Gross global Scope 1 GHG emissions to the atmosphere are reported in line with the GHG Protocol. Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g. emissions associated with fuel combustion).

In 2021, Odfjell’s CO2 emissions increased by 9%, compared to 2020, due to a number of vessels in the Odfjell fleet. While the total CO2 emissions are up, the Annual Efficiency Rate (AER) is down (please see GHG emission intensity below).

Odfjell reports CO₂ emissions to the Carbon Disclosure Project (CDP), the source for metrics used for banks, in accordance with the Poseidon Principles. Odfjell also reports CO₂ via the EU MRV and the IMO DCS protocol.

Odfjell also reports CO2 via the EU MRV and the IMO DCS protocol according to required scope.
Shipping emissions represent 99% of our total Scope 1 emissions.

Odfjell has set a target to have a climate-neutral fleet by 2050.

Vessels included in the emission calculations are all vessels operated by Odfjell, including time charter and pool vessels.

Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Odfjell converts purchased electricity to metric tonnes of CO2 equivalents location-based.These numbers are reported in the Carbon Disclosure Project (CDP).

Scope 2 emissions data for 2021 are not available yet due to CDP reporting cycle. Terminals represent 98.4% of our total Scope 2 emissions.

We have initiated a program to monitor and measure value chain emissions Scope 3 with our major suppliers. We have requested emission numbers from our suppliers, and intend to build models for Scope 3 emissions for our business.

Odfjell uses the Annual Efficiency Ratio (AER) and the Energy Efficiency Operational Indicator (EEOI) to monitor fleet efficiency performance over time. The indicators enable us to measure the fuel efficiency of the fleet, and to gauge the effect of any improvement initiatives.

AER is used by the IMO for its official Carbon Intensity Indicator (CII). Odfjell reports preliminary AER, for controlled fleet and operated fleet, every quarter.

Odfjell has set a climate target to improve carbon intensity (using AER) by 50%, by 2030, compared to 2008 baseline.

Odfjell supports the Paris Agreement and the IMO strategy to reduce GHG emissions and global warming. Odfjell will contribute to the achievement of SDG 13 to combat climate change and its impacts by reducing GHG emissions.

Odfjell has in 2020 set ambitious climate targets that go beyond IMO's levels of ambitions/targets. Odfjell's climate targets are approved by the Board of Directors. Odfjell:

1) will cut the carbon intensity of our fleet by 50% by 2030 compared to 2008

2) is dedicated to pursuing a zero-emission strategy and will only order newbuildings with zero-emission       capable technology

3) will have a zero-emission-capable fleet from 2050

4) will actively support initiatives to develop technology and infrastructure for decarbonization, energy           efficiency and zero emissions, and support international regulation to drive zero-emission for our               industry and our value chain

By setting ambitious climate targets, Odfjell is committed to reducing GHG emissions and has prepared a fleet transition plan to achieve that goal. The plan and performance of targets are audited annually by
a third-party assessor under the Sustainability Linked Bond Framework.

Scope 2 emissions represent less than 2% of Scope 1, and targets have not yet been set. Still, we are dedicated to the efficient use of energy, and have made several energy improvements at our headquarters.

See separate table on climate risk reporting in accordance with the TCFD Recommended Disclosures and the guidelines of Euronext ESG reporting (annual report 2021 page 154). 

In 2020 Odfjell stopped using Heavy Fuel Oil (HFO) and moved to Very Low Sulphur Fuel Oil (VLFSO) and Marine Gas Oil (MGO).

Fuel consumption in 2021 was as follows:
   – 5.18% HFO (0.06% in 2020)
   – 17.53% MGO (16.3% in 2020)
   – 77.29% VLSFO (83.6% in 2020)

Total energy consumption is calculated based on a model from CDP that includes all energy consumed related to purchased electricity for terminals and offices as well as consumed fossil fuels and gases for vessels, terminal sites, and owned cars.

We are not able to monitor SO2 emissions directly, but we can calculate a weighted average based on all bunker delivery notes for purchase in 2021.

None of Odfjell's owned ships are fitted with open- or closed-loop scrubbers. Odfjell’s current policy is that we do not retrofit our fleet with scrubbers to ensure sulphur regulation.

Seven ships owned by TRF entered an Odfjell commercial pool in 2021. These vessels are fitted with an open-loop scrubber.

At Odfjell Terminals, our storage tanks are sealed and pressurized. This reduces emissions more than regular atmospheric storage tanks for chemicals.

Vapors generated by product movements are managed through vapor balancing to reduce emissions, and any remaining vapors are flared, along with breathing losses from products requiring vapor treatment.

The Odfjell fleet is, or will be, fitted with ballast water treatment systems (BWTS) to prevent the spread of harmful aquatic organisms from one region to another, thus complying with the BWM Convention.

As of the end of 2021, Odfjell has 53 ships that fall within the scope of the requirements and of those, 48 have BWTS.

All pool and time charter vessels in the Odfjell fleet are in compliance with the BWM Convention.

The fleet is fitted with compliant and class-approved systems to handle effluent water, wastewater, and oily water. The systems are registered, and subject to inspections by authorities.

At our terminals, we have wastewater treatment systems for effluent management. The remaining waste at our Houston terminal is treated off-site by the Houston terminal Gulf Coast Waste Disposal Authority (GCWDA), to which we are connected by pipeline for wastewater.

Our storage tanks are designed to reduce hazardous waste. The sloped design of the tank bottoms limits residual product in tanks, making cleaning easier and better. We use infrared inspection techniques to detect heat leaks due to damaged insulation. This is then repaired, reducing heat losses and thereby reducing energy consumption.

We also employ acoustic inspection techniques for nitrogen and compressed air systems to eliminate small leaks and reduce energy consumption.

Odfjell supports and follows the recommendations of the Norwegian Shipowners' Association, the EU and the IMO.

Responsible and compliant ship recycling is a significant part of the circular economy, keeping resources in use for as long as possible and minimizing waste.

Ship recycling is an essential industry for sustainable production, and it supports the developing economies of several countries.

Steel production represents 8% of global CO₂ emissions, three times more than international shipping. Increased use of recycled steel will reduce global emissions. Recycling one tonne of steel saves 1.67 tonnes of CO₂.

Using recycled steel reduces CO₂ emissions by 58%, air pollution by 86%, water use by 40%, and water pollution by 76% (Source: EuRIC Metal Recycling Factsheet).

We are an active participant in the Recycling Forum of the Norwegian Shipowners' Association and have dedicated personnel to follow up on recycling issues.

We encourage ratification and implementation of the IMO Hong Kong convention to have a mandatory international regulation for ship recycling.

Odfjell has not sent a ship for recycling since 2016. Should an Odfjell ship be earmarked for recycling, the process shall be fully in compliance with applicable rules and regulations of the flag state of the ship and international rules and regulations.

The Ship Recycling Facility shall be compliant with the rules and regulations of the flag state of the ship and applicable international conventions.

Our shipping operations follow the main routes between major ports around the world. We follow international and local regulations and guidance to avoid protected areas.

We do not currently track time and operations in areas of protected conservation status in accordance with UN Environment Programme World Conservation Monitoring Centre (UNEP WCMC).

Emission Control Areas (ECAs), or Sulphur Emission Control Areas (SECAs), are sea areas in which stricter controls are established to minimize airborne emissions from ships, as defined by the MARPOL Protocol.

For our fleet, all spills of any substance – harmful or not – are registered and handled as a spill. We also register whether the spill has been contained on board or affected the environment beyond.

At our terminals, we strive to further reduce the number of spills through better inspections and additional operational training.

There was no pollution outside the terminals caused by spills in 2021. One reportable spill was recorded, in June 2021, at the Houston terminal. The spill exceeded reportable quantity, but all product was contained within the terminal. No spill to the environment. Terminals are complying with the regulations mentioned in their permits.

Sustainable procurement is important to Odfjell, and we verify and ensure suppliers will follow our Suppliers Conduct Principles. We also meet with our major suppliers, and have initiated requests for reporting of CO2 for the products we buy.

Every year, Odfjell reports its status on green and sustainable procurement to EcoVadis, including information on our interactions with our suppliers and the suppliers' performance in ESG audits, ESG clauses in contracts, training etc.

We are developing a dashboard with various ESG KPIs for suppliers that will be implemented in 2022.

Following the new Transparency Act, Odfjell will increase follow up, audits and cooperation with suppliers on Human Rights in the value chain.