Odfjell sets sights on climate-neutral fleet from 2050

Norwegian shipping and tank terminal company  Odfjell SE has revealed plans to cut its greenhouse gas emissions by 50% by 2030 compared to 2008 levels and have a climate-neutral fleet from 2050. 

The targets exceed the objectives of the International Maritime Organization (IMO) of 40% CO2 emissions reduction by 2030 and a 50% reduction by 2050 compared with 2008.

“We believe that climate change poses a severe threat to society and business. Failing to operate in a sustainable way present significant risks to our industry, locally and globally, Øistein Jensen, Chief Sustainability Officer, said.

“Climate risk affects all businesses – but also creates many opportunities for those able to adapt and willing to work to make a positive change.” 

Jensen was appointed in August 2020 as the company’s first Chief Sustainability Officer (CSO) and he has been tasked to lead company-wide work on environmental, social, and governance matters (ESG). 

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In line with its strategy, the company said it would only order vessels with zero-emission technology from 2030, vowing support to initiatives to develop technology and infrastructure for zero-emissions ships. 

Odfjell has managed to reduce its carbon intensity by almost 30% when compared to 2008 levels, according to its figures, and it claims to be on the right track when it comes to its sustainability goals.

Initiatives that helped the company cut its environmental footprint included optimizing fuel consumption and fuel efficiency, as well as fleet renewal and retrofitting, investments in new technologies, and digitalization.

The tanker owner has also committed to recycling its ships in accordance with current environmental regulations and conventions, i.e. Hong Kong convention.

Q3 Results

For the third quarter of 2020, Odfjell reported positive results despite a seasonally slower market, a high number of drydockings, and an unclear macro environment. 

Odfjell’s Q3 EBITDA was $72 million, compared with $82 million in 2Q 2020, with $64 million EBITDA reported by Odfjell Tankers and $8 million from Odfjell Terminals. 

The net result stood at $4 million compared to $31 million last quarter and a loss of $1.1 million from the same quarter last year.

During the quarter, Odfjell took delivery of the fifth super-segregator newbuilding and concluded its newbuilding programme with the sixth and last delivery in October.

“We have concluded 3 long-term timecharters for medium stainless steel vessels at Asakawa shipyard for delivery in 2022 at attractive timecharter rates,” the company said.

In addition, Odfjell has established a new pool for coated IMO2 chemical tankers, initially adding 6 vessels, and is actively working to further expand this pool.

“3Q20 was impacted by seasonality and a high number of drydockings. We are satisfied with our ability to continue to report positive results in this challenging environment,” CEO Kristian Mørch said.

We keep renewing contract rates at higher rates, which is an encouraging sign. We have taken further steps to consolidate the chemical tanker market by establishing a new coated pool which will further strengthen our operational platform in a capital-efficient way. We expect the 4Q20 results to be in line with 3Q20.”