Sustainable growth report 2022
Sustainable growth report 2022
Our journey to reduce our environmental impact started already in 2006 when we selected LNG as a fuel for Coral Methane totalling 10 vessels in 2022.
To become net zero in GHG (greenhouse gases) by 2035 is very ambitious. We believe we can achieve this by building a fleet that for propulsion is capable of running on methane gas, transitioning from fossil LNG towards bio or synthetic LNG.
Our vision is to build any future newbuild with methane gas burning capabilities and when considering the economic lifetime of a vessel, the vast majority of our fleet is capable of doing that by 2035. If we manage this, we also have eliminated SOx and particulate matter emissions, and up to 95% reduction in NOx emissions.
We introduced a new KPI to measure our performance: the Net Zero Rating (NZR). NZR uses the same methodology as the AER (tank-to-wake) but uses CO2 equivalent emissions with carbon factors from a well-to-wake analysis, divided by the product of the distance sailed and the summer deadweight of that vessel. It has the advantage that the KPI stays close to the AER methodology, which enables analysing the effectiveness of our measures to become net zero.
In the case of a growing fleet, looking at absolute emission figures could give a distorted view of the effectiveness of the measures.
Strategy Net zero on GHG by 2035
Net Zero Ratio KPI to measure performance:
Based on AER (Annual Efficiency Ratio) methodology but using the GHG emissions with carbon factors from a well-to-wake analysis. The GHG emissions are being divided by the product of the distance sailed and the summer deadweight of the vessel.
In the short term, we will reduce our NZR by introducing a few newbuilds running on LNG; the remainder of our fleet running on MGO.
However, we also will see the effect of sailing with slower speeds due to EEXI, CII and just-in-time arrival (JITA). Additionally, we will continue focussing on reducing energy consumption, optimising operations and supply chain conditions, in parallel with increasing environmental awareness in the company. Combining these measures, we expect a 5% reduction of the NZR by 2025 compared to 2022.
In the mid-term, we should be able to reduce emissions further by even more energy-efficient newbuilds, possibly aided by wind assist. Methane slip abatement technologies and CCS on board should become available to a few ships. The blending of bio and synthetic LNG will be introduced.
Our ambition will be further strengthened by data-driven vessel performance increasing operational efficiencies. By energy efficiencies throughout the supply chain, such as the introduction of
using shore power and benefitting from more favourable cargo conditions. To reach our ambitions, the dependencies from other stakeholders in the supply chain become larger. We expect a 40% reduction of the NZR by 2030 compared to 2022.
On the longer-term, methane slip abatement technologies and CCS on board for trading in Europe will become the norm which should lead to further significant reductions of the NZR of methane gas-driven vessels. Another significant part should come from the availability of alternative fuels with lower carbon factors, such as bio and synthetic LNG.
To reach our target of becoming net zero in GHG by 2035 we determined a 3-pillar strategy.
- Energy savings
- Act now
Energy Savings ^ 3
Saving energy is the most effective way of reducing emissions, especially when there is not (yet) a surplus of renewable and cost- effective fuels available.
Therefore, we first focus on preventing the use of energy or saving as much energy on board of the vessel, such as hull and propulsion optimisation, improved insulation of cargo tanks and use of subcoolers (which can reliquefy cargo).
Secondly, we focus on reducing the use of energy by optimising the operational performance of the vessel, such as speed versus consumption, JITA, weather routing and the use of wind assist for certain trades.
Thirdly, we look at optimising the use of energy within the supply chain, where measures to reduce carbon emissions are more effective to realise than on board our vessels. Examples are the use of shore power, colder loaded cargo, but also by improving contractual incentives.
We want to contribute to reducing emissions as soon as possible. The choice of fuel has a major impact. With the lack of renewable fuels available for the maritime sector in the short to midterm, the only fuel that can realise a significant contribution as of today is LNG.
LNG is currently the most sustainable and scalable marine fuel solution. We have been investing in our digital infrastructure on board, enabling data-driven performance optimisations.
Within the supply chain, we see opportunities to reduce emissions, such as JITA, and we shall continue our discussions with our customers.
We believe that with LNG- propelled vessels we are ready for the future when renewable fuels based on renewable hydrogen are being introduced allowing for the production of bio or synthetic LNG.
We need to eliminate methane slip on board. CCS on board is required in case only part of the LNG is produced from renewable bio or synthetic LNG.
However, as we do not know what the future brings, we need to be ready for more than 1 possible outcome and alternative hydrogen carriers. We consider two pitfalls in our strategy.
The first one is the ability to reduce methane slip on board; if we do not succeed then the impact of reducing GHG emissions by LNG is limited.
Secondly, in a scenario where fossil fuels or circular CO2 play less of a role in the solution toward climate neutrality, there will be limited and less cost-effective sources of CO2 available to produce synthetic LNG.
To be ready, we participate in various R&D projects on methane slip abatement technologies and CCS on board, as also how to run vessels on ammonia and liquid hydrogen. Our membership in SGMF provides a platform for learning and sharing experiences on new technologies regarding safety and technical and economic feasibility.
As stated, our ambition is heavily dependent on other stakeholders, such as governments and other regulatory bodies.
Future regulations are decisive for the role of any renewable fuel, and as such, also for the role of LNG, whether fossil, bio or synthetic LNG. We will follow the developments of regulations closely and we shall adjust our pillars if needed to reach our target. The next paragraph provides an overview of key regulatory requirements, directives and our related actions.