Singapore-headquartered Eastern Pacific Shipping said it has surpassed its CO2 reduction target two years ahead of the schedule by pursuing a combination of strategies -- fleet renewal, operational improvements, as well as the use of green technology and alternative marine fuels.

The company, while releasing its 2021 Environmental, Social and Governance Policy report on Jan. 28, said it had achieved an Annual Efficiency Ratio, or AER, of 4.4 in 2020.

This compares to the company's 2019 AER of 4.7, which showed a steady decline from 2015, where it had an AER of 5.1.

AER is a carbon Intensity Indicator widely recognized and accepted by the maritime industry. Its calculation considers fuel types, deadweight tonnage, voyage distance, and cargo weight.

"We need to maintain a low AER at a time when our diverse fleet across the container, dry bulk, and tanker segments is expanding, with over 40 newbuilds on the horizon," EPS CEO Cyril Ducau said in a statement, adding that most of these vessels will be powered by alternative marine fuels, making them the cleanest ships on water in their respective categories.

EPS has a fleet of over 15 million DWT across three core segments: containerships, dry bulk, and tankers.

"While the ultimate objective is zero emissions, that is simply not feasible today. What is feasible is using various resources currently available to significantly lower CO2 emissions and greenhouse gas emissions in general," Ducau said.

Environmental regulations

EPS' fleet is fully compliant with the International Maritime Organization's global sulfur limit rule for marine fuels, it said in its 2021 ESG report.

EPS, and the industry, is now focused on IMO 2030 which mandates a 40% reduction in CO2 and IMO 2050 which mandates a 50% reduction in Green House Gas emissions, the company said.

Over the next few years, EPS will add LNG and LPG Dual-Fuel vessels across various segments creating a future-proof fleet that will comply with IMO regulations and significantly reduce emissions until even cleaner energy sources are available, it said.

In December 2020, EPS said that its managed vessel M/V CMA CGM Tenere successfully carried out the company's first LNG bunkering during a scheduled port call in Rotterdam.

The 14,800 TEU dual-fuel LNG Ultra Large Container Ship (the first in a series chartered to CMA CGM) took on 10,600 cu m of LNG, which is enough fuel for a round trip voyage between Rotterdam and Asia, it said at the time.

Besides LNG and LPG dual fueled vessels, EPS is also looking at other alternative marine fuels such as ethane and biofuels.

The shipowner said it had seen commercial gains from its efforts to reducing emissions. Its philosophy has attracted charterers with the same goals such as CMA CGM, Equinor and BHP, it said.

Shipping will have to prepare for the use of different fuels in future to not only meet regulatory requirements but also the needs of financial institutions, banks, charterers as environmental concerns gain increased momentum, industry sources said separately.

Mechanisms such as the Energy Efficiency Design Index, or EEDI, and the Energy Efficiency Existing Ship Index, or EEXI, are hitting the industry hard, they said, adding that operational efficiency, decreasing fuel consumption as well reduced emissions will determine how expensive and valuable your ship is in the market.

In November 2020, IMO's Marine Environment Protection Committee (MEPC) 75 strengthened EEDI phase 3 requirements and confirmed the application dates for qualifying ships as April 1, 2022, but encouraged early application.

The amendments to MARPOL Annex VI now require mandatory reporting of verified attained EEDI values and related information for ships that are already subject to phase 0 and phase 1.