Sustainability & ESG in Maritime Supply Chains: Measuring Scope 3 Emissions, Building Circular Value Chains, and Advancing Ethical Sourcing

Discover how Scope 3 emissions, circular supply chains, and ethical sourcing are reshaping maritime logistics—with practical steps, case examples, and 2025 rules.

The supply chain mirror we can’t look away from 🌍

Shipping moves ~80% of world trade by volume, so what happens at sea echoes across factories and households worldwide. The climate math is equally stark: when you count “beyond the funnel” emissions—fuel production, upstream materials, logistics before and after the sea leg—Scope 3 often dwarfs direct (Scope 1) and energy (Scope 2) emissions. The result is a new era where sustainability is measured not only in a ship’s engine room, but across entire value chains: cargo owners, charterers, ports, towage, rail, trucking, shipyards, and recyclers.

2025 is a watershed. Maritime emissions have entered the EU ETS, with surrender obligations starting this year for 2024 voyages. FuelEU Maritime begins its well-to-wake GHG intensity curve at -2% in 2025, steepening to -80% by 2050. The IMO’s 2023 GHG Strategy sets net-zero “by or around 2050,” with checkpoints for 2030 and 2040. And the Hong Kong Convention for safe and environmentally sound ship recycling enters into force on 26 June 2025. Together, these rules drag Scope 3 from footnote to front page.

This guide explains—in plain language—how maritime players can measure Scope 3, design circular supply chains, and embed ethical sourcing, while staying aligned with frameworks such as the GHG Protocol, SBTi Maritime, and the Sea Cargo Charter.

Why Scope 3, circularity, and ethical sourcing matter in modern maritime operations

For most cargo owners and logistics providers, Scope 3 accounts for the majority of the footprint—from the fuels your carriers buy to the end-of-life of ships that move your goods. The value-chain lens brings three advantages:

Risk visibility: You can’t manage climate, deforestation, or labour risks you can’t see. A Scope 3 inventory highlights hotspots (e.g., heavy fuel oil refining, feeder legs, hinterland trucking).
Cost clarity: Fuel volatility, carbon prices (EU ETS now includes maritime), and FuelEU penalties directly affect landed cost. Good data helps negotiate charters and align incentives.
License to operate: Investors, lenders, and charterers look for credible, comparable disclosures. Frameworks like the Sea Cargo Charter and SBTi link your operations to climate alignment trajectories.

Ethical sourcing rounds out the picture: human rights in shipbreaking, seafarer welfare, and fair labour in upstream materials are rising expectations in ESG ratings and due-diligence laws (including CSRD and related EU initiatives).

Key concepts you’ll hear (in friendly terms)

Scope 3 emissions: All indirect emissions beyond your direct fuel burn and purchased electricity—e.g., upstream fuel production for bunkers, third-party transport, end-of-life treatment, and use of sold products. The GHG Protocol Scope 3 Standard lists 15 categories covering both upstream and downstream activities.
Well-to-wake (WTW): Emissions from fuel extraction/production (well-to-tank) plus combustion (tank-to-wake). FuelEU Maritime sets declining WTW intensity limits.
Climate alignment: Are your voyages and charters aligned with IMO-consistent decarbonisation pathways? The Sea Cargo Charter standardises this assessment for charterers and, since 2024, for shipowners too.
Circular supply chain: Designing out waste and pollution; keeping materials (steel, lubricants, batteries, electronics) in use; and regenerating natural systems—applied to ships, ports, and equipment across their full life.

How regulation is rewriting the Scope 3 playbook (2025 update)

EU ETS for shipping: Applies to cargo and passenger ships ≥5,000 GT calling EU ports. Phase-in of surrender: 40% of 2024 emissions (surrender 2025), 70% of 2025 (surrender 2026), and 100% from 2026. Methane (CH₄) and nitrous oxide (N₂O) join from 2026. Offshore ships ≥5,000 GT join in 2027.
FuelEU Maritime (from 2025): Starts with -2% WTW GHG intensity vs. 2020 baseline (91.16 gCO₂e/MJ), tightening to -6% by 2030 and ramping to -80% by 2050. Penalties apply for non-compliance; incentives include multipliers for RFNBOs and wind-assist rewards.
IMO 2023 GHG Strategy & Net-Zero Framework: Targets net-zero by or around 2050, with global checkpoints: -20% (strive -30%) by 2030 and -70% (strive -80%) by 2040, all vs. 2008. The IMO has advanced a package including a fuel standard and global pricing mechanism slated for adoption in October 2025, with effects beginning 2027.
CSRD and sector standards: CSRD expands who must report ESG data in the EU and calls for sector-specific standards (ESRS). Even as thresholds and timing are debated, transition plans, Scope 3 coverage, and due-diligence expectations remain central.
Hong Kong Convention (ship recycling): In force from 26 June 2025—an important lever for circularity and ethical sourcing. Many Indian yards are now HKC-compliant following upgrades, reshaping perceptions of safe recycling options.

In-depth analysis: Turning ESG from promise to practice

Building a credible Scope 3 inventory (what to count—and how)

1) Map your value chain and assign categories.
Start with the GHG Protocol’s 15 Scope 3 categories. For a shipowner/manager, focus on Category 3 (Fuel- and energy-related activities), Category 4 (Upstream transport), Category 5 (Waste), Category 11 (Use of sold products) if you sell services affecting customer fuel use, and Category 12 (End-of-life) for vessels and major components. Cargo owners and logistics providers will emphasise Category 4/9 (Transport & distribution)—including ocean freight, feedering, rail, barge, and trucking.

2) Choose calculation methods wisely.
The Scope 3 Calculation Guidance provides method options (supplier-specific data, spend-based, average data with activity multipliers). Use primary data where material (e.g., bunker volumes per voyage from carriers), supplement with credible databases for the rest, and document assumptions.

3) Tie voyage data to climate alignment.
If you charter vessels, apply the Sea Cargo Charter to disclose climate alignment vs. IMO-consistent trajectories. For corporate targets, use SBTi Maritime Guidance (e.g., intensity metrics, supplier engagement covering ≥67% of Scope 3).

4) Link to carbon pricing and penalties.
EU ETS exposure and FuelEU penalties are P&L realities. Modelling these alongside WTW emissions helps you choose the best routing, fuel, and technology mix.

5) Disclose for trust.
Use consistent system boundaries (WTW), cite emission factors, and align with CSRD where applicable. Strong, transparent reporting wins lenders, insurers, and customers.

Designing circular maritime supply chains

Circularity isn’t abstract—it’s practical engineering and procurement:

Design for longevity and reuse: Standardise components; specify rebuildable pumps/valves; plan mid-life retrofits (e.g., shaft-gen, wind-assist). These choices both cut Scope 3 (fewer new parts, less embedded carbon) and improve uptime.
Closed-loop consumables: Lubricants, coolants, batteries, filters—work with suppliers to regenerate, remanufacture, or recycle, and request mass-balance certificates where relevant.
Green steel pathways: Track embedded emissions in newbuild hull steel; consider near-zero steel procurement pilots to slash capital goods (Category 2) emissions.
End-of-life ships: Choose HKC-compliant yards; keep an Inventory of Hazardous Materials (IHM) current; plan for material recovery (steel, copper, aluminum) and responsible waste handling. From 26 June 2025, HKC standards become mandatory.

Ethical sourcing: making supply chains safe, fair, and compliant

Due-diligence expectations: Human rights and environmental due diligence are converging into mainstream reporting. Even amid threshold debates, large shippers and financiers increasingly require proof of ethical chains.
Ship recycling practices: Public scrutiny is intense. HKC compliance, transparent yard audits, safe worker conditions, and hazardous-waste controls are the new baseline. Industry voices stress that HKC-upgraded yards must be recognised in procurement policies—not dismissed by outdated perceptions.
Seafarer welfare: Ethical sourcing includes crew welfare in contracts and audits (rest hours, anti-harassment, timely wages, connectivity access). It’s risk management and the right thing to do.

Technology enablers: data, contracts, incentives

Digital measurement stacks now integrate AIS, noon reports, e-Bunker Delivery Notes, fuel LCA factors, and port/berth data to produce auditable WTW emissions and cost curves. With this visibility, you can embed sustainability into commercial levers:

Charter party clauses: Clarify who accounts for and reports emissions under different charter types; align incentives for speed, routing, fuel choices, and shore power.
Climate-aligned finance and chartering: The Sea Cargo Charter normalises alignment reporting; lenders use Poseidon-style logic; SBTi turns targets into capital allocation rules.
Transition levers: Wind-assist devices, voyage optimisation, slow steaming, shaft-gen/air-lubrication, and fuel switches (biofuels, e-methanol, e-ammonia when available) improve both climate alignment and compliance with EU ETS/FuelEU.

Practical roadmap: from first inventory to lasting impact

Step 1 — Establish your baseline.
Map all relevant Scope 3 categories using the GHG Protocol. Prioritise Category 3 (fuel chain), 4/9 (transport), 2 (capital goods), and 12 (end-of-life). Capture WTW factors for fuels you influence.

Step 2 — Set targets that meet the market test.
Adopt SBTi Maritime (intensity and supplier-engagement targets). If you charter, commit to the Sea Cargo Charter for annual disclosure.

Step 3 — Build a circularity playbook.
Specify rebuildable equipment; plan retrofits; choose HKC-compliant recyclers; pilot near-zero materials. Each action has a Scope 3 line item.

Step 4 — Align procurement.
Use sustainability-linked clauses and scorecards (fuel WTW, alignment scores, welfare requirements). Pay for verified performance, not promises.

Step 5 — Model policy exposure.
Quantify EU ETS costs and FuelEU penalties; compare technology options under different carbon/fuel price scenarios to de-risk the P&L.

Step 6 — Report with confidence.
Disclose methods, factors, and boundaries. Track progress visibly—investors, insurers, and customers reward clarity.

Case studies and real-world moves

1) Charterer alignment via Sea Cargo Charter
A global agribulk shipper published climate-alignment deviations across its chartered voyages, then negotiated “speed-for-alignment” clauses and fuel choices (biofuel blends where available). This cut voyage intensity and reduced future FuelEU exposure—and the transparency built trust with lenders and customers.

2) Carrier roadmap under EU ETS + FuelEU
A container line modelled ETS surrender costs and WTW intensity outcomes for several compliance packs: (a) voyage optimisation + slow steaming; (b) biofuel drop-ins on selected corridors; (c) wind-assist on feeder vessels; (d) e-methanol pilots for 2030 readiness. The blended portfolio lowered ETS costs and kept the fleet on the FuelEU trajectory path.

3) Circularity at end-of-life
An owner with several 90s-era bulkers adopted HKC-compliant recycling with upgraded yards in South Asia, maximising steel recovery and ensuring worker safety. Public disclosure answered NGO concerns and met bank policy thresholds tied to sustainable recycling.

4) Supplier engagement target (SBTi)
A European freight forwarder set an SBTi-compliant supplier engagement target to cover >67% of its Scope 3. It convened carriers and trucking partners to standardise data templates and phase in low-carbon lanes, meeting SBTi criteria and CSRD expectations.

Challenges (and workable solutions)

Data quality & boundaries.
Problem: Mixing TTW and WTW, or incomplete feeder/hinterland legs, undermines credibility.
Solution: Standardise WTW factors and require carrier-verified activity data; use GHG Protocol Scope 3 methods and version-locked factors in your inventory notes.

Responsibility splits in charters.
Problem: Who reports which emissions? Owner vs. time charterer vs. voyage charterer?
Solution: Clarify accounting responsibilities and data rights in charter parties, leaning on industry guidance.

Policy uncertainty and cost pass-through.
Problem: Evolving CSRD thresholds and potential IMO global pricing can feel like moving targets.
Solution: Focus on no-regret levers (efficiency, optimisation, welfare safeguards) and keep disclosures conservative and comparable.

Ethical sourcing blind spots.
Problem: Audit fatigue; inconsistent yard standards.
Solution: Prefer HKC compliance, publish audit summaries, and engage worker-safety partners where feasible.

Future outlook: What changes next (2025–2030)

Global carbon pricing in shipping: The IMO’s package (fuel standard + pricing mechanism) is expected to be adopted in 2025, with start in 2027. Expect higher rewards for zero/near-zero fuels and stronger incentives for climate-aligned voyages.
Sharper WTW accounting everywhere: FuelEU’s WTW approach will shape contracts, data systems, and even bunker procurement analytics across regions.
Sector-specific reporting standards: As the EU finalises sector ESRS and companies settle into CSRD cycles, comparability will improve; Scope 3 will get more granular by corridor and commodity.
Circular shipbuilding and recycling: With HKC live, expect upgraded yards, better material recovery, and board-level policies tying finance to verified circular outcomes.
Target-driven ecosystems: SBTi Maritime and Sea Cargo Charter will keep aligning capital, contracts, and operations to credible 1.5 °C pathways.

FAQ (quick answers your stakeholders will ask)

What exactly are Scope 3 emissions for a shipping company or cargo owner?
They’re indirect emissions across the value chain—fuel production, feeder and hinterland transport, capital goods, waste, and end-of-life. The GHG Protocol lists 15 categories with calculation methods.

How do EU ETS and FuelEU change my decisions today?
EU ETS adds a carbon cost to voyages touching EU ports (phase-in 2024–2026), while FuelEU caps well-to-wake fuel GHG intensity from 2025 with penalties for non-compliance. Together, they push route optimisation, fuel choice, and efficiency retrofits.

What is climate alignment (and why should I disclose it)?
It shows whether your voyages are aligned with IMO-consistent decarbonisation pathways. The Sea Cargo Charter makes this comparable across the market and builds trust with financiers and customers.

How do I set credible targets?
Use SBTi Maritime Guidance for intensity and supplier-engagement targets, and publish a transition plan covering fuels, technologies, and efficiency measures.

Is ship recycling part of Scope 3 and ESG?
Yes—end-of-life sits in Scope 3 and is central to circularity and human rights. From 26 June 2025, the Hong Kong Convention is in force; prioritise compliant yards.

Will IMO’s global pricing make EU ETS irrelevant?
No. Regional and global measures will likely co-exist, with interactions yet to be finalised. Prepare for both—and focus on no-regret efficiency and fuel-readiness.

Conclusion: From checklists to change

Sustainability in shipping isn’t a CSR add-on. It’s the operating system of modern trade. Scope 3 accounting gives you the map; circularity and ethical sourcing are the route and the rules of the road. With EU ETS costs live, FuelEU’s WTW lens tightening, and IMO’s global package on the horizon, leaders are moving from spreadsheet compliance to contract-linked performance, climate-aligned finance, and HKC-verified circularity.

Start with what you control—data quality, fuel choices, speed policies, supplier engagement—and expand outward. The companies that integrate sustainability into commercial logic will steer costs, win business, and earn trust in a market that is finally (and firmly) aligning planet, profit, and people.

References (hyperlinked)

GHG Protocol. (2011). Corporate Value Chain (Scope 3) Standard; Scope 3 Calculation Guidance. ghgprotocol.org.
European Commission. (2025). Reducing emissions from the shipping sector (EU ETS phase-in & deadlines). climate.ec.europa.eu.
DNV. (2024). Understanding EU ETS for Shipping. dnv.com.
European Commission DG MOVE. (2025). Decarbonising maritime transport – FuelEU Maritime. transport.ec.europa.eu.
DNV. (2025). FuelEU Maritime—Regulation insights. dnv.com.
Vertom. (2025). FuelEU Maritime 2025 (penalties and incentives). vertom.nl (PDF).
IMO. (2023). IMO 2023 GHG Strategy. imo.org.
IMO. (2025). Press Briefing—IMO approves net-zero regulations for global shipping (MEPC 83 outcomes). imo.org.
IMO. (2025). Recycling of ships & the Hong Kong Convention (Entry into force 26 June 2025). imo.org.
BIMCO. (2025). Ship recycling is about to change (HKC-compliant yards). bimco.org.
Sea Cargo Charter. (2024/2025). Annual Disclosure Reports; FAQ. seacargocharter.org.
Science Based Targets initiative. (2023–2025). Maritime Guidance; Standards & Guidance. sciencebasedtargets.org.
BIMCO. (2024). Who is responsible for accounting and reporting a ship’s emissions? bimco.org.
DNV. (2024). EU CSRD overview for maritime. dnv.com.
Reuters. (2025). EU to pare back sustainability rules…; EU countries split on delay. reuters.com.

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