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Managing Decarbonization

THE MANAGING DECARBONIZATION PROGRAM

Marsoft’s Managing Decarbonization program ensures that your retrofit investment is aligned with your strategic and commercial goals. 

 

The benefits of the program include world-class evaluation of the retrofit options for each ship in your fleet, access to execution support from our collaborator SeaTec, access to bank debt to support the retrofit investment, and incremental revenue from the sale of carbon credits linked to the reduction in emissions yielded by the retrofit.

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Investment Optimisation

Choosing the best ship-specific retrofit option requires that all options be evaluated in a consistent and systematic approach. 

 

With nearly 100 options, and combinations of options, available on many ships that is an impossibly time-consuming and costly approach using existing techniques. 

 

Marsoft’s GreenScreen™ platform completes that analysis in just days using only the vessel data already available in your files.  Furthermore, the vessel performance analysis is linked with Marsoft’s powerful FLAGSHIP platform to provide a vessel-specific financial analysis of the risk-adjusted returns and risks.

The GreenScreen/FLAGSHIP platform provides a vital 2nd opinion to support a retrofit program recommendation to your board, ensuring that the recommended program has undergone the thorough, objective, and rigorous evaluation required to support the investment recommendation.

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SeaTec

A successful retrofit starts with the business plan but only ends successfully with successful execution of each step in the retrofit execution program. 

 

SeaTec and Marsoft have established a collaboration that combines the worldclass abilities and experience of each organization.  SeaTec staff have successfully executed some of the biggest and most successful retrofit programs for leading owners. 

 

They also have access to the industry’s largest purchasing community, Marcas, which delivers lower costs for your program via its massive purchasing power. 

 

At a time when regulatory pressure is likely to drive thousands of ships into yards for retrofitting programs intended to deliver compliance with EEXI and CII, SeaTec’s access to yard capacity around the world can provide a clear competitive advantage.

Get in touch with us to learn more about our Managing Decarbonization: GreenScreen™ program

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Access to Finance

Marsoft works closely with leading shipping banks, including the Poseidon Principles signatories. 

 

We will work with you to obtain conditional funding approval for your retrofit program, highlighting how it contributes to the earnings, value, and trading life of your fleet (and thus its debt capacity), and how your ship’s Poseidon Principles score will improve as a result.  We can help you take advantage of the “carrots” available from the banks for green investments and avoid the “sticks.”

 

The Managing Decarbonization program lowers your cost of capital by reducing the need to commit costly equity to retrofits.

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Carbon Credits

A recent FT article reports that industrial projects including solar and windpower issued more than $126 million in carbon credits in 2019. 

 

In other words those project sold credits linked to their delivery of reductions in carbon emissions to investors to help fund those project. 

 

Carbon-linked securities are traded in countless national, regional, and global markets around the world.  Each of those markets has its own complex standards for certifying, verifying, and commercializing those credits.

Shipping has so far not taken advantage of the carbon credits funding opportunities because the startup costs are high and no single company can bring credits to the market at the scale necessary to realize premium pricing. 

 

Marsoft’s Managing Decarbonization program eliminates those barriers by establishing a standard for certification and its CO2POOL™ to consolidate and manage the credits created via the program to realize maximum value on the credits market.

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GreenScreen™

Marsoft’s GreenScreen™ retrofit evaluation platform, developed in collaboration with the MIT Sea Grant Design Lab, provides an extremely accurate assessment of the benefits of the retrofit – the results are within 5% of the estimate 90% of the cases we have evaluated. 

 

GreenScreen™ opens the door to carbon credit origination, verification, and certification – essential steps to monetizing the value of the reduction in carbon emissions delivered by your retrofit investment.

The objective of the MD program is to deliver fuel and CO2 savings on terms that meet investor requirements. 

 

The criteria we use to evaluate the profitability of an investment include:

  •  An expected return on equity of at least 8% on an unlevered basis, over the ship’s remaining life.

  • An expected payback period of less than five years.

  • A minimum return of 2% under adverse market conditions. 

The scale of the retrofit/upgrade investment has ranged from $0.7 million to $2.5 million in a variety of cases across the dry bulk, tanker, and containership markets.

 

MD conducts a rigorous financial risk assessment accounting for the uncertainty in charter market conditions and bunker prices.

 

We account for changes in the ship’s speed/consumption tradeoff as a result of the upgrade/retrofits to ensure that the ship will always meet charterer requirements.

 

The scale of the retrofit/upgrade investment has ranged from $0.7 million to $2.5 million in a variety of cases across the dry bulk, tanker, and containership markets. MD conducts a rigorous financial risk assessment accounting for the uncertainty in charter market conditions and bunker prices.

 

We account for changes in the ship’s speed/consumption tradeoff as a result of the upgrade/retrofits to ensure that the ship will always meet charterer requirements.