The Company is fully aware of the environmental impact of its business activities and the need for a low-carbon economy. Minimizing the ecological load from operations by achieving complete clarity regarding emissions and waste from each emitting source in the supply chain. The urgency to work on goals towards lower greenhouse gas (GHG) emissions before it goes higher than 1.5°C is clear.

Carbon footprint per transported ton
Eimskip’s official KPI was set in 2015. It measures the development of reducing GHG emissions of transported tons by 40% before 2030. In 2023 accelerated targets to become net-zero before 2040 were set.  Eimskip however continues to display the Official KPI with the base year 2015 since it evaluates the progression of Eimskip’s journey. The KPI represents all scope 1 emissions of all cargo vessels in Iceland, Norway, the Faroe Islands, and trucks/equipment in Iceland per ton of the transported unit. The KPI is adjusted to the vessel-sharing agreement with Royal Arctic Line (RAL) due to regulations regarding transportation to and from Greenland.

The Company’s carbon footprint KPI is calculated in the graph below. It shows accumulated carbon intensity per ton of transported units, compared to the base year 2015.

Greenhouse Gas Emissions
Eimskip has a good overview of the operation’s GHG emissions. The Company has an environmental management system and gathers its data digitally. The data covers the vessel fleet’s energy and waste management, trucking fleet, terminal assets, warehouses, and office facilities. 

In the environmental statement for 2023, the Company has registered scopes 1 and 2 for all vessels and offices in Iceland. Eimskip operates in 20 countries, and as of 2023, all the countries are part of environmental reporting compared to 17 countries in 2022. In the Company’s ongoing commitment to sustainable and environmentally responsible practices, Eimskip maps all scopes 1 and 2. To Eimskip, reporting environmental data for the subsidiary Sæferdir and the utilization of non-combustible gases in cold storage facilities and temperature-controlled containers was added. The Company has an outstanding overview of scopes 1 and 2. 

Eimskip’s total emissions were 284,124 tCO2e in 2023 compared to 308,210 tCO2e in 2022, which is an 8% reduction. Scope 1 is 283,917 tCO2e, where the vessel fleet is responsible for most emissions. 

Scope 2 has increased from 1,517 tCO2e in 2022 to 2,027 tCO2e in 2023 due to data on electricity from more countries. In scope 2 the Company has mapped the business flight in Iceland and Norway and the waste resulted from the operation in Iceland.  Scope 3 is down 45%, from 377 tCO2e in 2022 to 207 tCO2e in 2023. The difference is primarily due to the incorrect flight registration in 2022. Further steps need to be taken to improve the registration of scope 3 The Company’s energy mix is 96% fossil fuel, with most vessel emissions.

New fuel source, infrastructure, and supply
The majority part of the energy that Eimskip uses comes from fossil fuels. The vessels are responsible for most of the fossil fuel use. 

An energy transition is required to achieve Eimskip’s CO2 reduction objective. The future will lead to green fuel, and there are several options. Green methanol, green ammonia, and green hydrogen are future energy sources for ocean and land transport. The supply of energy and the infrastructure must be in place before steps are taken. It is also important that the pricing of the new energy is transparent so that it will be possible to calculate all green investments based on operational requirements.

Eimskip is evaluating its steps regarding energy change. The Company is in discussion with various parties concerning Eimskip’s energy transition for its shipping- and ground transport fleet. 

Eimskip has focused on the sailing system, e.g. slower and optimized sailings in 2023, but is still evaluating its options in renewing the container vessel fleet, focusing on the next generation of vessels using alternative greener fuel.

Carbon projects 
The Company’s largest vessels, Brúarfoss and Dettifoss, undertook regular shipyard work where, among other things, the vessel hull was painted with a special paint that reduces the vessel’s resistance while sailing, reducing fuel consumption by an estimate of approximately 6%. The vessels are also utilizing the electric shore power connection system in Sundahöfn Terminal in Reykjavík while docking. It is estimated that it reduces the oil consumption up to 240 tons per year, which equals 750 tCO2 emissions.

Eimskip added three new electric trucks with refrigerators and one methane truck to the fleet in 2023. Eimskip is among the first companies to distribute temperature-controlled goods with electric trucks. Distributing temperature-controlled goods in electric vehicles is an additional challenge, as considerable energy is needed to cool food during distribution. Simultaneously with the reception of the cars, a powerful 150 kwh charging station was installed, and the Company added charging stations for passenger cars. Now, Eimskip has 28 charging stations available in Iceland.

Running Tide is an innovative company working to decrease carbon footprint by growing macroalgae in the ocean. Still, the ocean’s biological carbon pump plays a significant role in the global carbon cycle. Running Tide and Eimskip cooperate, whereas Running Tide utilizes Eimskip land at Grundartangi in return for carbon credits. Eimskips employees have also assisted by putting measuring devices into the ocean, so it is possible to measure ocean currents. Running Tide will then use the information to decide where to release its macroalgae in the sea.

Legislation  
Several items of legislation play significant roles in the shipping industry; the EU has unveiled the Fit for 55 Package, focusing on more ambitious climate change targets. One of the EU legislative packages the EU has proposed to help achieve that objective is the Emission Trading System (ETS). ETS seeks to minimize GHG emissions by establishing a carbon market where businesses may purchase and sell emissions allowances depending on GHG output. Eimskip has implemented an ETS surcharge and has taken measures to minimize the necessary allowances, with a long-term goal of reaching net zero emissions.

Another legislation is the EU Taxonomy, where companies report on sustainability-related issues based on the EU classification system for sustainable investment. Eimskip reported based on EU Taxonomy in 2023 (see chapter below). 

IMO (International Maritime Organization) is a global agency of the United Nations that has taken several steps to support the reduction of GHG emissions. In 2023, IMO set ambitious intermediate and long-term targets for shipping to reach net zero. IMO has also mandated using the EEXI (Energy Efficiency Existing Ship Index), EEDI (Energy Efficiency Standards for new ships), and SEEMP, which requires ships to have an energy efficiency plan. The Carbon Intensity Indicator (CII) is intended to complete other measures; this became effective as of January 1, 2023 and is currently monitored.  

EU Taxonomy
This year for the first time, Eimskip reports information related to EU Taxonomy. The purpose of the taxonomy framework is to establish a standardized and transparent classification system for sustainable investments by emphasizing science-based reporting, and technical screening criteria enabling companies to clearly report sustainable activities. For companies to be considered environmentally sustainable (i.e. aligned) they are required to fulfill criteria set in the EU Taxonomy regulation. An economic activity must contribute to one or more stated environmental goals while simultaneously it may not do significant harm to others (DNSH). Furthermore, it must be conducted in compliance with minimum safeguards as well as fulfilling relevant technical criteria.  The main Eimskip activities that are considered eligible are: 6.6. Domestic land transport, 6.10. Vessel operation, 6.11. Ferry operation, and 6.16. Terminal operation in Iceland and vessel to shore connection, these activities represent 54% of the Company’s revenue and 76% of the CAPEX. 

Substantial effort was invested in the taxonomy journey in 2023 outlining the Group's sustainability contributions. Parts of the Company’s assets, 6.6. Domestic land transport and 6.16 Terminal operations in Iceland and vessel to shore connection, contain business activities that are close to alignment and fulfil technical criteria as well as DNSH requirements.  Eimskip is going to improve further minimum safeguards with regards to due diligence, and the Company focus in 2024 is to ensure full compliance of the due diligence process.  

For many years, Eimskip has sorted and recycled most of the waste produced by its operations. In recent years, the focus has been on recycling as much as possible, and the procedures are continuously revisited.

On board vessels, Eimskip works on waste management, according to MARPOL. All vessels have a garbage management plan and a garbage record book. To further improve monitoring, recycling, and reporting, Eimskip has digitized the garbage log and started streaming the data to the environmental data warehouse in 2016. Through this, waste has become a part of the supply chain footprint calculation and analytics.

Land operation waste management is continuously improving. Continuous focus was in 2023 to identify the source of waste to reduce it. Eimskip took several actions to meet the goals. The Company has started to build a waste management station in Sundahöfn, which will be open in 2024.  

Within the Company, there is a strong culture of reusing material and preventing waste, and material is reused as much as possible. An example of such a project that focuses on reuse is dunnage bags. Dunnage bags are used to stabilize cargo and are reused. Another example is the handling of old pallets in the system. When the pallet cannot be used anymore, the wood is given a new life as a spare part for other pallets. In inland transport, a reusable box is used to transport goods within Iceland, reducing the need for plastic in the operation and minimizing the risk of damage. 

Vöruhotelid, the Eimskip warehouse in Reykjavik uses film to secure cargo on pallets. The operation has changed to thinner films that are partly produced with recycled plastic. The warehouse expects the carbon footprint to be reduced by 6.6 tCO2e annually. 

As part of Eimskip’s commitment to being an active partner in the circular economy,all films are sent to the innovation company Pure North, which is developing new solutions for recycling plastic. In 2022, about 33 tons of film were sent to Pure North from all land operations in Iceland, and Eimskip reduced the emission of those 33 tons by 82%.

The environmental system only records waste generated within Iceland. 2023, the total waste generated in Iceland was 3% less than in 2022. The rate of recycled waste was 74% in 2023, and the percentage of sorted waste was 75% in 2023 compared to 77% in 2020. The sorted waste has decreased by 5%, which explains the difference in the percentage of sorted waste. 

At the office, most waste is due to the use of paper. All around the world, employees have worked on projects to support “Eimskip Paperless Journey.” Employees have run several projects focusing on digital solutions, and in other cases, employees changed their way of working to reduce printing. 

Eimskip operation mainly impacts the ocean and land. Special efforts have been made on actions regarding climate change, but the Company also evaluates other possible environmental impacts, including the effect of pollution on biodiversity and ecosystems. In the operation, there is a risk of affecting nature, but as a part of the operation, the risk is monitored and evaluated constantly.

Air quality
The terminal in Sundahöfn operates an electric shore power connection system for the container vessels Bruarfoss and Dettifoss. Eimskip can now use its largest vessels on electricity instead of oil-powered auxiliary engines during their port time in Sundahöfn. The benefit is reduced emissions, improved air quality and acoustics in the area, and a reduction in oil consumption by up to 240 tons per year, which equals 750 tCO2 emissions. 

Eimskip added three new electric trucks with refrigerators and one methane truck to the fleet in 2023. Eimskip is among the first companies to distribute temperature-controlled goods with electric trucks. Distributing temperature-controlled goods in electric vehicles is an additional challenge, as considerable energy is needed to cool food during distribution. Simultaneously with the reception of the cars, a powerful 150 kwh charging station was installed, and the Company added charging stations for passenger cars. Now, there are 28 charging stations available in Iceland.