• 2015 December 2 09:28

    WISTA UK looks at how the shipping industry can curtail its emissions

    WISTA UK, the Women in Shipping and Trade Association, isn't shy in hosting events that challenge its members to address the major issues affecting the shipping industry, and this was very much the case during the its most recent Forum, WISTA's press release says. With the Paris hosting this week, The 2015 United Nations Climate Change Conference COP 21 meeting, the Forum looked at the part the maritime sector plays in the climate change agenda.

    The subject of Thursday’s debate (26 November) was the divisive emissions problem, with the panel exploring potential solutions to curtail shipping’s emissions. Three different, highly informative speakers set the scene and challenged the audience to look at the issues from a number of perspectives.

    First to stimulate thoughts was David Donnelly, Partner at Mazars, who looked at his experience as an expert in energy efficiency in buildings and how techniques could be transferred across into the maritime sector. Members learned that there has to be a financial justification in undertaking any investment in retrofitting environmental-efficiency technologies to vessels.

    Where financial gains could be realised fairly quickly after initial CAPEX, it was explained, as in insulation and lighting systems, then retrofitting could be undertaken with relative ease. Other technologies, however, may not be retrofitted so easily because of the longer return on investment or simply because their commercial benefits cannot be monitored – in the maritime sector this is illustrated by ballast water treatment systems.  In such cases in other sectors, said Donnelly, the energy efficient investment is deferred until the normal lifecycle replacement of the particular equipment.

    There is an element of corporate social responsibility or corporate goodwill which has led to some businesses leading these changes and the UK’s National Health Service and developments in social housing are starting to adopt a number of the low risk, quick return energy efficient elements to newbuild programmes. But for real change to happen then there needs to be financial incentives or a legal obligation to drive the change, said Donnelly.

    Donnelly said that, similar to real estate, it may be difficult for the maritime sector to make a financial case for some energy-efficiency technologies as the shipowner usually has to pay for the retrofit but it is the charterer that makes all the savings. This means that the relationship between the owner and charterer will need to change, with a revision to charter rates and charter party agreements the likely way forward if the industry is to fully embrace clean shipping.

    WISTA UK member, the Carbon War Room’s Phoebe Lewis emphasised the significant energy-efficient technologies available to the shipping industry, which could give real financial savings to both charterers and shipowners. She also explained that adapting the ESCO (Energy Service Company) or MESA (Managed Energy Service Agreement) model could offer an innovative way to finance ship retrofits. Carbon War Room’s Self-Financing Fuel-Saving Mechanism (SFFSM) adapts this model such that financiers take on the upfront cost of a group of technologies and are repaid through the fuel savings. One of the key aspects of this financing model is the potential to apply a suite of energy efficient technologies, usually at least three, that are all retrofitted together, meaning only one dry docking but which collectively afford significant benefits of 10-15% fuel savings per vessel. New York-based private equity financier EfficientShip Finance has an attractive finance model for funding ship retrofits in which they cover the upfront cost and are repaid by the charterer through the energy savings.

    The industry itself has undertaken some great initiatives with the RightShip Greenhouse Gas (GHG) Emissions Rating scheme, a systematic and transparent framework for comparing the relative efficiency of the world's existing shipping fleet. Based on this rating, charterers representing 20% of global shipped tonnage have implemented policies in which they refuse to charter inefficient vessels, commonly F and G rated vessels.

    Further, as a two-tier market in which efficient vessels garner price premiums, banks are increasingly involving energy efficiency in their lending decisions to reduce the risk of their assets prematurely losing value. In reality retrofitting ships can actually be more attractive financially than retrofitting commercial buildings.

    Other financial incentives are entering the industry. The Port of Prince Rupert and Port Metro Vancouver became the first ports in the world to offer discounted harbour dues to the most efficient vessels calling on their ports based on various environmental ratings. Port of Rotterdam has also expressed interest in looking at this.

    Carbon War Room recognises it is challenging to stimulate shipping efficiency investments and in September 2015, released a request for proposal for a $200,000 grant for performance monitoring equipment to be installed when a vessel retrofits with their SFFSM model. Applications for this award have now closed and the winning project will be announced in due course.

    Krispen Atkinson, Principal Maritime Analyst at IHS then addressed the subject from an industry perspective. The key forces behind the changes, he said, are being driven by the UN on the IMO.

    Emission Control Areas (ECA) in North America and parts of Europe have seen sulphur levels capped at 0.1% since 1st January 2015 and ECAs will continue to grow in number with China likely to be the next one. This will bring in far more ships that will have to comply, with serious fines for non-compliers. And although to-date only a small number have been fined this will grow, he said.

    To place this in context, compliant fuel costs $220/250 per ton and a vessel uses 30-40 ton a day. But will emissions regulations push more owners to seek alternatives to using compliant fuel? There is still conjecture as to whether the global sulphur cap of 0.5% will happen in 2020 or if it will be delayed.

    Looking to the future, Atkinson asked will costs reduce? It is unlikely for retrofits as they need a bespoke solution – with every ship requiring its own answers. However time out of service will be reduced as newbuild designs will incorporate “off the shelf” solutions. Plus new entrants into the market will further competition, forcing prices down or we could see a consolidation of existing manufacturers bringing in cost savings.

    To end the debate Atkinson asked us to think about future fuels. Methanol fuel, biofuels, hydrogen and batteries are all being talked about, so this is an interesting time for the maritime world, he said. Certainly there are great opportunities for low carbon, energy efficient technology solution providers.

    Questions from the floor were varied: How can finance models be adapted to help shipowners take up these technologies? Should there be mandatory requirements or incentives and what role does the shipowner play in the greater debate.




2018 November 13

18:06 Navios Containers seeks to list on a U.S. stock exchange
17:53 BIMCO adopts 2020 bunker clauses
17:34 CMA CGM to revamp its CIMEX 2K2 service
17:11 Nevsky Shipyard takes part in «Transport of Russia» exhibition
16:56 NOVATEK shipped first LNG cargo to CNOOC
16:34 KOTUG and Petroconsult join forces to establish KOTUG PETRO Maritime (KPM)
16:20 Ttraining on oil spill preparedness and response held for countries in eastern Africa
16:04 Diana Shipping announces the sale of a Panamax dry bulk vessel
15:55 Throughput of port Kavkaz in 10M’18 grew by 19% Y-o-Y to 42.6 million tonnes
15:34 Royal IHC wins KNVTS Ship of the Year for SCHELDT RIVER
15:03 Damco launches a dedicated warehouse for Barry Callebaut and inaugurates a new facility in the heart of Poland
14:41 MAN Cryo to design and deliver LNG regasification terminal
14:25 LUKOIL reports preliminary operating data for Q3 and 9M’2018
14:03 COSCO Shipping Heavy Industry and GTT sign agreement for LNG carrier repairs
13:42 Alfa Laval wins two orders to supply Framo pumping systems to oil platforms in the North Sea
13:13 HH Ferries Group officially inaugurates two battery-powered passenger ferries
12:48 BIMCO launches survey to highlight biofouling management
12:24 HHLA container throughput up by 1.0 percent in the first nine months of 2018
12:07 Torqeedo reveals new products for electric mobility on the water
11:51 Bunker prices are still high in the Far East ports of Russia (graph)
11:22 Throughput of port Riga (Latvia) in 10M’18 climbed by 6.5% Y-o-Y to 29.9 million tonnes
10:53 RF Navy's training ship Perekop returns from distant cruise
10:29 Brent Crude futures price down 1.04% to $69.39, Light Sweet Crude – down 1.33% to $59.13
10:10 ABP invests £1 million in Port of Lowestoft as part of energy hub vision
09:44 National maritime transport policy training held for Mexican officials
09:16 Baltic Dry Index is down to 1,125 points
09:07 Valencia Containerised Freight Index rises 2.57% and stands at 1,105.61 points
08:07 ERMA FIRST obtains USCG type approval for ballast water treatment system using FILTREX filters
07:18 Long Beach cargo volumes up 5.4 percent in October 2018

2018 November 12

18:01 Major ASW ship Severomorsk of RF Navy's Northern Fleet participates in Russian-Japanese exericse in the Gulf of Aden
17:42 Maritime Administration of Ukraine announced selection of 13 seaport captains
17:04 Maersk Line announces FAK rates from Northern Europe to Middle East and ISC
16:56 Danish shipyard orders large equipment package from Rolls-Royce
16:54 Wan Hai Lines orders 20 new vessels
16:50 Throughput of Rostov-on-Don port in 10M’18 up 18% Y-o-Y to 21.1 million tonnes
16:34 CMA CGM announces GRR from Asia to South Africa
16:22 RF Ministry of Industry and Trade announces tender for R&D and designing of marine systems and technologies
16:04 Bigger share of modal split envisaged for inland shipping in the Baltic Sea Region
15:51 RF Ministry of Industry and Trade announces tender for documentation on construction of Leader icebreaker
15:34 IMRF and The Nautical Institute sign MOU
15:20 Port of Liepaja (Latvia) handled 6.24 million tonnes of cargo in 10M'18, up 19% Y-o-Y
15:04 Yang Ming reports its financial results for 2018 Q3
14:46 Sea Port of Saint-Petersburg completes New Leaders project
14:31 ClassNK and TÜV Rheinland sign partnership agreement for cybersecurity services
14:03 Maersk Line announces rates from North Europe to Far East Asia
13:47 ICTSI plans to invest over P5 billion in Iloilo ports
13:28 Baltiysky Zavod shipyard loaded reactors onto nuclear-powered icebreaker Ural, second serial ship of Project 22220
12:40 Average wholesale prices for М-100 HFO down to RUB 20,508 in RF spot market
11:57 Reduced Klaipeda seaport charges for container ships to boost shipping development
11:34 IMO supports equal opportunities for women in fisheries
11:12 Trinidad and Tobago benefits from IMO port security training
10:49 RF Navy's Northern Fleet holds exercise to assist a submarine in distress
10:13 Brent Crude futures price up 1.55% to $71.27, Light Sweet Crude – up 0.96% to $60.77
09:56 Port of HaminaKotka throughput in 10M’2018 up 12.8% Y-o-Y to 13.57 million tonnes
09:34 Throughput of port Helsinki (Finland) in 10M'18 up 4.8% Y-o-Y to 12.38 million tonnes
09:15 Baltic Dry Index is down to 1,147 points
09:08 Global Maritime Administrators attend the 8th Maritime Public Leaders’ Programme in Singapore
08:51 TORM establishes joint venture with Guangzhou Shipyard International and ME Production to manufacture scrubbers to reduce sulfur emissions

2018 November 11

11:19 Maersk Line increases FAK rates from Far East Asia to Mediterranean
10:16 Day Tourist Tax for cruise passengers to apply to sea cruise and river cruise passengers in Amsterdam