GOGL lowers carbon footprint as it progresses towards ‘truly green’ fleet

Norway-based dry bulk shipping company Golden Ocean Group Limited (GOGL) revealed a 13.3% reduction in the Carbon Intensity Indicator (CII) across all segments of its fleet in 2023 compared to a 2019 baseline.

“During the year we successfully improved the Carbon Intensity Indicator (CII) across all segments of our fleet. Notably, our Newcastlemax vessels achieved an 11.5% reduction in CII in 2023 compared to our 2019 baseline. Additionally, our renewal efforts for the Kamsarmax and Panamax fleets resulted in significant CII reductions of 9.9% and 8.2%, respectively,” Peder Simonsen, Interim Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Golden Ocean Group, said in the company’s 2023 ESG Report.

“Our Capesize fleet also saw an 8.3% reduction in CII. In 2024, we aim to continue outperforming the emission trajectories set by the IMO and the Poseidon Principles.”

As previously disclosed, GOGL aims to reduce its fleet’s CII by 15% in 2026 and by 30% in 2030 relative to 2019. In addition, the company has committed to reaching net-zero by 2050.

To achieve this goal, a ten-year CII roadmap is established for each of GOGL’s vessels where the company has identified the technologies needed and quantified the required investments. These roadmaps provide ‘a solid basis’ for optimizing its operations, the company said.

As it continues to make progress towards its targets, Golden Ocean invests in decarbonization, striving to have a young and energy-efficient fleet. In 2020, the company iniatiated its “Decarbonization journey towards 2030-2050” to ensure its fleet complies with constantly evolving regulations.

Since 2020, the company has increased the size of its fleet by 30% based on dwt while reducing the fleet’s average age by approximately 2%. This was achieved through the acquisition of 35 ‘modern’ ships and the sale of fifteen older, less efficient ones.

In 2023 and the first half of 2024, GOGL sold six older vessels while welcoming six newer Newcastlemaxes with an average age of 3.2 years as well as eight ECO dual-fuel ready Kamsarmax newbuilds. The newbuilds are equipped with advanced propulsion systems which give the company the flexibility to evaluate propulsion options as future emissions-related regulations and technology continue to advance.

In the second half of 2024, the Norwegian company expects to take delivery of two additional dual-fuel ready Kamsarmax newbuilds.

With decarbonization being of strategic importance to the company, the company believes that ESG considerations can have a material impact on its financial position. Therefore, it is working to identify the most suitable long-term solutions in the context of future propulsion.

Apart from modenizing its fleet, GOGL invested throughout 2023 in various energy-saving devices, digitalization and cargo hold maintenance to improve the efficiency of its fleet.

What is more, the company secured in 2023 a $250 million sustainability-linked loan to refinance 20 of its vessels. Further, in 2024, the company secured two additional sustainability-linked credit facilities with total commitment of $540 million.

“As of the date of this report approximately 50% of our fleet include financing with sustainability linked KPIs. The annual sustainability margin adjustment mechanism is directly tied to our ambitious goal of reducing carbon emissions and surpassing the carbon intensity targets set by the IMO and the Poseidon Principles,” the company said in its ESG report.

“In 2023, our fleet emissions (metric tons of CO2) increased by 4.55% compared to 2022. However, our transported work (mDWT-nm) increased by 9.62% during the same period resulting in an effective decrease of 4.67% in emissions per transported work. Based on our 2023 emissions data verified by DNV, our owned fleet has outperformed the IMO and the Poseidon Principles emission trajectories and achieved an overall weighted average of 2.45 and a B-rating under the CII.”