Scaling low-carbon products with book and claim systems

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Dec 19, 2024

Adam Klauber, Vice President of Sustainability and Digital Supply Chain at World Energy, dives into the intricacies of book and claim systems for low-carbon products. He discusses how these systems can bridge the gap between mismatched suppliers and buyers, especially in sustainable aviation fuel and clean steel markets. Klauber highlights the challenges like double counting and the need for registry interoperability, while advocating for certification's role in building trust. His insights shine a light on how long-term contracts can stabilize emerging low-carbon sectors.

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INSIGHT

Book and Claim vs. Other Tracking Systems

Book and claim systems decouple environmental attributes from physical goods, enabling flexible ownership.
Mass balance systems track molecules, while physical separation is impractical for industrial use.

ANECDOTE

Milk Analogy for Mass Balance Limitations

Shayle Kann uses the milk analogy to explain the limitations of mass balance.
Targeted ownership is crucial, especially for niche products like eFuels.

INSIGHT

RECs: Benefits and Drawbacks

RECs provide additional revenue for renewable energy projects but have additionality issues.
It's difficult to determine the carbon intensity of electrons on a real-time basis.

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A mismatch between suppliers and buyers is making it hard to grow the supply of low-carbon products like cement, steel, and sustainable aviation fuel (SAF).

If you want to produce a product like SAF, you want to find the cheapest place to do it — someplace where there’s cheap, low-carbon hydrogen, for example. But the buyers who have the incentive and money to pay for those products might be halfway across the world.

Or say you’re a supplier of a low-carbon building material. Risk-averse contractors with tight margins may hesitate to pay a green premium — even if the final buyer of the building might be willing to pay extra to cut emissions.

So how do you bridge the gap between the buyers and sellers of low-carbon products?

In this episode, Shayle talks to Adam Klauber, vice president of sustainability and digital supply chain at World Energy, a low-carbon fuels company. They talk about book and claim, a system to separate the environmental attribute (avoided emissions) from the physical good (e.g. fuel). It’s a system that developed in the power sector as renewable energy credits (RECs) and is now spreading to SAFs and other industries. Shayle and Adam cover topics like:

Book and claim versus other systems of tracking environmental attributes, such as mass-balance and physical chain-of-custody
Lessons from the most mature book and claim systems, like RECs and SAF
Key challenges like double counting the interoperability of digital registries and certification
Other industries where book and claim may develop like maritime, trucking, steel, cement, and chemicals

Recommended resources

Roundtable On Sustainable Biomaterials: RSB Book & Claim Manual

World Economic Forum: The Clean Skies for Tomorrow Sustainable Aviation Fuel Certificate (SAFc) Framework

Sustainable Supply Chain Lab: Decarbonizing the Air Transportation Sector: New greenhousegas accounting and insetting guidelines for sustainable aviation fuel

Maersk Mc-Kinney Møller Center for Zero Carbon Shipping: MaritimeBook & Claim

RMI: Structuring Demand for Lower-Carbon Materials: An Initial Assessment of Book and Claim for the Steel and Concrete Sectors

Catalyst: The complex path to market for low-carbon cement

Catalyst is brought to you by EnergyHub. EnergyHub is working with more than 70 utilities across North America to help scale VPP programs to manage load growth, maximize the value of renewables, and deliver flexibility at every level of the grid. To learn more about their Edge DERMS platform and services, go to energyhub.com.