Hamburg-based ship owner Hammonia Reederei will retrofit three sister vessels with multiple efficiency technologies on a unique charter agreement to New Orleans-based charterer Intermarine, thanks to a $120,000 from global non-profit organisation, the Carbon War Room (CWR).
CWR awarded Hammonia a grant to retrofit the vessels Industrial Ruby, Industrial Royal, and Industrial Revolution. Intermarine has agreed to award Hammonia a rate that is above market rates through a retrofit clause in the charter party, sharing the fuel savings between both parties, while also earning Hammonia a five-year time charter.
Furthermore, as Industrial Ruby is Liberian flagged, it is eligible for a 50% tonnage tax discount for the first year after retrofit, part of the incentive scheme offered by The Liberian Registry to encourage and reward efficiency retrofits using third-party finance.
Included in the retrofit installation is an optimised bulbous bow, rudder optimisation, high-performance hull coating, and trim and ballast optimisation at standard dry-dock. The 10,536 dwtIndustrial Ruby is the final vessel to leave dry-dock after undergoing the retrofit and was relaunched on March 1, 2016.
Hammonia purchased the three sister ships second-hand. The vessels’ financier has extended the liens to finance the bulk of the $1.2 million retrofits.
The CWR grant funded the installation of continuous monitoring software the ships in order to measure, verify, and publicise the fuel and carbon savings. The data will be analysed by University College London (UCL) over a five-year period, with initial results being released to the industry six months post dry-dock.
According to DNV GL, only one in 10 companies aim for greater than 10% 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.
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.”
