CarbonChain's Shipping Methodology

Our carbon accounting methodology for the shipping industry empowers owners, financiers, and charterers to reduce their emissions

Our methodology

CarbonChain provides standardized greenhouse gas (GHG) emissions reporting and benchmarking for estimating the carbon intensity of ships.

To provide as comprehensive an insight into carbon intensity as possible, the following two metrics are used by CarbonChain to estimate the carbon intensity of international shipping:

  • Energy Efficiency Operational Indicator (EEOI): CO2 emissions per actual cargo tonne miles or passenger miles (sum of the product of payload and the corresponding distance travelled), in gCO2/tonne/nautical mile
  • Annual Efficiency Ratio (AER): CO2 emissions per unit of nominal transport work (product of a ship’s capacity and total distance travelled), in gCO2/dwt/nautical mile; GHG emissions for a given ship are calculated to indicate “CO2 emissions per transport work”.

Given various understandings on “transport work” under different circumstances and for different ship types, metrics used by CarbonChain are aligned with IMO proposals of metrics and future policy scenarios. However, no metric has been generally accepted as the best choice for the time being (IMO 4th GHG Study, 2020).

Final emissions figures are always derived independently by CarbonChain although sometimes informed by exchanges with asset-owners and validated using asset-level data in the public domain where applicable. For further information on CarbonChain and the methodologies used, please contact: support@carbonchain.com

Our rating

We provide a rating for each ship based upon its carbon intensity compared to similar ships.

1. We first compose a peer group of vessels of the same type with a Deadweight within 10%.

2. We then calculate the ranking of the ship's emission intensity within that peer group, formulated as a percentile. For instance, if there are 100 ships in the peer group, the best ship is afforded a percentile rank of 1, and the worst ship is 100.

3. We use this percentile ranking to assign a rating, from A-E. Ships in the top 20% are assigned an A, and the worst 20% are an E , with B C D assigned for 20-40, 40-60th, and 60-80th percentiles.

For example, in a peer group of 500 ships, the 150th best ship would be assigned a rating of B (150/500 = 30th percentile). Similarly, the 30th best ship in a peer group of 100 would be a B (30/100 = 30th percentile).

Alignment with Poseidon Principles

CarbonChain provides indicative estimates of a ship’s alignment to the Poseidon Principles.

The Poseidon Principles are a global framework for assessing and disclosing the climate alignment of financial institutions’ shipping portfolios. They establish a common, global baseline to quantitatively assess and disclose whether financial institutions’ lending portfolios are in line with adopted climate goals. Thus they also serve as an important tool to support responsible decision-making.

These Principles apply to lenders, relevant lessors and financial guarantors including export credit agencies. They must be applied by all Signatories in all business activities that are credit secured by vessel mortgages or finance leases secured by title over vessel, or unmortgaged ECA loans tied to a vessel, and where a vessel or vessels fall under the purview of the IMO.

Poseidon Principles are consistent with the policies and ambitions of the International Maritime Organization, a UN agency responsible for regulating shipping globally, including its ambition for GHG emissions to peak as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008.

A negative number indicates that the vessel is performing better than the Poseidon Principles threshold which is a favourable result given the ambition to reduce emissions. A positive number shows that the vessel exceeds the Poseidon Principles guided performance level.

For further information on the Poseidon Principles, please refer to their website: https://www.poseidonprinciples.org/about/

Alignment with Sea Cargo Charter 

CarbonChain provides indicative estimates of a ship’s alignment to the Sea Cargo Charter.

The Sea Cargo Charter is a global framework for assessing and disclosing the climate alignment of chartering activities. It establishes a common, global baseline to quantitatively assess and disclose whether chartering activities are in line with adopted climate goals. Thus, it also serves as an important tool to support responsible decision-making.

The Sea Cargo Charter is applicable to all bulk charterers as well as the disponent owners and all charterers in a charterparty chain. It must be applied by Signatories in bulk ship chartering activities that are:

  • on time and voyage charters, including contracts of affreightment and parceling, with a mechanism to allocate emissions from ballast voyages,
  • and for voyages carried out by dry bulk carriers, chemical tankers, oil (crude and product) tankers and liquified-gas carriers,
  • and where a vessel or vessels are of at least 5,000 gross tonnage and engaged in international trade.

The Sea Cargo Charter is consistent with the policies and ambitions of the International Maritime Organization, a UN agency responsible for regulating shipping globally, including its ambition for GHG emissions to peak as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008.

A negative number indicates that the vessel is performing better than the Sea Cargo Charter threshold which is a favourable result given the ambition to reduce emissions. A positive number shows that the vessel exceeds the Sea Cargo Charter guided performance level.

For further information on the Sea Cargo Charter, please refer to their website: https://www.seacargocharter.org/about/

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