Marine Link
Tuesday, June 25, 2024

Blue Visby Trial Demonstrates Significant CO2 Emissions Savings

Maritime Activity Reports, Inc.

May 21, 2024

© A. Emson / Adobe Stock

© A. Emson / Adobe Stock

The first voyages of the Blue Visby Prototype Trials took place in March/April 2024 with the bulk carriers Gerdt Oldendorff and the Begonia, which, under voyage charter to Blue Visby Consortium member CBH Group, performed ballast voyages to CBH Group’s Kwinana Grain Terminal, Australia.

The Blue Visby Solution is aimed at eradicating Sail Fast Then Wait (SFTW): the operational practice of ships that sail to their destination "with the utmost despatch", without regard to other ships or to the conditions at the destination. This practice can be justified for various reasons, but is responsible for about 20% of shipping's carbon footprint.
The Blue Visby Solution combines software, operations and contracts, so as to systemically optimise the ocean passage of participating ships, and thereby reduce CO2 emissions. It does not interfere with the voyage planning or weather routing of individual ships; and it does not interfere with berthing or with port operations.  A crucial component of the multilateral nature of the Blue Visby Solution is a benefit-sharing mechanism, "Blue GA" (inspired by the age-old maritime principle of general average), which incentivises participation and removes the obstacle of split incentives.

The Prototype Trials resulted in CO2 savings of 28.2% for Gerdt Oldendorff and 12.9% on Begonia meaning on average 17.3%, measured against the vessels' respective service speeds of 14 knots. In the case of the Gerdt Oldendorff, the Prototype Trial resulted in CO2 savings of 7.9% measured against the vessels intended voyage speed of 12 knots. If the vessel was required to speed up to 14 knots for example to meet a laycan (the period during which a vessel is allowed to arrive at the loading port for a particular charterparty) then the potential CO2 savings would have been 28.2%.

Several alternative benchmarks were tested in this regard involving speed, RPM, laycan dates and "business as usual" assumptions. The parties also had a choice as to whether to calculate the financial value of fuel savings and of the prolongation of the ocean passage by using contract rates or market rates provided by the Baltic Exchanges (also a Blue Visby Consortium member). The parties reached commercial agreement as to the applicable benchmark for the purposes of the benefit-sharing mechanism.

The level of CO2 savings in the CBH Prototype Trials was consistent with studies that had been conducted previously: (a) during the pilot program in 2023, during which 10 voyages produced an average of potential CO2 savings of 18.9%; and (b) in a series of hindcast simulations of 284 voyages in November 2021-August 2023, which had produced potential CO2 savings of 25.6% on average.

Over the course of these Prototype Trials, all components of the Blue Visby Solution were deployed and subjected to rigorous testing: software, technical and operational system, as well as the benefit-sharing mechanism ("Blue GA").

It was also demonstrated that the Blue Visby Solution does not interfere with weather routing, voyage planning or the timing of berthing – all of which were left in the hands of the participants. Indeed, the robustness of the operational side of the Blue Visby Solution prevented disruption of the Prototype Trial during a time when one of the vessels needed to deviate.

From a wider perspective, the data collected during the CBH Pilot Program in 2023 and the CBH Prototype Trials in 2024 are consistent with earlier studies and hindcast simulations of 20,580 voyages worldwide of 3,651 Panamax vessels in 2022, which showed potential CO2 savings by applying the Blue Visby Solution in the order of 23.2% (median).

The accumulating evidence demonstrates that the systemic optimization of the ocean passage can deliver substantial reductions in emissions, in a way that is compatible with the commercial and contractual structure of bulk maritime trade, and without causing disruption, as the Blue Visby Solution does not interfere with voyage planning or with cargo operations. The Blue Visby Solution requires no CAPEX, is compatible with any other measure for reducing emissions, while its unique benefit sharing mechanism removes the obstacle of split incentives and can create financial benefits for all participants.

The CBH Prototype Trials are part of a wider program across many geographical areas and market segments, involving more members of the Blue Visby Consortium: Marubeni, Port of Newcastle and Port Authority of New South Wales. Prototype Trials with a wider group of participants will be conducted in the coming months, as the R&D phase of the Blue Visby is completed and commercial deployment begins.