Answer
A carbon credit is a tradable certificate representing reduction, removal, or avoidance of 1 tonne of CO₂ equivalent (tCO₂e) from the atmosphere.
How Carbon Credits Work (The Core Principle)Quantification: 1 Carbon Credit = 1 metric tonne of CO2e sequestered, reduced, or avoided.
Creation: Projects that actively remove carbon (e.g., reforestation, direct air capture) or prevent emissions (e.g., renewable power, methane capture) are audited and issued verified credits.
Surrender/Offset: Polluting entities purchase these credits on open markets to offset emissions that exceed regulatory limits or internal targets.
The maritime industry is rapidly integrating carbon credit and pricing mechanisms under global and regional environmental mandates:
EU ETS for Maritime:
Applies to ships calling at EU/EEA ports.
Shipping companies have to surrender EU allowances corresponding to their covered emissions. The phase-in is:
2026: 70% of 2025 emissions
2027 onward: 100% of covered emissions
From 2026, CH₄ and N₂O are also included, in addition to CO₂.
IMO Net-Zero Framework (Mid-Term Measures):
At MEPC 83, the IMO introduced a GHG Fuel Intensity (GFI) Standard paired with an economic pricing mechanism.
Ships burning clean fuels below the mandatory GFI target earn Surplus Units (SUs), which can be banked or sold via an IMO registry to non-compliant vessels emitting above the target