Climate Change and Energy Management

Climate Risk and Opportunities & Responses

Impact of Climate Change on Operations

The global maritime industry emits approximately 1 billion metric tons of GHG annually, accounting for about 3% of total global emissions, which significantly impacts the environment If no active actions are taken, in addition to the negative impact on the environment, we may also be forced to face the situations in which the investors, customers and other stakeholders will gradually increase their demands for low-carbon ships and the government may impose stricter laws and regulations so that the ships may be required to slow down or be levied carbon taxes or carbon fees. Proactive countermeasures have to be proposed to avoid negative impact on corporate profitability. Looking at this from another perspective, new market opportunities can be created by ensuring the advantages of environmental performance. Shih Wei Navigation will strive to work on its environmental performance so as to become the most preferable bulk shipping company with sustainability development.

 

Energy Management Certification and Regulatory Compliance

Shih Wei Navigation has established an Energy Management Policy (EMP) and prepares the Ship Energy Efficiency Management Plan (SEEMP Part II & III) in accordance with the mandatory regulations of  MARPOL Annex VI and IMO Resolution MEPC.213(63). The plan is executed by the SEEMP task force to manage fuel consumption and reduce GHG emissions from vessel operations. The SEEMP Part II and Part III for the entire fleet have been strictly audited by ClassNK, a third-party verification body, and have obtained the "Confirmation of Compliance (CoC)." All shore based and seafaring personnel are required to follow the Company’s EMP when implementing SEEMP. Records, monitoring/analysis, and improvement actions are consolidated to lay the groundwork for the next iteration of improvement. Through SEEMP, both the Company and its vessels operate an energy-efficiency PDCA cycle (Planning, Doing, Checking, Assessment) for continual improvement.

Marine fuel is the fleet’s primary energy source. To comply with the IMO 2020 global sulphur cap, the fleet uses 0.5% LSFO worldwide; ≤ 0.1% sulphur fuel in Emission Control Areas (ECAs); and ≤ 0.1% sulphur distillate (MGO/MDO) within 24 nautical miles off the California coastline. These measures reduce SOx at source, help lower air pollution, and improve the Air Quality Index (AQI).

The fleet strictly complies with international environmental conventions and applicable regional environmental regulations, and implements operational controls and decarbonization strategies to reduce energy consumption— delivering safe, high-quality transportation services while contributing to marine ecology and planetary health. At the HQ, Shih Wei promotes green procurement, purchasing energy-efficient, power-saving certified products to reduce electricity use.

• The Fleet: Fuel oil (main engines, generators, auxiliaries)
• Head Office: Purchased electricity

GHG Management

To strengthen GHG control and disclosure, Shih Wei completed self-inventories for 2019 ~ 2024 for parent company and its subsidiaries (HQ and Fleet) and formally adopted ISO 14064-1:2018 in 2023, defining organizational boundaries under operational control.

The GHG emission data for 2023 and 2024 has obtained a Greenhouse Gas Verification Opinion Statement issued by the CR Classification Society. We received a reasonable assurance level for Scope 1 and Scope 2, and a limited assurance level for other indirect GHG emissions. Execution progress has been reported to the Board quarterly since 2022. Comparing 2023 vs. 2024, the total emissions decreased by 10.14%.

Unit: tonCO₂

1. The Company’s GHG emissions inventory covers the parent company Headquarters, one passenger ship, and vessels operated by subsidiaries/sub-subsidiaries, conducted in accordance with ISO 14064-1.
2. Adopt IPCC AR6 global warming potential (GWP) values.
3. 2.Since ISO 14064-1 was adopted in 2023: for the fleet’s Scope 1 emissions, fuel consumption is based on Class NK fuel consumption verifications, and calculations use emission factors from the IMO Fourth GHG Study and IMO DCS (diesel: 3.206, HFO: 3.114, LFO: 3.151). For the HQ and passenger ship Scope 2 emissions, electricity use is taken from utility bills and calculated with the Bureau of Energy, MOEA annual grid emission factors.
4. Ton-nautical miles = Cargo weight (metric tons) x Distance traveled (nautical miles)
5. GHG emission intensity = vessel fuel emissions (tCO2e) / ton- mile.
6. Our latest GHG inventory data is filed per regulatory requirements and is available on the Market Observation Post System .

2024 GHG Reduction Actions

The Fleet

Sold 3 aging vessels; added 1 eco vessel (main-engine daily fuel consumption reduction about avg. 29.65 MT; equivalent to 10.6740 tCO2e reduction). Based on Class NK Consulting Service Co., Ltd. (NKCS) calculations, EPL installation on selected vessels to meet EEXI. Use of silicone-based antifouling paint on hull to reduce hydrodynamic drag, improve fuel efficiency, and protect marine biodiversity. The installation of PBCF on vessels to effectively reduce fuel consumption. Full LED lighting retrofit on board. In 2024, one vessel completed full-ship LED conversion, reducing annual fuel consumption by about 28.64 MT per vessel and about 10.3104 tCo2e per vessel per year.

Head Office

Replaced fuel-powered company cars with 2 hybrid vehicles, saving 799.6 Liters of fuel versus 2023 (31.61% Reduction) and reducing ghg emissions by about 2.3348 tCO2e per year (Note 1). Monitored HQ’s air conditioning system and optimized operating schedules to conserve energy. ・ Confidential-document destruction by hydro pulping; in 2024, 2,010 kg were processed, reducing ghg emissions by 0.7236 tCO2e compared with traditional incineration (Note 2). Hosted the employee portal on microsoft azure cloud servers; compared with traditional rack-mounted servers, it’s estimated to reduce ghg emissions by about 2.0568 tCO2e per year (Note 3).

   Note:

1. Conversions adopt the Taiwan Ministry of Environment carbon footprint emission factor for mobile gasoline
   sources: 2.92 kgCO2e/L.
2. Conversions follow the factor announced on the Product Carbon Footprint Information Platform: 1 metric ton (mt) = 3.60E+2 kgCO2e
3. The cloud service provider Microsoft has committed to achieve company-wide carbon neutrality by 2030. Its global data centers emphasize energy efficiency and actively use green energy (e.g., wind and solar) to reduce reliance on conventional energy and lower carbon emissions by consolidating computing resources, improving energy efficiency, and adopting renewables. Scope 2 electricity calculations use the grid emission factor of 0.474 kgCO2e/ kWh announced by the Energy Administration, MOEA, 2025.

Air Pollutant Management

Shih Wei manages nitrogen oxides (NOx) and sulfur oxides (SOx) across vessel design/build, equipment replacement, and voyage operations to ensure full compliance and reduce air emissions.

To meet the IMO 2020 global sulfur cap, the fleet uses 0.5% LSFO worldwide; ≤ 0.1% sulfur fuel in Emission Control Areas (ECAs); and ≤ 0.1% sulfur distillate (MGO/MDO) within 24 nautical miles off the California coastline. To comply with NOx emission limits for marine engines, engines are tuned and operated to meet Tier I or Tier II requirements. In 2024, the Company did not emit ozone depleting substances (ODS) during vessel operations.

 

Three Years statistics for air pollutant emissions from Fleet

Unit: Metric ton(s)

1. Activity data are based on Class NK fuel consumption verification.
2. Calculations adopt emission factors and formulas from the IMO Fourth GHG Study and related methodologies.