Executive Summary

Facilitating the transfer of approximately 90% of the world’s goods, the global shipping sector is the foundation of international trade. Global commerce depends heavily on the shipping industry, which has approximately 110,000 vessels contributing to an annual capacity of 2.3 billion Dead Weight Tonnage (DWT). But also accounts for 2– 3% of yearly worldwide emissions of Green-House Gases (GHGs), primarily carbon dioxide (CO₂). As efforts to tackle climate change around the world pick up momentum, there is growing pressure on the shipping industry to decarbonize and comply with international environmental regulations.

With the aim of cutting emissions to half from 2008 levels and reaching net-zero emissions by 2050, IMO has established a framework for cutting the emissions of carbon from shipping through its Initial GHG Strategy. With the goal to fulfil aggressive
climate targets, international businesses, including shipping, must also embrace sustainable practices to comply with the Paris Agreement. To cope up with the upcoming requirements of decarbonization, PNSC, a significant participant in the
national and regional maritime trade, is gearing up efforts to adopt relevant measures w.r.t its ships.

The worldwide shipping industry plays a crucial role in facilitating trade and economic growth, but its carbon-intensive activities also contribute to climate change. Along with other shipping companies, PNSC must meet its operating demands while lowering its carbon footprint. The company’s fleet needs to comply with new environmental rules, especially those that control emissions of strong greenhouse gases (GHGs) like carbon, methane (CH₄), and nitrous oxide (N2O). The key challenge is to come up with affordable ways to cut emissions without compromising effectiveness or market competitiveness.

The primary goal of the study was to determine the CO2 emissions of PNSC’s fleet by examining each vessel’s fuel usage statistics for the years 2022 and 2023. To estimate emissions, the fuel consumption data was translated into standard unit and multiplied using emission factors given by the Intergovernmental Panel on Climate Change (IPCC). Various fuels, including Diesel, Marine Gas Oil (MGO), Heavy Fuel Oil (HFO), and Light Fuel Oil (LFO), were utilized throughout the fleet, each with a distinct emission factor.

The investigation showed that although the vessels’ total fuel use varied, several of them managed to significantly lower their CO2 emissions. For example, Lahore’s total CO2 emissions decreased from 24,401,731.29 kg in 2022 to 16,987,493.06 kg in 2023. The corporation was able to get carbon credits under global carbon trading schemes because of the reduction in emissions. The total number of carbon credits gained by the entire fleet was 24,794 metric tons. These credits could be sold for €1.98 million or $2.16 million through the EU Emission Trading System (EU ETS) at a price of €80 per metric ton.

The study also provides observations at greenhouse gas emissions of N2O, which has a GWP 298 times greater than that of CO2. N2O emissions were computed utilizing fuel usage data and techniques approved by the IPCC. The findings revealed notable 301 discrepancies in N2O emissions throughout the fleet, with ships like Mardan and Sargodha seeing notable rises in 2023 in contrast to 2022.

For example, N₂O emissions from Mardan rose from 94.81 kg in 2022 to 226.06 kg in 2023, while Sargodha saw an increase from 79.03 kg to 198.5 kg during the same period. The elevated N₂O levels suggest inefficiencies in combustion processes,
potentially related to engine conditions, fuel quality, and operational factors such as longer voyages and port residence time. These emissions are particularly concerning because of their disproportionately large impact on global warming compared to CO₂ .

The study also placed a lot of emphasis on CH4, a powerful greenhouse gas which has a GWP 28 times greater than that of CO2. According to the assessment, several ships, especially older Aframax tankers that are getting close to the end of their useful lives, were emitting excessive levels of methane. For example, Quetta experienced a sharp increase in its CH4 emissions from 20.23 kg in 2022 to 103.85 kg in 2023, which may indicate inefficiencies in the fuel combustion and methane capture processes. Older engines with reduced fuel efficiency and methane slip, a phenomenon when unburned methane escapes after fuel combustion, were blamed for the increased CH4 emissions. To gain a better understanding of methane emissions’ role in global warming, CO2 equivalent (CO2e) values were calculated. CO2 emissions have decreased because of PNSC’s installation of Carbon Intensity Indicator (CII) and Energy Efficiency Existing Ship Index (EEXI) systems on its ships.

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