Finland-headed oil refiner and renewable products major Neste Oyj, International Sustainability and Carbon Certification (ISCC), and global logistics major DHL Group joined forces to pioneer and test a system through which airlines, logistics service providers, and end customers such as corporates can credibly report the emission reduction achieved by using sustainable aviation fuel (SAF) to reduce their carbon footprint from air travel and transport.
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As part of this collaboration, the companies piloted the ISCC Credit Transfer System, developed by ISCC, an independent, multi-stakeholder-driven non-profit organization with a long history in supply chain certification.
In the ISCC Credit Transfer System, SAF use and related sustainability benefits, namely greenhouse gas (GHG) emission reductions, are tracked and transferred via a registry operated by ISCC.
This newly developed system provides full traceability of SAF transactions and related sustainability benefits.
This ensures that companies purchasing SAF and airlines using the fuel are able to credibly and transparently claim emission reductions and use them towards their climate targets while reducing the risk of incorrect sustainability claims and double counting of SAF volumes and their greenhouse gas (GHG) emission reductions.
ISCC has developed the ISCC Credit Transfer System as a natural continuation of our established and globally used supply chain certification systems. With the ISCC Credit Transfer System, we provide a solution for traceable and credible Scope 1 and 3 emission reduction claims related to SAF use, said Professor Dr Gernot Klepper, Chairman of the ISCC Association.
Collaboration with key stakeholders
In developing the system, ISCC worked closely with key stakeholders from across the aviation sector.
The system is designed to align closely with the requirements set by the SBTi’s aviation guidance for SAF use in addressing organizations’ value chain (Scope 3) emissions.
Airlines report Scope 1 for direct emissions of fuel use, as well as Scope 3 category 3 “Fuel- and Energy-Related Activities Not Included in Scope 1 or Scope 2”.
As the leading producer of SAF, Neste tested the system with ISCC in cooperation with DHL Group, the leading global brand in the logistics industry, earlier this year.
For DHL Group, SAF is one of the key levers to achieve its 2030 Science-Based Targets initiative (SBTi) approved decarbonization target and 2050 net-zero target – DHL group aims for 30 percent SAF use by 2030.
The pilot involved processing the first SAF transaction through the system:
- Neste utilized one of its ISCC EU-certified SAF deliveries to DHL Group’s airline EAT and registered the environmental attributes of those SAF volumes, such as the emission reductions achieved, as “credits” in the ISCC registry.
- This enabled EAT, the airline using the SAF, to claim a reduction in its own direct emissions (Scope 1), and the corresponding Scope 1 credit was retired on behalf of EAT ensuring the credit cannot be used again.
- The Scope 3 credit for the achieved reduction in indirect emissions was transferred to DHL Groups’ account in the registry. As part of their GoGreen Plus lower-emission transport services to customers, DHL Group was then able to credibly verify the emission savings achieved in the customers’ value chain Scope 3 emissions, and the corresponding SAF credit was subsequently retired.
Processing this transaction through the registry in line with the rules defined by ISCC helps Neste as well as DHL Group and its customers to ensure full traceability of their SAF transactions and SAF use-related environmental benefits while avoiding erroneous double counting of emissions reductions along the value chain.
At DHL Group, we are already using significant amounts of sustainable aviation fuel to replace kerosene. It is very important for us that there is a registry that ensures transparency and reliability of sustainability claims related to the use of SAF. A registry that regulates all necessary information from fuel suppliers as well as producers and provides traceability along the value chain is key for credible transactions and builds the basis for a trustworthy book and claim mechanism, stated Dr Klaus Hufschlag, SVP Sustainability Reporting & Controlling at DHL Group.
Public consultation next step
Following the successful piloting of the ISCC Credit Transfer System, the system is now ready for public consultation and can afterward be used by all companies – airlines, logistic service providers, and corporate end-customers – wishing to ensure credible and transparent reporting of emission reductions from the use of SAF.
SAF is a key solution to reduce aviation-related greenhouse gas emissions but it’s also critical for airlines, freight forwarders and shippers, and corporate end-customers to be able to credibly and transparently report their SAF use and related emission reductions. The new ISCC Credit Transfer System is a big step forward as it also integrates with existing sustainability certification systems, said Jonathan Wood, VP of Commercial and Technical Management from Neste’s Renewable Aviation business unit.
