Helena Athoussaki, CEO, Carbon Positive, writes*:
Emissions control equates to operational efficiencies: this is a statement that is not new to the tanker sector, but one that is increasingly pertinent as fuel costs remain high and charter rates weak. Owners and operators are faced with the ongoing challenge of sustaining operations. To survive in these conditions and adapt for the future, streamlining is absolutely imperative. A significant factor in achieving this and securing your business for the long-term is measuring and managing your carbon emissions risk.
Carbon risk is an issue that demands prompt action. Given the EU’s latest announcement that it plans to consider creating Carbon Emission Control Areas (CECAs), shipping could be exposed to further carbon penalties and costs unless action is taken to measure and manage emissions. This risk comes from the need for compliance, but also ensuring a competitive advantage and generating efficiencies. To generate these efficiencies, measuring your carbon footprint to understand your starting point and monitoring reduction methods on an ongoing basis is essential.
Remaining competitive in the current market requires an understanding of your carbon footprint – and this demand comes from all elements of the supply chain. Investors, financial institutions, charterers and increasingly industry associations are all evaluating transparency of sustainability information, including carbon footprint and CSR initiatives and using this as a factor in decision-making. Moreover, charterers are increasingly scrutinising the vessels that they hire to ensure that they are contracting only the most efficient vessels.
Regulation is another driver, and with mention of CECAs potentially adding to existing regulation including EEDI, SEEMP and EEOI, shipping already has a foundation on which to base its actions. However, compliance with regulation should be seen as a minimum – shipping must go beyond these requirements. SEEMP in particular is a great example of regulation that provides a foundation for compliance with a monitoring and reporting process, but developing this further by ingraining the principles of measurement and monitoring emissions and using this across your organisation is the next step – a form of ‘SEEMP Plus’ – and one that will benefit individual companies and the industry as a whole.
Measuring, monitoring and reporting energy efficiency, as SEEMP stipulates, opens the door to industry-wide data transparency on carbon emissions. This will be invaluable for the successful selection of market-based measures, given that a price on carbon is a certainty in the future. For individual tanker operators, this process will promote best practice standards and enable fair and practical benchmarking for genuine emissions reduction.
It is time to take emissions reduction back to basics, and measurement is at the heart of this. Standardising measurement is essential for shipping to make progress in reducing its carbon footprint. UNFCCC and EU guidelines already provide the foundation for a methodology to work with, citing completeness, consistency, cost-effectiveness, transparency and faithfulness as the principles for any effective measurement process.
Embedding measurement and therefore emissions reduction as part of a process within an organisation demands a level of expertise and whilst there is a steadily growing awareness of regulation, abatement measures and principles, shipping is still very much undergoing an education. Expert guidance is therefore necessary to enable you to create a comprehensive database of your historical emissions. This will provide the basis for ongoing monitoring on a daily basis and in line with the Energy Efficiency Operational Indicator (EEOI), which is a transparent and recognised approach to assess the carbon efficiency of a vessel.
Experts can also assist you by conducting a full on-board energy audit to assess each vessel’s operational pattern, establish energy consumption key performance indicators and identify potential energy saving opportunities. A thorough cost benefit analysis of the various technical and operational measures that will deliver optimum emissions reduction can then be carried out to ensure that the most relevant measures for your organisation and fleet are used. Evaluating your baseline carbon footprint and using this precious data to set realistic reduction targets that can be met cost-effectively is at the heart of any emissions control programme. Finally, an outsourced provider can also deliver valuable training for onboard and onshore personnel of SEEMP and its procedures, which will be crucial to truly implement energy efficiency measures and achieve reductions across your organisation.
There has been talk of the potential for overspending on investing in new, super efficient vessels within the tanker sector, but in reality there are many different technical options, including retrofit, that negate the need for high newbuild capex to be an issue. Crucially, being able to identify these measures and making an informed investment based on all potential options is another benefit of conducting a thorough measurement process.
Whilst emissions control within shipping and in particular, managing carbon emissions risk, is still in its formative stages, owners and operators that act now have a significant opportunity to not only reap commercial benefits for themselves in the short term and stabilise operations for the future, but also contribute to shaping a workable regulation for shipping, grounded in realistic baselines.
Measurement is fundamental to making progress on emissions reduction, and whilst the industry appears to be in agreement that a formal process is needed, making this a reality by adopting measurement as a part of daily operational life will be the next emissions reduction milestone.
* This article was written especially for Tanker Operator for the Jun/July 2012 issue.-