Implementation of Carbon Accounting in the Shipping Industry: An Exploratory Study

Implementation of Carbon Accounting in the Shipping Industry: An Exploratory Study

This study explores whether the shipping industry is ready to implement carbon accounting practices to improve environmental sustainability. With the industry heading towards net zero in the near future, there are several reasons why organisations are not ready to embrace new technologies and practices such as carbon accounting, apart from what they are already doing. While many firms have started tracking fuel use and meeting reporting requirements, carbon accounting often requires more than compliance. Hence, readiness is uneven across the sector, especially when companies face tight margins, more complex supply chains and differing customer demands and regulatory expectations. Primary qualitative data was collected through semi-structured, one-to-one interviews with industry experts across different maritime organisations to gain insights into current practices, challenges and opportunities. Through the interviews, the study demonstrates that the adoption of carbon accounting systems is affected by high costs, enforcement gaps, limited understanding and low willingness. Interviewees also identified opportunities, including long-term cost savings through fuel optimisation, market differentiation as well as the need for further research and development to improve the lifecycle performance and cost-competitiveness of low-emission options. Then, the PESTEL framework is used to examine the factors that shape adoption of carbon accounting systems in the shipping industry. Additionally, existing research on carbon accounting in other industries and countries was reviewed and revealed its benefits and impact on the organisation and environment. Ultimately, the study argues that there is a need for a more comprehensive and long-term solution. Better financial products and incentives to aid the industry must be provided for there to be a higher adoption rate of carbon accounting practices, especially for smaller players that lack capital and technical resources. Stronger regulations can increase participation and ensure consistent implementation. However, more work must be done to address the concerns and highlight the benefits of the adoption of carbon accounting in the maritime sector so that the shipping industry can move towards a more sustainable future.