Controlling costs and gaining carbon credits
Trevor Solomon, Intersleek Business Manager, at International, Akzo Nobel’s marine coatings business discusses the company’s carbon credits offer with Wendy Laursen.
Controlling costs while meeting environmental legislation will be a top priority from 2015 onwards. According to one leading operator, compliance with ECAs will cost around US$250m per year for 650,000 tonnes of fuel with 0.1% sulphur content, equivalent to 7% of all fuel purchased by the company.
Amid these circumstances, ship operators should think laterally about the options available to them. While paying a higher cost for distillates may be unavoidable, there are technologies available that can reduce overall fuel consumption by improving operational and energy efficiencies. The resultant savings can be used to offset the cost of ECA compliance.
One example is advanced hull coatings, which can reduce bunker bills by safeguarding underwater hulls against marine fouling, including slime. Slime is a complex, varied and dynamic range of organisms that begin to colonise surfaces as soon as they enter the water. It has been proven to have an adverse effect on the efficiency of all vessel types to the tune of 44 million extra tonnes of bunker fuel, US$28.6 billion in additional fuel costs and an extra 134 million tonnes of CO2 emissions per annum across the industry.
International has invested significantly in research and development, and most recently, this has resulted in the development of Intersleek1100SR, said to be the shipping industry’s first biocide free, fluoropolymer technology that influences and resists the adhesion and settlement of the organisms that make up slime.
The technology has been proven to increase vessel efficiency and reduce CO2 emissions and associated fuel costs by an average of 9%. All those operating in ECAs can benefit, because the coating can be applied to any commercial vessel, even those slow or ultra slow steaming.
On top of fuel savings, Intersleek1100SR can contribute to the wider profitability of the business by generating a 40% reduction in paint volume and 60% reduction in VOC emissions for first time application. At future dockings it can reduce paint by around 75%, VOC emissions by over 80% and waste packaging by over 60%.
While the economic importance of underwater hull conditions as a means of combating sustained high bunker prices is indisputable, liquidity and a lack of finance remain barriers for the uptake of clean technologies within the shipping industry. Although hull coatings are used more than any other eco-efficiency technology increasing uptake and driving greater efficiency gains requires the industry to look at innovative financing models to better incentivise owners and operators.
International recognises this need and has spent over two years working in partnership with the Gold Standard Foundation to develop the first marine-based methodology for generating carbon credits within the shipping industry.
The new methodology is aimed at shipowners and operators converting to International’s range of premium eco-efficient foul release technology coatings, Intersleek on all types of existing vessels currently coated with biocidal antifoulings. There is effectively money available, and on the table for the many owners and operators that are currently using Intersleek technology to coat their vessels.
In fact, based on the 100 existing ships already converted from a biocidal antifouling to Intersleek technology, there is an estimated US$3.6m worth of carbon credits potentially available to shipowners and operators.
A baseline emission level is determined for the vessel prior to the application of Intersleek with the same data source then used to determine the emission savings after the application of the technology. The carbon credits generated are directly related to reduced emissions as a result of the reduction in fuel consumption.
Using a ‘results-based finance’ approach, carbon credits are awarded annually, based on vessel data that is collected, analysed and administered by International; shipowners and operators do not have to invest any time, capital or resource in generating carbon credits. The data is then submitted to The Gold Standard Foundation for validation. To ensure rigour and transparency, the fuel savings that are generated are verified by independent UN accredited auditors.
Once the carbon credits are issued to International they can be sold at market price and the revenue given to customers. Besides selling them on the carbon market, carbon credits can be passed on to important stakeholders to offset their emissions (e.g. cargo owners) or can be used to voluntarily offset other sources of CO2 emissions.
The generation of carbon credits demonstrates sustainability leadership enhancing the brand and reputation of shipowners and operators, particularly among shippers and charterers who are now placing a significant premium on increased sustainability within the shipping supply chain.
Following the public launch of the programme in April 2014, several International customers are going through the process to unlock their carbon credits. The first claim, consisting of 17 vessels from two owners averaging 3,000 credits per vessel per year, will be available in February 2015. While the details of the claim are still being finalised, it is expected that almost 100,000 credits will be claimed, or $600,000.
When the global sulphur limit drops from 3.5% to 0.5% in 2020 or 2025 and in all European Union waters from 2020, no commercial operator will be immune from the cost of environmental compliance. Carbon Credits can provide tangible returns that incentivise the international shipping community to invest in clean technology.
Due to continued expansion Select Offshore Ltd, are looking to recruit an Offshore/Marine Consultant... Read more
Provides expert knowledge, operational advice and overarching support to the Gas Fleet teams afloat ... Read more
Are you looking for a new challenge and would you like to work with a heritage company that has been... Read more
We have a fantastic opportunity for an experienced and talented Sales Executive to join our fast-gro... Read more