Decarbonization is a hot topic across the shipping industry, affecting decisions by a multitude of stakeholders. Pressure exists not only from regulators – but also from consumers, bankers, and insurance providers. The impact of carbon emissions calculations has broad-reaching implications for all stakeholders, but most especially for shipowners, fuel suppliers, and charterers.
Whether you’re calculating carbon emissions in support of CII, ETS, or your own ESG initiatives, producing detailed and accurate emission assessments is no longer a reasonable “nice to have” goal or a “too hard to get” response. With impending EU and ASEAN tax schemes coming in 2024, guesstimates or generic calculated reporting could leave you unfairly financially penalized.
It’s possible you’re closer to achieving your emissions goals than you think. If you’re using typical industry calculations, you could be significantly overstating your emissions, and understating your performance.
Our recent analysis on over 12,000 vessels indicates that emissions reporting in the industry in 2021 was over-reported by an average of 4.18% – with the range being from 2% to 20%! That’s significant when you equate percentage points to money that is tied directly to CII constraints, lost commercial opportunities from shippers, and very soon, carbon-tax schemes across the globe.
One thing we found to have a huge impact on emissions reporting is the baseline that fleets are using to measure their carbon emissions. The methodology used can significantly impact the results depending on when measurement began and the extent to which the actual fuels (by bunker), engines, and voyage information was used.
Current emissions models offer only rough estimates based on generic calculator models that don’t account for chemical interactions, source fuel data, or supply/delivery chain impacts. Many also require massive amounts of manual input, or the installation of costly devices aboard vessels.
As an example, one of our shipowner clients reported their fleet emissions using the standard DCS emission ratios. When we examined their fuel lab results and operations data using our patent-pending artificial intelligence technology, we discovered that the fuels they purchased, and the engines that burned them, produced at least 8% lower CO2 emissions than reported… and that was before any equipment and operational improvements. If they had to pay EU carbon taxes on a typical year’s European destination voyages based on their DCS analysis, they would have overpaid by more than €500K per year.
Today it’s possible to use FuelTrust’s AI and science, along with your own operation data, to get accurate yearly emissions results in weeks, not months. This gives you the ability to establish a more accurate CII basis with your Class Society. Further, it produces accurate “green credentials” for your vessels for Charterers whose initiatives to reduce their Scope 1 and Scope 3 emissions are critical to their chartering decision-making. Through an accurate, scientific assessment of your carbon emissions baseline and your improvements – both direct and indirect benefits for your fleet and your customers can be achieved.
By processing tens of thousands of chemical and combustion simulations, based on ISO lab COAs and fuel burn, FuelTrust’s Carbon Baseline solution determines the actual carbon and other emissions based on the specific fuel bunkers used, the consumption patterns, voyage information, and fuel lifecycles. This means we can produce an exacting measurement of your actual historic emissions for each vessel and each voyage.
Since Carbon Baseline can provide emission results for previous voyages, it helps you not only certify past emissions, but can also help you verify the ROI of the investments you’ve made over time, such as adding scrubbers or hull coating. One of our clients calculated they had achieved a 4% reduction against their IMO 2050 goal of 50%. Our analysis, going back to 2019, proved they had achieved a 36% reduction! That’s a significant difference with big financial implications when it comes to future carbon tax and vessel value.
Imagine how useful accurate and validated carbon emissions information could be in support of CII and EEXI regulations reporting, measuring the ROI of efficiency investments, or validating KPIs associated with your company’s initiatives, and your IMO 2030 and 2050 emissions reduction goals.
Companies that establish a scientifically validated carbon baseline for their fleet will have a commercial and ESG compliance advantage because the science makes a material difference.
We’d love to deliver you a validated historic performance baseline in less than 8 weeks – come talk to us.
