Cargill commits to chartering energy-efficient ships

OCTOBER 3, 2012 —Agribusiness giant Cargill committed yesterday to chartering only energy-efficient ships. It was joined in its announcement by chemical manufacturer Huntsman Corporation and oil and oil products trader UNIPEC UK Company Ltd. Combined, the three move over 350 million tonnes of commodities annually.

The announcement was hailed as a milestone for a vessel fuel efficiency ratings system, the Existing Vessel Design Index (EVDI), created by ship vetting specialist RightShip.

Charterers can now get information on the GHG emissions ratings of over 60,000 ships, graded A through G, via ShippingEfficiency.org (an initiative launched by the Carbon War Room and RightShip). The ratings are based on a ship’s theoretical greenhouse gas emissions and relative energy efficiency as determined by RightShip’s EVDI.

“Cargill has introduced a senior management override on the use of the least energy efficiency vessels,” said Jonathan Stoneley, Environment and Compliance Manager, Cargill Ocean Transportation. “By choosing the more efficient vessel available to us, we are making a strong statement to the market. We hope this action will demonstrate to shipowners that they can and should do more in terms of efficiency, and that the market will reward them and will also show other charterers the decision support tools available if they want to operate more efficiently. We will work together with customers, as best appropriate, to help them meet their environmental objectives linked to transportation and this rating system.”

“Cargill is committed to minimizing our environmental impact throughout our global operations,” Mr. Stonely continued. “We do this by developing management systems and policies to ensure best practice environmental compliance and continually improving performance on criteria relevant to our business and operations. We partner with governments, non-governmental organisations, communities, employees and customers to leverage market-based solutions to reduce the environmental footprints of the supply chains in which we participate.”

Peter Boyd, COO of Carbon War Room commented: “This deal represents the first major capital shift on behalf of the charterers towards making greater efficiency a factor in their vessel chartering decisions. Cargill, Huntsman Corporation and UNIPEC UK should be congratulated for being the first to make this commitment. We’d encourage other charterers within the market, to look towards the simple and understandable ways to quantify, measure and track efficiency represented by the efficiency rating system and the A-G benchmark. Those that lead the curve on presenting more eco-efficient vessels will benefit from the choices charterers are making and the charterers themselves will see lowered operating costs through fuel efficiency – a win-win-win decision for the owner, the charterer and the environment.”

Warwick Norman, Chief Executive Officer, RightShip, noted “newer ships aren’t always more efficient than older ships. We’ve developed the Existing Vessel Design Index, or EVDI, to estimate the amount of CO2 emitted per tonne by any nominated ship, per nautical mile travelled, based on complex analysis of a range of reliable data. With our partners at www.shippingefficiency.org, we’ve used that data to also create the A-G GHG Emissions Rating that makes it easy to compare energy efficiency. The online rating system directly compares the efficiency of a vessel against vessels of comparable size and within the same ship type. This practical, usable information can enable our customers to make fuel savings and meet energy efficiency targets, and their preference for more efficient ships also rewards owners who have invested in operating a sustainable fleet.”

The Carbon War Room describes itself as “a global entrepreneur initiative that accelerates entrepreneurial solutions to deploy profitable, scalable clean technologies. It focuses on breaking down market barriers for capital to flow to entrepreneurial solutions, and takes a global sector-based approach.”

RightShip is a leading provider of third party ship vetting services, supporting almost 2,500 users in over 200 organizations worldwide. Its offices are in London, Houston and Melbourne.

RightShip used its 10 years of experience in the development of online risk rating algorithms in the maritime sector to develop the Existing Vessel Design Index (EVDI) to allow its customers to include the growing importance of carbon emissions along with all the other existing risk factors associated with marine transportation in their vessel selection process.