PETALING JAYA: MISC Bhd
has more room to optimise its fleets’ emissions through retrofitting some of its older vessels with more efficient technologies, deploying just-in-time arrival, as well as joint efforts with clients in voyage planning.
Hong Leong Investment Bank (HLIB) Research said the provider of energy-related maritime solutions and services remains committed to lowering its greenhouse gases emissions by 50% (base year: 2008) and achieve net zero by 2050.
MISC’s total emissions for Scope 1 and 2 stood at 4.2 million tonnes carbon dioxide equivalent and would amount to seven million if Scope 3 is included.
Scope 1 covers direct emissions that are owned or controlled by a company, whereas Scope 2 and 3 are indirect emissions as a consequence of the activities of the company but occur from sources not owned or controlled by it.
“The group’s Scope 3 emissions are understandably high due to emissions related to its offshore assets (such as floating production storage and offloading vessels) and heavy engineering division.
“Tasked with lowering emissions while growing its fleet size, MISC intends to improve the energy efficiency of its existing fleet by undergoing technology retrofits, utilising low-carbon alternative fuels, and deploying zero-emission vessels equipped with new ammonia-fuelled engines by 2030, among other initiatives,” the research house said in a report yesterday.
According to the International Maritime Organisation (IMO), from Jan 1, 2023 onwards all vessels are required to assess their Energy Existing Ship Index to be granted a carbon intensity indicator rating.
Based on the first annual reporting in 2023, the initial ratings for vessels (graded from “A” to “E”) will be assigned in 2024.
A ship rated “D” for three consecutive years or “E” for one year will have to submit a corrective-action plan to demonstrate how it can be upgraded to the required “C” or better rating.
“We understand that most petroleum tankers should be ‘A’ and B-rated, implying a significant buffer from violating the standards set by IMO for many years to come.
“Meanwhile, about half of MISC’s liquefied natural gas carriers are expected to be C-rated or better, while the rest will be mostly D-rated given their higher age and use of older steam-turbine technologies,” the research house said.
HLIB Research maintained a “hold” call on MISC with a target price of RM7.48 a share.
