Neste Corporation, News, 6 October 2023
Neste, ISCC and 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.
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 GHG emission reductions.
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 Science Based Targets initiative’s (SBTi) aviation guidance for SAF use in addressing organizations’ value chain (Scope 3) emissions.
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 SBTi approved decarbonization target and 2050 net-zero target – DHL group aims for 30% 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.
“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 Prof. Dr. Gernot Klepper, Chairman of the ISCC Association.
“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, Vice President Commercial and Technical Management from Neste’s Renewable Aviation business unit.
“At DHL Group, we are already using significant amounts of sustainable aviation fuel to replace kerosine. 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.
Following the successful piloting of the ISCC Credit Transfer System, the system is now ready for public consultation and can afterwards 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.
Sustainable aviation fuel (SAF)
SAF is widely recognized as a key solution to achieve the aviation industry’s goal of net-zero carbon emissions by 2050. By purchasing SAF for their business flights or transports, businesses can reduce their aviation-related greenhouse gas (GHG) emissions. This additional demand beyond regulatory requirements mandating SAF use can also stimulate the acceleration of the scale-up in SAF production.
*) 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".
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Neste in brief
Neste (NESTE, Nasdaq Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. The company refines waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials.
As the world’s leading producer of sustainable aviation fuel and renewable diesel and a forerunner in developing renewable and circular feedstock solutions for polymers and chemicals, Neste helps its customers to reduce their greenhouse gas emissions by at least 20 million tons annually by 2030.
The company’s ambition is to make the Porvoo oil refinery in Finland the most sustainable refinery in Europe by 2030. Neste is committed to reaching carbon-neutral production by 2035, and will reduce the carbon emission intensity of sold products by 50% by 2040. Neste has also set high standards for biodiversity, human rights and the supply chain. The company has consistently been included in the Dow Jones Sustainability Indices and the Global 100 list of the world’s most sustainable companies. In 2022, Neste's revenue stood at EUR 25.7 billion. Read more: neste.com