Value chain

Industry partnerships are key to decarbonizing the commodity value chain

Jhe COP26 summit in Glasgow in November highlighted the growing pressure on all industries, including the shipping industry, to decarbonise. The challenge for the Australian oil industry and other major users of deep-sea shipping will be to begin to prepare and find the most cost-effective and low-risk ways to reduce emissions through marine logistics.

The call to action for the decarbonization of maritime transport at COP26 was developed by a multi-stakeholder working group stressing that the complete decarbonisation of international maritime transport is both urgent and achievable, calling on governments to work with the shipping industry to put in place the policies and investments needed for global decarbonization. supply chains

In the absence of sufficient institutionalized regulations, shipowner Klaveness Combination Carriers (KCC) is challenging the status quo by developing strategies and business models that reward collaboration and move from talk to action today. The centerpiece of this strategy is to pursue the maximum possible operational efficiency, minimize waste in the daily service to its customers and make significant investments in its modern fleet to maximize vessel energy efficiency. KCC CEO Engebret Dahm said: “Achieving substantial reductions in carbon emissions per ton of freight carried through operational and energy efficiency is a winning recipe in a future likely to see the high costs of new types of fuels and likely carbon taxes to be levied on shipping. industry.”

Source: Klaveness Combined Carriers

Ingrid Kylstad, sustainability manager at Klaveness, said“Shipping customers must support business models that encourage collaboration to enable participants to move forward with decarbonization even if the regulatory framework is lacking, and they must effectively reduce the risks of being a first mover.”

In 2021, KCC entered into two new Charter Agreements (COAs) for its CABU and CLEANBU fleet with well-known international charterers in the tanker market, particularly focused on achieving significant carbon emission reductions through close cooperation. between the customer and KCC.

KCC recently signed a six-year COA with a subsidiary of South32 in December 2021 for shipments of liquid caustic soda to the Worsley alumina refinery in Western Australia. The COA establishes a framework for how KCC and South32 will work together to further reduce the carbon emissions associated with freight from South32 to WA. The agreed sustainability framework includes detailed reporting of carbon dioxide emissions, as well as the establishment of trajectories for annual carbon dioxide reduction targets and cooperation arrangements to achieve the set targets. It further includes the ambition to jointly establish a path towards future zero-emission freight.

KCC CEO Engebret Dahm said KCC and South 32 will together tackle the biggest challenge of our generation – climate change – in this next era of their relationship. He added: “We have jointly set an ambition to significantly reduce carbon emissions from shipping by leveraging KCC’s low carbon caustic soda shipping solution, which already today provides South32 with a 30-40% lower carbon footprint than competing tankers.

Brendan Harris, South32’s director of human resources and commerce, said it’s partnerships like these that help decarbonize their value chain and promote responsible production of the raw materials needed in a low-carbon world. carbon.

Just before that, KCC also signed a COA for its new CLEANBU fleet with a major international charterer in the tanker market. The contract will provide the client, from the start, with a 30-40% lower carbon footprint of its ocean freight compared to standard tankers of similar size and, through identified initiatives, will achieve an additional targeted emissions reduction of 20 % over the next 3-4 years. the next years.

CLEANBU combination carriers are both large LR1 tankers carrying clean petroleum products and Kamsarmax dry bulk carriers carrying various dry bulk cargoes such as grain, salt and iron ore. Over the past year, KCC has successfully expanded its CLEANBU business to Australia, frequently shipping clean petroleum products for Australian customers and calling to date at 10 ports and 9 terminals in WA, Queensland, NSW, Tasmania and Victoria.
Source: Klaveness Combined Carriers