In January, our first LNG dual-fuelled bulk carrier, Ubuntu Harmony, loaded its maiden cargo, an important milestone in our decarbonisation efforts.
Our chartered fleet moves over 70 million tonnes of materials each year. This is a key link between our mines and those who buy and value our products.
Over the past few years, our Shipping team has led in driving improvements and pioneering new approaches to meaningfully contribute to the maritime industry’s decarbonisation efforts.
Shipping is one of the most efficient sectors emissions-wise. But its sheer size (it carries around 90% of world trade) means it is responsible for approximately 3% of global GHG emissions1. This number is projected to rise considerably.
Our efforts are guided by our ambition to reach carbon neutrality across our controlled ocean freight activities by 2040, with an interim target of a 30% reduction in carbon emissions by 2030. Alternative marine fuel options are a cornerstone of this strategy.
Introducing ten LNG dual-fuelled ships to our chartered fleet across 2023 and 2024 offers the potential for immediate emissions reduction, as the industry works to accelerate the development of other low and carbon-neutral solutions.
The fleet’s first two vessels – Ubuntu Harmony and Ubuntu Equality – were launched in December 2022 and, on charter by Anglo American for 10 years, will allow us to deliver an estimated 35% reduction in CO2 emissions compared to ships fuelled by conventional marine oil fuel.
LNG is a readily available option with an established network of existing infrastructure on key trading routes. Its use will also lead to a significant reduction of nitrogen oxides and particulate matter from vessel exhausts. New vessel technology allows to eliminate the release of unburnt methane, one of the main environmental risks associated with the use of LNG as a marine fuel.
The Ubuntu Harmony recently loaded its first cargo of iron ore from our Kumba operations in South Africa.
Peter Whitcutt, CEO of Anglo American’s Marketing business, said: “We are proud to see the Ubuntu Harmony begin its voyage transporting future-enabling products from our mines to our customers around the world. This milestone cements our vision to be a leader in low carbon shipping, a natural extension of our commitment to achieve carbon neutrality across our operations by 2040.”
These vessels will predominantly transport iron ore and steelmaking coal, key ingredients for the steel industry.
To view a timelapse of the construction and launch of Ubuntu Harmony and Equality, built by Shanghai Waigaoqiao Shipbuilding in China, click here.
Transitioning to a lower-carbon fuel mix is an important aspect of our ambition to help decarbonise the wider steel value chain and deliver on our Scope 3 emissions reduction ambition. It is just one part of a comprehensive framework of medium- and long-term, diverse and complementary measures we are exploring to decarbonise our shipping activities.
Cross-industry collaborations also play an important role in helping to embed sustainability practices and we are actively engaged in many of the critical conversations accelerating change, including:
- The Global Maritime Forum (GMF):
Anglo American was the first mining company to join the GMF as a partner member. This forum aims to increase sustainable long-term economic development and human wellbeing by addressing global challenges important to the maritime industry.
- Getting to Zero Coalition:
In September 2019, Anglo American, with over 100 companies, joined the Getting to Zero Coalition, an alliance committed to getting commercially viable deep sea zero emission vessels powered by zero emission fuels into operation by 2030.
- Sea Cargo Charter Initiative (SCCI):
In September 2020, Anglo American became a founding signatory of the SCCI, which establishes a standard methodology to allow charterers to measure and align their emissions from ocean transportation activities. Signatories are required to calculate emissions on a yearly basis, declaring them to other members for benchmarking.
Digitalisation also holds numerous opportunities, such as the transition to electronic bills of lading (eBLs). Anglo American is one of the signatories of the ’25 by 25’ pledge initiated by international shipping association, BIMCO; a commitment by major shippers in the bulks sector to target the use of eBLs for 25% of their annual seaborne trade volumes, for at least one commodity, by 2025.
Bills of lading are important legal documents that serve several critical functions; namely acting as the contract between a shipper, carrier and consignee. The use of eBLs – rather than traditional, paper-based processes – will help increase efficiency, reduce costs, and improve the overall transparency and security of trade. This pledge is part of the maritime industry’s efforts to accelerate the digitalisation of trade and streamline the supply chain process.
Anglo American has also joined a newly-formed industry consortium, convened by the Global Maritime Forum – together with Tata Steel, CMB, Freeport Saldanha, and ENGIE – to explore options for developing a maritime green corridor for the zero-emission shipping of iron ore between South Africa and Europe.
Maritime green corridors – routes between major port hubs where zero-emission solutions are supported and demonstrated – have swiftly become recognised as one of the most important tools to aid industry and governments in the decarbonisation of the maritime sector.
1 ‘Your climate change goals may have a maritime shipping problem’, Esther Whieldon, S&P Global, https://bit.ly/3llklUp