The availability of alternative fuels and electric vehicles is undoubtedly a challenge. However, there is a practice that can accelerate mainstream adoption across the value chain: Insetting. Insetting refers to investments in emissions-reducing projects within the supply chain and industry sector — for example, subsidizing the use of low-carbon fuels by logistics partners.
Insetting investments help reduce the company’s scope 3 emissions and support broader industry adoption. Companies can still account for these improvements internally, reinforce their climate goals, and directly contribute to decarbonizing the logistics systems they rely on, thus enhancing their resilience.
Insetting: The industry hurdles
A major challenge lies in the tension between shippers and carriers over who should bear the cost of adopting more sustainable practices, as highlighted in the alternative fuels discussion above. Many shippers —including large retailers and consumer goods companies— are demanding lower-emission logistics solutions.
However, when these options are offered, often at an additional cost due to investment in technologies such as electric trucks and alternative fuels, customers are frequently hesitant to buy. Our latest survey on sustainable logistics confirms this: Only 6% have a dedicated budget for sustainable logistics. 53% of our survey respondents are exploring budget options, and perhaps most importantly, 41% do not plan to set a budget for sustainable logistics. This disconnect slows the transition towards cleaner distribution systems.
The way forward for decarbonized logistics
For insetting initiatives to succeed, scale, and decarbonize logistics, clear communication and alignment between shippers and customers are essential. Both parties must share reliable emissions data and agree on how to divide the costs, risks, and benefits. Without this collaboration, the financial burden remains a barrier.
In this context, insetting becomes a critical tool for advancing decarbonized logistics – not just by financial subsidies but also by fostering research, development, new innovations, and scale-up of existing innovations – all with a sectoral focus. With cost-sharing models and mutual accountability, insetting bridges the gap between ambition and action—between intention and measurable results. As such, insetting is one of the most powerful levers for decarbonized logistics.
LEMAN offers insetting for alternative fuels and electrification, and we encourage all our customers to take part in reducing emissions and helping decarbonize logistics.