Due to stricter environmental regulations, container shipping companies now must track CO₂e emissions and comply with CSRD regulations.
The European Union’s Corporate Sustainability Reporting Directive (CSRD) mandates structured sustainability reporting. This step aims to ensure businesses disclose their carbon footprint transparently and accurately.
CO₂e tracking is critical for regulatory compliance as it helps companies involved in container shipping reduce their environmental impact while improving operational efficiencies.
In this guide, we explore CSRD compliance in container shipping, strategies for measuring CO₂e emissions, and best practices for reducing emissions in line with sustainability reporting standards (ESRS).
Understanding CO₂e and CSRD in Container Shipping
What is CO₂e and Why is It Important for Container Shipping?
CO₂e (Carbon Dioxide Equivalent) is a metric that quantifies the global warming potential of multiple greenhouse gases (GHG). GHGs include carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O). These gases contribute to climate change, and container shipping plays a significant role in their emissions.
The shipping sector accounts for virtually 3% of global CO₂ emissions. This percentage results from fuel combustion, cargo operations, and supply chain logistics. Reducing CO₂e emissions is essential to meeting Paris Agreement climate targets and ensuring compliance with CSRD regulations.
The Role of CSRD in Container Shipping Sustainability
The Corporate Sustainability Reporting Directive (CSRD) is central to maritime decarbonization. It requires shipping companies to disclose their carbon emissions and climate risks.
Under the European Green Deal, the EU enforces stringent sustainability reporting requirements, aligning with the Paris Agreement and the United Nations Framework Convention on Climate Change (UNFCCC).
Shipping companies operating in EU member states must integrate CO₂e reporting into their management reports. This would ensure transparency in their environmental, social, and governance (ESG) disclosures.
Who Needs to Comply with CSRD in Container Shipping?
Key CSRD Compliance Criteria
CSRD compliance applies to shipping companies and logistics providers operating in EU-regulated markets. Companies must meet at least two of the following three criteria:
- 250+ employees.
- €40 million turnover.
- €20 million total assets.
Additionally, non-EU shipping companies generating over €150 million in EU revenue must comply with CSRD requirements by 2028.
CSRD Compliance Timeline for Container Shipping
- FY 2024: Large EU companies start CSRD-aligned reporting in 2025.
- FY 2025: Other large companies submit their first CSRD reports in 2026.
- FY 2026: Listed SMEs in container shipping begin compliance in 2027.
- FY 2028: Non-EU companies with €150M EU revenue must report by 2029.
Measuring CO₂e in Container Shipping for CSRD Compliance
How to Accurately Calculate the Amount of Carbon Dioxide (CO₂e)
Freight operators can measure CO₂e emissions using several approaches:
- Fuel-based emissions modeling: Calculating CO₂e emissions based on fuel type (e.g., Heavy Fuel Oil, LNG, Biofuels).
- Distance-based calculations: Tracking CO₂ emissions per cargo unit and transport distance.
- Activity-based modeling: Assessing energy usage, cargo weight, and fuel efficiency to ensure precise emissions calculations.
Reporting CO₂e with Global Warming Potential (GWP) Metrics
To ensure CSRD compliance, CO₂e reporting must align with Global Warming Potential (GWP) factors outlined by the Intergovernmental Panel on Climate Change (IPCC). Accurate GHG emissions reporting ensures freight operators disclose their environmental impact in a standardized, approvable format.
European Financial Reporting and Sustainability Standards
The European Financial Reporting Advisory Group (EFRAG) plays a critical role in sustainability reporting. Compliance with European Sustainability Reporting Standards (ESRS) ensures CSRD-aligned environmental impact disclosures, meeting EU reporting requirements for container shipping companies.
Best Practices for Reducing CO₂e in Container Shipping
1. Optimize Fuel Efficiency and Reduce the Amount of CO₂ Emitted
Freight operators can lower carbon intensity by adopting route optimization techniques, slow steaming, and energy-efficient vessel designs. These approaches help minimize fuel consumption and emissions output.
2. Shift to Alternative Fuels and Low-Carbon Technologies
Transitioning to LNG, hydrogen, and ammonia fuels reduces carbon emissions. Shore-side electricity (cold ironing) allows docked vessels to power operations using renewable energy, cutting port emissions.
3. Improve Transparency Across the Supply Chain
Real-time emissions tracking enhances visibility into the environmental impact of shipments. Blockchain technology ensures transparent emissions data across the supply chain.
4. Implement Carbon Offsetting and Emissions Reduction Strategies
Investing in carbon offset projects helps shipping companies meet CSRD requirements. Circular economy initiatives, such as ship recycling, further reduce carbon footprint.
Dockflow offers offsetting solutions through its partnership with Go Forest. For more information, visit our page on emissions tracking.
5. Automate CO₂e Reporting with Digital Tools
Dockflow’s RealCalc ensures CSRD-compliant reporting. It simplifies emission reporting by automating CO₂e calculations and regulatory compliance tracking.
The Business Case for CSRD Compliance in Container Shipping
Strengthening ESG and Corporate Sustainability Reporting
Meeting CSRD requirements enhances ESG credibility, helping companies build trust with investors, clients, and regulators.
Avoiding Financial Penalties and Market Barriers
Failure to comply with CSRD regulations leads to financial penalties and restricted market access. Ensuring alignment with EU environmental standards mitigates these risks.
Gaining a Competitive Advantage in Sustainable Container Shipping
Adopting green shipping practices enhances market positioning. Companies prioritizing low-emission freight solutions attract eco-conscious clients and partners.
Get Started with CSRD-Compliant CO₂e Reporting for Container Shipping
Dockflow’s RealCalc CO₂e emissions calculator simplifies CSRD compliance with automated emissions tracking and real-time CO₂e reporting. Ensure your container shipping operations align with sustainability reporting standards (ESRS) today!
