Gearbulk Integrated Report 2023 - Report - Page 79
INTEGRATED REPORT 2023
Sustainability-linked 昀椀nancing
In 2022, the Group entered into a 5-year $245m sustainability-linked revolving credit and term loan facility, with a
syndicate led by DNB Bank ASA as agent and sustainability
coordinator and with Nordea, SR1 Bank, Sparebanken Vest
and Swedbank as mandated lead arrangers.
2023 was the 昀椀rst year the Company measured certain
sustainability linked KPIs as de昀椀ned in our sustainability linked
loans. In addition to the whole 昀氀eet needing to be MARPOL
compliant with regards to emissions, there are speci昀椀c
annual e昀케ciency ratio (“AER”) and total recordable injury
cases frequency (“TRCF”) targets to be met. AER measures
CO2 emissions intensity in accordance with IMO de昀椀nitions.
TRCF is a measurement of all injuries except for 昀椀rst aid cases.
While the 昀椀gures for 2023 have yet to be audited and therefore subject to change, the Company did not achieve its TRCF
number for 2023. The Company has set a tartget to reduce
its TRCF by 40% in 2024 to improve the situation. The speci昀椀c
AER target for 昀椀ve particularly low performing vessels was
met in 2023.
Newbuild vessels
In line with the strategic goals of the Company to have a cost
e昀케cient and zero emission capable 昀氀eet, a 昀氀eet replacement
and modernisation programme is high on the agenda. In Q1
2024 the Company commenced its newbuilding programme
by signing shipbuilding contracts for two Pulpmax vessels
for delivery in 2027 and an option for a further two vessels.
EU Emissions Trading System (EU ETS)
EU-carbon market witnessed a notable downturn as prices
The EU ETS is a fundamental aspect of the EU’s climate change
experienced a signi昀椀cant decline throughout 2024, reaching
strategy, designed to reduce greenhouse gas emissions. Oper-
their lowest point in 30 months. This decline can be attributed
ating on a cap-and-trade principle, it limits the total emissions
to lackluster auction results and bearish dynamics within
allowed from speci昀椀c industries and sectors within the EU.
the power market. Remarkably, thermal power emissions in
Over time, this cap decreases to align with EU climate targets.
2023 decreased by 21% year-on-year, while renewable energy
Industries receive emissions allowances, each representing
sources saw a 10% increase. Additionally, the mild winter
one tonne of CO2, which can be traded. Surplus allowances
experienced in Europe led to a decrease in natural gas prices,
can be sold to companies exceeding their limits, fostering
exerting immediate downward pressure on carbon prices.
a market for emissions. The EU ETS encompasses various
sectors like power generation, steel, cement, and aviation.
New contract for Brazil terminal
By pricing carbon emissions and o昀昀ering economic incen-
In 2023, the Group’s terminal operations in Brazil entered a
tives for emission reductions, it promotes the adoption of
new long-term contract with one of Brazil’s largest traders. The
cleaner technologies and practices, supporting EU member
contract runs until maturity of the present lease safeguarding
states in achieving their climate objectives outlined in the
the operation for the foreseeable future.
Paris Agreement.
During 2023, G2 Ocean actively participated in the EU ETS
through its EU-Carbon hedging program, acquiring a total of
32 thousand EU Carbon Allowances (EUAs). These allowances
were strategically obtained to hedge against both ballast and
committed COA exposure for the year 2024. However, the
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