• 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 September 25

16:29 Kotug Smit Towage performs naming ceremony for tug Southampton
16:20 Portugal joins WISTA International
15:38 Volga Shipping Company named the best in terms of transport security
15:12 Mr. Birkir Hólm Guðnason hired as CEO of Samskip Iceland
14:11 CMA CGM to review sales policy regarding Low Sulphur IMO 2020 Regulation
13:49 NIBULON successfully completed its passenger transportation season
13:11 North Carolina Ports’ terminals resume full commercial operations following hurricane Florence
12:50 Fuel oil prices are going up in the Far East ports of Russia (graph)
12:31 Havila Kystruten selects Havyard to deliver the ship design and extensive equipment package for four new vessels
12:14 European ports welcome Parliament’s explicit support to remove the tax barriers for shore-side electricity for ships
12:01 Long Beach Commission OKs budget for expanded rail yard
11:43 DHT Holdings announces $50 mln scrubber financing
11:32 Nevsky Shipyard takes part in «Marintec Offshore Russia» exhibition
11:00 GTT receives a new order from Samsung Heavy Industries for the tank design of two new LNG carriers
10:55 NYK announces delivery of new wood-chip carrier for Hokuetsu Corporation
10:24 Baltic Dry Index is up to 1,434 points
10:01 Brent Crude futures price up 0.2% to $80.69, Light Sweet Crude – up 0.12% to $72.17
09:38 Yaroslavsky Shipyard lays down oil recovery vessel of Project Р2114 for Transneft
09:15 Audit summary report to be considered by Sub-Committee on Implementation of IMO Instruments

2018 September 24

18:36 DNV GL unveils the complexity of ocean governance in report for the UN Global Compact
18:03 Klaveness Combination Carriers AS announces completion of USD 45.0 million private placement
17:52 Port of Southampton recognised in top 20 under 40 cruise award
17:36 CMA CGM announces GRR from India West Coast to Mozambique
17:03 Metropolitan Plan for Great Newcastle endorses Port of Newcastle vision
16:50 Ust-Luga Container Terminal handles cargo for Nord Stream 2
16:47 Wightlink names its new flagship
16:45 Bomin exits the bunker markets in Singapore and Antwerp
16:43 Hamburg and St. Petersburg strengthen cooperation at the Port Evening
16:33 DNV GL ends operations in Iran by 4th November
16:19 Vladimir Panchenko dredger built by Shipbuilding - Ship Repair Corporation features local content of 90%
16:03 IMO sadness over Nyerere casualty
15:47 Moby Dik terminal starts handling vessels of Sea Connect line
15:33 Wärtsilä inaugurates upgraded EGC test facilities in Norway
15:20 ESPO wants more ambition on harmonisation of data, while maintaining flexibility in reporting systems
15:03 Vinalines to build 2 terminals at $299 mln in Lach Huyen Port
14:46 Port of Antwerp presents smart port of the future at Supernova
14:33 DFDS Seaways raises capacity on route Zeebrugge - Norway
14:18 Feasibility study of concession of state stevedoring companies «Olvia» and «Kherson» presented for acquaintance to potential investors
14:03 Norway’s largest cruise port of Bergen to build Europe’s largest onshore power supply facility
13:59 Sea Port of Saint-Petersburg named one of the best transport infrastructure facilities
13:34 Average wholesale prices for М-100 HFO up to RUB 21,529 in RF spot market
13:11 Okskaya Sudoverf lays down fourth dry cargo carrier of Project RSD32M
12:45 NOVATEK shipped first LNG cargo to Brazil
12:23 Finalists for the Seatrade Maritime Awards in Dubai announced
12:00 Nor-Shipping 2019 takes place in Oslo and Lillestrøm, Norway, from 04 to 07 June 2019
11:16 Longline factory ship Marlin laid down by Severnaya Verf shipyard to feature 40% of local content
10:54 Damen performs float-out of Australian icebreaker
10:52 NOVATEK increases number of Management Board members
10:28 Smart shipping to be under the spotlight at Seatrade Maritime Middle East
10:05 Baltic Dry Index is up to 1,413 points
09:43 Brent Crude futures price up 1.25% to $79.22, Light Sweet Crude – up 1.2% to $71.63
09:21 Freeport of Riga’s project on construction of Krievu Island Terminal enters its final phase
09:00 Vice Premier Han Zheng inspected COSCO-PSA terminal in Singapore
08:14 International maritime community reaffirms cooperation in the Straits of Malacca and Singapore

2018 September 23

10:47 DEME unveils innovative nodule collector pre-prototype ‘Patania II’
10:33 Global Ship Lease secures additional charter coverage and adds Maersk Line to charterer portfolio
10:30 Hapag-Lloyd announces rates from Latin America to North Europe and South Europe

2018 September 21

18:06 Forth Ports wins prestigious award for community work
17:44 NCSP Group's cargo turnover for January–July 2018 totaled 82,351 thousand tons
17:28 First ISO-container ever loaded with liquefied natural gas at the LNG terminal in Świnoujście