Shipping

CARGILL WANTS SHIPPING INDUSTRY TO RETHINK CARBON INTENSITY RULES

It’s fair to say that Cargill is responsible for a lot of cargo shipping. So, when looking at their Scope 3 emissions, a natural target are the container ships that use the cheapest fuel, known as alternatively, ‘bunker diesel’, or ‘Marine Fuel’, it is cheap for a reason. The sulphur content is about 500 times that of your average car.

As bad as that sounds, prior to 2020 it was around 1,300 times worse.

The unrefined sludge is a thing of environmentalist nightmares. It’s so toxic that even though developed countries such as the UK require ships to use a more expensive version which has a lower sulphur content, the practice is still a major contributor to sulphur oxide emissions. It also accounts for about 15% of Nitrogen Oxide emissions globally, and about 3% of CO2 emissions.

With the sustainability reporting requirements for companies that are now unavoidable, Cargill has a thing or two to say about the shipping industry’s plans to measure carbon emissions, and their points look valid.

What the Shipping Industry is Doing

The industry is introducing ways to metrify the carbon cost of transport by ship. I.e. by putting numbers against key indicators, they can measure things. Measuring is the first step to understanding, which can lead to better decision-making and introducing improvements.

It was a surprise to me that companies weren’t already doing this. Or perhaps they were, but the system needed improvement. 

But if that is the case, then Cargill thinks they can do better. Eman Abdalla, global operations and supply chain director at Cargill Ocean Transportation, who was attending the Posidonia shipping industry event in Athens on June 9, told S&P Global Commodity Insights about her concerns.

The new system of measuring the amount of diesel used per mile can be distorted by events outside of directly shipping cargo. A so-called ‘ballast voyage’, where the vessel typically travels without cargo to their next destination, would be included in the metrics, yet these trips will be more fuel-efficient due to the lighter weight.

One could imagine a scenario where unnecessary ballast trips were made in order to bring down the overall statistics in line with regulatory requirements.

Instead, we want regulations that are focusing on carbon intensity per ton-mile

Eman Abdalla, global operations and supply chain director at Cargill Ocean Transportation

CARGILL TALKS DIRTY ABOUT SHIPPING INDUSTRY: CARBON INTENSITY RULESInstead, Abdalla proposes a slightly more obvious solution – to work out the cost per ton/mile. This should be straightforward since ships will know the weight they’re carrying, and the metric will adjust according to the load, giving a more accurate assessment of the vessel’s efficiency.

Photo by Kinsey on Unsplash

Author

  • Nick 2017 500X500 1

    organisation:

    Nick Baskett is the editor in Chief at Bartalks. He holds a diploma from the Financial Times as a Non Executive Director and works as a consultant across multiple industries. Nick has owned multiple businesses, including an award-winning restaurant and coffee shop in North Macedonia.

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