Today, shipowners and charterers are facing complex challenges in the transition to reduce emissions. Skuld is a reliable partner on the journey to reduce Green House Gases (GHG) and meet relevant International Maritime Organisation (IMO) target levels.
Skuld's role is reflected in our purpose statement "Protecting Ocean Industries", ensuring a precautionary and caring approach to foreseeable health, safety and environmental risks in shipping.
Our environmental, social and governance (ESG) efforts consist of a wide range of activities that demonstrate our commitment to sustainability. Skuld is providing financial protection and risk assessments of new technology and fuels, and helping to advise on emerging sustainable regulations and policies.
European Union Emissions Trading System (EU ETS)
As of 1 January 2024, shipping companies are required to purchase carbon credits through the European Union Emissions Trading System, where the ship calls in at least one EU port.
The EU ETS operates on a “cap and trade” principle, limiting greenhouse gas (GHG) emissions and reducing the cap annually to align with EU climate targets.
The EU ETS can have an impact on members and clients' operations. Skuld urges shipping companies to develop knowledge about the EU ETS and its impact on maritime transportation. For members trading in the EU, the cost of allowances can be significant and will increase each year. Prioritising a robust plan for decarbonisation and fleet optimisation is crucial.
Please see our EU ETS flyer for the most important info affecting the shipping companies.
International Maritime Organization (IMO) GHG strategy
Climate action is high on the shipping world's agenda and, as an insurer, we incorporate activities in our business that fit the needs and requirements of shipowners to be sustainable in their operations.
In July 2023, IMO decided to revise the GHG reduction strategy for global shipping. The shipping industry accounts for approximately 3 % of the world's annual emissions and therefore adoption of this strategy is significant. The new strategy includes 4 levels of ambitions:
- Carbon intensity of the ship to decline through further improvement of the energy efficiency for new ships.
Skuld's comment: This focuses on the continuous implementation of EEXI and EEDI requirements.
- Carbon intensity of international shipping to decline.
Skuld's comment: The IMO CII regulation will be instrumental in reduction of carbon intensity. This is the most important regulation in force and already affects shipowners and will do so until at least 2030. IMO will review the CII regulation in 2026.
- Uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to increase.
Skuld's comment: Uptake of zero or near zero emission technologies are now specified with the ambition of at least 5 % of the energy mix for vessels, striving for 10 % within 2030. This will likely enhance the development of alternative energy sources compared to conventional fuels. This new goal implies an increase in 3 500 – 7 000 vessels with zero/low carbon emission profile. Newbuilding's are expected to align with development of new fuel technologies.
- GHG emissions from international shipping to reach net zero.
Skuld's comment: Shipping's GHG should peak and decline as soon as possible, and IMO has set a target of net zero GHG emissions in shipping within 2050. IMO states that they pursue efforts towards the long-term goals of Article 2 in the Paris Agreement. IMO has also introduced two indicative checkpoints that become extremely important in the future development of GHG reduction measures. These are:
1. to reduce the total annual GHG emissions from international shipping by at least 20%, striving for 30%, by 2030, compared to 2008; and
2. to reduce the total annual GHG emissions from international shipping by at least 70%, striving for 80%, by 2040, compared to 2008.
Furthermore, IMO states 'The mid-term GHG reduction measures should effectively promote the energy transition of shipping and provide the world fleet a needed incentive while contributing to a level playing field and a just and equitable transition.' We expect IMO to improve both technical and economic elements to achieve this going forward.
Skuld acknowledges these new ambitions from IMO and the challenges that arise for shipowners. Aligning towards the Paris Agreement to achieve net-zero emissions by 2050 to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared with pre-industrial levels, is essential for shipping to follow global efforts.
Shipowners and charterers must comply with an increasing number of regulations entering the maritime industry. Whether it is the CII, EEXI/EEDI, ETS, Fuel EU Maritime, Sulphur Caps, NOx tier requirements or others, they create new challenges. Skuld's expertise and closeness to the market offer benefit of industry insight to members and clients on these topics.
Whether you are a shipowner, charterer or other stakeholders, Skuld is here to assist you in your decarbonisation efforts. Please contact our decarbonisation team to discuss any needs you might have.
Engaging in industry transition initiatives
Mission Ambassador for Maersk Mc-Kinney Moller Center for Zero Carbon Shipping
Skuld is a mission ambassador for Maersk Mc-Kinney Moller Center for Zero Carbon Shipping. The partnership will further support and promote our common goal of securing and providing tomorrow's zero carbon shipping solutions.
Partner to The Green Shipping Programme
Skuld is partner to The Green Shipping Programme (GSP), a public-private partnership, aiming to advance the Norwegian government's maritime strategies and plans. The programme's vision is to develop and strengthen Norway's goal to establish the world's most efficient and environmentally friendly shipping.
Since becoming a partner in 2021, Skuld has participated in two ammonia related pilots; Green Ammonia Powered Bulk Carrier and Ammonia powered tanker.
Signatory to the Poseidon Principles for Marine Insurance (PPMI)
Knowledge starts with understanding data and our portfolios baseline compared to industry standards. Skuld wants to monitor our alignment with IMO and industry targets, and we are a signatory to the Poseidon Principles for Marine Insurance (PPMI). The PPMI initiative underlines the importance of transparency and the use of reliable data in the journey towards decarbonization.
PPMI covers the H&M business. In order to estimate our total portfolio, we have teamed up with a data provider to estimate our total scope 3 emissions through AIS data and with this tool we are able to understand our emission impact.
Continuous knowledge building and organising our efforts are essential to be a leading provider in offering legal and industry advice in a constantly changing environment. Skuld has an underwriting expert group, with the aim to streamline information exchange and to create clear channels towards our local markets.