The practice of tracking and transferring environmental attributes associated with sustainable fuels involves a chain-of-custody system. This system allows companies to purchase and retire these attributes, effectively claiming the environmental benefits of sustainable fuel production even if they are not directly consuming the physical fuel itself. For example, an airline could purchase and retire attributes associated with sustainable aviation fuel produced elsewhere, reducing their reported carbon footprint even if they are currently using conventional jet fuel at their hub. This mechanism facilitates investment in sustainable fuel production by creating a broader market for its environmental benefits.
Decoupling the physical fuel from its environmental attributes offers several advantages. It allows companies to support sustainable fuel development even if the physical infrastructure for its use is not yet in place. This approach can accelerate the transition to a lower-carbon economy by incentivizing producers and providing a mechanism for consumers to participate in the market regardless of location. Historically, similar systems have been used for renewable electricity through Renewable Energy Certificates (RECs). Adapting this concept to the fuels sector presents a significant opportunity to scale sustainable fuel production and consumption.
