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The challenge: to reduce global emissions from shipping

The international shipping industry is responsible for the movement of around 90 percent of goods traded around the world. While shipping is universally recognised as the most fuel-efficient mode of bulk transportation, the sheer scale of global trade makes the sector a significant contributor to greenhouse gas emissions. In 2018, the International Maritime Organization (IMO) adopted a strategy to halve global emissions by 2050 and reach carbon neutrality as soon as possible this century.

The IMO has introduced two sets of standards for lowering greenhouse gas (GHG) emissions. The Energy Efficiency Design Index (EEDI) lays out increasingly challenging carbon emission reduction requirements for new-build vessels. Operational efficiency is addressed through the Ship Energy Efficiency Management Plan (SEEMP).

Our approach

Trafigura is committed to collaborating in efforts to decarbonise shipping, appropriate to its position in the value chain.

1. Better ships

We are improving baseline performance by chartering younger vessels and investing in state-of-the-art ships. We began to take delivery of 35 new vessels in the first quarter of 2019, all of which comfortably meet the current EEDI requirement of 10 percent reduction in carbon emissions. In most cases, they also exceed the 20 percent EEDI requirement for new-build vessels delivered between 2020 and 2025.

2. Smarter shipping

We have introduced port, speed and route optimisation strategies to improve the operational efficiency of our owned and chartered vessels covering each vessel on every voyage. Taken together, these measures generated an estimated USD6 million in bunker savings in FY2018, equivalent to 50,000 tonnes of avoided CO2 emissions. We also require the owners of the vessels that we charter to report their ships fuel consumption and nautical miles so that we can calculate the vessels’ emissions intensity to better understand our emissions profile and to improve efficiencies.

IMO studies suggest that reducing a ship’s speed by 10 percent can reduce fuel consumption by as much as 20 percent. Our speed optimisation guidelines require vessels to steam as slowly as possible for just-in-time delivery. Masters are asked to apply super-slow steaming where they can still ensure their vessels reach their destinations by the agreed delivery times.

Our route optimisation strategy generates additional bunker savings. We supply navigation consultancies with voyage and vessel data both ahead of, and during, each journey. They factor in tides, currents and meteorological conditions to plot the most bunker fuel-efficient routes.

3. Reporting progress

Formalising our reporting is driving further performance improvements. We have adopted the Smart Freight Centre’s Global Logistics Emissions Council (GLEC) framework for carbon-based accounting. The GLEC framework provides a much-needed industry standard for measuring GHG emissions and is increasingly being adopted in the logistics industry.

While Smart Freight has recognised our leadership role here, we understand that in the longer term more fundamental changes will be needed. Trafigura will continue to engage and partner with industry peers and trade associations such as the Global Maritime Forum to encourage new thinking and innovative approaches to decarbonising shipping.