London Stock Exchange Group (LSEG) and Norwegian company Siglar Carbon have partnered to provide the shipping industry with the insights needed to factor carbon into their decisions.
International shipping emits more than 1 billion tonnes of CO2e per year, a number that is projected to rise. 85 million of these tonnes will be included in the EU Emissions Trading System (EU ETS) in 2024, leading to increased cost for owners, charterers and traders who fail to include emissions.
The Siglar Carbon TC2e index estimates emissions from ships carrying gasoline between Europe and the USA via the TC2 route – one of the most commonly traded tanker routes.
According to the index, the most efficient alternative would emit approx. 1,200 tonnes and the related EU ETS cost would be approx. 25,000 USD.
According to the company, the least efficient choice would emit 2,500 tonnes with an EU ETS cost of 50,000 USD. In 2026, once the EU ETS is fully phased in the same cost would add up to 63,000 and 125,000 USD respectively.
The collaboration is expected to give charterers or traders in the spot market access to data which will allow them to instantly locate the most carbon efficient alternative.
Furthermore, analyses by the two companies show that access to the right emissions insight in commercial shipping decisions can drive down emissions and cost on specific routes by 50 %.
“Right now, the most efficient place to start cutting shipping emissions is at the trading desk, where actionable emissions insights can unleash substantial reduction potential. This makes LSEG’s unique position with the Eikon platform a great enabler for commercial decarbonisation ,” Sigmund Kyvik , Siglar Carbon CEO, commented.
“When evaluating the different options in maritime trade the right insights are vital to cut emissions and costs. The partnership with Siglar Carbon provides our users with the necessary insight to make carbon efficient decisions,” Fabrice Maille, Head of Shipping & Agriculture at LSEG, added.
“ There are already ongoing efforts to decarbonise focusing on aspects such as fuels and ship technology but planning carbon-efficient voyages is a low hanging fruit and the coming carbon cost makes it more attractive than ever.”