New Report Highlights Potential of Voluntary Insetting to Support Maritime Decarbonisation, Calls for Robust Safeguards

A new report from the UCL Energy Institute, supported by maritime consultancy UMAS, has examined the evolving role of voluntary insetting schemes in accelerating the shipping sector’s transition to zero emissions. The analysis concludes that while insetting can be a valuable tool during the pre-regulatory phase of maritime decarbonisation, its success depends on strong governance, alignment with future regulatory frameworks, and a commitment to long-term climate goals.

The report, authored by Professor Tristan Smith and Dr Nishatabbas Rehmatulla of UCL, along with Dr Haydn Francis of UMAS, synthesizes existing literature and emerging practices related to insetting in the maritime context. Insetting is defined as direct investments that reduce greenhouse gas emissions within an organisation’s own value chain. In the maritime sector, this can involve mechanisms such as book and claim systems, which allow companies to financially support low-emission fuel use even if the fuel is not physically consumed in their operations.

According to the study, insetting schemes can provide early market signals, foster innovation, and help channel private investment into low and zero-emission technologies. This is particularly valuable in the current transitional period, where formal international regulation is on the horizon but not yet fully implemented.

“With the approval of the International Maritime Organization’s Net Zero Framework, there is now a clearer picture of the regulatory path forward,” said Professor Smith. “However, there are still critical gaps that voluntary action can help bridge. One of the main challenges is ensuring alignment between how greenhouse gas reductions are accounted for in both regulatory and voluntary initiatives.”

The report cautions that without proper oversight, insetting could lead to unintended consequences, such as establishing ineffective norms or diverting investment from more impactful decarbonisation strategies. To avoid this, the authors recommend that insetting schemes be grounded in science-based methodologies, governed by credible third parties, and designed to accelerate the uptake of long-term solutions rather than short-term emissions offsetting.

The study also notes that insetting lowers the cost of entry for early adopters, enabling them to experiment with sustainable fuels and technologies in anticipation of stricter regulations. By supporting this early-stage engagement, insetting can play a key role in preparing the industry for future compliance requirements. However, the window for insetting to demonstrate its full catalytic potential is limited. The report stresses that the true value of these schemes will not lie in the number of emissions credits generated but in their ability to accelerate structural change and support a just and effective energy transition across global shipping.