to the underlying emissions data: the GFI attained calculator computes the well-to-wake intensity that voluntary credits aim to offset; the methane slip CO₂-equivalent calculator and LNG well-to-wake calculator provide the per-fuel intensities used in book-and-claim arrangements; the SEEMP combined operational measures calculator supports the calculation of operational reductions that may underpin maritime-specific credits. A full listing is available in the calculator catalogue.

Contents

Background and history

Origins of the voluntary carbon market (1990s to 2010s)

The voluntary carbon market (VCM) developed in the 1990s as a parallel mechanism to the Kyoto Protocol’s compliance carbon market. The VCM differs from compliance markets (like the EU ETS) in that:

  • Participation is voluntary: no regulatory obligation forces buyers to retire credits.
  • Credits are issued by independent standards (Verra, Gold Standard, etc.) rather than by governmental regulators.
  • Credits can be used for any climate-related claim (carbon neutrality, net-zero pathways, ESG reporting, customer-facing marketing), but they do not discharge any compliance obligation under cap-and-trade systems.

The VCM grew steadily from approximately USD 100 million in 2007 to approximately USD 2 billion in 2022, peaking in 2021 to 2022 with significant corporate demand from net-zero commitments.

Maritime use through 2018 to 2022

The first systematic maritime use of voluntary credits emerged in the late 2010s, driven by:

  • Cargo buyer climate commitments: major commodity traders (Cargill, Trafigura) and consumer-goods companies (Unilever, IKEA) committed to “carbon-neutral cargo” pathways requiring credit purchases for the unabated portion of their freight emissions.
  • Container line marketing: Maersk, MSC, CMA CGM, Hapag-Lloyd offered “carbon-neutral” container service tiers using credits to offset the per-container emissions.
  • Cruise line offerings: Royal Caribbean, Carnival, Norwegian Cruise Line offered passenger-funded offset options at booking time.
  • Bunker fuel offsetting: some bunker fuel suppliers (KPI OceanConnect, Bunker Holding, Peninsula) offered credit-bundled fuel sales.

By 2022, maritime-related credit purchases reached approximately 5% of total VCM transaction volume (~ USD 100 million). The dominant credit types were:

  • REDD+ forest conservation credits (the most widely used due to low cost and large supply).
  • Renewable energy credits (typically Indian or Chinese wind and solar projects).
  • Methane reduction credits (landfill gas, agricultural methane).
  • Cookstove credits (replacing biomass cooking with cleaner fuels in developing countries).

2022 to 2023: credibility crisis

The voluntary market experienced a significant credibility crisis in 2022 to 2023:

  • The Guardian / Die Zeit / SourceMaterial investigation (January 2023) found that more than 90% of the rainforest carbon offsets from Verra (the world’s largest VCS) were “phantom credits” that did not represent genuine emissions reductions.
  • University of Cambridge studies (2022 to 2023) confirmed similar findings for many cookstove and renewable energy credit projects.
  • Several major buyers withdrew from the voluntary market: Apple, Disney, Shell publicly distanced themselves from voluntary credits as a primary climate strategy.
  • Verra suspended approximately 30% of its forest credits pending re-validation.

The crisis prompted the establishment of the Integrity Council for the Voluntary Carbon Market (ICVCM) as a multi-stakeholder body to set integrity standards.

March 2023: ICVCM Core Carbon Principles

The ICVCM published its Core Carbon Principles (CCPs) in March 2023, comprising 10 principles that any credit must meet to be considered “high-integrity”:

  1. Effective governance: credit programme must have transparent governance.
  2. Tracking: secure registry preventing double-counting.
  3. Transparency: public disclosure of project details.
  4. Robust independent third-party validation.
  5. Additionality: emissions reductions would not have occurred without credit revenue.
  6. Permanence: reductions must be durable.
  7. Robust quantification: conservative emissions reduction calculation.
  8. No double-counting.
  9. Sustainable development benefits: contribution to UN SDGs.
  10. Contribution to net-zero transition.

The ICVCM has since assessed major VCM standards (Verra VCS, Gold Standard, ACR, CAR) against the CCPs, with CCP-compliant credit categories receiving a “CCP-Approved” badge that buyers can use as a quality marker.

2024: SBTi maritime position

In April 2024 the Science Based Targets initiative (SBTi) published a position paper on the use of voluntary credits in scope-3 emissions claims. The paper:

  • Confirmed that voluntary credits may not be used to offset scope-1 emissions in SBTi-validated targets (the strictest position in the industry).
  • Permitted limited use of credits for scope-3 residual emissions that genuinely cannot be eliminated through other means (e.g. residual aviation/maritime emissions for cargo buyers).
  • Required CCP-approved credits where credits are used.
  • Excluded avoidance credits (REDD+, renewable energy in countries with substantial existing renewable build-out).

The SBTi position has significantly constrained the use of voluntary credits in shipping companies’ own decarbonisation claims, while still permitting cargo-buyer use for residual emissions.

Standards and credit types

Verra (the Verified Carbon Standard, VCS)

Verra (formerly Verified Carbon Standard) is the world’s largest voluntary carbon standard, accounting for approximately 75% of the VCM by credit issuance volume (approximately 1.2 billion credits issued cumulatively through 2024). Verra was founded in 2007 as a non-profit; it operates the Verra Registry through the APX Registry technical platform.

Maritime-related Verra methodologies include:

  • VM0028 Methodology for Reducing Emissions from Shipping: covers fuel-switching and operational efficiency projects for ships.
  • VM0042 Methodology for Improved Agricultural Land Management: indirectly relevant for biofuels feedstocks.
  • VM0035 Methodology for Methane Emission Reduction: relevant for LNG dual-fuel methane slip mitigation.

Verra is in the process of revising its REDD+ methodologies in response to the 2022 to 2023 credibility crisis.

Gold Standard

The Gold Standard is a Geneva-based voluntary standard founded in 2003 by WWF and other NGOs. It accounts for approximately 12% of the VCM and is widely regarded as the highest-integrity standard.

Maritime-related Gold Standard methodologies include:

  • GS Methodology for Energy Efficiency: covers ship operational efficiency improvements.
  • GS Methodology for Renewable Energy: covers shore power and alternative-fuel infrastructure.

American Carbon Registry (ACR)

The American Carbon Registry, operated by Winrock International, accounts for approximately 5% of the VCM. ACR specialises in US domestic projects and has been an early adopter of CCP-aligned methodologies.

Climate Action Reserve (CAR)

The Climate Action Reserve, based in Los Angeles, accounts for approximately 4% of the VCM. CAR was founded in 2001 by the California state government as a state-level standard; it now operates internationally with a focus on California-related projects.

Maritime-specific project types

Shore power infrastructure

Shore power projects at developing-country ports can generate voluntary credits under the GS Methodology for Renewable Energy or the VM0028 Methodology. The credit volume is calculated as the avoided emissions from auxiliary engines that would otherwise run during the at-berth period.

Notable shore power projects:

  • Port of Mombasa shore power retrofit (2024 to 2026): Verra-registered project supported by a consortium including the Kenya Ports Authority, World Bank IFC, and Maersk. Expected to generate approximately 50,000 tonnes CO₂e per year of credits.
  • Port of Karachi shore power infrastructure (under development 2025 to 2027): Gold Standard-registered project.

Alternative-fuel bunkering infrastructure

Voluntary credits can be issued for the construction of low-carbon bunker fuel infrastructure that would not otherwise be commercially viable. Notable examples:

  • Bio-LNG facility at Port of Genoa (Verra-registered, 2024 to 2030 crediting period): supports Mediterranean ferry methanol transition.
  • Green ammonia bunkering infrastructure at Singapore (Gold Standard-registered, 2025 to 2030): supports the Asia-Europe corridor.

Book-and-claim arrangements

Book-and-claim is a market mechanism widely used in shipping to allow cargo buyers to support low-carbon fuel use on ships they don’t directly control:

  • The cargo buyer pays a premium for “carbon-neutral cargo” or “low-carbon shipping”.
  • The premium funds the use of low-carbon fuel on a participating ship (which may be transporting different cargo).
  • The cargo buyer claims the resulting emissions reduction in their corporate inventory.
  • A central registry (typically operated by a class society or specialised registry) tracks the credit issuance and retirement to prevent double-counting.

The leading book-and-claim platforms include:

  • GoodShipping (operated by GoodFuels): allows cargo buyers to claim biofuel use on selected ships.
  • MaerskECO Delivery: Maersk’s own book-and-claim service for Maersk container customers.
  • CMA CGM ACT+: CMA CGM’s book-and-claim for biofuel and methanol use.
  • DP World CARE: Multi-line book-and-claim for major DP World container terminals.

Cargo-buyer attributed credits

Some cargo buyers issue insetting credits (rather than offsetting credits) for emissions reductions achieved on their chartered ships. Insetting differs from offsetting in that the reductions occur within the buyer’s value chain (scope 3) rather than externally. Insetting is generally regarded as more credible than offsetting and is preferred by SBTi-aligned cargo buyers.

Use cases and case studies

Maersk ECO Delivery (2019 to 2024)

Maersk launched ECO Delivery in 2019 as a book-and-claim service offering customers carbon-neutral container shipping. The service:

  • Charged a premium of approximately USD 50 to 200 per TEU depending on the route and carbon-neutral level chosen.
  • Funded the use of biofuel (B30 to B100 blends) on participating Maersk vessels.
  • Generated approximately 2 million TEU of carbon-neutral shipping in 2023, equivalent to approximately 250,000 tonnes of CO₂e reductions.
  • Was used by major cargo buyers including Volvo, BMW, IKEA, H&M, P&G, Unilever, Microsoft.

Maersk’s 2024 annual report indicated that ECO Delivery is being phased out in favour of direct fuel-switching arrangements (where customers pay for actual low-carbon fuel use on specific routes rather than a more abstract book-and-claim).

Trafigura’s voluntary credit programme

Trafigura, the major commodity trader, has used voluntary credits as part of its broader decarbonisation strategy:

  • Annual credit retirement: approximately 1.2 million credits in 2023 (covering scope-1 emissions from Trafigura’s wholly-owned shipping fleet plus a portion of scope-3 chartered shipping emissions).
  • Credit type mix: shifted from primarily REDD+ in 2020 to 2022 to a mix of CCP-approved credits (forest conservation + cookstove + renewable energy) from 2023 onwards.
  • 2024 announcement: Trafigura is reducing its voluntary credit reliance by 50% over 2024 to 2026 in favour of direct fuel-switching investments.

Cargill’s avoided-deforestation programme

Cargill operates a voluntary credit programme focused on avoided deforestation in soy supply chains in Brazil. While not directly maritime, the credits are used in Cargill’s overall climate strategy including its Sea Cargo Charter alignment reporting.

Critical assessment

Credibility concerns

The voluntary credit market has faced sustained credibility concerns:

  • Additionality challenges: many credit projects (especially renewable energy in countries with mature renewables markets) are not clearly “additional” to what would have happened anyway.
  • Permanence concerns: forest credits are vulnerable to wildfire, illegal logging and political instability.
  • Quantification uncertainty: the avoided-emissions baseline is often subject to significant assumption sensitivity.
  • Greenwashing risk: companies using credits to claim carbon neutrality without simultaneous emissions reduction efforts have faced reputational and regulatory backlash.

Regulatory response

Several jurisdictions have introduced or proposed restrictions on credit-based climate claims:

  • EU Green Claims Directive (2024 proposal): would require companies making “carbon-neutral” claims to substantiate the underlying emissions reductions, with credit-based claims subject to strict integrity criteria.
  • EU Corporate Sustainability Due Diligence Directive (CSDDD, 2024): requires large companies to address climate impacts within their value chains, with credit-based claims explicitly insufficient.
  • UK Competition and Markets Authority (2024): published guidance restricting carbon-neutral claims that rely primarily on credit purchases.
  • California Cleanups (AB 1305, 2024): requires US companies making climate claims in California to disclose the credit projects they use and their integrity assessment.

Maritime sector position

The maritime industry’s position on voluntary credits has evolved significantly:

  • 2018 to 2022: enthusiasm; many major lines and traders launched credit-based services.
  • 2023 to 2024: scepticism; following the credibility crisis, most major lines have de-emphasised voluntary credits in favour of direct fuel-switching, operational efficiency and regulatory compliance.
  • 2024 onwards: residual use only; voluntary credits are now used principally for the small residual emissions that cannot economically be eliminated through other means.

The BIMCO 2024 Voluntary Credit Guidance (issued November 2024) recommends that shipping companies:

  • Prioritise regulatory compliance and direct fuel switching over voluntary credits.
  • Use only CCP-approved credits where credits are used.
  • Disclose credit use transparently in annual sustainability reports.
  • Do not use credits to claim carbon neutrality at the company or fleet level.

Future outlook

By 2030 the voluntary credit market is expected to:

  • Have substantially reformed in line with the ICVCM CCPs and SBTi position.
  • Have shrunk as a share of total climate finance, from peak ~USD 2 billion in 2022 to ~USD 1 billion by 2030 (in real terms).
  • Have shifted toward removal credits (direct air capture + storage, biochar, enhanced rock weathering) and away from avoidance credits (REDD+, renewable energy).
  • Continue to play a niche role in shipping for residual emissions, book-and-claim arrangements and developing-country infrastructure projects.

The dominant maritime decarbonisation pathway will increasingly be direct fuel switching (LNG, methanol, ammonia, biofuel, hydrogen) supported by IMO Net-Zero Framework, EU ETS Maritime and FuelEU Maritime regulatory drivers, with voluntary credits as a complement rather than a primary tool.

See also

Additional calculators:

Additional related wiki articles:

References

  1. Verra. VM0028 Methodology for Reducing Emissions from Shipping. Verra, Washington, 2018.
  2. Gold Standard. Annual Report 2024. Gold Standard, Geneva, 2024.
  3. American Carbon Registry. Standards and Methodologies. ACR, Winrock International, 2024.
  4. Climate Action Reserve. Annual Report 2024. CAR, Los Angeles, 2024.
  5. Integrity Council for the Voluntary Carbon Market (ICVCM). Core Carbon Principles. ICVCM, March 2023.
  6. Science Based Targets initiative (SBTi). Position on the Use of Voluntary Carbon Credits in Scope-3 Emissions Claims. SBTi, April 2024.
  7. The Guardian, Die Zeit, SourceMaterial. Investigation: Phantom Forest Credits. January 2023.
  8. University of Cambridge. Voluntary Carbon Market Effectiveness Studies. 2022 to 2023.
  9. Maersk. ECO Delivery Service Annual Report. A.P. Møller-Mærsk, Copenhagen, annual editions 2020 to 2024.
  10. Trafigura. Sustainability Report 2024. Trafigura Group, Geneva, 2024.
  11. CMA CGM. ACT+ Service Annual Report. CMA CGM, Marseille, 2024.
  12. Hapag-Lloyd. Annual Sustainability Report 2024. Hapag-Lloyd, Hamburg, 2024.
  13. BIMCO. Voluntary Credit Guidance for Shipping Companies. BIMCO, Copenhagen, November 2024.
  14. International Chamber of Shipping. ICS Position on Voluntary Carbon Markets. ICS, London, 2024.
  15. European Commission. Proposal for a Directive on Substantiating Green Claims (Green Claims Directive). COM(2023) 166 final, March 2023.
  16. UK Competition and Markets Authority. Guidance on Environmental Claims in Marketing. CMA, London, 2024 update.
  17. California State Senate. AB 1305 (Voluntary Carbon Market Disclosures Act). Sacramento, 2024.
  18. Ecosystem Marketplace. State of the Voluntary Carbon Markets 2024. Forest Trends, Washington, 2024.
  19. McKinsey & Company. Voluntary Carbon Markets: Future Outlook to 2030. McKinsey, 2023.

Further reading