SPO has long been strongly committed to limiting our negative environmental impact and radically decarbonising our operations and to meet this goal has been implementing various initiatives to reduce and mitigate our Scope 1 and 2 carbon footprint (i.e. the emissions from our business operations that are under our own control – iaw GHG Protocol*).
Our goal is to pursue both a reduction in fossil fuel consumption and GHG emissions consistent with maritime industry climate goals, and an increase in other positive environmental impacts.
We are seeking emissions reduction within our operations through more energy efficient vessel designs and operations, as well as reducing electricity consumption in our offices. Until such time as technology allows SPO to achieve the industry's emission reduction targets, we decided to act as a Project Proponent to develop our own carbon offsets.
We have in place a number of policies (e.g. Environmental and Sustainable Development Policies) which provide the framework for reducing SPO's environmental negative impact and impacts on biodiversity under our influence.
These cover (but are not limited to) using low-sulphur Marine Gas Oil (MGO) to fuel our vessels, improving vessel design and fuel efficiency leading to lower emissions from fleet and voluntarily offsetting our Scope 3 business travel GHG emissions with effect from 1st July 2011. We have also been voluntarily reducing our Scope 1 and 2 carbon emissions in line with the maritime industry climate goals through our carbon offset project in Paraguay and purchasing carbon credits for any shortfall. For the latter, we engaged the services of a carbon broker that trades credits in the voluntary emissions market.
All the projects from which we chose to buy credits have Verra certified CO2 environmental benefits, combined with CCBA certified economic and social benefits to the local communities.
In 2010, we invested in a REDD+ ("Reducing Emissions from avoided Deforestation and Forest Degradation") Paraguay Forest Conservation Project ("PFCP") in South America, through which we generate carbon credits to partially offset the Scope 1 and 2 CO2 emissions from our operations. The project was designed to achieve dual accreditation against both the Voluntary Carbon Standard from an environmental / carbon perspective and the 'Gold Level' of the Climate, Community and Biodiversity Alliance ("CCBA") Standard (now consolidated under the Verified Carbon Standard ("VCS"), and then renamed "Verra").
This project is solely driven by SPO's sense of environmental and social responsibility and is a wholly voluntary commitment, given that the shipping and aviation sectors were excluded from the Kyoto Protocol and the December 2015 Paris Agreement. The REDD+ project is designed to develop around 10,000 dual CCBA and Verra verified carbon credits per year for 20 years. The project is managed locally by Guyra Paraguay (a non-profit civil society organisation that works to protect and enhance the biological diversity of Paraguay) and supported by SPO's SD team.
While vessel designs continue to be very transport energy efficient, the offshore industry demands larger and more powerful vessels able to work in ever deeper waters and in locations with more extreme weather conditions (and the energy of these extreme events is set to continue to increase with anthropogenic global warming), which means that our incremental vessel design emission reduction initiatives alone will not be enough.
All SPO vessels use Marine Gas Oil (MGO): a low-sulphur, lower particulate matter (PM) fuel in accordance with both the latest fuel standard, ISO 8217:2017 and the IMO 2020 low-sulphur regulations as a minimum.
As a positive effort to reduce GHG emissions, SPO constantly upgrades our fleet using latest technology and emission control equipment. The Company's latest generations of vessels are certified by DNV for 'Clean'*, 'Clean Design'** (or equivalent), resulting in lower emissions, including for refrigerant gases which can be up to 2,000 times more harmful to the atmosphere, weight for weight, than CO2 from all machinery. They are additionally all delivered with an Inventory of Hazardous Materials ("IHM") for more efficient recycling at the end of the economic life of the vessel, and in accordance with the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (HKC), even before it is sufficiently ratified and in force.
We also comply with the MARPOL Regulations and the EU Ship Recycling Regulation (EU SRR) for relevant vessels by having a certified IHM. EU SRR aims to reduce the negative impacts linked to the recycling of ships by ensuring that proper vessel dismantling methods are used to achieve safe disposal or recycling of all ship components, including hazardous materials.
*Clean notation shows compliance with all mandatory MARPOL requirements regardless of any exemption granted by a flag state administration. In addition, it contains additional requirements to prevent oil pollution. It also requires a vessel to have improved technical and management procedures to reduce discharges to sea and emissions to air.
**Clean Design contains all Clean notation requirements and additional Constructional and Design requirements such as stricter oily tank protection, installation of 5ppm oily bilge separator and alarm, installation of approved ballast water treatment system. Clean Design also requires Compliance with Hong Kong Convention for Ship Recycling.
Our newest vessels have been fitted with low-NOx main engines, sewage treatment plants, waste macerators and garbage compactors. Vessels undergoing routine drydocking over the past decade have all been coated with fully TBT-free anti-fouling applications (in accordance with the IMO TBT Resolution, passed at MEPC-42 in November 1998 and in force from 1st January 2008).
Each SPO vessel over 400GT has also been operating according to its Ship Energy Efficiency Management Plan (SEEMP) since January 2013. The purpose behind the SEEMP is to establish a management tool to assist the Company in managing the ongoing environmental performance of our vessels.
SPO is using two fuel management systems on board our vessels: FUELTRAX® and Aquametro. FUELTRAX® is installed on 11 vessels with two of these vessels installed with the latest "FUELTRAX Vision" technology. Additionally, four vessels are fitted with an Aquametro system. Both systems are smart, self-contained, marine fuel management solutions, which ensure security of fuel, compliance and optimised vessel performance.
To implement the vessels' Environmental Management Plans, we have incorporated specific procedures and guidelines within our onboard Safety Management System (SMS). All vessels are provided with, and must comply with, an externally audited and approved Shipboard Marine Pollution Emergency Plan (SMPEP).
SPO has a target of zero unplanned releases of substances hazardous to the marine environment. This includes mineral oil, other hydrocarbons and chemicals that are hazardous to the marine environment and the release of CFC / HFC / HCFCs with both high Ozone Depleting Potential (ODP) and high Global Warming Potential (GWP) to the atmosphere. Reporting of accidental spills and releases is a statutory requirement, through the appropriate procedures and reported to relevant authorities.
Whilst ships' staff are required under the IMO MARPOL Convention, Annex V, to segregate waste, to promote further environmental awareness they are also encouraged to maintain high standards of housekeeping and observe proper procedures for pollution prevention. All efforts are made to reduce and ultimately eradicate waste discharge to the sea, all scrap and engine room waste are bagged and discharged ashore, as is all sludge which is discharged to shore facilities. The Garbage Management Plan for each vessel includes detailed plans and instructions for garbage handling and charts showing authorised areas and procedures for waste disposal.
Above: Photo by TJ Fitzsimmons on Unsplash
SPO holds certification to ISO 14001:2015 and ISO 9001:2015. We are bound by the IMO International Management Code for the Safe Operation of Ships and for Pollution Prevention (the "ISM Code") and audited against this code both internally, internationally and externally.
The external audit is performed by a third-party independent classification society whose auditors are appointed by the Maritime and Port Authority of Singapore (MPA) on behalf of the Singapore government in respect of our main Flag Registry, plus a small number of others that we use for local reasons. The ships can be (and are) audited by national inspectors at any and every port worldwide at which every vessel calls.
SPO implemented IMO's compulsory Data Collection System (DCS) for fuel across our fleet. We also comply with the EU Monitoring, Reporting and Verification (MRV) of CO2 emissions. Both EU MRV and IMO DCS requirements are mandatory and intend to be the first step in a process to collect and analyse emission data related to the shipping industry.
Our direct and indirect Scope 1, 2 and 3 emissions are calculated in accordance with the GHG Protocol and ISO 14064. We also report GHG emissions from our entire operations within our operational management and operations' boundaries.
We have an Environmental Management Plan and Quality Health Safety Security and Environment Plan in place with clearly defined targets. We report quarterly on our Scope 1, 2 and 3 GHG emissions against an internal and voluntary 3% intensity y-o-y reduction target*.
*Subject to review in 2021 in line with the recent parent company commitment to be carbon neutral by 2050, and the next IMO MEPC meeting in June 2021 which is charged with defining metrics and modalities of short term carbon intensity measures for our industry sector.
In 2020, we identified two pilot projects to help us to reduce total carbon emissions and carbon intensity from our operations. They are:
SPO received funding approval from the parent company's SD fund to proceed with the first pilot project in 2021. The second project was put on hold and will be revisited in 2021.
To help reduce the Company's carbon footprint, SPO strongly encourages all employees to follow the Swire group Green Guidelines. We hold Eco-Office certification from the Singapore Environment Council that measures improvements in the areas of: recycling, electricity and paper usage, green procurement, adoption of sustainable practices by employees amongst others. SPO held Eco-Office certification since 2010. We continue measuring our office electricity / water / paper consumption and reducing them y-o-y.
Middle Photo: Federico Bottos on Unsplash. Right: Sigmund on Unsplash
In mid-2008, SPO voluntarily committed to being "Carbon Neutral", as the "right thing to do" environmentally and socially, so that the CO2 for which we are directly responsible (Scope 1 and 2) would be "Net Zero". The ultimate solution to achieve Net Zero is to use a non-fossil fuel that does not emit any CO2 in all our vessels, however this is not achievable in the short term.
Whilst SPO has been looking, and continues to look, at alternate low / zero carbon fuels (such as Hydrogen from Methanol or Ammonia, or BioFuel) for some time already, an available 'silver bullet' solution does not yet exist. So, between 2008 and the time when a zero-carbon fuel becomes widely available to the shipping industry, the next option is to develop our own carbon credits. These come from our doing environmentally positive things that, once rigorously independently audited and certified, can be used to exactly offset the environmentally negative effects of our Scope 1 and 2 GHG emissions, and in so doing we become "net carbon neutral".
Forests both take in (or "sequester") atmospheric CO2, and then hold the CO2 in the green leaves, thus doubly helping to slow man-made global warming. Slashing and burning the forest releases the CO2 back into the atmosphere, and stops any more being sequestered. If we can help prevent this, we get X tonnes of carbon credits equal to the amount of the threat that we have removed.
In 2009, we partnered a non-governmental organisation (NGO) in eastern England, the World Land Trust, who have a long history of work in this specialised area, and donated USD 1.1 million to Guyra Paraguay (GP), a local ecosystem NGO in Paraguay, central South America. This enabled GP to buy nearly 5,000 hectares of dry Quebracho forest in the Chaco-Pantanal in NE Paraguay. GP then gave half the land title to the indigenous Indians of that area, with the promise of all the remaining land title at the end of our 30-year project, so they recovered their traditional, and in places sacred, land.
We also worked with some local Campesiños (peasant farmers) in La Amistad Community in San Rafael National Park in SE Paraguay. There are approximately 100 families there, each with a plot 100 m wide and 1,000 m deep, and they are working down their own plots slashing and burning the trees to plant crops such as sesame, and a local type of tea called Yerbe Mate.
We pay them every year not to cut down any more trees, and pay them for the crops they would have grown if they had, thus preserving the original tree cover to sequester CO2, whilst ensuring that they are no worse off financially. This is called Payment for Ecosystem Services (PES). We also pay a small amount in both project areas into a collective fund for them each to spend, as they like, on things that will benefit their communities.
In 2020, after many years of saving from the PES funds SPO had been giving them every year, the first 11 of the Campesiños members working with us now finally had enough to buy the title of their own plot from the Paraguayan Government Bureau of Indigenous Peoples Affairs (INDERT). A ceremony was held to formally hand over the land titles to them, make the PES payments to all our 35 members for 2019, and donate the extra sum into their Community Fund.
This is a major first achievement for our Paraguay Forest Conservation Project stakeholders, as they are able to provide security to the families in La Amistad, who had lived as tenants to a government organisation in faraway Asuncion for all their lives.
This shows that:
A truly win-win-win-win-win situation!
Simon Bennett, General Manager – Sustainable Development, SPO
Representatives from the Paraguay Forest Conservation Project partners