Realising the value of high-quality data and sharing it across the global shipping industry is key to catalysing investment and meeting ambitious decarbonisation targets, says Øistein Jensen, chief sustainability officer of Odfjell.
Norwegian shipping company Odfjell recently announced an ambitious goal of cutting emissions by 50 per cent by 2030 compared with 2008, committing to climate neutrality by 2050. The company aims to start ordering vessels with technology to enable zero emissions by 2030 and will actively support initiatives to develop technology and infrastructure for zero emissions. Odfjell is also is committed to backing international regulation around shipping’s emissions.
To directly cut emissions from its operations by improving the performance of its ships, Odfjell has invested in weather routing technology from StormGeo. The technology helps Odfjell vessels to complete voyages that use less fuel and therefore emit fewer greenhouse gases. “From 2016 to 2020, we have about 4,500 routes that have been rerouted by StormGeo. We have saved 343 days, reduced fuel by 9,000 tonnes, and cut CO2 emissions by 28,000 tonnes,” Øistein Jensen, chief sustainability officer of Odfjell explained during a webinar hosted by VPO Global this week.
In one example, Mr Jensen noted that Odfjell saved 22 hours and 35,000 pounds in bunkers as well as achieving a substantial reduction in emissions thanks to StormGeo rerouting a vessel to sail in more favourable weather conditions. In another example, StormGeo helped Odfjell to save 16 hours of sailing time and USD 18,000 by rerouting based on heavy weather conditions.
Digital tools and data
In addition to the operational changes Odfjell is making, the company is also focussed on using digital tools to create and process high-quality data. By not only collecting significant quantities of high-quality data but also transforming these data into valuable information, Odfjell hopes to gain a better understanding of why and where technical retrofits are needed to improve ship efficiency.
“When we are doing technical retrofits, decisions are based on high-quality data. So, we see that the way we are operating, that the access to the data will give us tremendous opportunities,” Mr Jensen noted. “However, if we look at our industry today, I think we will see that most data are locked down in silos. They are related to the engine, their performance to the pumps, to the navigation, and those data are not really shared. In our industry, we don’t like to share either. So, I think we need to share with and between industries and within the company. We need to share the data from the different operational technical equipment to break down the silos.”
He went on to say that while he sees a lot of promising developments in the industry, the big iPhone moment and true springboard into the digital transformation has yet to happen. “Going forward, I think that we will need to see that we are able to connect the source data into the consumer data, which will enable the organisation to use those data to innovate from it, to create value from it and to improve the efficiency, which ultimately improves sustainability.”
Mr Jensen noted that the first step is for companies to start realising the value in data and from there they can do the relevant investments. “These don’t have to be major costs, it’s more like a cognitive threshold that you need to need to pass to understand and believe that these data could have value for you,” he said. “It’s actually easier than a lot of people believe to collect those data and make use of them, and in the end that can significantly improve efficiency and sustainability.”
Furthermore, Mr Jensen spoke to the importance of maintaining strong communication within and outside of a company to facilitate data sharing. “You also need to be in dialogue with your providers and others and look at how these data can be merged within the company and within the ship. Then you can bring these data onshore and you are given many more possibilities. With cloud computing these data can easily be shared and used for further efficiency and improvements.”
Financing fleet decarbonisation
To achieve the ambitious 50 per cent reduction in emissions by 2030 that Odfjell has set for itself, the shipping company looked at possibilities for financing. Explaining more about this, Mr Jensen said, “We made a Sustainable Financing Framework in which we use a KPI related to the carbon intensity of the fleet we control, not including the time-chartered vessels. The sustainability performance target is related to an achievement of the AER (Annual Efficiency Ratio) index. There will be an annual verification of the KPIs to see if we actually achieved this. The characteristics of this loan and bond framework will be linked to the margin of the loan, so it’s a proposed step down or step up, whether we achieve those targets or not,” he explained.
In January 2021, Odfjell issued a sustainability-linked bond as part of its Sustainable Financing Framework. It was reportedly set to NOK 850 million with a maturity date in January 2025.
Tools for seafarers to decarbonise
Another critical but often overlooked aspect of decarbonisation is providing seafarers with the right tools and incentives that will enable them to manage decarbonisation tasks, says Petty Leung, managing director Greater China, StormGeo.
She believes crew need to be onboard and has noticed over the last few years that many seafarers feel that they cannot make a difference in reducing emissions. “For seafarers, decarbonisation is not their first objective. They are focussed on the safety of cargo and crew, and even if they do something good this isn’t always noticed and measured,” Ms Leung said.
One of the major issues she sees is that seafarers just don’t realise how their efforts could be contributing to huge performance benefits. She noted that feedback is essential to catalyse changes in habit.
Referring back to Mr Jensen’s earlier point made about small changes leading to big results, she agreed that minor adjustments in speed or route can contribute to large emissions savings, but in order for big benefits to be reaped in fleet performance and decarbonisation, the frontline seafarers are the ones with the control. For this reason she believes a shift in the mindset of seafarers is critical.
One example she referred to was a 20 per cent saving in main engine cylinder oil consumption that was achieved as a result of onboard crew striving to achieve better results once they realised how their actions could help. StormGeo alerted the team to the fact that the cylinder oil consumption was at 1.7 g/kWh. Following the alert, the ship staff made some adjustments to decrease the consumption to 1.5 g/kWh. However, according to Ms Leung, the chief engineer was still not happy with the result and was particularly concerned at the high cylinder oil consumption as a recent valve change should have cut consumption, not increased it. This led the onboard staff to carry out further inspections on the new valve, which ultimately identified a missing flow value, causing higher consumption. After more adjustments, the consumption decreased to 1.2 g/kWh.
Ms Leung drew attention to this as an important example of where crew members go one step further as a result of realising the impact they can have on the ship performance. “This is what we need,” she said. “No amount of compliance and no amount of regulation will help with all these small parts. We must motivate and then change minds. Digitalisation gives us the tools and the opportunity to do that,” she said.
Pointing to artificial intelligence (AI) and autolog data, she said while they are good tools, they are not perfect and human support is still essential. “Everyone has to be very conscious around how to use these tools and we need a supportive culture to change mindset,” she said. “Corrective action is very important and so is having an open loop system. Everything needs to feedback into a system so we can learn and then relearn.”
To learn more about Odfjell and StormGeo’s pathways forward with maritime decarbonisation, watch our webinar here.