With a long-term ‘zero emissions’ target, emissions – of which the majority for the Wallenius Wilhelmsen group are SOx, NOx, Particulate Matter and CO2 – are naturally a big focus for the company. The company embraces the fact that society and businesses are moving towards zero emissions, and sees this as an opportunity as well as a potential risk. Not only will it allow Wallenius Wilhelmsen to reduce operating costs, but it will also give the company the chance to differentiate in a competitive market.
The company’s Lean:Green environmental approach is a central part of the strategy for navigating towards zero emissions. You can read more about this in ‘Sustainability at Wallenius Wilhelmsen’.
GHG emissions from ships
Transoceanic shipping is an industry of paradoxes. It is the most carbon efficient mode of transport, yet it accounts for over 2% of global CO2 emissions, and there is currently no viable substitute for fossil fuels. The emissions are the result of the onboard generation of energy for propulsion, as well as electricity and steam to run ancillary systems. Power is generated from fuel oil, which means fuel consumed is accountable for all Scope one and Scope two emissions of the fleet.
For Wallenius Wilhelmsen, GHG emissions from its ships are dominated by CO2 and other GHGs, and are negligible in comparison. Managing the technical performance of the fleet is the responsibility of the Marine Operations Management team and is reported on a quarterly basis to the top executive team and the board of directors.
Vessel performance management
The fuel consumption of each vessel is recorded daily along with many other factors that affect performance. The data is assessed by the Marine Operations Management team to determine vessel performance, and adjustments are continuously made to achieve a better result. The total and relative CO2 results for the entire fleet under Wallenius Wilhelmsen’s control are reported in line with the ISO 14064 standard for greenhouse gas accounting.
The relative CO2 objective (CO2/tonne kilometre) applies to the combined performance of all vessels under the company’s control, regardless of whether they are owned or chartered. Major factors that will contribute to achieving the result will be: optimised fleet deployment and utilisation, enhanced hull fouling management, and the addition of four modern and efficient HERO vessels to the global fleet.
Evaluation of results
Scope 1 and Scope 2 GHG emissions from the entire fleet are reported as one figure because they come from the same source and are not possible to separate. For 2018 total CO2 arising from all ocean operations was 5 188 534 tonnes, which is just 0.3% more than the 2017 result of 5 171 315 tonnes. The result is a reflection of the amount of cargo work done in the interval and is driven by the state of global markets, which were similar in 2017 and 2018.
Relative CO2 emissions, or carbon intensity, is also a significant GHG KPI. For the fleet under the group’s control, the 2018 carbon intensity result was 35.52 g/tkm, which was a 1.1% reduction on the 2017 figure of 35.91 g/tkm. It is difficult to reliably attribute a marginal improvement of this kind to any single factor or set of factors when there are such a wide range of operational, technical and market factors that influence the result.
During 2018 the company GHG emissions baseline was recalculated to include the entire Wallenius Wilhelmsen fleet. From that the company’s medium-term objective for relative CO2 emissions (carbon intensity) was set at an 8% reduction by 2020 relative to 2017. In numeric terms that is a reduction from 35.9 grams of CO2 per tonne kilometre (g CO2/tkm) to 33.0g CO2/tkm. The objective is embedded in the Lean:Green sustainability strategy which has been approved by the Board of Directors. The company does not set a near or medium- term target for the absolute reduction in CO2 because there is currently no viable technical means to achieve it for transoceanic shipping.
Ambitions and next steps
The data liberation project discussed in the ‘Quality of Service’ section will be the most prominent initiative contributing to continued improvement in GHG performance in 2019. To a large degree it will focus on retrofitting and commissioning the equipment to achieve data liberation across a large portion of the fleet, however it is anticipated that analytical tools to improve different aspects of vessel operating performance and efficiency will also being to be used. As the technology is new it is premature to comment on anticipated results or targets.
In May 2019 IMO will hold it’s 74thMEPC meeting where the next stage in the development of future GHG regulations will take place. Wallenius Wilhelmsen engages in such regulatory events to try to achieve progressive but pragmatic outcomes. For MEPC 74 the company will urge support for initiatives that will contributing to raising the scale and global coordination of low and zero emission research and development.
Non-GHG air emissions from ships
Deep sea vessels emissions other than CO2 are chiefly nitrogen oxides (NOx), sulphur oxides (SOx) and particulate matter (PM). NOx is a product of the combustion process, SOx originates from the sulphur in the fuel, and PM arises from a combination of the type of fuel and how it is combusted. All of the aforementioned emissions are the subject of increasingly impactful international regulations.
Wallenius Wilhelmsen has a zero emissions vision for its ocean services, making non-GHG emissions a material topic for the company.
The scope includes all vessels under Wallenius Wilhelmsen’s control, whether owned or chartered, and the progress of these emissions and CO2 emissions is driven by specific regulation. Overall responsibility for compliance and vessel performance lies with the Marine Operations Management team: their decisions and instructions affect performance in this area, however, as with CO2, the results are also heavily affected by factors outside the company’s control, such as market conditions.
How the topic is managed
Compliance with NOx regulation is established through adjustment of engine settings and or installation of specialist machinery during the building of the ship. SOx and PM fall under the same IMO regulation, which allows compliance through the use of a fuel- either liquid or gaseous- of the required sulphur content, or through operation of a device (‘scrubber’) that removes SOx from air emissions, which is regarded as an ‘alternative compliance method’ as outlined in IMO’s MARPOL Annex 6, Regulation 4.1. Compliance on an individual vessel level is managed by the crew with oversight by the ship managers.
Sulphur regulation will undergo a step change in 2020, with the introduction of a new global cap on the amount of sulphur in fuel. From 1 January 2020, the cap will be 0.5%, an 86% reduction from the current level of 3.5%. Wallenius Wilhelmsen will comply with the new limits through a combination of operating with different types of low Sulphur fuel and installing scrubbers on the most suitable vessels. The company is also the founder and current chair of the Trident Alliance, a network of over 40 shipping companies that believe in robust enforcement of sulphur regulations for the benefit of health, the environment and fair competition.
During 2018, a relative NOx target was set as part of the Lean:Green strategy. The target is a 1% reduction in the owned fleet’s main engine average IAPP value from 13.68 to 13.53 between 2017 and 2022, which will be achieved through fleet renewal.
The validity of this as a KPI is underscored by the fact that NOx and CO2 emissions go hand in hand. Particulate Matter (PM) is regulated together with SOx and there are no explicit PM levels to be met, so targets have not been set and nor will results be reported. It is important to note that all the foregoing criteria emissions correlate strongly with CO2 emissions. Therefore, all initiatives to improve fuel efficiency, such as enhanced hull fouling management generally, have a positive effect on NOx, SOx and PM emissions too.
Evaluation of results
In 2018, the total SOx emissions of the fleet under the group’s control was 68 480 tonnes, which represented a 5.1% reduction on the 2017 value of 71 330 tonnes (restated from 72 194 after review). The difference is mainly attributed to the lower average sulphur content of High Sulphur Fuel Oil (HSFO) on the market in 2018 compared to 2017. The amount of cargo work carried out by the fleet and its carbon intensity can affect the total SOx result, however, there were only marginal differences in those factors between 2017 and 2018.
The average sulphur content in fuel used was 2.06%, a reduction of 4.6% compared to the 2.18% reported for 2017. In most cases, the average sulphur content of a fleet is affected by several factors, including compliance with sulphur regulation, the proportionate exposure to Emission Control Areas for the year, and the actual sulphur content of the fuel on the market during the year. For Wallenius Wilhelmsen, compliance is always 100% and exposure to ECAs was similar in 2017 and 2018, so the main factor in the difference is the change in average sulphur content of HSFO.
The relative NOx for the owned fleet in 2018 was 13.66g/kWh, a marginal reduction on the 2017 result of 13.68g/kWh. This reduction was due to the addition of MV Titus to the global fleet.
Ambitions and next steps
The data liberation project will have a positive impact on total SOx, NOx and PM emissions, but it is premature to quantify what that contribution will be. With SOx, the continuation of the Four Stream and Trident Alliance initiatives are central to continued progress, while with relative NOx, the addition of new HERO vessels will have a positive impact.
GHG emissions in landbased operations
While the landbased activities of Wallenius Wilhelmsen are not energy-intensive compared to its ocean activities, they are significant from a GHG perspective. The scope of landbased GHG emissions includes all types of facilities, including vehicle processing centres, vehicle distribution centres and ocean terminals, and vehicles that the company operates. Facilities and vehicles that the company has operational control over can be directly or indirectly influenced in relation to GHG emissions. Responsibility for GHG emissions, including from the vehicles associated with a facility, lies with the respective operational manager.
Reducing energy consumption
Energy consumption is managed on an individual facility basis. The leading source of energy at most facilities is electricity, and the focus has been on making energy consumption more efficient. An example of this has been upgrading to LED lighting at several facilities. Energy is also consumed by cargo handling and distribution vehicles. Local or regional regulation govern emissions from such vehicles, and Wallenius Wilhelmsen is always committed to full compliance.
It is important to note that the annual emissions of a typical landbased facility heavily depend on the volume and profile of activity that the facility performs, and can fluctuate greatly from one year to the next depending on market demand. For these reasons, it may be difficult to establish a CO2 intensity metric or targets for either relative or absolute reduction in GHG for Wallenius Wilhelmsen Solutions. The matter will be closely evaluated during 2019.
Evaluation of results
During 2018, a new online global performance reporting system for all landbased facilities was created, covering fuel and power consumption. The intention was that it would provide robust full-year baseline GHG emissions figures, however, development has not yet reached that point. Conversion of electricity to CO2 is yet to happen, and for similar reasons, the GHG targets for WW Solutions have yet to be decided.
The total CO2 from liquid and gaseous fuels was 5 611 tonnes. The fuels covered were diesel, petrol, propane and natural gas, and represented the operational consumption related to WW Solutions’ vehicles, equipment and buildings. This does not include offices, personal vehicles and customer property unless they were included on the same bill as WW Solutions’ operations. Facilities belonging to Keen were also not included as they have yet to be brought into the WW Solutions standard operating environment. 2018 was the first year of data reporting and because of the business factors affecting total GHG emissions of WW Solutions, it is not possible to infer anything on performance from these results.
The total electrical consumption of WW Solutions in 2018 was 17.350 megawatt hours and represented liquid and gaseous fuels. The reporting solution does not yet convert electrical consumption to CO2 according to how electricity is produced in the area where each facility is located. The same applies for gaseous and liquid fuels.
Ambitions and next steps
In 2019, the existing global KPI reporting system will be extended to become a global, streamlined Plan Do Check Act (PDCA) solution for registering energy consumption and improvement actions (ImpACTs). The intention is to harness the system to develop environmental policies, objectives and initiatives for WW Solutions, as well as to share improvement opportunities across the organisation. Additionally, the reporting will be amended so that electrical consumption is converted to CO2. Furthermore, there will be an evaluation into the possibility to target (relative) reductions in either fuel or power volume fluctuations, as well as the profile of activities at facilities.
Non-GHG emissions in landbased operations
The landbased operations of Wallenius Wilhelmsen include terminals, equipment processing centres and trucking operations. All of these consume energy and for the majority, energy is derived either directly or indirectly from fossil fuels. This means that the operations Wallenius Wilhelmsen Solutions undertake will result in both GHG and non-GHG emissions. The latter includes primarily NOx and Particulate Matter emissions.
The scope of landbased non-GHG emissions includes all facilities and vehicles which the company has operational control over. All of these facilities and vehicles can be directly or in-directly influenced in relation to their non-GHG emissions, depending on the form of energy in question. Responsibility for non-GHG emissions, including from the vehicles associated with a facility, lies with the respective operational manager.
Regulations that govern vehicle non-GHG emissions apply in many of the jurisdictions in which the company operates, and compliance is compulsory for Wallenius Wilhelmsen, which makes it an essential issue for the company. Local communities increasingly take interest in the non-GHG emissions of industrial facilities because of the negative health impacts of such emissions.
Managing non-GHG emissions.
Non-GHG emissions in the group’s operations are predominantly due to mechanical or electrical power generation, which means they are closely linked to GHG emissions. This means that aside from a commitment to compliance with all applicable environmental regulation, reduction in non-GHG emissions is achieved through the company’s efforts to reduce GHG emissions. Furthermore, GHG emissions are linked to cost, so the company strives to reduce non-GHG emissions for this reason too.
Evaluation of results
A global reporting system for power and fuel consumption was implemented during 2018 – however, it has not been developed to the point where it can do the conversions necessary to report on non-GHG emissions.
Ambitions and next steps
During 2019 the existing fuel and power reporting tool will be developed to provide non-GHG KPIs across Wallenius Wilhelmsen’s Solution’s organisation.