The Mosaic Company, one of the world’s largest producers and marketers of concentrated phosphate and potash crop nutrients, announced a policy to exclude vessels with inefficient greenhouse gas emissions ratings from its supply chain.
Charterers representing 20 percent of global shipped tonnage now have policies in place to avoid using the most inefficient ships based on the GHG Emissions Rating.
In the past two and a half years, use of the GHG Emissions Rating and the A to G scale has increased by more than 450 percent, from 350 million shipped metric tons to 1.95 billion shipped metric tons today.
Developed by RightShip and Carbon War Room, the GHG Emissions Rating allows charterers and other stakeholders to assess the efficiency of vessels. It utilizes an A to G scale, where A represents the most efficient ships, and G the least efficient. In addition to allowing companies to avoid chartering inefficient vessels, the data held on each individual ship is also used by some companies as a guide for calculating their carbon footprint from maritime shipping.
The Mosaic Company uses this data in its assessment of its Scope 3 emissions reporting within CDP. Mosaic, which charters around 130 vessels annually, now excludes all G-rated vessels for international shipping and uses the GHG Emissions Rating as a guide for calculating and reporting its maritime carbon footprint.
The company explained that using more efficient ships has allowed i to gain cost efficiencies and further reduce its carbon footprint. Emissions from shipping currently represent less than 5 percent of the company’s carbon footprint.
Given the success of GHG Emissions Rating vetting, Mosaic is now reviewing options to exclude F-rated vessels.
Leading banks in the shipping industry, including HSH Nordbank and KfW IPEX-Bank, are using the A to G rating as an important part of assessing risk and return, with inefficient vessels representing a higher-risk investment.
Photo Credit: cargo ship via Shutterstock