Sustainable growth report 2023

We promote sustainable regulations to drive innovations and investments in more eco-friendly technologies, creating opportunities for the development of cleaner, more efficient vessels and infrastructure.

Ultimately, these efforts contribute to a more sustainable and resilient maritime industry that can thrive while safeguarding the health of our planet. We need regulations to create a (global) equal level playing field. We are critical on regulations that do not result in these goals. We are vocal through various partnerships and conferences about our vision towards sustainable shipping.

CII
One of IMO’s new regulations starting on January 2023 is the implementation of the CII (Carbon Intensity Indicator) for all vessels above 5,000GT. A till C scores are satisfactory. In case a vessel scores 1 time an E or 3 times in a row a D, a new SEEMP plans need to be submitted. CII scores of our fleet for 2023 are provided in the paragraph under emissions. We believe that the current CII regulation in its current form does not effectively reduce emissions, as intended. We promote the review of the regulations by IMO in 2025.

EEXI
The Energy Efficiency Existing Ships Index (EEXI) is a regulation by the IMO, supplementing the Energy Efficiency Design Index (EEDI) for newbuildings, that applies to existing ships above 400GT. The scope for improvements for these ships, however, is limited.

The mathematical framework of the EEXI rule tends to penalise ships with relatively large engines, despite the fuel efficiency of larger vessels. Given the short time available to comply with EEXI regulations, we were faced with a choice between Engine Power Limitation (EPL) and Shaft Power Limitation (ShaPoLi). We opted to implement ShaPoLi. With this system we could keep the full power available for the power take-off. It also allows ice-class vessels to utilise the full power on the shaft when necessary, such as when sailing in icy conditions.

This overridable functionality ensures the safety of the ship in icy conditions. Out of our entire fleet, 13 ships qualify for a ShaPoLi. During 2023, 10 ships were equipped with this system. The remaining 3 ships are scheduled to receive this system during the first half of 2024.

We are in favor of reducing emissions by existing ships however, this measure is only focusing on engine power, therefore we think this regulation can be further improved. Lowering the engine power results in lower speeds. The expectation is that by lowering the speed of a vessel the fuel consumption per nautical mile sailed would reduce as well. However, the design of many vessels has been optimised for a certain service speed, such as hull shape, bulbous bow, propeller and propulsion configuration, by reducing the engine power alone will in most cases not lead to a significant fuel savings per nm sailed; other design elements of the vessel would counter balance the positive effect of a lower speed.
Our value mapping exercise supports us in taking additional measures making the outcome of slower speeds by the EEXI regulation more effective.

EU ETS
As of January 2024, shipping will be introduced in the European Emission Trading System (EU ETS). This means that shipowners need to purchase and surrender EU Allowances (EUAs) on emissions of 2024 by 30 September 2025. This is applicable for all Anthony Veder owned vessels, larger than 5,000GT, sailing within the EU. Voyages from an EU to a non-EU and vice versa will need to buy 50% of the CO2 emissions.

The regulation will be phased in, starting with 40% in 2024, 70% in 2025, and 100% in 2026. In 2023 we have made agreements with our customers and included compensation for EUA’s in our contracts to cover our total CO2 emissions.

We believe in a global taxation of CO2 as a means to reduce emissions. As the threshold of 5,000GT brings a certain imbalance in the trade we would suggest to include vessels lower than 5,000GT in this measure.

Another improvement would be to include well-to-tank emissions in the regulation. Currently the only tank-to-wake is included. Hypothetically, this could incentivise the use of fuels without a carbon molecule, e.g. ammonia, that has been produced outside of Europe by fossil fuels (grey), and whereby the CO2 emissions are not taxed. Overall, in this particular situation CO2 emissions would increase.

FuelEU
The FuelEU, a maritime regulation set by the European Union, will officially enter into force from January 2025. The objective of the FuelEU regulation is to promote alternative energy sources in the maritime sector. It achieves this by progressively reducing the permitted greenhouse gas (GHG) intensity of the fuel on a well-to-wake basis.

Starting in 2025, the allowable GHG intensity will be 2% lower compared to that of Very Low Sulphur Fuel Oil (VLSFO). Every five years thereafter, this percentage will increase until it reaches an 80% reduction in 2050. Non-compliance results in paying a penalty. The regulation makes fossil fuels less attractive and promotes the use of biofuels, E-fuels, wind-assist propulsion, and shore power. Over the past year, we have delved deeper into the regulations and mapped out the scope and its implications to determine our strategy.

We believe the FuelEU measure has the correct approach, being based on well-to-wake emissions of fuels and promoting shore power and wind assist. Although the regulation is not yet into force, we are concerned about the equal level playing field between transportation industries, such as aviation. Without this, the FuelEU regulation could be considered penalizing the maritime industry, whereby the scarce low-carbon intense resources (renewable energy) would not be used where it has most potential reducing emissions.

Ballast Water management
Ballast water serves as a potential carrier for marine species, facilitating their transfer from one location to another, thereby affecting the biodiversity of the destination area.

To mitigate this impact, regulations mandate ballast water treatment before discharge into new environments. Consequently, all vessels built after 2013 are equipped with such systems. In addition to the 22 vessels already fitted with ballast water treatment systems (BWTS), our fleet saw the installation of 1 more BWTSs in 2023 and remaining 3 will be done in 2024.