Agriculture
Biochar Livestock Sustainable Agriculture
Energy Supply
CHP & Energy Recovery Renewable Energy Transmission, Distribution & Storage
Forestry
Sustainable Forestry
Industry
Building Materials CO2 Removal Industrial Energy Use
Buildings
Energy Efficiency
Transport
Aviation Road Transport Shipping
Waste
Landfill Gas Recovery & Waste to Energy Recycling & Waste Reduction Waste Water & Sewage

You are here

  1. Home
  2. > What We Do
  3. > Operations
  4. > Shipping Efficiency
CLOSE

The shipping industry has the opportunity to save $70 Billion per year on fuel and reduce carbon and other pollutants by 30 percent.

MISSION

Vision

Operation Shipping Efficiency aims to encourage investment, development and installation of energy efficiency technology to improve the efficiency of the fleet, by providing transparent data to the wider market. The latest International Maritime Organization study highlighted that up to 75% fuel efficiency was potentially achievable.

Operation Shipping Efficiency envisions a future shipping industry whereby technologies that deliver both real cost savings and reductions in carbon emissions are deployed on both new and existing ships. From modern wind power, energy recovery (waste heat recovery from engine) and hull optimization air lubrication to new optimized engines and the latest in rudders, hull coatings and propeller technology, the future fleet will be a flagship for efficient transport. As a result of retrofitting the existing fleet, new jobs and business will be created for ship-yards and contractors around the world.

About the Shipping Operation

Take Action

BACKGROUND

The Situation

The maritime shipping industry emits more CO2 than Germany and is the 6th largest producer of greenhouse gas (GHG) emissions globally. Despite being the most efficient method of cargo-transport, because over 90% of the world’s goods are transported by sea, the industry emits more than 1 billion tons of CO2e per year. Maintaining business as usual will result in an estimated 250% growth in emissions by 2050, leaving the industry responsible for 18% of global emissions.

This challenge provides a significant opportunity to reduce costs and emissions. At current bunker fuel prices, the industry can save $70 billion per year and reduce emissions by 30% through the adoption of technologies and operational measures.

In spite of the cost savings, these technologies are not yet being broadly adopted by the industry. We have identified several market barriers responsible for this, based on five years of engagement with industry stakeholders and reviews of current research and surveys conducted by University College London Energy Institute. These market barriers include:

  • Suboptimal information regarding relative vessel efficiency
  • Split-incentives, whereby approximately 70% of the bunker fuel in the industry is paid for by the cargo owner; the ship owner has no incentive to pay for the technologies as they would not benefit from the resulting fuel savings
  • Lack of access to capital to fund the retrofits

The Opportunity

Working with experts across the industry, the Carbon War Room has identified three key objectives to address the barriers and encourage greater efficiency in the shipping industry:

  • Improve the flow of information about the relative efficiency of the existing fleet and enable greater transparency
  • Increase the demand for energy efficient vessels and efficiency retrofits
  • Unlock new sources of third-party capital for efficiency retrofits by attracting sources of private finance and developing the financial mechanisms to accelerate investment
Increased Information Flows and Transparency

In recent years, a variety of international stakeholders have criticised the accuracy of and calculations behind the shipping industry’s carbon emissions, noting that the most recent calculations were underestimated. ShippingEfficiency.org aims to bridge the information gap within by increasing transparency in the existing fleet.

 
Demand Side ‘Pull Through’

Operation Shipping Efficiency convenes key stakeholders, such as the people who rent ships, pay for the fuel, and run ports, to convince them of the commercial and environmental benefits of incorporating carbon emissions data into everyday decision-making.

 
Unlocking Capital

Shipping companies or ship owners that pay for technology retrofits do not receive the full benefit, because clients and others enjoy the fuel and thus monetary savings – therefore aligning financial and environmental interests is crucial to facilitating needed capital flows.

Take Action

STRATEGY & PROGRESS

Using this approach, we have achieved the following to date across our objectives:

Improve Information Flows and Transparency

  • In partnership with RightShip, we provide the world’s first carbon-specific eco-label for the industry through ShippingEfficiency.org, and drive widespread use of the tool by the industry.
  • Launched in December 2010, the A to G label is a simple-to-use tool enabling charterers and shippers to select the most energy efficient vessel; allowing terminals, insurers, and banks to provide preferred rates for more efficient vessels; and rewarding ship owners for investing in efficiency technologies for their vessels.

Increase Demand for Efficient Vessels and Efficiency Retrofits

  • Currently, 23% of the non-container charter market uses the A to G rating system to inform their vessel chartering process, positioning it as the main carbon-specific index in the industry. This represents 1.8 billion tonnes of cargo, 26 companies, (including Cargill, Huntsman, and UNIPEC UK), and 22,000 vessel movements per year.
  • In January 2014, Prince Rupert Port Authority and Port Metro Vancouver became the first ports in the world to offer incentives to the most efficient vessels calling to their ports based on the A to G rating, rewarding those ship owners who invest in more efficient fleets. Now, we are promoting adoption of the rating system at other ports around the world. Read more in our news bulletin

Mobilize Capital to Finance Technology Retrofits that Enhance Efficiency

  • Most recently, we have partnered with PwC and UCL Energy Institute to develop innovative finance models that can provide financing for efficiency retrofits to cover multiple vessel upgrades. Read more about these finance models in our whitepaper Hidden Treasure: Financial Models for Retrofits
  • We are also working to build consortia around bankable deals to bring more capital to the industry. In the long term, our goal is for these financing models to be widely used across the industry, facilitating the adoption of more efficient maritime technologies within the existing fleet.

Getting Involved with Shipping Efficiency

  • Charterers and Shippers: Join the movement of industry leaders using A to G ratings to inform vessel selection
  • Shipowners: Contact us to explore opportunities to retrofit your fleet using third-party finance
  • Ports: Contact us for information on offering incentives using the A to G ratings

You can also find out more at ShippingEfficiency.org and follow us on Twitter @shipefficiency.

Increased Information Flows and Transparency

Over the next year the web platform will become more robust. We will continue to work with port authorities, shippers, technology companies, and buyers of shipping services to deliver highly specified information, tailored to each stakeholder group.

 
Demand Side ‘Pull Through’

We continue to convene those that pay for the fuel, run ports, & buy/sell ships regarding the incorporation of carbon emissions data into everyday decision-making. Operation Shipping Efficiency is working with leading ship owners and technology firms on the supply-side and shippers and ports on the demand-side to encourage the up-take of new standards.

 
Unlocking Capital

Operation Shipping Efficiency is working with stakeholders across the entire shipping value chain from ship-owners and charterers through to financiers and insurers to align economic and environmental interests to facilitate necessary capital flows for investment in clean technologies for the new and existing international shipping fleet.

Take Action

There is no Planet B™
Carbon War Room in association with Elsevier Biofuel TechSelect Go to the Carbon War Room website