SK Energy and Korea Shipping Association Collaborate to Reduce Carbon Emissions through 'Economic Speed Operation' of Ships

Agreement on the 'Campaign for Compliance with Economic Speed in Ship Operation'

On the 28th, at the SK Seorin Building in Jongno-gu, Seoul, during the agreement ceremony for the 'Ship Operation Economic Speed Compliance Campaign' between the Korea Shipping Association and SK Energy, (from left) Seo Seok-won, CEO of SK Energy R&S CIC, and Lim Byung-kyu, Chairman of the Korea Shipping Association, are holding up the agreement document. Photo by SK Innovation

[Asia Economy Reporter Choi Seoyoon] SK Innovation's petroleum business subsidiary SK Energy announced on the 29th that it will promote the activation of ship economic speed operation for the greening of the shipping industry in cooperation with the Korea Shipping Association.

The Korea Shipping Association and SK Energy held a 'Ship Operation Economic Speed Compliance Campaign' agreement ceremony at the SK Seorin Building in Jongno-gu, Seoul, attended by Lim Byung-gyu, Chairman of the Korea Shipping Association, and Seo Seok-won, CEO of SK Energy R&S CIC. This agreement was prepared to proactively respond to the implementation of the International Maritime Organization (IMO)'s EEXI (Energy Efficiency Existing Ship Index) and CII (Carbon Intensity Indicator) regulations and to spread an eco-friendly trend throughout the domestic shipping industry.

According to the agreement, the Shipping Association plans to provide fuel cost discounts when shipping companies that comply with economic speed purchase SK Energy fuel through the Shipping Association to encourage voluntary participation in economic speed operation by national shipping companies. National shipping companies refer to companies that transport cargo by sea based in Korea.

When ships reduce their operating speed to economic speed, fuel consumption decreases, and greenhouse gas emissions are also reduced. The ship fuel oil supplied annually by SK Energy through the Shipping Association amounts to 200 million liters (L), nearly half of the total domestic demand of 420 million liters (L). Even reducing fuel by 20 million liters (10% of the supply) would reduce greenhouse gas emissions by approximately 58,000 tons. If the entire fuel supply to national shipping companies is targeted, the greenhouse gas reduction effect is expected to be even greater.

According to the IMO, greenhouse gas emissions from ship operations worldwide reached 1.06 billion tons annually in 2018, accounting for 3% of global greenhouse gas emissions. The amount of greenhouse gas emissions from ship operations and their proportion of total greenhouse gases are also increasing.

The Shipping Association and SK Energy agreed to jointly discover and promote projects to establish an eco-friendly trend in the shipping market, such as supplying future eco-friendly ship fuel, starting with the economic speed compliance campaign. SK Energy is expected to play a meaningful role in creating an eco-friendly atmosphere in the shipping market by contributing to reducing greenhouse gas emissions not only in petroleum product production and distribution but also for shipping companies, while the Shipping Association leads the shipping industry's net zero efforts.

Lim Byung-gyu, Chairman of the Korea Shipping Association, said, "Through this agreement with SK Energy, we hope the shipping industry will actively participate in the national net zero commitment and contribute to passing on a clean and sustainable environment to future generations."

Seo Seok-won, CEO of SK Energy R&S CIC, said, "For carbon emission reduction in the shipping market, efforts by not only the shipping industry but also refineries supplying marine fuel are important. We hope that through the activation of ship operation economic speed compliance, the two goals of coexistence between SK Energy and the shipping industry and carbon emission reduction in the shipping market will be achieved."