KCC Chartering, a subsidiary of Klaveness Combination Carriers (KCC), and South32 Marketing, a subsidiary of miner South32 have added a carbon pricing mechanism to their existing contract of affreightment.
The six-year deal, first announced in January this year, will see the two companies work towards reducing CO2 emissions from KCC’s fleet, including ships that carry South32’s caustic soda to Australia.
Under the agreed mechanism, KCC will receive higher freight if actual carbon dioxide emissions are below the agreed baseline and lower freight in the event of under-performance relative to the baseline. Additional freight paid by South32 through this agreement will be dedicated to investments in energy efficiency measures in the fleet.
KCC CEO Engebret Dahm said: “The shipping industry needs a price on carbon emissions to incentivise efficiency improvements, cut waste and to start the transition to new fuels. In the absence of effective regulations, we are grateful for the support and partnership with front-runner South32 in developing and introducing the first carbon pricing mechanism in the dry and tanker industries.”
