Carbon War Room (CWR) announced that a collaboration between Hammonia Reederei, a Hamburg-based shipowner, and New Orleans-based charterer Intermarine, has enabled the retrofit of three sister vessels with multiple efficiency technologies. Under expected operating conditions, each vessel is anticipated to see 25 percent fuel savings, to be shared between Hammonia and Intermarine.
José María Figueres, Chairman of the Board, Carbon War Room commented “This deal proves the profitability of shipowners and charterers collaborating on multi-technology retrofits. Hammonia and Intermarine should be lauded for using innovative financing and best practices in measurement and methodology to win a competitive edge.”
CWR awarded Hammonia a $120,000 grant to retrofit the vessels Industrial Ruby, Industrial Royal, and Industrial Revolution. The project won praise for its ambitious use of multiple technologies, as well as for its revenue-sharing collaboration between charterers and owners. Intermarine has agreed to award Hammonia a rate that is above market rates through a retrofit clause in the charter party. This effectively shares the fuel savings between both parties, while also earning Hammonia a five-year time charter.
Furthermore, as Industrial Ruby is Liberian flagged, this vessel is eligible for a 50 percent tonnage tax discount for the first year after retrofit. This is part of the incentive scheme offered by The Liberian Registry to encourage and reward efficiency retrofits using third-party finance.
Hammonia purchased Industrial Ruby as well as sister vessels Industrial Royal and Industrial Revolution second-hand. The vessels’ financier has extended the liens to finance the bulk of the $1.2 million retrofits.
Galen Hon, Shipping Operations Manager, Carbon War Room commented: “This deal showcases how to overcome the split incentive between owners and charterers, and delivers hard proof of the fuel savings from deep retrofits. Hammonia and Intermarine should be congratulated for employing best practices to measure and monitor savings, and for sharing their data—which will increase industry confidence in the profitability of retrofits. These first movers will inspire more owners and charterers to follow in their footsteps.”
The CWR grant funded the installation of continuous monitoring software on Industrial Ruby, Industrial Royal, and Industrial Revolution in order to measure, verify, and publicise the fuel and carbon savings. The data will be analysed by the independent third-party University College London (UCL) over a five-year period, with initial results being released to the industry six months post-drydock.
According to DNVGL, only one in 10 companies aims for greater than 10 percent savings from its retrofit projects. After two years of working on retrofit finance, CWR views this deal as a model for the industry to achieve far greater savings, while creating win-win scenarios for both charterers and owners. This is especially pertinent in today’s market of overcapacity. CWR’s team can work with and support any interested owners or charterers to help them develop or find financing for efficiency retrofit projects.
This project is funded by the Dutch Postcode Lottery, which recently granted €1 million ($1.09 million) to CWR and Rocky Mountain Institute (RMI) for their LeaderShip project, expanding their efforts in the Shipping industry, including collaboration with the Port of Rotterdam.
Source & Image Credit: Carbon War Room
