July 27, 2023
For charterers and traders, access to the right insights at the right time might halve emissions from single voyages. On a TC2 voyage 1,300 tonnes of CO2 and its related carbon cost could be avoided by making one single data-based decision. A partnership between London Stock Exchange Group and Siglar Carbon provides actionable emissions data to trading desks, where great carbon and cost reduction potential can be unleashed.
International shipping emits more than 1 billion tonnes of CO2e per year, a number that is projected to rise. 85 million of these tonnes will be included in the EU Emissions Trading System (EU ETS) in 2024, leading to increased cost for owners, charterers and traders who fail to include emissions and its related cost into their daily decisions.
London Stock Exchange Group (LSEG) and Siglar Carbon now partner to provide shipping professionals with the insights needed to factor carbon into their decisions. Analyses by the two companies show that access to the right emissions insight in commercial shipping decisions can drive down emissions and cost on specific routes by 50 %.
The Siglar Carbon TC2e index estimates emissions from ships carrying gasoline between Europe and the USA via the TC2 route - one of the most commonly traded tanker routes. According to the index, the most efficient alternative would emit approx. 1,200 tonnes and the related EU ETS cost would be approx. 25,000 USD. The least efficient choice would emit 2,500 tonnes with an EU ETS cost of 50,000 USD. In 2026, once the EU ETS is fully phased in the same cost would add up to 63,000 and 125,000 USD respectively. The collaboration gives charterers or traders in the spot market access to data which will allow them to instantly locate the most carbon efficient alternative.
Detailed information about emissions and carbon cost is also crucial for ship owners. Siglar analyses show that a charterer or owner who is active in the European short sea market with 20 ships could generate approx. 100,000 tonnes of CO2 eligible emissions a year. At a carbon cost of USD 100 per EUA, this would mean an added cost of USD 10 million per year once the EU ETS is fully phased-in. Charterers and owners engaged in larger vessels could easily generate ETS eligible emissions close to 500,000 tonnes of CO2 per year with an annual carbon cost of 50 million USD.
Sigmund Kyvik, Siglar Carbon CEO, comments:
“Right now, the most efficient place to start cutting shipping emissions is at the trading desk, where actionable emissions insights can unleash substantial reduction potential. This makes LSEG’s unique position with the Eikon platform a great enabler for commercial decarbonisation.”
Fabrice Maille, Head of Shipping & Agriculture at LSEG, comments:
“When evaluating the different options in maritime trade the right insights are vital to cut emissions and costs. The partnership with Siglar Carbon provides our users with the necessary insight to make carbon efficient decisions. There are already ongoing efforts to decarbonise focusing on aspects such as fuels and ship technology but planning carbon-efficient voyages is a low hanging fruit and the coming carbon cost makes it more attractive than ever.”
LSEG (London Stock Exchange Group) is a leading global financial markets infrastructure and data provider, playing a vital social and economic role in the world’s financial system. With our open approach, trusted expertise and global scale, we enable the sustainable growth and stability of our customers and their communities. We are dedicated partners with extensive experience, deep knowledge and a worldwide presence in data and analytics; indices; capital formation; and trade execution, clearing and risk management across multiple asset classes. LSEG is headquartered in the United Kingdom, with significant operations in 70 countries across EMEA, North America, Latin America and Asia Pacific. We employ 23,000 people globally, more than half located in Asia Pacific. LSEG’s ticker symbol is LSEG.
About Siglar Carbon
Siglar is an independent Norwegian provider of actionable emissions insights helping to reduce ship emissions and spot commercial opportunities. We monitor, report and analyse granular emissions data for large cross commodity cargo and ship owners. Our best in business predictive emissions analytics help our customers understand carbon risks and opportunities related to commercial shipping decisions. Our team consists of 25 people combining extensive experience from the global shipping industry with leading edge technology.