Cargill Ocean reports carbon dip driven by ‘more sluggish economic environment’

Cargill Ocean Transportation has reported a drop in the carbon intensity of its fleet, but the giant bulker and tanker operator attributed the improvement to market factors.

The shipping unit of US agricultural giant Cargill reported an Energy Efficiency Operational Indicator (EEOI) of 7.21 for its chartered fleet in 2022, which was better than 7.7 in 2021.

That is the lowest EEOI level, which measures grams of CO₂ emissions per tonne-mile, since the company started tracking it in 2017. And it comes after Cargill Ocean reported carbon increases in 2020 and 2021.

But the Geneva-based operator, which has a fleet of 650 mostly chartered ships primarily in the dry bulk sector, pinned the improvement chiefly on market factors, as it had with the prior year’s jump in emissions.

President Jan Dieleman said “a more sluggish economic environment” led his company’s ships to slow down, as it did across the dry bulk shipping fleet.

“When demand slows down, so do cargo vessels. And slower vessels emit less carbon. When the demand accelerates, so do ships and emissions, which is what we saw when economies began to open up again after the first part of the Covid-19 pandemic,” he said in the report.

“It illustrates that decarbonising shipping will not be a linear process.”

In an interview on the sidelines of the Nor-Shipping exhibition in Lillestrom, Norway, he said what he is really proud of at Cargill Ocean are the actions the company has taken that will bear fruit in the long term, such as ordering the first methanol-fuelled bulkers, deploying biofuels and retrofitting a vessel with wind sails.

Next levers for change

“We know that in the short term, yes, you can focus on efficiencies, etc … but there’s only so much you can do,” he said.

“And we need to start getting to the next group of levers that we have, and one of them is clearly the zero and low-carbon fuels.”

And he said that emissions will only come down on a structural basis if the shipping industry systematically implements carbon-saving technologies.

“In this process, Cargill wants to be a catalyst — and we’re already making sizeable investments for the future,” he said.

Above benchmarks

While Cargill Ocean improved its carbon emissions in 2022, the figure was higher than two key benchmarks.

The company’s EEOI of 7.21 in 2022 was 4.5% above the trajectory set by the Sea Cargo Charter, which is better than the 5.9% overshoot in 2021. The Global Maritime Forum-backed initiative is made up of charterers that have committed to reporting their shipping emissions and benchmarking them against the International Maritime Organization’s current target calling for a 50% cut in greenhouse gas emissions by 2050.

Panamaxes, which make up the largest share of the company’s chartered fleet, came in 6.7% above target, down from 8.9% in 2021.

Ships on long-term charters outperformed, coming in below the Sea Cargo Charter benchmark by 2.3%. But ships in the spot market or short-term charters were above the track by 16.6%.

Cargill Ocean’s 2022 emissions figure is also 1.25% below the 2017 baseline put down by the company when it set the goal of reducing the greenhouse gas intensity of its fleet by 30% in 2030, although it is above the trajectory towards that goal.

“Although we are pleased with this result, we don’t want to get overconfident, and we are certainly not about to rest on our laurels,” Dieleman said.

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