The maritime industry is entering a period of major change as global efforts intensify to cut greenhouse gas (GHG) emissions. The International Energy Agency (IEA) has highlighted the need for clean energy solutions—especially green hydrogen and ammonia—to help shipping cut emissions and reach climate goals.
Ships now emit about 3% of global greenhouse gases (GHG). So, there’s growing pressure to decarbonize fast. The IEA recently stated that we need urgent improvements in storage, safety rules, and policy support. These changes are essential for making these fuels viable for widespread use.
The industry’s goal is to reach zero emissions by 2050. However, the road to decarbonization is complex and demands progress in technology, safety, and policy. This is where green hydrogen and ammonia come in.
The Promise of Green Hydrogen and Ammonia
Green hydrogen is made using renewable energy, like wind or solar, to split water into hydrogen and oxygen. Ammonia, which can be made from green hydrogen, is another low-carbon fuel option.
Both fuels provide a cleaner option than fossil fuels. This is especially true for long-distance shipping, where battery-powered ships aren’t practical yet. These fuels are essential to meeting the International Maritime Organization’s (IMO) climate targets.
The IMO aims to reduce shipping’s total annual emissions by at least 50% by 2050 compared to 2008 levels, and to peak emissions as soon as possible. Achieving these targets will require the wide-scale adoption of alternative fuels.
The IEA highlights that green hydrogen and ammonia can support these goals. However, industry players must tackle several key challenges:
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Storage Challenges: Hydrogen is difficult to store due to its low energy density. It needs high-pressure tanks or must be cooled to cryogenic temperatures. Research is focused on safer and smaller storage methods. This includes metal hydride systems and compressed gas solutions.
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Safety Concerns: Hydrogen is highly flammable, while ammonia is toxic. To avoid risks, ships need new safety systems, and crew members must receive updated training. The development of international safety standards will help guide proper handling and storage.
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Cost Barriers: Green hydrogen is currently 2-3 times more expensive than traditional marine fuels. Ammonia is also costly to produce at scale. According to BloombergNEF, costs could drop by 2030 with scaling and technology advances. Reducing these costs will require financial support from governments and private investors.
Bloomberg further estimates that clean ammonia could represent 13% of global ammonia supply by 2030.
DNV, a global maritime classification society, says ammonia and hydrogen could be 60% of shipping fuel by 2050. This depends on policies that support their growth. Yet today, they account for less than 0.1% of total fuel use at sea.
Both clean fuels’ costs would go down by 2050, per IRENA’s projections.
Boosting Maritime Decarbonization Through Policy
Policy support is critical to drive the shift toward cleaner fuels in shipping. Experts and industry groups are calling on governments and international regulators to create favorable conditions for investment in green hydrogen and ammonia.
Proposed policy measures include:
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Clean Fuel Subsidies. Direct incentives can help shipowners adopt low-emission technologies and offset higher fuel costs.
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R&D Grants. Public funding can support research into fuel storage, fuel cells, bunkering infrastructure, and vessel designs optimized for alternative fuels.
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Carbon Pricing. Implementing a carbon tax or emissions trading system in the maritime sector can make green fuels more competitive.
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International Standards. Harmonized regulations across countries can prevent market fragmentation and ensure global progress.
Some countries are already taking steps. Norway has introduced zero-emission requirements for cruise ships in its fjords by 2026. The EU has included shipping in its Emissions Trading System (ETS) starting in 2024, requiring ships to pay for carbon pollution. The bloc has also launched the “FuelEU Maritime” initiative to promote green fuel adoption.
The IEA and IMO are also working with ports, shipbuilders, and fuel producers to design a shared roadmap for green fuel adoption. In addition to cargo vessels, ferries and cruise ships are being looked at as early candidates for green fuel use.
GHG Emissions and the Urgency to Act
The shipping industry emits over 1 billion tonnes of CO2 annually. Without action, emissions could rise by 50% to 250% by 2050, according to IMO projections. The IEC stresses that if these emissions are not reduced, they can hinder global efforts to limit warming to 1.5°C above pre-industrial levels.
To stay on track, the shipping industry must embrace low-carbon technologies and provide clear emissions reports. Many digital tools are being created to track emissions in real time. This helps companies stay accountable and make smart choices.
Some shipping companies have already begun testing hydrogen and ammonia-powered vessels. NYK Line and Maersk are testing ammonia-fueled ships. Others are looking into hybrid vessels that mix green fuels and batteries.
The Poseidon Principles, signed by over 30 global banks, require shipping lenders to align their portfolios with climate goals. This initiative puts additional pressure on companies to invest in cleaner ships or risk losing access to finance.
Trends Shaping the Clean Fuel Market
The market for green fuels is expanding rapidly, driven by both regulation and investor interest. IEA forecasts say the global hydrogen demand could reach over 6 Mtpa by 2030.
By 2050, the total demand for green hydrogen will reach 46 million tonnes, according to IRENA. About 74% of this will be used to produce ammonia, 16% for making methanol, and the remaining 10% will be used directly as hydrogen.
Ammonia demand is also expected to rise, especially in sectors like shipping and power generation. It can grow at an annual rate of 70% through 2030.
Key developments include:
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EU Green Deal Initiatives. New climate laws are allocating billions of euros to fund clean energy, including maritime fuel infrastructure.
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Private Investments. Companies such as BP, Shell, and TotalEnergies are investing in hydrogen production and supply chains. Maersk, the second-largest shipping company in the world, is investing in vessels powered by methanol and hydrogen. Other firms, like NYK Line and MOL from Japan, are testing ammonia-powered ships.
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Green Corridors. More than 20 “green shipping corridors” are being planned worldwide. These include routes between Asia and Europe, and across the Atlantic. These corridors will enable ships to refuel with green fuels and test low-emission technologies.
These initiatives show progress. But to fully implement them, we need stronger partnerships. This includes working with governments, industries, and environmental groups.
In January 2024, the Global Maritime Forum announced that over 200 companies had joined efforts to decarbonize shipping, focusing on scalable fuel alternatives and supportive regulations.
Navigating Toward Zero Emissions
Decarbonizing the maritime sector is no longer optional. It’s a needed change due to environmental issues, investor demands, and new rules. The transition needs big investments and teamwork. But it also offers chances for new ideas and long-term savings.
The push for green hydrogen and ammonia is helping to reshape the industry’s future. These fuels offer a path to meet zero-emission targets while supporting cleaner global trade. With ongoing backing from governments, industry players, and the public, the move for maritime decarbonization is speeding up.
The post Shipping Toward Net Zero: Maritime Turns to Green Hydrogen and Ammonia appeared first on Carbon Credits.
The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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