Why Carbon Insetting Is the Future of Sustainable Logistics

When businesses talk about cutting their climate impact, the term offsetting often comes up. Traditionally, companies buy carbon credits to fund projects outside their operations (such as tree planting or renewable energy abroad) to “offset” their emissions. But sustainability thinking is shifting, and a new approach is emerging: carbon insetting. In this blog, you’ll learn what carbon insetting is, why it matters, and how it can reshape supply chains – with real-world examples from leading companies.

What is Carbon Insetting?

Carbon offsetting involves using avoided emissions or enhanced removals to compensate for greenhouse gas (GHG) emissions. By contrast, carbon insetting focuses on reducing emissions within a company’s own supply chain, rather than elsewhere. Instead of buying credits for unrelated projects, businesses invest directly in initiatives that cut emissions from the sourcing, production, and transport of their own goods and services. Put simply, carbon insetting means cleaning your own house, rather than paying someone else to clean theirs on your behalf.

Carbon Insetting: What Can You Do?

The logistics industry has a significant environmental footprint. According to the Massachusetts Institute of Technology, freight transport (trucks, ships, planes, and trains) generates around 8% of global greenhouse gas emissions– rising to 11% when warehouses and ports are included.

As a result, carbon insetting in logistics is a particularly powerful tool. Examples include:

• Switching fuels: Transitioning fleets from diesel to biofuels, HVO (hydrotreated vegetable oil), or green hydrogen.

• Electrification: Deploying electric trucks and vans for last-mile delivery, which accounts for roughly 41% of total shipping emissions.

• Sustainable sourcing: Partnering with suppliers who use regenerative agriculture, renewable energy, or circular packaging.

• Efficiency upgrades: Optimising routes with AI-driven logistics platforms, reducing empty miles, and cutting fuel waste.

• Port & warehouse improvements: Installing solar power, heat recovery systems, and better insulation in cold-chain and storage facilities.

Each of these measures lowers emissions across the value chain, making reductions real, measurable, and directly tied to company operations.

Why Carbon Insetting Matters

Protecting the planet for future generations is reason enough, but carbon insetting also brings clear business advantages:

• Transparency: Regulators, stakeholders, and customers increasingly demand verifiable climate action. Insetting demonstrates real accountability, avoiding accusations of “greenwashing”.

• Resilience: Cleaner supply chains improve efficiency, lower fuel costs, and reduce reliance on volatile fossil fuels.

• Co-benefits: Many projects improve air quality, biodiversity, and local communities (e.g. tree planting along supply routes, regenerative farming with suppliers).

• Alignment with Net Zero: With global targets such as the UN’s 2050 net-zero goal, insetting ensures companies are making progress, not simply buying time.

• Future-proofing: Regulations like the EU’s Corporate Sustainability Reporting Directive demand deeper carbon accountability. Insetting is a proactive way to stay ahead.

Real Examples of Carbon Insetting

1. DP World

DP World’s UK-based programme increased the inset benefit per loaded container from 50 kg to 250 kg CO2e. The initiative is built around Unifeeder’s use of lower-emission fuels on Northern European routes. These insets are independently verified and help customers reduce Scope 3 emissions (meaning all other emissions after direct and indirect).

2. DHL & Smart Freight Centre

DHL teamed up with the Smart Freight Centre to promote a white paper targeting carbon insetting for the logistics and freight sector. They suggest redirecting funds from offsets to internal projects like sustainable fuels, fleet upgrades, engine retrofits, and routing efficiency – all aimed at real reductions within logistics.

3. Reckitt, Danone, and Nestlé

Brands like Reckitt, Danone, and Nestlé are investing in regenerative agriculture and agroforestry to reduce emissions in their raw-material supply chains. For instance, Reckitt is trialling agroforestry in its rubber supply chain across Southeast Asia. Nestlé supports 15 landscape initiatives globally, aiming to source 50% of materials from producers using regenerative farming by 2030.

4. Amazon

Earlier this year, Amazon announced the largest-ever order of electric heavy goods vehicles (eHGVs): more than 200 Mercedes-Benz eActros 600s. These trucks will transport over 350 million packages annually as part of Amazon’s pledge to reach net-zero carbon emissions by 2040.

5. Ganni

The Copenhagen fashion brand Ganni decided to stop buying offsets and instead fund a solar plant at a supplier’s facility in Portugal. They aim to measure emissions and biodiversity impacts on-site and reduce their absolute emissions by 50% by 2027.

The Bigger Picture of Carbon Insetting

According to McKinsey & Company, supply chains account for over 80% of many companies’ emissions, which means that focusing climate action inside the supply chain (insetting) has a far greater impact than offsetting alone.

Companies like Amazon, Nestlé, or DHL have already invested in carbon insetting projects, proving that greener supply chains aren’t just possible, they’re profitable. Additionally, it increases business resilience, transparency, aligns with the Net Zero initiative, helps to protect the planet, and provides many more benefits for the companies.

If you need help in creating the best action plan for your business, do not hesitate to contact KATA Global Logistics, which is a leading provider of freight services offering a range of transportation solutions to meet the needs of businesses across the industry.

Contact KATA Global Logistics to turn climate action into a business advantage!