Odfjell: A global market-based measure with a carbon price is vital for industry’s energy efficiency

Mr. Jensen also refers to the importance of sustainability in their strategy, stressing that sustainability is about caring for people, the planet and society on a long-term perspective. In that regard, Odfjell has put sustainability at the heart of its operations, engaging in activities that contribute to a better future.

SAFETY4SEA: Odfjell received this year’s SAFETY4SEA Sustainability Award for supporting sustainability with ESG reporting and ESG communication. What does ‘sustainability’ mean for your organization and how do you embed it into your corporate culture?

Øistein Jensen: First and foremost, we want to thank the Safety4Sea expert panel and readers for their votes and the Sustainability award. This greatly acknowledges our ongoing efforts toward a more sustainable business and ESG reporting. Odfjell defines sustainability as having a long-term perspective on how we do business. It is all about making changes today that will have an impact tomorrow. Our 108-year track record speaks for itself. We intend to be here for the next 100 years. To do so, we must act responsibly and consider the long-term effects of our operations on people and the environment. We have taken numerous steps to address, act and report on sustainability issues. This is deeply embedded in our organization.

As an integrated shipping company, we can leverage a wealth of internal technical, commercial, and operational expertise to meet our climate targets. One of Odfjell’s four core values is sustainability. It is also part of our overall strategy. We clearly communicate our commitment to sustainability, as well as our Vision, Mission, and Customer Commitment. In our strategic pillars, we have also set our ambitions to take a leadership role on sustainability, and make it a competitive advantage. In 2019, we set out ambitious climate targets. Today, our shore-based organization, including management, has decarbonization as a part of the incentive plans. Sustainability is also about caring – for people, the planet, and society. So our organization is also engaged in how we can contribute to a better world for more people through various local initiatives.

S4S: What are your top priorities on the agenda for the next 5 years?

Ø.J.: Our priorities will always be to be profitable, to have a safe working environment, to provide great service to our customers, to protect the environment, and to have high standards for business ethics and compliance. From a sustainability standpoint, our priorities are:

• We will continue to drive fleet energy efficiency, prepare to be zero-carbon capable by 2030, and achieve our climate targets.
• We support new regulations that promote decarbonization. We want to take advantage of the opportunities new regulations creates.
• Maintain a leadership position in sustainability by developing our high standards and leading ESG reporting.
• Collaborate with our suppliers to reduce scope-3 emissions and mitigate negative impacts on human rights in our supply chain.
• We recognize the importance of diversity in our organization. We will continue to develop as a diverse organization that attracts, develops, and retains the best talent in the industry.
• We continue our efforts to fight corruption through collective actions in our industry.

S4S: How technology and data will play key roles in helping the maritime industry comply with ESG?

Ø.J.: There are no short-term solutions to decarbonize shipping. To fully decarbonize our industry, we would need access to green energy that does not compromise other sectors, to produce green fuel. We need infrastructure, regulation, and market-based measures. Technology is vital for all of this. Underway to a zero-carbon future, we will have to focus on energy efficiency and technology to improve shipping efficiency. This will be technology from onboard energy-saving technology to digitalizing operations, like weather routing and optimal voyage planning. We also know that data is a value. So today, we collect a wide range of data from our operations to improve decision-making and report efficiently. Some examples are monitoring our vessels’ efficiency, and quarterly reporting on energy intensity to the market.  With new regulations such as the EU Emission Trading Scheme (EU ETS) on the horizon, we must ensure that our data is of high quality and transparent, as the cost of emissions will be allocated and passed on to our customers. A fuel tax will also benefit companies with high efficiency because they will represent a lower cost to charterers.

S4S: In your view, has the industry been successful in implementing safety culture? What should be our key priorities for strengthening safety culture onboard and ashore?

Ø.J.: It is challenging to answer for the industry. Accidents continue to occur, but shipping companies and charterers have shifted their focus from safety compliance to safety culture. To make it work, we need good and clear regulations and compliance, but we also need a good culture. I believe that understanding risk and taking it into consideration is critical for operating safely and reducing the risk of accidents. So, to strengthen the safety culture, I believe in focusing on risk and taking risk-mitigation measures. A good safety culture begins at the top, with the message and action that we will not compromise on safety and that safety is always the number one priority. Over the last few years, the industry has seen a focus on mental health and safety attitude. The mental health focus includes caring for each other and building better and safer teams on board. We endorse attitude campaigns like the Life Saving Rules and Partners in Safety. And we firmly believe they contribute to a stronger safety culture on board. We inform all of our employees that they have a significant responsibility, not only to the company, but also to themselves and their families, to ensure that they can safely return home from work. I believe this is a simple message for developing a safety culture.

S4S: What is your wish list for the industry and/or regulators and all parties involved towards decarbonization?

Ø.J.: One of the major impediments to reaching zero is the lack of green energy to produce green fuels. Green energy is and will be for a long time a scarce resource. From the standpoint of total greenhouse gas emissions, using green energy to produce fuel is not very efficient, as green energy will reduce greenhouse gas emissions more efficiently in other sectors. That is why politicians and governments should increase renewable energy production and land-based carbon capture and storage. There must be a polluter-pays principle. A carbon price must be implemented to incentivize decarbonization, energy efficiency, and the use of alternative fuels. I believe in a global carbon levy administered by the IMO, with the proceeds going back to the industry to support the transition. Then the transition will work for all – not only for developed nations but also for developing nations. Nobody is left behind.  Regulations, policies, and commitments must be in place to support the transition to alternative fuels and the use of market-based measures. Politicians should look for ways to support early adopters, green corridors, and contracts of difference.

S4S: What needs to change to raise the industry’s profile and attract future talents?

Ø.J.: Shipping, in my opinion, is appealing to future talents. Our industry is undergoing a major transformation, and now is an excellent time to be a part of it. In addition, many businesses have clearly defined sustainability goals and digitalization ambitions. This is important to young talents, according to our experience. So, when combined with the opportunity to work in a global industry at a time when one can truly make an impact, I believe this would be very appealing to young people. However, I believe that we can always improve how we communicate with and meet young people.

S4S: If you could change one thing across the industry from your perspective, what this would be and why?

Ø.J.: Climate change is the most pressing issue of our time. It has an impact on people, societies, and businesses. To mitigate climate change, we must significantly reduce greenhouse gas emissions and adhere to the Paris Agreement’s 1.5-degree target. Shipping must also play a role in this. We need green energy to decarbonize shipping without jeopardizing other sectors. However, before we have enough green energy and shipping can go to zero, we must do everything we can to improve onboard and shipping operations efficiency. So having a global market-based measure with a carbon price to drive energy efficiency is an important incentive for shipowners, operators and charterers.

The views presented hereabove are only those of the author and do not necessarily reflect those of  SAFETY4SEA and are for information sharing and discussion  purposes only.