July 06, 2016

Profit-Sharing Shipping Retrofit Deal Wins Business Green Award

At an award ceremony in London today, green media company Business Green presented its prestigious Energy Efficiency Project of the Year award to the landmark collaboration between shipowner Hammonia Reederei and charterer Intermarine, which was facilitated by a Carbon War Room (CWR) grant.

"THE HAMMONIA AND INTERMARINE DEAL IS A PROFITABLE MODEL FOR RETROFITS THAT CAN BE REPLICATED ACROSS THE INDUSTRY".

Jules Kortenhorst, CEO, Carbon War Room and Rocky Mountain Institute

The award recognises an innovative energy efficiency initiative that demonstrates clear financial payback. Judges were impressed by the deal’s ambition for 25 per cent fuel savings using multiple retrofit technologies on three vessels, and the unique contractual agreement that shares the risk and the profits between a shipowner and its charterer. Intermarine agreed to award Hammonia an above-market rate through an innovative retrofit clause in the charter-party agreement. 

The efficiency technologies used include an optimised bulbous bow, an automated ballast and trim system, an improved rudder, and high-performance hull coating—all fitted during the ships’ standard drydock period. CWR awarded Hammonia a $120,000 grant to retrofit the vesselsIndustrial RubyIndustrial Royal, and Industrial Revolution with advanced performance-monitoring software in order to measure, verify, and publicise the fuel and carbon savings from the bundle of technologies. This will provide best practice data measurement and sharing, increasing confidence in efficiency retrofits throughout the industry. 

The grant was funded by the Dutch Postcode Lottery, which recently granted €1 million ($1.09 million) to CWR and Rocky Mountain Institute (RMI) to expand their impact in the shipping industry. 
Galen Hon, Shipping Operation Manager, Carbon War Room, said: “Hammonia and Intermarine have demonstrated how to overcome the split incentive between owners and charterers. Business Green’s recognition proves that this deal can be a model for the rest of the industry and the onus is now on shipowners and charterers to use it as a blueprint to fully realise the profitability of retrofit bundles.”

Article from online magazine "Carbon War Room"