A battery-electric trucking project in China has converted verified freight emission reductions into transferable environmental attributes. The model could open a new channel for financing Scope 3 decarbonisation, but only if the market can demonstrate additionality, transparent electricity accounting and credible ownership of every environmental claim.

On 10 June 2026, Sentinel Earth and 123Carbon announced the issuance of what they describe as the world’s first Environmental Attribute Certificates generated from battery-electric heavy-duty trucking and issued through a global registry.[1]

The certificates originate from Azure Road, an electric freight project operating across Inner Mongolia, Hebei, Sichuan, and Yunnan in China. According to the announcement, the project deployed 287 battery-electric heavy-duty trucks that transported more than 289 million tonne-kilometres of freight during 2025 while consuming approximately 14.8 million kilowatt-hours of electricity.[1]

The physical activity is significant. Yet the wider importance of the announcement lies not simply in the number of trucks deployed or the electricity consumed.

Azure Road has attempted to transform the lower-emission performance of an electric freight fleet into a transferable environmental attribute that corporate buyers can purchase and retire against freight-related Scope 3 emissions.

This moves electric trucking into a market structure already familiar from renewable electricity certificates, sustainable aviation fuel certificates, and other book-and-claim systems. It also introduces many of the same questions that have shaped those markets: What exactly does the certificate represent? Who owns the environmental benefit? What emissions baseline was used? And can the certificate demonstrate that its revenue contributes to additional decarbonisation?

These questions will determine whether EV freight certificates develop into a credible new instrument for transport decarbonisation or simply add another environmental claim to an activity that has already occurred.

Freight emissions are difficult to control and even harder to allocate

Road freight remains one of the most challenging parts of the transport sector to decarbonise.

Global road-sector emissions stood at just over 6 billion tonnes of CO₂ in 2024, with trucks responsible for approximately one-third of the total.[2] Heavy-duty vehicles therefore, represent a major source of transport emissions even though they account for a much smaller share of the global vehicle fleet than passenger cars.

For companies, the challenge is compounded by the structure of modern supply chains.

Manufacturers, retailers and commodity producers may depend on hundreds of freight operators without owning the trucks that transport their products. The emissions occur outside their direct operational boundaries and are therefore reported primarily under Scope 3.

Under the GHG Protocol, Category 4 covers upstream transportation and distribution services purchased by the reporting company. Category 9 covers qualifying transportation and distribution of sold products after the point of sale when the transport service is not purchased by the reporting company.[3][4]

This creates a disconnect between the party making the investment and the party seeking the environmental benefit.

The freight operator must finance the electric truck, charging connection, battery-swapping infrastructure and operational transition. Yet much of the willingness to pay for lower-emission logistics may sit with cargo owners and corporate customers further along the value chain.

A book-and-claim system is designed to bridge this divide.

Instead of requiring a company’s physical goods to be transported by a specific electric truck, the environmental attribute associated with a verified lower-emission freight service can be separated from the physical shipment. A corporate buyer can purchase and retire that attribute, while the resulting revenue flows towards the operator or project that delivered the lower-emission transport activity.

In principle, this could allow corporate climate finance to reach fleet operators even where direct physical matching is impractical.

What the Azure Road figures tell us

The project’s published figures provide a useful indication of its operational scale.

Dividing 14.8 million kWh of electricity consumption by the reported minimum of 289 million tonne-kilometres produces an electricity intensity of no more than approximately:

0.051 kWh per tonne-kilometre, equivalent to around 51 watt-hours per tonne-kilometre.

This calculation connects the electricity consumed by the fleet with the transport service it delivered. It is more informative than the number of vehicles alone because it considers both freight mass and distance.

However, electricity intensity is not the same as emissions intensity.

The greenhouse-gas impact of the project depends on the emissions associated with its electricity consumption and the emissions of the diesel freight activity it is assumed to replace.

The same electric truck can have substantially different lifecycle and operational emissions depending on:

• the carbon intensity of the electricity used for charging;
• the ownership and retirement of renewable electricity attributes;
• charging and battery losses;
• vehicle size and payload;
• empty return journeys;
• terrain and operating conditions;
• upstream fuel and electricity emissions;
• and the performance of the reference diesel vehicle.

According to the project announcement, the emission reductions were quantified using the Global Logistics Emissions Council, or GLEC, Framework and independently verified by Normec Verifavia. The certificates were designed to conform with Smart Freight Centre’s Market-Based Measures methodology and were issued through 123Carbon’s blockchain-backed registry.[1]

The GLEC Framework is an established methodology for calculating and reporting logistics emissions and serves as an industry implementation framework for ISO 14083.[5]

These elements provide important foundations: an accounting methodology, independent verification and a registry that tracks ownership and retirement.

But several central figures have not been disclosed publicly.

The initial announcement does not state:

• the total verified tonnes of CO₂-equivalent reduced;
• the total number of certificates issued;
• the unit represented by each certificate;
• the electricity emission factors applied;
• the emissions intensity of the reference diesel service;
• the certificate price;
• or the amount of revenue expected to flow back into additional electric-freight investment.

We can therefore confirm the reported physical activity, but the publicly available information is not yet sufficient to independently reconstruct the total climate value represented by the issuance.

That distinction is essential for a market based on environmental claims.

These are not simply renewable electricity certificates for trucks

EV freight certificates share several characteristics with renewable electricity certificates.

Both systems depend on a measurable underlying activity. Both require rules for issuance, unique identification, transfer, ownership, retirement and double-counting prevention.

But the environmental value of a freight certificate is more complex.

A conventional renewable electricity certificate generally represents the attributes associated with a defined quantity of electricity generated by an eligible facility, commonly one megawatt-hour.

An EV freight certificate does not represent electricity consumption alone. Its environmental value is derived from the difference between the emissions associated with the electric transport service and the emissions associated with a defined reference service.

The certificate is therefore dependent on a counterfactual.

Would the freight otherwise have been transported by diesel? What kind of diesel truck would have been used? What payload and utilisation rate would be reasonable? Would the electric vehicle have been purchased without certificate revenue? Was the transition already required by law or economically inevitable?

A weak or unrealistic baseline can exaggerate the calculated benefit even when the electric trucks and electricity consumption are real.

The first market-integrity requirement is therefore not the registry. It is the credibility of the comparison against which the emission reduction is calculated.

The interaction with electricity certificates must be addressed

There is another layer of complexity that is particularly important from an energy-certificate perspective.

Battery-electric trucks consume electricity. If the charging electricity is presented as renewable or low-carbon, the project must establish who owns the associated electricity attributes.

For example, Guarantees of Origin, Renewable Energy Certificates or International Renewable Energy Certificates may be issued for the electricity used to charge the trucks. If those attributes are sold to another electricity consumer, their renewable characteristics cannot simultaneously be embedded in a freight certificate without clear allocation and cancellation rules.

This creates a potential form of attribute stacking.

The same physical megawatt-hour could theoretically support:

1. a renewable electricity claim by an electricity-certificate buyer;
2. a low-carbon charging claim by the truck operator;
3. and a reduced-emission freight claim transferred to a corporate cargo owner.

These claims may be compatible only where the underlying attributes are clearly separated and allocated. Otherwise, multiple parties could derive overlapping environmental claims from the same electricity generation.

A blockchain-backed freight registry can help prevent the same freight certificate from being sold or retired twice. It cannot automatically establish whether the electricity attributes were separately issued, retained, cancelled or transferred through another registry.

The development of EV freight certificates will therefore require coordination between transport-emissions accounting and electricity-attribute accounting.

Without that coordination, the market could solve double counting within the freight registry while leaving double claiming between the freight and electricity markets unresolved.

China could provide the scale for a major new certificate market

The fact that this first issuance originates in China is commercially significant.

According to the International Energy Agency, global electric-truck sales more than doubled in 2025 and reached approximately 9% of all truck sales worldwide. China accounted for the vast majority of this growth, and one in every four trucks sold in the country during 2025 was electric.[6]

China’s expanding electric-truck fleet could therefore generate a large volume of operational data and potentially a significant future supply of freight environmental attributes.

This could create a new funding channel for:

• electric-truck acquisition;
• high-capacity charging infrastructure;
• battery-swapping stations;
• grid connections;
• depot electrification;
• route optimisation;
• and the deployment of electric vehicles on routes that remain commercially challenging.

But scale should not be confused with integrity.

Rapid growth in certificate supply could place downward pressure on prices while increasing the risk that certificates are issued for vehicles that would have entered operation regardless of certificate revenue.

A strong market must distinguish between projects where certificate income materially supports deployment and projects where certificates merely monetise reductions from an investment that was already economically viable.

Additionality is the central commercial test

The project developers argue that Environmental Attribute Certificates can improve the business case for electric trucking by creating additional value from verified emission reductions.[1]

This is a reasonable economic proposition.

Electric trucks may face higher upfront costs, infrastructure constraints and operational uncertainty. A new revenue stream connected to verified environmental performance could improve project returns and accelerate investment.

But the existence of certificate revenue does not automatically demonstrate additionality.

A credible additionality assessment should establish how the revenue affects the project. For example:

• Does it reduce the investment gap between diesel and electric trucks?
• Does it finance charging or battery-swapping infrastructure?
• Does it make a previously uneconomic freight route viable?
• Does it support the purchase of additional vehicles?
• Does it reduce financing risk for operators?
• Would the deployment have proceeded at the same scale and time without the expected certificate revenue?

The difference matters.

A certificate may represent a real emission reduction without having caused that reduction. However, claims that the certificate market is accelerating electrification require evidence that purchasing the certificate creates or is reasonably expected to create additional investment.

This relationship between revenue and future deployment should eventually become a core disclosure requirement.

The emergence of the certificates coincides with stricter integrity rules

The timing of the Azure Road announcement is notable.

On 11 June 2026, one day after the issuance was announced, the Science Based Targets initiative published Version 2.0 of its Corporate Net-Zero Standard. The standard is scheduled to become effective on 1 February 2027.[7]

The updated framework does not provide automatic approval for EV freight certificates. It does, however, establish integrity principles that are directly relevant to this market.

Under the new standard, companies are expected to prioritise actions as close as possible to the source of emissions before moving towards broader activity-pool or sector-level interventions.

Projects and market instruments used to support target implementation are expected to demonstrate, among other things:

• activity matching;
• system association;
• transparent and conservative quantification;
• verifiability;
• temporal alignment;
• unique attribution;
• double-counting prevention;
• and, where applicable, additionality.

The standard also requires market instruments to accurately convey the emissions or physical attributes of the underlying activity, match the relevant activity volume and contribute to the decarbonisation of the wider system.[7]

These conditions closely reflect the issues that will determine the credibility of EV freight certificates.

A company should not assume that purchasing and retiring a certificate automatically allows it to remove an equivalent quantity of emissions from its Scope 3 inventory.

Physical inventory reporting, target-progress accounting and broader contribution claims may be treated differently. Companies will need to explain the intervention used, the methodology applied, the relationship with their value chain and the accounting treatment of the purchased attribute.

Certificates may support corporate freight decarbonisation, but they should not replace efforts to contract directly for lower-emission logistics, engage transport suppliers, improve utilisation or electrify the company’s own freight activities where this is feasible.

What credible EV freight certificates should disclose

In our assessment, long-term market confidence will require a minimum level of public transparency.

Certificate documentation should clearly identify:

• the physical project and fleet;
• the vehicle types and operational locations;
• the verification period;
• the measured tonne-kilometres;
• the electricity consumed;
• the project and baseline emissions intensities;
• the electricity factors and renewable-energy attributes used;
• the treatment of charging losses and empty journeys;
• the certificate unit;
• the total issuance volume;
• the applicable methodology version;
• the verifier and assurance standard;
• the vintage and retirement status;
• the additionality test;
• and the claims available to the final buyer.

Commercially sensitive data do not need to be disclosed in full. But the core environmental calculation should be understandable and independently assessable.

A registry can demonstrate that a certificate has been issued, transferred and retired. It cannot by itself prove that the baseline was conservative, that the electricity attributes were correctly allocated or that certificate revenue contributed to additional deployment.

Technology can protect the transaction record. It cannot replace environmental integrity.

A promising instrument but not yet a completed market model

The Azure Road issuance should be recognised as an important development.

It connects a sizeable battery-electric truck fleet, measured freight activity, independent verification and a transferable environmental attribute. It creates a potential route for companies to direct climate finance towards freight electrification even when their own goods cannot be physically matched with specific electric vehicles.

That is a meaningful innovation.

It could help resolve one of the most persistent problems in value-chain decarbonisation: the party seeking the emission reduction is often not the party that owns the asset required to deliver it.

However, first-of-a-kind instruments should be assessed as market experiments as well as milestones.

The project has demonstrated that electric freight activity can be quantified, verified, and converted into certificates. The next challenge is to demonstrate that those certificates can be transparently valued, consistently accounted for, and credibly connected to additional decarbonisation.

In our view, EV freight certificates have the potential to become an important component of the wider environmental-attribute market. They could channel corporate capital into electric fleets, charging systems, and zero-emission freight corridors while giving companies a practical instrument for addressing difficult Scope 3 categories.

But their value will not be determined by the word “electric,” the use of blockchain, or the existence of third-party verification alone.

It will depend on whether each certificate can answer five questions clearly:

1. What physical transport activity took place?
2. What emissions were generated by that activity?
3. What credible reference activity did it replace?
4. Who owns the environmental attributes of the electricity generated by the charging?
5. How did certificate revenue contribute to further decarbonisation?

The principle is already familiar from renewable energy markets: environmental attributes may be separated from physical delivery, but they cannot be separated from evidence.

Azure Road may represent the first issuance of its kind on a global registry.

What happens next will determine whether EV freight certificates become a credible new asset class for Scope 3 decarbonisation or merely a new environmental claim attached to an electric truck.