Richard Branson
Advertorial Feature
05
Preparing for CO2 emissions regulation: What shipowners and operators should do today to prepare
In a not too distant future, ship owners, operators and charterers will have to account for CO2 emissions as a cost item in their in voyage estimates, the same way as bunker fuel consumption or port duties are computed today.
Today, fuel efficient ships are rewarded by the market with higher daily rates, and more competitive ports become ports of choice for many operators.
Ships with lower CO2 emissions however don’t command the same premiums because there is no direct economic incentive for the market to use a ship with a lower carbon footprint. This will soon change: various options are being considered at the IMO for an international agreement that will put a price on each ton of CO2 emitted by ships; failure by the IMO to reach an agreement by the end of this year is likely to trigger a decision by the European Union in 2012 to move unilaterally by including all ships, of any flag, calling at ports within the EU to have a cap on their emissions and be included in the EU Emissions Trading Scheme.
Whilst acting unilaterally may not be the preferred option for the EU, this is exactly what it has done in the Aviation sector, when it decided that all airlines flying to, from and within the EU will be included in the ETS starting in 2012.
The message to the shipping community is clear: whilst the exact mechanisms are not yet defined, within a few years CO2 emissions will affect a ship’s competitiveness and have a tangible impact on the bottom line.
Shipowners have a reputation for being one of the most dynamic group of entrepreneurs, and the upcoming regulation of CO2 emissions should be seen as an opportunity to embark on a low carbon growth strategy with the ultimate goal of achieving a first mover advantage and ensuring competitiveness of the fleet.
To draw a comparison with bunker fuel consumption: the decision to invest in a more fuel efficient ship is typically made by contrasting increased investment costs with the potential higher daily rates a more fuel efficient ship may achieve. Ship owners should start implementing low carbon growth plans to ensure opportunities are maximized, especially as a large number of CO2 reduction initiatives have a negative cost of abatement, meaning they can be implemented at zero cost.
About the Author and Enecore Carbon Stuart Cerne is the CEO of Enecore Carbon, a company active since 2006 in the management of compliance to emission reduction targets for some of the world’s largest emitters through the development of emission reduction and energy saving projects.
Stuart has a strong interest in reducing CO2 from the shipping industry given his strong shipping background: Prior to working with Enecore, Stuart worked as a shipbroker with Simpson Spence & Young and Midship Marine, as well as for the London office of the Greek shipowning group of Vangelis Marinakis (Curzon Maritime, Barclay Shipping, Capital Maritime, ESTC).
Two simple and low cost things that ship owners should consider doing today:
1. Implement a Carbon and Energy Management Plan – Centralizing energy and emissions measurement and benchmarking is the first step toward identifying and implementing latent CO2 reduction opportunities, and can serve as the basis for identifying future compliance needs;
2. Learn from the Aviation industry experience – as an example, many airlines failed to fill in simple questionnaires in March 2011, and therefore will not be eligible to receive free emission allowances, meaning they will have a much higher cost of CO2 emissions than their competitors who complied;
Stuart Cerne CEO Enecore Carbon
stuart.cerne@enecore.com
Hong Kong +852 2855 6078
info@enecore.com
www.enecore.com WWW.CARBONWARROOM.COM ISSUE 02. JUNE 2011
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68