Navigating towards zero emissions
Navigating towards zero emissions is about WWL group’s air emissions. The company has significant air emissions throughout its value chain including, SOx, NOx, Particulate Matter, and CO2 and other Green House Gas (GHG) emissions mainly originating from the fleet’s fuel use. WWL acknowledges and embraces the fact that society and business are moving towards zero emissions, a large challenge which represents a potential risk, but also an opportunity to reduce operating costs and differentiate itself in a competitive market.
The company’s lean:green environmental strategy is therefore a central part of the strategy for navigating towards zero emissions. Read more about this strategy in the chapter "Sustainability at WWL".
GHG emissions from ships
Transoceanic shipping is an industry of paradoxes. It is the most carbon efficient mode of transport there is, yet it accounts for over 2% of global CO2 emissions and there is currently no viable substitute for fossil fuels. The emissions arise from the onboard generation of energy for propulsion and electricity to run ancillary systems. All the power generated comes from the fuel oil, which means fuel consumed is accountable for the entirety of Scope 1 and Scope 2 emissions, i.e. the sum of all emissions from sources that are owned or controlled by the company plus emissions from the consumption of purchased energy.
GHG emissions and operating costs are two sides of the same coin and for WWL there is great benefit in reducing both. For the former the benefit is in reducing exposures to disruptive technology and regulation while for the latter there is the potential to significantly reduce the cost base. For the company’s customers, related benefits apply. There is also a wider societal interest in reducing GHG emissions due to its connection to climate change.
Several parts of the company contribute directly to the effort including sales, operational and technical teams. For WWL, GHG emissions from its ships is dominated by CO2 and other GHG emissions are negligible in comparison.
Vessel performance management
Fuel consumption of each vessel, whether at sea or alongside, is recorded daily along with many other factors that affect performance. The data is assessed by the Marine Operations Management team to determine vessel performance. Adjustments are continuously made to achieve a more optimal result. For credibility, the total and relative CO2 results for the entire fleet under WWL’s control are independently verified and reported annually in compliance with the ISO14064 standards for greenhouse gas accounting and verification.
The company’s objective for relative CO2 emissions (carbon intensity), is expressed as a reduction in grams of CO2 emitted per tonne kilometre (gCO2/tkm) over a specified time interval. For transparency the actual figure at the start of the interval and the goal to be reached are published.
The relative CO2 objective will apply to the combined performance of all vessels under the control of the company, regardless of whether they are owned or chartered. Major factors that will contribute to achieving the result will be optimised fleet deployment and utilisation made possible by the creation of WWL, enhancing hull fouling management and by adding four more HERO vessels to the fleet.
Evaluation of results
WWL is undertaking ISO14064 compliant GHG reporting for the total and relative CO2 emissions for all vessels under its control in 2017. The process involves an external auditor and will be completed during the first quarter of 2018. The results stated below have therefore not been subjected to auditing, however the company does not anticipate significant adjustments.
Scope 1 and Scope 2 are reported as one figure because they come from the same source and are not possible to separate. For 2017 total CO2 arising from all ocean operations was 5 171 315 tonnes. The result is primarily a reflection of the amount of cargo work done in the interval, which is driven by the state of global markets. Fuel efficiency, or relative CO2 emissions, is also a significant factor affecting the results. For the fleet under the group’s control, the 2017 carbon intensity result was 35.9 g/tkm. Again, as a first-year result, it is difficult to put in perspective. Given the company’s fleet includes a sizeable proportion of smaller vessels with a light cargo profile (more cars, less rolling equipment and breakbulk), the result is acceptable. An improving freight market is the main reason for the 2017 result; vessel utilisation is at an elevated level.
Ambitions and next steps
The company is in the process of recalculating its baseline for relative CO2 emissions. When this process is completed in the early part of 2018 a relative CO2 reduction target will be set. Continued improvement in GHG performance will primarily be achieved in 2018 through hull fouling management improvement as well as by extracting efficiencies from fleet deployment and utilisation arising from the creation of WWL. Additionally, a common data collection and analysis system for use across all owned vessels and long-term charter vessels will improve the robustness of data driven decision making.
Non-GHG air emissions from ships
Deep sea vessels produce a range of emissions other than CO2. They are chiefly nitrogen oxides (NOx), sulphur oxides (SOx) and particulate matter (PM). NOx is a product of the combustion process, SOX originates from the sulphur in the fuel and PM arises from a combination of the type of fuel and how it is combusted. All are the subject of increasingly impactful, global regulations.
WWL’s business is built on the bedrock of compliance, that by itself makes non-GHG emissions a material topic for the company. Additionally, the company has a zero emissions vision for its ocean services because it believes it will have the best long-term outcome for people, planet and profit.
NOx, SOx and PM emissions have negative environmental and health impacts, therefore for society in general these emissions are a material issue. For investors and customers, the importance of the issue derives both from their need for compliance in their supply chain and investments respectively and, increasingly, from environmental awareness and criteria used for purchase and investment decisions.
The scope of this material topic is all vessels under WWL’s control, whether owned or chartered. Progress with these emissions is driven by regulation as well as by progress with CO2 emissions. responsibility for compliance and vessel preformance lies with the Marine Operations Management team. Their decisions and instructions affect performance in this area, however as with CO2, the results are heavily affected by factors outside the company’s control such as the condition of freight markets.
How the topic is managed
WWL is committed to full compliance with all applicable global, regional and local emissions regulation. Compliance with NOx regulation is gained through technical modifications to the main engine during ship building. SOx and PM are regulated as one. For them, compliance is gained either through choice of a fuel of the required sulphur content, or through operation of a device (‘scrubber’) that removes SOx from engine emissions. Compliance on an individual vessel level is maintained by ship managers through correct use of fuel provided by WWL’s bunkering staff.
Sulphur regulation will undergo a step change in 2020 with the introduction of a new global cap of 0.5% sulphur fuel content, an 86% reduction on the current level of 3.5%. Considerable technical, operational and financial uncertainty surrounds the best compliance choice for a vessel. To mitigate the uncertainty the company has been running a ‘Four Stream’ project for several years which has involved the proactive examination and testing of four different compliance pathways in order to develop a deep understanding of their merits for deepsea, global RORO operation. The company is also the founder and current Chair of the Trident Alliance, a network of almost 50 shipping companies that believe in robust enforcement of sulphur regulations for the combined benefit of health, the environment and fair competition.
Lastly, it is important to note that all the foregoing emissions correlate strongly with CO2 emissions. Therefore, all initiatives to improve fuel efficiency, such as enhanced hull fouling management generally have a positive effect on NOx, SOx and PM emissions too.
Evaluation of results
As this is the first year of reporting for WWL a like-for-like comparison with previous years cannot be made.
The total SOx emissions of the fleet under the group’s control in 2017 was 72 194 tonnes. The calculation method used is based on the formula used in Annex 6 of IMO’s 3rd GHG Study, 2014 and accounts for both SO2 and SO3.
The average sulphur content in fuel used, which is the parameter on which regulatory limits are based, was 2.18% for the year. The results are driven by 100% compliance with sulphur regulation, the quantity of fuel used, the degree of exposure of the fleet to 0.1% sulphur Emission Control Areas, which exist in northern Europe and North America and the average sulphur content of heavy fuel oil on the market during the year.
Particulate Matter measurement requires sophisticated equipment and specialist competence. For this reason, there is no PM result to provide other than that WWL following the applicable regulation throughout 2017 because sulphur and PM are regulated as one.
Every vessel must have an International Air Pollution Prevention certificate (IAPP) which states the relative NOx emissions of the engines onboard. The most effective indicator of NOx performance for WWL is the average International Air Pollution Prevention (IAPP) certification value for the owned fleet. The 2017 result for the owned fleet was 13.68g/kWh.
The validity of this as a KPI is underscored by the fact that NOx and CO2 emissions go hand in hand.
Ambitions and next steps
The continuation of the Four Stream and Trident Alliance initiatives are central to the continued progress on SOx. In addition, the approach to GHG will also pay dividends for all non-GHG emissions.
GHG emissions in land-based operations
Although the land-based activities of WWL are not energy intensive compared to its ocean activities, due to their extent, they do account for significant GHG emissions. The scope of land based GHG emissions includes all kinds of facilities, including vehicle processing centres, vehicle distribution centres and ocean terminals, and vehicles which the company operates. Facilities and vehicles over which the company has operational control, can be directly or in-directly influenced in relation to their GHG emissions, depending on what form the energy in question takes. Leadership on land-based facility and vehicle GHG emissions lies with the respective operational manager.
GHG emissions are directly linked to operating cost for WWL and are increasingly accompanied by environmental regulation, which is a combination of importance to the company. For the company’s customers, interest is linked to their desire for their supply chains to reflect the zero emission vehicles that they are increasingly producing and renewably-powered factory facilities that they are producing them at.
Reducing energy consumption
Energy consumption is managed on an individual facility basis. The leading source of energy at most facilities is electricity and the focus of improvement is on large, inefficient consumers. A notable case in point has been the upgrading to LED lighting at several facilities.
Energy is also consumed by cargo handling and distribution vehicles. Local or regional regulation govern emissions from such vehicles and WWL is committed to always complying fully with them.
Evaluation of results
Due to the recent corporate level reorganisation, work remains to be done to implement a robust and global land-based GHG emissions reporting routine. Although data on energy consumed has been recorded during 2017, the process is not fully mature and hence the data set is not complete.
Ambitions and next steps
During 2018 a new global performance reporting system for all land-based facilities is being brought online. It is anticipated that it will provide robust full-year baseline GHG emissions figures.
The data acquired will contribute to the development of environmental policies, objectives and initiatives for WWL’s landbased business. This work will also be completed during 2018.
Non-GHG emissions in landbased operations
The land-based operations of WWL include terminals, equipment processing centres and trucking operations. All of these consume energy and for the majority that energy is derived either directly or indirectly from fossil fuels, which means that the operations account for both GHG and non-GHG emissions. The latter is the focus of this material aspect and includes primarily NOx and Particulate Matter emissions. The scope of land based non-GHG emissions includes all kinds of facilities and vehicles which the company operates. Facilities and vehicles over which the company has operational control, can be directly or in-directly influenced in relation to their non-GHG emissions, depending on what form the energy in question takes. Leadership on land-based facility and vehicle GHG emissions lies with the respective operational manager.
Regulations that govern vehicle non-GHG emissions apply in many of the jurisdictions in which the company operates and compliance with them is a minimum ticket to trade for WWL. Local communities increasingly take interest in the non-GHG emissions of industrial facilities because of the negative health impacts such emissions can have.
Managing non-GHG emissions
Non-GHG emissions in the group’s operations are predominantly due to mechanical or electrical power generation, which means they are closely linked to GHG emissions. Thus, the main approach to reducing non-GHG emissions has been to reduce GHG emissions.
Evaluation of results
Data on land-based non-GHG emissions has not been reported previously.
Ambitions and next steps
During 2018 a project will be run to establish non-GHG reporting across WWL’s landbased organisation. It will also serve to inform any related policies, objectives and initiatives that need to be taken.