UPS Offers Carbon Offsets and Calculation Services

UPS (NYSE:UPS) on Tuesday became the first small-package carrier to offer its customers the ability to offset the carbon dioxide emissions generated by delivery of their packages within the United States.

The per-package price for optional carbon offset is $0.05 for UPS Ground services and $0.20 for UPS Next Day Air®, UPS 2nd Day Air® and UPS 3 Day Select® services. UPS said a flat fee was chosen, based on on customer feedback. The price includes the cost of calculation, administrative costs associated with the service and the cost of the offsets.

To encourage customers to participate in the program, UPS said it will match the offset purchases up to $1 million in 2009-2010.

The calculation to measure the CO2 impact of the customers’ shipments is based on a variety of current and historical operational data, including distance and transport mode. UPS’s calculation methodology and processes are verified by Société Générale de Surveillance (SGS), an inspection, verification, testing and certification company. The calculator is based on Greenhouse Gas Protocol, the most widely used international standard for carbon accounting and reporting. In addition, the carbon offset process is also certified by The CarbonNeutral Company.

“Our customers told us they wanted an easy, credible way to join us in our efforts to reduce the environmental impact of their supply chains,” said Bob Stoffel, senior vice president, engineering, strategy, supply chain and sustainability.  “These services complement UPS’s own sustainability efforts while offering customers a new option to address the environmental challenges of their supply chains.”
UPS said it plans to extend the program to other UPS customers outside th U.S. in 2010.

UPS said it will purchase high-quality certified carbon offsets.  Initially, these will include offsets certified to the “Gold Standard,” “Voluntary Carbon Standard” or “Climate Action Reserve.”

In a second, related move, UPS also announced a carbon analysis service for its high-volume customers. Under this plan, available only on a contract basis, UPS will calculate the carbon impact of a customer’s entire UPS shipping activity. The calculations then can be used by the shipper to purchase offsets directly or through UPS. The proprietary calculator used for this service also is verified by SGS.

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