The global shipping industry is essential to the functioning of our societies and economies, as more than 80% of global trade, by volume, is carried by sea. It is by far the most carbon efficient way of transporting goods across continents. However, shipping emits more than 1 000 million tonnes of CO2e per year, and according to the Fourth IMO Greenhouse Gas Study the number is projected to rise. This leaves a big gap to close if we are to reach the Paris Agreement target to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels, or even to reach the International Maritime Organization's less ambitious target of reaching 50% emissions reduction by 2050, compared to 2008 levels.
If we continue along the current trajectory and only start reducing emissions in 2030, we’ll need to get to zero emissions by 2044 to stay within the well below 2 °C carbon budget. To stay within the 1.5 °C budget we’ll need to get to zero emissions by 2030. That’s why it’s so important to start reducing emissions as quickly as possible. If emissions remain high, we’ll need to cut back even more rapidly in the future, states the International Council on Clean Transportation (ICCT) in an article about why the IMO needs to pick a zero date and set interim targets in its revised GHG strategy.
Ships have an lifespan of 20 years or more, and 50% of ships sailing the oceans today will still be sailing in 2030. So, to make short-term emissions reductions we need to do something about the way today’s fleet is traded and operated. This change cannot be made by ship owners alone, other maritime ecosystem actors need to be involved.
The Siglar CEO, Sigmund Kyvik, argues that a common carbon language is needed to accelerate substantial short-term reductions in maritime emissions. Below, he explains why he thinks a common carbon language for the maritime industry is necessary, and why Siglar decided to launch a free carbon estimator to kickstart the learning of this language.
Why does the maritime industry need a common carbon language?
My background as a commodity trader being involved in the commercial side of shipping taught me that fragmented access to information as well as lack of transparency often results in sub-optimal decision-making. In a complex chain of information where charterers, operators, brokers and shipowners often work in silos, I experienced that neutral and comparable data was hard to come by.
Even if the industry is opening up, comparable data is still in short supply and there is no common reference for data quality for fuel performance monitoring or for environmental reporting across the industry.
Siglar Carbon's role is to provide comparable and actionable emissions insight to commercial shipping decisions. Our insight is based on neutral data input, allowing everyone to speak the same language and making sure no one is comparing apples to bananas.
To speed up the learning of the common language, we launched the Siglar Carbon Estimator, free of charge for all shipping professionals.
Why did you choose to make the Siglar Carbon Calculator free of charge?
We know that the willingness to pay for such a tool is high. Cargo owners, traders and brokers have long expressed the need for a tool to compare ship and voyage candidates based on emissions so that they can bring emissions data to negotiations. Forward leaning ship owners who have invested in carbon efficiency experience that our estimates promote their emissions performance. The way I see it they are all expressing a need for the common carbon language, and our estimator is a basic introduction to such a language.
Making a free version of the estimator will accelerate both the use of the common carbon language and the needed decarbonization of the maritime industry.
However, I must admit that another motivating factor for us as a relatively young company has been to challenge the established shipping societies and prove that innovation often is easier without heavy luggage, and that sharing information is a key enabler for decarbonisation.
There is also no need to hide that we’re hoping to attract new customers to our full carbon efficient chartering platform where the carbon estimator is available together with more detailed and tailored emissions insight and predictions. The more people on our platform, the more data in our learning loops and the better our estimates. We believe that it eventually will be a win win for both the users of the estimator, for our clients, for us and most importantly for the planet.
There are other initiatives trying to set environmental standards for the industry, why should the industry embrace Siglar’s standards?
There is an old saying that “cargo is king”, and large responsible charterers have been waking up to the fact that they can use their purchasing power to set standards. We work closely with some of the world’s largest charterers, and my experience is that their views weigh heavily in discussions.
We have agreed on a common reference for data quality for fuel performance monitoring and the Siglar carbon data collection clause is being used by our clients and generally accepted in the industry. On the reporting side, the launch of the Sea Cargo Charter (SCC) supported our standards. The SCC framework for assessing and disclosing the climate alignment of ship chartering activities is 100% in line with our reporting standards, however the Siglar reporting model provides more detailed data for analysis.
What has the feedback been like since the launch of the free Siglar Carbon Estimator?
The number of sign-ups from the industry a week after launching has amazed us, and the overwhelming positive feedback from all over the world and many different segments took us by surprise. Honestly, we expected some unfriendly inquiries especially from ship owners, but only praise and interest in our neutral estimates have come to my ears so far.
I see this as a great proof that the industry needs a common carbon language. The amount of positive feedback that we have received from the industry and the will that they have shown to contribute also proves beyond question the need for a neutral party to make emissions insight available.
If you want more insight into your shipping emissions profile and your future emissions exposure, please drop us a line.
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