Despite being the most environmentally and energy efficient form of transport, responsible for carrying and distributing 90% of global trade, shipping is facing significant challenges when it comes to sustainability.

Indeed, with charterers scrutinising their supply chains for sustainability and efficiency improvements, as well as a new wave of environmental regulations that will see fuel prices spiral, the industry is facing seismic change.

As a result, the link between commercial success and energy efficiency has never been stronger. This close connection has meant that over recent years, investment in efficiency measures and clean technology in particular, is on the rise.

In 2013, an independent global study was commissioned by AkzoNobel’s Marine Coatings business, International®, a supplier of advanced hull coating technologies. Leading academic institute University College London’s Energy Institute (UCL-Energy) conducted research entitled ‘On the attitudes and opportunities of monitoring and measurement and the identification and validation of energy efficiency and performance’. Significant findings were revealed about the shipping industry’s attitude to clean technology, fuel consumption monitoring and its impact on energy efficiency.

Specifically, the responses demonstrated that rising fuel costs and sustainability pressures are a real concern, as well as highlighting the current areas of clean tech investment.

70% of respondents stated that energy efficiency is a board agenda item. And 86% of the 130 respondents surveyed, spanning ship owners, operators and charterers, have adopted a number of clean technology measures over the last five years. Hull coatings represented 70% of those measures, making it the most widely adopted and cost-effective form of clean technology used in the market today.

However, while this is good news, there is still a clear barrier to entry for the widespread uptake of clean technologies; namely finance and the incentive to invest. The shipping industry has seriously suffered at the hands of the global economic downturn. While we are starting to see the first green shoots of recovery, there is still a lack of liquidity within the market, as well as a continued retreat by the institutions that traditionally finance shipping. This has stifled uptake.

The solution is to look for new and innovative ways of financing that drive and incentivise investment in clean technologies.

Investing in the future – today

Working with Gold Standard, International® has developed the first marine-based methodology for generating carbon credits within the shipping industry.

The new methodology is aimed at owners and operators converting to International Paint’s premium eco-efficient Intersleek® foul release technology on all types of existing vessels currently coated with biocidal antifoulings. There is effectively money already available for many owners and operators, currently being generated by the Intersleek® technology that coats their vessels.

In fact, based on the 100 existing ships which have already converted from a biocidal antifouling to Intersleek® there is an estimated $3.6M worth of carbon credits potentially available to ship owners and operators.

How it Works

The methodology is based on ship owners and operators converting existing vessels from a biocidal antifouling system to International’s® premium, biocide-free advanced hull coating, Intersleek®. A baseline emission level is determined for the vessel prior to the application of Intersleek® with the same data source then used to determine the emission savings after the application of the technology The carbon credits generated are directly related to reduced emissions as a result of reduced fuel consumption.

Using a ‘results based finance’ approach, carbon credits are awarded annually, based on vessel data that is collected, analysed and administered by International®; Ship owners and operators do not have to invest any time, capital or resource in generating carbon credits. The data is then submitted to The Gold Standard Foundation for validation. To ensure rigor and transparency, the fuel savings that are generated are verified by independent UN accredited auditors. Once the carbon credits are issued to International® they can be sold at market price and the revenue shared with customers. Besides selling them on the carbon market, carbon credits can be passed on to important stakeholders to offset their emissions (e.g. cargo owners) or can be used to voluntarily offset other sources of CO2 emissions. Another advantage is that the generation of carbon credits demonstrates sustainability leadership and can enhance the brand and reputation of ship owners/operators.

Landmark methodology in the making

In conjunction with Gold Standard, International® spent more than two years developing the carbon credits methodology as part of its research into making eco-efficiency technologies more accessible for the wider shipping industry. The environmental credentials for Intersleek® technology have already been thoroughly established through an Eco-Efficiency Analysis conducted according to ISO14040 and ISO14044 and independently validated by the Swedish Environmental Research Institute.

The methodology effectively enables ship owners and operators to benefit twice when they invest in Intersleek® technology. Firstly, they can increase operational, environmental and energy efficiencies, which reduces fuel costs and emissions, and then they can reap the additional financial benefits of carbon credits, which International® will share with them.

With International® customers already going through the programme, which was publicly launched in April 2014, this looks to be the first step in a new wave of thinking around clean technology investment for the shipping industry.