It was a sunny morning in September of 2005 when, at a tiny alfresco restaurant overlooking Monaco’s Port Hercules, a small group of press gathered for a breakfast conference hosted by brokerage firm Camper & Nicholsons International (CNI).
The small talk and cappuccino sipping subsided when the announcement was made: CNI had partnered with British environmental firm The CarbonNeutral Company to offset the carbon emissions generated by its staff’s and yachts’ attendance at the Monaco Yacht Show.
The press responded with awkward shuffling and polite applause. It was the yachting industry’s first major announcement regarding carbon offsetting and not many present were familiar with the concept, much less understood why such a reputable firm would approach a topic as taboo as the environment.
By the 2011 Monaco Yacht Show, however, ‘carbon-neutral’ was a familiar adjective in the yachting community.
The show itself was in its sixth year of being carbon neutral and the process of carbon offsetting was adopted and offered by leading charter and brokerage houses, several marinas, yards and agencies worldwide, as well as a growing number of charter yachts.
The classification society RINA also recognizes carbon offsetting through its Green Plus certification.
How being carbon-neutral works
In theory, carbon offsetting is simple: calculate the estimated greenhouse gas emissions generated from using any fuel-burning or emissions-creating mechanism such as a vehicle, yacht, airplane or machinery, and offset this estimate by funding emissions-reducing initiatives elsewhere.
The concept of carbon offset is rooted in the Kyoto Protocol, an agreement between nations to attempt to stabilize atmospheric concentrations of greenhouse gases to prevent dangerous interference with the earth’s climate.
In 1997, the Protocol set binding targets for the European Union (EU) and 37 industrialized countries (including the US) to reduce their greenhouse gas emissions by a total of 5.2 per cent over a five-year period.
While the countries – with the exception of the US, which signed but did not ratify the Protocol – agreed to begin reducing greenhouse gas emissions through national measures – such as expanding renewable energies – the Protocol introduced market-based mechanisms to assist in the process. One of these mechanisms is the concept of emissions trading, which has become known as the ‘carbon market’.
On the carbon compliance market, countries exceeding their greenhouse gas emissions may purchase or trade carbon credits from countries with an emissions deficit.
The UN administers carbon credits for the international Kyoto compliance market, but there are now a variety of smaller voluntary markets monitored by other organizations such as the Verified Carbon Standard and the Gold Standard.
On the carbon compliance market, countries exceeding their greenhouse gas emissions may purchase or trade carbon credits from countries with an emissions deficit. One credit equals one metric ton of greenhouse gas emissions. In the same way, businesses also can trade on the spin-off markets, offering carbon credits for using cleaner production methods to businesses with significant emissions… and the need for some green marketing.
The Kyoto Protocol went into effect in 2005, the same year CNI announced its carbon offsetting program. In an industry that publicly recognizes the oxymoronic nature of calling anything that produces emissions through its build or use environmentally friendly, the burst of carbon offsetting options were noticed, but not quickly adopted or publicised.
They were, however, supplemental to a host of other new significant and tangible forays by owners, designers and builders into sustainability, efficiency and environmental responsibility, aided by the 2008 crisis and the need for fuel efficiency.
In 2008, Mark Robinson, a financial analyst tasked with evaluating green energy projects, switched gears and industries to create what is now the yachting industry’s most well-known carbon offset program: the aptly named Yacht Carbon Offset.
Robinson is quick to stress one point, and that is about a lifestyle change. ‘If you’re operating a superyacht, you’re not trying to save the planet,’ he says. ‘Carbon offsetting is about changing our lifestyle.’
Robinson knows that this message does not sit comfortably with superyachting, but he also recognizes that more boats, owners and businesses are adopting methods to be more efficient in every area.
If you’re operating a superyacht, you’re not trying to save the planet. Carbon offsetting is about changing our lifestyle.
Mark Robinson, founder, Yacht Carbon Offset
Yacht Carbon Offset’s process is as straightforward as any other offset program: a yacht or business uses an online carbon emissions calculator to estimate the amount of emissions generated by a pre-determined activity, such as a week-long charter, a specific event, a year’s worth of cruising or business travel, etc.
Credits for the calculated emissions are then purchased at the current exchange value for one metric ton of carbon and remitted to any of the vetted renewable projects in Yacht Carbon Offset’s portfolio.
With a cost ranging from $7 to $11 per metric ton emitted on the UN compliance market, to $2 to $16 on the voluntary markets, offsets certainly may be cheaper and more convenient alternatives to reducing one’s own fossil fuel consumption, but if you don’t do your homework, you might as well have paid to breathe air.
You should ensure that the project you are funding would not otherwise be operational without the funding from your carbon offset programs. Some projects have negative side effects – like a wind farm project in India that upended tribal farmers and their livelihoods – while some noble causes end up not even getting off the ground. In fact, the Vatican itself was duped by crediting its carbon neutrality to a Hungarian tree forest project that never planted a single tree.
What Yacht Carbon Offset offers to yachts, owners and the industry is ‘credited and properly documented action that is just one part of a yacht or business’s overall environmental action plan’. Each carbon credit purchased through the program is audited with the Lloyd’s Register Quality Assurance services. And, compared to the annual running costs of a large boat, the cost of carbon offsetting is modest, says Robinson, using an example of a 61m boat burning roughly 250,000 gallons of fuel annually.
‘It would cost less than $40,000 per year to fully offset,’ he says. ‘It is real money, but not prohibitive.’
Captain Nick Doyle of the 61.5m motor yacht Solemar, a participant in the program, says the impact of carbon offsetting on a daily basis is barely noticeable, but the contributions pay dividends to those projects being funded.
‘Everybody always feels better if they feel they are making a difference,’ he says, ‘no matter how small it is.’
Richard Franklin of ECOsuperyacht says that while he passionately believes that carbon offsetting is an important step, he thinks that it should be supplemental to other efforts to reduce a yacht’s emissions.
‘Our philosophy is based on the premise that less-in equals less-out, both in terms of emissions and cash,’ he says. ‘A well-structured program to improve the energy efficiency of a yacht can reduce total energy consumption by up to 25 per cent, reducing total emissions by a similar amount.’
Franklin’s company offers an ECOSeas Programme, in consultation with Ward & McKenzie surveyors and naval architects BMT Nigel Gee, that measures a yacht’s energy consumption, advises owners on efficiency improvements and sets measurable targets to implement changes based on the yacht’s budget. This results in more palatable cost savings to an owner in addition to green credentials.
This past December, Canada dealt the struggling carbon market an additional blow by denouncing the Kyoto Protocol
Mark Robinson, founder, Yacht Carbon Offset
Charter companies that offer carbon offsets for their yacht charters show mixed emotions.
‘We have offered [carbon offsetting] for three years now and have had a slow take up,’ says Patrick Coote, global marketing director for Fraser Yachts. ‘[However,] owners are often very interested in green options when it comes to proactively designing and constructing a yacht – from non-polluting materials, machinery, wood from managed forests, ecologically sound waste disposal, fuel consumption, hull design, solar and wind energy, efficient heating and AC systems, etc…’
Chiara Remonti of brokerage house Y.CO agrees, citing that the wholly environmentally sound sailing yacht Ethereal offers carbon offsetting for its charters, but none of Y.CO’s other charter clients have elected to offer this option.
At Camper & Nicholsons International, which pioneered the movement, offsetting is still offered to its charter and new-build clients, but the company no longer offsets all of its own activities, a decision made during the economic downturn.
The carbon market’s fall
In the early years of the Kyoto Protocol, the carbon market was forecasted to become the world’s biggest commodity market.
In 2008, more than $700 million of carbon offsets were purchased on the voluntary market alone, representing about 120 million metric tons of greenhouse gas reductions. During that year the carbon market was estimated to be worth $118 billion.
A report from the World Bank last year showed a much bleaker image of this market, stating that only $1.5 billion credits were traded in 2010: the lowest since the market opened in 2005.
This past December, Canada dealt the struggling carbon market an additional blow by denouncing the Kyoto Protocol. Canadian Minister of the Environment Peter Kent said, citing that because the world’s two main emitters of greenhouse gas emissions – the US and China – were not covered by the agreement, it ‘is not the path forward to a global solution to climate change’.
With the first Kyoto Protocol set to expire this year and a new climate treaty looking to be in place by 2015, whether carbon offsetting will continue as established or be replaced by a new structure remains to be determined.
‘What is evident now,’ says Captain Doyle, ‘is that more brokers are asking their clients if they want to participate [in carbon offsetting.] This is a great move toward awareness in the industry as a whole and the beneficial impact [on] the environment.’
‘You don’t have to believe in global warming,’ says Robinson, ‘but you should take a stand on greenhouse emissions.’ This might end up being a mandatory requirement for some large vessels, with the Ship Energy Efficiency Management Plan set to go into effect 1 January 2013.
Despite what the future holds for carbon offset, the yachting industry has come a long way in terms of embracing environmental responsibility the last six years. A note from Richard Sauter, of Sauter Carbon Offset Design, says, ‘The post-carbon Ocean Supremacy is on the horizon. When she docks, yacht owners will see that ultra-green, no-compromise eco-luxury superyachts are a real alternative.’
Just have the cappuccino ready and the press will show up en masse for that announcement.
Originally published: May 2012.