How to use Carbon Credits for your fleet in India

Discover how your business can earn carbon credits, how they work, and how to use them

Carbon dioxide (CO₂) emissions, as well as emissions of other 'greenhouse gases', are a major challenge for fleet-operating businesses to face up to. With nation-states, businesses, and other organizations and collectives aiming to reach net zero emissions by 2050 or sooner, companies need to strive to reduce carbon emissions wherever possible. However, where emissions do occur, steps can still be taken to remove harmful gases from the atmosphere.

One of the ways carbon offsetting is measured and regulated is through the carbon credits system. At Shell, we provide business customers with the option to offset emissions so that an equivalent amount of carbon credits are purchased and used for a variety of nature-based solutions. Here, you can find out more about how carbon credits work, how your business can earn carbon credits in India, and how nature-based solutions can help tackle climate change.

Understanding carbon credits

First, it is important to fully explore some of the basic questions, like what are carbon credits, and how do they actually work? In the sections that follow, we will answer these questions and explain the role that carbon credits can play as a growing number of businesses across India strive to reach net zero carbon emissions.

Additionally, we will provide information on carbon offsetting, how it relates to carbon credits, and what carbon offsetting means for efforts to decarbonize businesses operating a fleet of vehicles.

What are carbon credits?

A simple way to think of carbon credits is as 'carbon allowances'. They function like a permission slip or certificate, allowing the emission of carbon dioxide or equivalent greenhouse gases into the atmosphere. This permission is granted because an equivalent amount has been kept out of the Earth's atmosphere through other means.

For example, at Shell, when business customers opt-in and decide to drive carbon neutral, we calculate their well-to-wheel carbon emissions, based on fuel consumption. The customer pays a small fee to participate in the scheme, and we purchase carbon credits equivalent to their emissions. These carbon credits are then used for a variety of nature-based solutions, which either prevent emissions or remove carbon dioxide and other greenhouse gases from the atmosphere.

How do carbon credits work?

Each carbon credit represents the avoidance or removal of one tonne of carbon dioxide or equivalent greenhouse gases from the atmosphere. Collectively, these gases are referred to as carbon dioxide-equivalent (CO₂e). This allows the quantity of a group of harmful greenhouse gases to be expressed as a single number. It also means the impact that the gases have on man-made climate change can be more easily understood and put in perspective.

Carbon credits in India and around the world are also able to be traded between governments, businesses, and other organizations. For this reason, robust third-party registries and verification are used to maintain their integrity.

What is carbon offsetting?

The concept of carbon credits is inextricably linked to the concept of carbon offsetting. Essentially, carbon offsetting is the process of removing carbon dioxide or equivalent greenhouse gasses from the atmosphere as a way of compensating for carbon emissions that are produced elsewhere. So, for a business operating a fleet, carbon offsetting would involve taking steps to remove carbon dioxide in order to compensate for vehicle emissions.

Carbon offsets are measured using a standardized metric, which is tonnes of carbon dioxide-equivalent (CO₂e). Carbon offsets can be a useful alternative to reducing or replacing the use of fossil fuels, especially in situations where that is challenging. As a general rule, businesses that are interested in behaving ethically and reducing their carbon footprint are advised to reduce or eliminate emissions as a first option while using offsets when this cannot be achieved.

How can businesses earn carbon credits in India with Shell?

Carbon credits in India can be earned by businesses that make use of the Shell Fleet Prepaid service. This is an optional extra, with the business agreeing to pay a small additional fee on top of the usual price of fuel in order to offset carbon emissions. The responsibility for calculating carbon emissions, purchasing carbon credits, and contributing to nature-based solutions will lie entirely with Shell, meaning you can go about your business as usual.

In the sections below, you can find out much more about how this works and why it is beneficial.

Earn carbon credits with Shell

Shell offers customers across India the opportunity to earn carbon credits and offset CO₂ emissions. This is an opt-in service that is available to business customers who make use of the Shell Fleet Prepaid service. The process for actually earning carbon credits with Shell is simple, and the steps are outlined below:

• The customer makes the decision to offset the carbon emissions of their fleet of vehicles.
• In exchange for the carbon offsetting, the customer agrees to pay a small additional fee
• The customer makes use of the Shell Fleet Prepaid service to pay for refueling of their fleet
• Shell tracks the customer's total fuel consumption and then calculates the well-to-wheel CO₂ emissions
• Carbon credits equal to the amount of CO₂ emitted by the customer's fleet are purchased
• Shell compensates for the CO₂ emissions through a variety of approved and accredited nature-based solutions

Nature-based solutions, or natural climate solutions, include a variety of activities that either protect or develop natural ecosystems. A good example of this would be protecting against deforestation. This is important because plants and trees are able to remove carbon dioxide from the atmosphere through photosynthesis.

Drive carbon neutral with carbon credits

Business customers who make use of the Shell Fleet Prepaid service exclusively for refueling are able to participate in carbon offsetting and earning carbon credits. In exchange for a small fee, Shell will carry out all of the calculations, using your fuel consumption to determine well-to-wheel emissions associated with your fleet. We will then purchase an equivalent amount of carbon credits, offsetting your carbon emissions.

At the end of each year, Shell will issue a certificate confirming that emissions have been offset at the equivalent rate to emissions being introduced to the atmosphere. Assuming you refuel your fleet solely using the Shell Fleet Prepaid service, you will be able to officially claim that your fleet operates on a carbon-neutral basis.

Benefits of carbon offsetting for your business

Making the decision to operate a more sustainable fleet, offset carbon emissions and drive carbon neutral has obvious benefits for the environment and for our collective efforts to reduce carbon emissions and tackle climate change. However, this decision can also be beneficial to your business in a number of key ways, which can help to make it a worthwhile investment. Some of the most significant benefits for your business are outlined below:

• Demonstrate leadership on climate change: By making the decision to offset your carbon emissions, you can position your business as a leader in the global effort to tackle climate change.
• Appeal to climate-conscious customers: Many customers actively seek out businesses that behave responsibly while avoiding the least sustainable brands. By earning carbon credits, you can gain favor with these customers.
• Attract climate-conscious employees: Highlighting carbon neutrality can help your business to recruit employees who are concerned about climate change and who only want to work for responsible organizations.
• Live up to obligations and meet personal targets: Many businesses have obligations when it comes to reducing carbon emissions, and offsetting emissions can also help with meeting any personal targets you may have set.

External sources used:

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