September 30, 2022
With increased expectations on reporting and reducing emissions through the value chain, reporting shipping emissions is becoming the norm. Collecting emissions data can also unlock great commercial opportunities. In this article we have summariszed some of the benefits from collecting emissions data from chartering.
When asked, Siglar Carbon clients state the following motivations to collect emissions data from chartering:
Aside from public regulations, multiple stakeholders expect sustainable business practices by the companies they engage with. Research by McKinsey show that two-thirds of consumers are changing their consumer habits towards lowering environmental impact. While sustainability demands have stronger foothold with end consumers, we see leading charterers moving in the same direction. Demonstrated by the introduction of the Sea Cargo Charter – a framework for reporting emissions from chartering, signed by some of the industry’s largest cargo owners.
“Emissions data can give insight and more importantly it can give you an edge. You can negotiate a more competitive offer, you can charter the right ship, you can position your ship the right way” Arthur Richier, Head of strategic partnerships at Vortexa
Collecting data does not only serve as an internal benchmark for emissions performance compared to company targets, it’s also a great opportunity to promote your performance to your counterparts to stand out in the crowd.
Commercial decarbonization = commercial opportunities was the unanimous advice from an interdisciplinary panel during Nor-Shipping 2022.
On July 14th last year the European Union voted to include maritime activities in the EU Emission Trade System. Till date, the EU ETS cost will be the most direct carbon cost on global shipping, currently at a cost of $72 per ton CO2 emitted.
While the final details are still to be agreed on, the implementation of shipping in the EU ETS will bring additional cost into the value chain and charterers should prepare accordingly. Siglar Carbon data shows that European carbon price above USD 100 can increase freight rates by 10-30 %.
Through systematic data collection charterers can identify their carbon cost exposure under the new regulations and understand the impact on different trading patterns.
Where do we start, and where do we stop evaluating emissions from chartering?
While you can derive much information from reports of completed activities, the largest reduction potential is prior to fixing. If you look to collect emissions data, it’s important to define your requirements; is reports on historic emissions sufficient, or are you looking for a solution that gives you the ability to reduce the environmental impact of your activities?
The adoption of a dedicated solution will improve the quality of the insights, decrease the cost of operations, and offer a complete end-to-end approach from cargo planning through carbon accounting after voyage.
Siglar Carbon offers tools that allow charterers to manage emissions throughout the entire chartering process, with pre-fixture emissions predictions, live monitoring along the voyage and insightful reports to better understand the environmental impact.