Collaboration between UCL-Energy and Carbon War Room targets shipping
4 March 2015
UCL Energy Institute Shipping Group has collaborated with the Carbon War Room to produce the Self Financing Fuel Saving Mechanism (SFFSM) for shipping. The third party financing model brings innovative financing models used in other sectors to the shipping sector improve the uptake of proven technologies with documented service experience and fuel savings. The model allows vessels to be retrofitted with zero capital expenditure while allowing owners to benefit from the savings in fuel and CO2 emissions.
The UCL Energy Institute had two key roles in the development of this financial model. UCL-Energy provided a background to the barriers inhibiting uptake of proven technologies, such as the split incentives, access and cost of capital, lack of measurement and verification methods, enabling the financing model to effectively overcome these barriers. UCL-Energy’s role also included building a robust monitoring and measurement methodology for the retrofit measures in order to rigorously test the performance claims of technology providers and bring confidence to the investors.
Further details about UCL-Energy’s role can be found in the joint report ‘Hidden Treasure: Financial Models for Retrofits’.
More recently, the CWR also partnered with the Liberian Registry (the world’s second largest flag state for ships) which has committed tax discounts of up to 50% for vessels retrofitting using this financing model. The discounts represent more than $53m in tax breaks for shipowners in addition to the fuel savings gained from the retrofit technologies.
UCL Energy Institute and CWR have also formed the ShIFT (Shipping Innovation Fast Tracker) project that aims to accelerate the deployment of technologies that yield double digit savings. These are less mature technologies without documented service experience but yield significant savings. The ShIFT project is working together with six wind technology providers to help them through to commercialization by helping to break down barriers specific to wind technologies. UCL Energy Institute’s role has been to research the barriers faced by the technology providers. A journal paper has been submitted on this subject with a poster presentation at the biggest green ship event, The 12th annual Green Shipping Technology 2015 which will be taking place the second week of March.
Additional ongoing research by the UCL-Energy Shipping Group includes Shipping in Changing Climates (SCC)