REWARDING SUSTAINABILITY 2015
VISION To be the supplier of choice of marine vetting services to achieve with our customers a safer and cleaner maritime environment MISSION To enable our customers to reduce their marine risk by providing comprehensive marine assessments on vessels and marine suppliers 2
CONTENTS Introduction 4 Program Benefits 4 Common Platform 5 GHG Emissions Rating: Comparing 76,000+ Vessels CO 2 Emissions 5 Environmental Star Rating 7 Implementation 9 Case Studies 11 Prince Rupert Port Authority Green Wave: Environmental Incentive Program for Vessels 11 Port Metro Vancouver 12 Communications Support 12 Contact 13 3
INTRODUCTION Leading ports around the world are positioning themselves as key influencers in reducing local pollution, as well as encouraging fleet owners to invest in energy efficiency measures for new and existing vessels: acting local, whilst driving global change. Although shipping is the most carbon efficient mode of commercial transport, the International Maritime Organisation s third Greenhouse Gas (GHG) study estimates it to have emitted 2.2% of global CO 2 emissions in 2012 comparable to those of a major national economy. Looking ahead, CO 2 emissions from shipping in 2050 are predicted to increase somewhere between 50% 250%. This sends a powerful message for stakeholders in the maritime industry to work together to achieve meaningful emissions reductions and deliver sustainable outcomes. Pioneering ports, charterers, and ship owners worldwide are currently implementing a variety of programs and initiatives to reduce emissions from shipping. One such initiative currently making a real difference to global shipping emissions are port incentive programs. PROGRAM BENEFITS There are many reasons to establish a port incentive program, including the ability to: join a recent and growing global movement to increase focus on emissions and efficiency, position your port as a key influencer / world-pioneering port, improve the sustainability of your port environs by reducing CO 2 emissions in the port area, generate significant social capital within your local community and in the wider maritime industry, promote more efficient ships, and therefore reduce overall emissions not only in the port area, but for the ship s entire journey, generate positive media exposure for the port through recognition of the efforts in driving sustainable shipping, and access the GHG Emissions Rating platform free of charge via www.shippingefficiency.org 4
COMMON PLATFORM To enable ports to consider sustainability as part of their key performance indicators, RightShip offers two environmental ratings: the Greenhouse Gas (GHG) Emissions Rating and the Environmental Star Rating. These complementary ratings compare ships sustainability credentials, and demonstrate their environmental performance relative to similar vessels. GHG Emissions Rating: Comparing 76,000+ Vessels CO 2 Emissions The Greenhouse Gas (GHG) Emissions Rating available free of charge on www.shippingefficiency.org is an easy-to-use tool containing information on over 76,000 existing vessels. Rather than adopting a one size fits all approach, this rating provides comparison of a peer group of vessels; for example comparing a 100,000 dwt bulk carrier to a bulk carrier of similar size. The rating is increasingly being used by charterers and vessel owners, and is also gaining momentum as an evaluation tool in various port incentive programs. As of December 2014, 22 charterers, or 23% of global non-containerized trade, factor energy efficiency into their decision-making through RightShip s GHG Emissions Rating. This accounts for 1.8 billion tonnes of cargo or 21,500 annual vessel movements. Using RightShip s Existing Vessel Design Index (EVDI TM ) to calculate GHG Emissions This GHG rating is based on the EVDI TM (Existing Vessel Design Index) developed by RightShip. RightShip s EVDI estimates the theoretical amount of carbon dioxide emitted per tonne nautical mile travelled, and is based on design characteristics of the ship at the time of build such as cargo carrying capacity, engine power and fuel consumption. The EVDI is a practical measure that allows relative comparison of a ship s carbon dioxide emissions to vessels of a similar size and type using a simple A G rating scale. For more information on how this calculation is derived refer to RightShip s Existing Vessel Design Index (EVDI TM ) Formula Inputs Explained. 5
Interpreting RightShip s GHG Efficiency Rating The vessel s EVDI TM is compared to ships of a similar size and type with the most efficient vessels in the peer group being A, and the least efficient G. The example below shows a chemical tanker with an EEDI of 4.850 that is rated B+ on the A to G scale. Applied to a port, the GHG Emissions Rating is used to benchmark historical arrivals over a defined period. This sets a baseline for displaying trends overtime, and is used to demonstrate improvements in GHG emissions from ships in port once the incentive program is applied. 6
Environmental Star Rating RightShip also provides an Environmental Star Rating which recognises operation and behaviours which are seen to be above compliance. This metric is made up of three sections, with the respective scores combined to provide a holistic rating of a vessel s environmental performance. This includes certifications and standards as well as recent activities like Port State Control deficiencies. An example of the Star Rating is provided below. 1. Environment Risk Profile The Environment Risk Profile is the first step in calculating a vessel s Environmental Star Rating, and it looks at nine key environmental risk parameters. For each parameter a vessel is independently allocated into a risk category ranging from low risk to high risk, with points awarded accordingly. The calculation is based on an analysis of Port State Control inspection performance (with / without MARPOL deficiencies) and is consistently applied across all 76,000+ vessels in the RightShip database. The table below is an example of the calculated risk profile. 7
2. Environmental Rating Adjustment The second step in the Environmental Star Rating metric, the Environmental Rating Adjustment recognises performance and behaviours which are seen to be above compliance. As indicated by the points column in the below system extract, certifications and quality standards achieved by a ship and its management can result in a positive scoring adjustment to a vessel s Environmental Rating Calculation. 3. Third Party Environmental Factors Third Party Environmental Factors represent a specific set of issues or events related to the performance of the vessel as observed by a number of third parties. These 13 factors limit the maximum star rating a vessel can achieve. If more than one factor is applied to a vessel, the most severe restriction will be enforced. 8
IMPLEMENTATION No two ports are identical, and so too incentive programs need to be tailored to a ports individual needs. RightShip can assist planning an implementation process to fit the objectives of the individual port authority s requirements. The following outlines a typical process: 1. Establish Program Objectives To ensure successful transition to an incentive program, the rationale for a port incentive program should be clear. For example the program could be tailored to: demonstrate strong leadership on air emissions to the local community and port customers, exceed community expectations in regards to the environment and sustainability, promote more efficient ships, therefore reducing overall emissions in the port area and ultimately for the ship s entire journey, and join a growing global movement to increase the focus on emissions and efficiency. 2. Overview of Existing Port Incentive Programs To take advantage of best-practise and learn from others experience, an overview of the structure and benefits of existing port incentive programs can be provided by RightShip. 3. Data Modelling Benchmarking Historical Arrivals Benchmarking vessel arrivals is crucial to successful planning and implementation of a port incentive program. A baseline spread of historical vessel arrivals can be produced using RightShip s GHG Emissions Rating. The data can be utilised to calculate a baseline for displaying trends over time and demonstrating improvements in GHG emissions from ships not only in port, but for the duration of their entire journey. An overview of benchmarking data is provided alongside, with A being the most efficient and G the least. 9
4. Port Incentive Program Cost Structure Benchmark data is used to estimate the cost of the proposed port incentive program. By analysing historical arrivals this ensures no surprises when the program goes live, also allowing the program to be tailored to meet the relevant port authority s budget and objectives. Various options exist for program budgeting. These include a standard program which incentivises more efficient vessels, a cost neutral program, or a program with a cost ceiling (i.e. set limit of funds or annual cap). Structuring the program to a certain budget ensures there are no financial overruns and will give the port authority confidence if applying for external (e.g. Government) funding. 5. Administrative and Operational Requirements In order to successfully implement an incentive program, port-specific administrative and operational requirements need to be considered. One option is to start small and grow the program as confidence in the systems and procedures implemented also grow. For example Prince Rupert Port Authority began with one environmental measure, gradually building up to offer incentives through six programs, one of which is RightShip s GHG Emissions Rating. 6. Communications Once the decision has been made to develop a port incentive program, it is important to ensure key stakeholders are informed and on board. RightShip can assist in the development of a communications plan to ensure maximum exposure and impact to benefit the port. The structure and key messages of the plan will be coordinated in advance of an announcement. Early engagement with key stakeholders can foster positive media exposure including: positive PR for the port through recognition of the efforts in driving sustainable shipping, and positioning the port as a key influencer / world-pioneering port. 10
CASE STUDIES Prince Rupert Port Authority Green Wave: Environmental Incentive Program for Vessels The Green Wave program, introduced by the Prince Rupert Port Authority in 2013, offers reduced harbour dues to vessels that have improved environmental performance. The program targets sustainability initiatives such as reducing air emissions and pollutants, using more energy efficient technology, and participating in marine sustainability organizations and initiatives that are being rapidly adopted worldwide. Prince Rupert Port Authority commenced using RightShip s GHG Emissions Rating within their own environmental incentive program in January 2014. Demonstrating success in the first ten months alone, Prince Rupert: provided discounts to 120 vessels (175 total calls), qualified 99 of these vessels (128 total calls) using RightShip s GHG Rating, provided over $103,000 in discounts, and accessed to the GHG Emissions Rating and Environmental Star Rating free of charge. We're proud to be accelerating the shipping industry's movement toward greater efficiency and sustainability using RightShip s GHG Emissions Rating. Since launching our Green Wave vessel incentive program in 2014, RightShip has been an exemplary qualifying measurement that has allowed vessel charterers and owners to take advantage of significant discounts to harbour dues at the Port of Prince Rupert. The support we have received through our partnership with RightShip has been integral to the success of our program. Our recognition of environmental performance is encouraging the adoption of similar practices across the global shipping industry. Don Krusel, President & CEO, Prince Rupert Port Authority. 11
Port Metro Vancouver Port Metro Vancouver commenced using RightShip s GHG Emissions rating in January 2013. Their EcoAction Program offers discounted harbour rates to vessels that have implemented emission reduction measures and other environmental practices. Program overview includes: ongoing access to the environmental data by Port Metro Vancouver is a free service provided by RightShip, Port Metro Vancouver offer Gold (47% discount), Silver (35%) and Bronze (23%) discount rates, and RightShip s GHG Emissions Rating and Environmental Star Rating offer opportunities for calling ships to qualify for discounts. Communications Support In February 2014 Carbon War Room, RightShip s NGO partners, coordinated the media campaign to announce the port incentive programs for Port Metro Vancouver and Prince Rupert Port Authority. This media campaign resulted in more than 6.7 million opportunities to view: twenty-three pieces were published in 21 publications e.g. following is an article from Environmental Leader (audience 118,724): 12
CONTACT For general enquiries or tailored proposals for your port incentive program, please contact: Kris Fumberger Project Lead Sustainability Level 20, 500 Collins St Melbourne Victoria 3000 Australia E kris.fumberger@rightship.com P +61 3 8686 5739 M +61 419 854 134 O +61 3 8686 5750 Anuj Chopra Vice President Americas 52 Sugarcreek Center Blvd, Suite #350, Sugar Land, TX 77478 USA E anuj.chopra@rightship.com P +1 832 770 8201 M +1 713 410 3254 O +1 832 770 8200 David Peel Manager Europe, Middle East & Africa Floor 15, 30 St Mary Axe London EC3A 8BF United Kingdom E david.peel@rightship.com P +44 207 337 6182 M +44 778 592 1582 O +44 207 337 6180 13
Melbourne RightShip Australasia Level 20 500 Collins St Melbourne Victoria 3000 Australia Email: vetting@rightship.com Phone: +61 3 8686 5750 London RightShip Europe, Middle East & Africa Floor 15 30 St Mary Axe London EC3A 8BF United Kingdom Email: vetting@rightship.com Phone: +44 207 337 6180 Houston RightShip Americas Suite 350 52 Sugarcreek Centre Boulevard Sugar Land TX 77478 United States of America Email: vetting@rightship.com Phone: +1 (832) 770 8200 www.rightship.com 14