Demand for voluntary carbon credits is set to rise in the shipping industry as more companies are seeking to claim their shipments as “carbon-neutral” to demonstrate efforts in combating climate change.
And some industry participants believe this is good news for shipowners undertaking retrofit projects to save fuel consumption.
Under the methodologies of Gold Standard, one of the main verifiers of voluntary credits, nearly all energy-saving vessel retrofits can be considered as carbon offset projects that help remove CO2 from the atmosphere.
While few owners have sought to generate carbon credits from their retrofits, BRS partner Alexander Hochreutener told TradeWinds this is about to change.
“There are more and more owners in the area…We think there are good opportunities for that,” said Hochreutener, who leads the brokerage’s green desk.
Scorpio Tankers, the world’s largest product tanker owner, is one of those companies on the environmental front.
During a conference call in February, chief operating officer Cameron Mackey said his company was planning to become a provider of carbon credits. He declined to provide details.
“It's something we're working on,” he said. “We have credits that we can transfer to some of our customers.”
Certification process
To certify their retrofits as carbon offset projects, shipowners need to calculate emissions during one docking cycle.
This will be used as the baseline for them to estimate the reduction in emissions following the retrofits.
“You can mix and match different retrofit technologies and you put them on a vessel. Carbon credits then can be generated from the decrease of carbon emissions,” Hochreutener said.
The process will need to be approved and data verified by Gold Standard and independent auditors before shipowners can begin to generate carbon credits. The offsets can be claimed for five years before the projects need to be recertified.
BRS figures indicate that cutting fuel consumption by one tonne would help reduce carbon emissions by 3.2 tonnes. Carbon credits historically can be worth somewhere between $5 and $10 per tonne, according to the shipbroker.
Hochreutener said the credits can be sold to other shipowners, charterers or financial institutions in the voluntary carbon markets.
“The use of the carbon credits…allows for shipping to already start investing in itself and with that [to] propel shipping through the energy transition,” he said.
“At a minimum, you can see it as the cherry on the cake, a little bit of an extra revenue stream. Best case the credits have a lot of value and can add well to yearly cash flows.”
