E1 Climate Change
Decarbonizing our shipping services
Strategy
Transition plan for climate change mitigation
Höegh Autoliners has set two clear strategic targets for decarbonizing its vessel operations. The first target is to reduce fleet-wide carbon intensity by more than 30 percent by 2030, compared to 2019 levels. The second target is to achieve net-zero emissions in its vessel operations by 2040. To meet these decarbonization targets, Höegh Autoliners has developed a comprehensive decarbonization plan that includes both necessary and ambitious measures within its own operations and supply chain. This plan is integrated into Höegh Autoliners’ business strategy and financial planning and has been approved by the board as part of the updated decarbonization strategy and ambitions launched in 2022.
Our net-zero ambitions and decarbonization plan focus on the life-cycle emissions of fuel used in vessel operations* (well-to-wake). We plan to expand this scope over time to also include other parts of our value chain emissions, and to obtain an external validation confirming alignment with the Paris Agreement’s 1.5-degree objective. On the other hand, our 2040 target positions us ahead of the International Maritime Organization’s goal of net-zero by 2050.
Roadmap to 2040
The decarbonisation plan outlined above highlights two primary drivers of our decarbonisation strategy: energy efficiency measures for the existing fleet and the shift to alternative fuels. Fleet renewal will play an essential role, encompassing both energy efficiency improvements and the adoption of alternative fuels.
Being aware of the increased uncertainties due to both internal and external factors beyond 2030, Höegh Autoliners has identified the following key decarbonisation levers to reach net-zero ambition in 2040:
Replacement of existing fleet
A substantial replacement of the current fleet is necessary for the Company to achieve its decarbonization targets, as the existing fleet cannot operate entirely on near-zero emission fuels. The current newbuilding program, initially comprising 12 vessels, has already seen two vessels enter operation in 2024. This program will ultimately deliver eight ammonia-ready vessels (vessels 1-8) and four ammonia-capable vessels (vessels 9-12). The first eight vessels can be converted to ammonia-capable vessels. Additionally, eight vessels from the current fleet, along with the newbuildings, are expected to remain in service by 2040 and are planned to be converted to run on near-zero emission fuels. Vessels reaching their expected lifetime of 30 years are typically phased out. These vessels will over time be replaced by those compatible with the fuel switch as part of the decarbonisation plan, sourced from the second-hand market, chartering market, or through an additional newbuilding program.
We have invested/committed nearly USD 1.4 billion in CapEx for our ongoing newbuilding program, directly supporting the decarbonization strategy, and it will require a significant amount of additional CapEx to successfully transition to net-zero in own vessel operations.
Information on EU Taxonomy eligible and aligned revenues, CapEx, and OpEx is provided in the EU Taxonomy section.
Adoption of alternative fuels
Achieving a net-zero capable fleet requires vessels capable of running on near-zero emission fuels, and Höegh Autoliners is committed to transitioning its fleet accordingly. As part of the decarbonisation strategy, Höegh Autoliners aim to operate its fleet on near-zero emission fuels, such as clean ammonia, or drop-in fuels like biodiesel and bio-LNG. By introducing the ammonia-capable Aurora class vessels to the market in 2027, Höegh Autoliners aims to demonstrate that zero-emissions shipping is possible, provided the fuel is commercially viable. For these vessels to be deployed at scale, the industry relies heavily on a well-functioning fuel market with the necessary infrastructure in place, supported by a global regulatory framework that incentivizes the long-term adoption of green technologies and fuels. We also depend on our customers’ willingness to contribute to the decarbonization journey. Through its membership in the First Movers Coalition, Höegh Autoliners has committed to running at least 5% of its deep-sea operations with green fuels by 2030. To achieve this commitment, the company is actively engaging and collaborating with external stakeholders, including fuel producers, regulators, and customers, to commercialize and build efficient supply chains for green fuels.
The current fleet will lead to locked-in emissions for certain vessels still included in our fleet in 2040. At the end of 2024, this relates to future emissions from eight legacy vessels that currently are not able to run on near zero-carbon fuels, except biofuels. In addition, the first eight vessels delivered as part of the ongoing newbuilding program will also contribute to locked-in emissions after 2040 if they are not converted to near net-zero capable propulsion.
Supporting its decarbonisation strategy, Höegh Autoliners integrates sustainability-related performance in management’s short-term incentive scheme. This aligns goal achievements with corporate objectives and sustainability ambitions, covering both environmental and social topics. For more details on this incentive scheme, please refer to our Remuneration Report available on our website.
Höegh Autoliners is not excluded from the EU Paris-aligned Benchmarks.
Material impacts, risks and opportunities and their interaction with strategy and business model
The double materiality assessment (DMA) process as described in ESRS 2 – IRO-1 identified the following material impacts, risks and opportunities:
| Impacts, risks and opportunities | Location in the value chain | Time horizon | |||||
| Upstream | Own operations | Downstream | Short-term | Medium-term | Long-term | ||
| GHG emissions in own operations | Actual negative impact | ⚫ | ⚫ | ⚫ | ⚫ | ||
| GHG emissions in the value chain | Actual negative impact | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |
| Financial consequences of climate change | Financial risks | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ |
| Financial opportunities | ⚫ | ⚫ | ⚫ | ⚫ | |||
Negative impacts on climate change
GHG emissions in own operations
Höegh Autoliners vessel operations produce a significant amount of greenhouse gases from combustion of fuel. These emissions contribute negatively to climate change, which can also have negative effects for human health and other environmental impacts. These impacts are part of its own operations, are systemic to the shipping sector, and are relevant in the short, medium, and long term.
GHG emissions in the value chain
A significant share of Höegh Autoliners’ GHG emissions occur within the value chain. Besides emissions from our newbuilding activities, the primary sources are the extraction, refining, and transportation of fuel used in our operations (Scope 3, Category 3). Emissions from purchased goods and services also significantly contribute. Additionally, end-of-life ship recycling of vessels that have surpassed their expected lifetimes is also expected to contribute significantly over the coming years.
Financial consequences of climate change
Physical climate risks
Climate change threatens global shipping lanes, potentially impacting Höegh Autoliners through heavy weather systems, canal droughts and port flooding. Critical routes like the Panama Canal have recently proven to be especially vulnerable. Such situations can potentially lead to increased operational cost due to operational downtime for suppliers, re-routing of own vessels and loss of revenues due to operational delays.
A qualitative climate-related analysis has been conducted concluding that our current fleet is expected to withstand the anticipated physical climate risks over its lifetime due to the nature of the assets. For the lower temperature scenario, we expect lower physical climate risks, with transitional risks being more relevant. Höegh Autoliners supports a 1.5-degree scenario and concludes that physical climate risks related to its shipping operations should be monitored over time, they are not material for this year’s reporting. For more information on the resilience analysis, please refer to ESRS 2 – IRO 1.
Transitional climate risks
The risks identified in the double materiality assessment are aggregated and presented in IROs Table above. The table indicates that certain financial risks are relevant across all time horizons, and each material risk identified is disaggregated and further detailed below.
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Pace of decarbonisation not meeting stakeholder expectation
The uncertainty surrounding our ability to decarbonize shipping operations at a pace that meets the expectations of external stakeholders—such as customers, investors, regulators, and financial institutions—represents a strategic transitional risk for Höegh Autoliners and depends on several external factors.To meet our decarbonization targets, we rely on global regulatory frameworks that ensure a level playing field across shipping participants. This framework should incentivize the adoption of alternative fuels until the market can regulate itself and become commercially viable.
This can be achieved through global carbon taxes, fuel standards regulating carbon intensity, or contracts for differences. Without a well-functioning market for decarbonization solutions, there is a risk that customers will opt out of decarbonization efforts, making it financially unsustainable to fully execute our decarbonisation strategy. These risks are relevant over the medium and long term.
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The choice of future propulsion technology
Höegh Autoliners has secured access to four dual-fuel ammonia engines, enabling vessels 9-12 in the newbuilding program to run on ammonia straight from the yard. However, investment decisions made today for assets with an expected lifetime of 30 years, come at a risk. The risk associated with the chosen fuel technology for our fleet transition program remains substantial and is relevant over the medium and long term.
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Increased CapEx/OpEx required for successful fleet transition
To fully execute a successful decarbonization strategy, increased CapEx and OpEx will be required. As shipping is an asset-intensive industry, substantial CapEx will be needed for our fleet renewal program. This includes not only the ongoing newbuilding program but also technical upgrades to the existing fleet and the future acquisition of net-zero capable vessels, either through newbuilds or the second-hand market. On the OpEx side, costs will rise due to more expensive fuels, carbon taxes, compliance costs for both onshore and offshore employees, and the training and upskilling of crew. These risks are relevant in the short, medium, and long term.
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Potential stranded assets, financial losses, and reduced access to favorable capital
The introduction of stricter environmental regulations poses significant financial risks for the existing fleet. Vessels that fail to comply with these regulations may be restricted from operating in certain regions or ports and, in the worst case, could become stranded assets with decreased asset values. Additionally, customers, investors, and financial institutions are increasingly factoring in environmental compliance in their decision-making, making it difficult for non-compliant vessels to attract favourable capital. These risks are particularly relevant in the medium and long term.
Opportunities
The opportunities identified in the double materiality assessment are aggregated and presented in the IROs Table above. The table indicates that certain financial opportunities are relevant across all time horizons, and each material opportunity identified is disaggregated and further detailed below.
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Being a first mover can position the company as the preferred green shipping partner for decarbonizing customers’ supply chains
The ongoing fleet transition presents an opportunity not only to achieve low greenhouse gas emissions and comply with upcoming regulations, but also to demonstrate strong leadership. This can position ourselves as the preferred green shipping partner for our customers, supporting them in decarbonizing their supply chains. This opportunity is relevant over the short, medium, and long term.
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Potential access to favourable capital
Having a fleet of vessels being compliant with environmental regulations, such as the EU Taxonomy, can result in access to favourable capital. This opportunity is relevant over the short, medium, and long term.
Impact, risk and opportunity management
Policies related to climate change mitigation and adaptation
IMO regulations serve as clear guidelines for policy development within Höegh Autoliners. By implementing policies reflecting our vision of a near-zero emission future for shipping—through fleet transition and adoption of alternative fuels—we establish a clear direction for our decarbonisation strategy.
“Höegh Autoliners’ Environmental Policy” prioritizes managing and reducing our environmental footprint by continuously improving performance in areas like decarbonization and renewable energy use. It outlines initiatives to reduce emissions across our value chain, foster innovation and research and engage stakeholders. The policy applies to all subsidiaries, with the Chief Executive Officer bearing ultimate responsibility for oversight.
The “Environmental Focus Plan” is an annual plan that describes our efforts on various environmental topics throughout the year, assigning detailed initiatives to each area. This plan was developed to enhance awareness of the environmental footprint of our vessel operations and to foster a safe and inclusive working environment. It sets clear objectives, targets, and actions for relevant environmental topics, with a particular focus on reducing GHG emissions and the consumption of non-renewable resources. Policy development and implementation are overseen and approved by the Chief Operations Officer, with the leaders in the Operations department responsible for driving the processes and initiatives, such as the Head of Höegh Technical Management, holding the fleet responsibility for compliance with the International Safety Management (ISM) code.
Höegh Autoliners’ “Supplier Code of Conduct” sets forth environmental requirements for our suppliers. This includes a commitment to best practices in environmental management, sustainability, and energy and resource efficiency.
All policies mentioned above are available to all employees through our internal intranet.
Actions and resources in relation to climate change policies
Höegh Autoliners focuses on two main areas for decarbonizing its shipping services: first, enhancing energy efficiency in our existing fleet and second, fleet transition, including the uptake of alternative fuels. To support the objectives and targets of our climate-related policies, we have implemented the following actions in accordance with our fleet wide Ship Energy Efficiency Management Plans (SEEMPs):
Enhancing energy efficiency in our existing fleet
Höegh Autoliners continues to follow up on its planned initiatives or technical upgrades, which are fully aligned with its long-term efforts to increase energy efficiency of the existing fleet.
The following upgrades have been installed in 2024:
- New propellers were installed on nine vessels, with additional orders placed for two vessels upgrades by the end of the reporting period. These propellers are customized to meet our operational requirements and are designed to enhance hydrodynamic efficiency through their integrated propulsive unit. Depending on trading pattern and speed, it is expected that they will deliver 3-6% fuel savings annually per vessel.
- Propeller boss cap fins have been retrofitted to four vessels, with orders in place for an additional three vessels. The expected annual fuel savings is around 2-2.5% per vessel.
- Turbocharger modifications have been completed on five vessels this year, with additional orders placed for three vessels at the end of the reporting period. These modifications aims to increase the vessels’ speed range, allowing for reduced fuel consumption while maintaining the same operational speeds. It is expected that the initiative will present 2-3% fuel savings annually per vessel depending on the operational profile of the vessels.
- eMarine variable frequency drives have been installed on 4 vessels, with orders in place for an additional eight vessels. The aim is to ensure that pumps and ventilation fans operate at optimal frequency and power levels, with the aim to yield fuel savings of up to 2% annually.
- In 2024, Höegh Autoliners allocated approximately MUSD 7.5 in CapEx for technical upgrades. We expect to invest an additional MUSD 3 in similar initiatives in 2025.
Additionally, other important initiatives related to energy efficiency is hull cleaning and vessel maintenance. This is performed for all operating vessels on a regular basis. With the same cleaning and maintenance plan year over year, the annual efficiency improvement is limited. However, the outcome of a hull cleaning improves energy efficiency by reducing drag and optimizing the vessel’s performance. It is expected that each hull cleaning contributes with 3-5% fuel savings when comparing consumption before and after cleaning.
- The implementation of a fleet-wide digital trim monitoring system optimises vessels’ trim in the water. By adjusting the trim based on real-time data, this reduces water resistance, leading to reductions in fuel consumption. This initiative is expected to yield 1% in fuel savings annually per vessel.
- Höegh Autoliners has taken delivery of approximately 6,200 metric tons of ISCC-certified sustainable biofuel (B100) this year. Additionally, we have taken delivery of 450 metric tons of biofuel blend (B24). Together, these deliveries will contribute to reduced GHG emissions of 19,700 metrics tons of CO2 equivalents.
- We have signed several Letters of Intent (LOIs) with partners across various segments of the clean ammonia supply chain. These collaborations aim to foster innovation and accelerate the adoption of clean ammonia as a viable alternative fuel, further supporting our decarbonization targets. Clean ammonia will substantially reduce the life-cycle emissions for the fuel we use by at least 70%.
- In late 2024, Höegh Autoliners partnered with one of its port suppliers in Australia. Four port calls of the recently delivered Höegh Aurora, were towed using biofuels, reducing scope 3 emissions by close to 100%. Höegh Autoliners will continue to seek similar opportunities in its efforts to decarbonize its supply chain.
Fleet transition, and uptake of alternative fuels
Reaching our decarbonisation goals requires a substantial transition of our fleet. This includes the addition of near zero-emission capable vessels, phase-out of legacy tonnage and the uptake of alternative fuels.
Introduction of Aurora Class Vessels
In 2024, Höegh Autoliners took delivery of four of our twelve near zero-emission ready Aurora Class newbuildings – Höegh Aurora, Höegh Borealis, Höegh Australis and Höegh Sunlight.
Key features of the Aurora Class:
Aurora Class vessels are equipped with DNV’s “ammonia ready” notation and has a capacity of 9,100 CEU.
The first 8 vessels of the newbuilding program have been and will be delivered with LNG dual-fuel engines, which have the potential to reduce carbon emissions per car transported by up to 58% when compared to the industry standard PCTC vessel running on fuel oil/diesel. Additionally, they can connect to shore power for emissions-free port operations.
In the upcoming year, Höegh Autoliners is set to take delivery of two additional LNG dual-fuel vessels, with deliveries scheduled for Q2 and Q3 of 2025. Furthermore, two more vessels are expected to be delivered in 2026.
Höegh Autoliners has continued its work to have vessels number 9-12 in the newbuilding program delivered with ammonia dual-fuel engines, with the first vessel scheduled to be delivered in 2027. These engines have been confirmed from MAN Energy Solution, enabling these vessels to run on clean ammonia with near zero carbon emissions when delivered from the yard.
All vessels of the newbuilding program are expected to be delivered by 2028.
Investments related to the Aurora Class vessels
In 2024, Höegh Autoliners paid approximately MUSD 357 in CapEx instalments related to the newbuilding program. By the end of 2024, the remaining CapEx for the project is estimated at USD 645 million, with USD 634 million expected to come from secured debt drawdowns and USD 11 million from equity. The total investment/commitment for the entire newbuilding program is estimated to be around USD 1.4 billion as of period end. Milestone payments are capitalized as part of additions to newbuildings (refer to note 7 in the financial statements).
During the year, Höegh Autoliners secured NOK 255.4 million in funding from Enova to de-risk the investments, aiming to enable Aurora Class vessels 9-12 to operate on clean ammonia upon their delivery in 2027.
In early 2024, the group linked MUSD 720 in long-term corporate financing to its decarbonization strategy through a sustainability-linked loan. The financing framework and its emissions trajectory, verified by DNV through a second-party opinion (SPO), is aligned with our 2030 carbon intensity reduction target. We measure and monitor carbon intensity development quarterly and obtain annual verification of the KPI as part of our loan agreement obligations. Four of the Aurora Class vessels are and will be pledged in the loan when delivered, while the remaining eight will be financed through sale-leaseback arrangements upon delivery.
Phase-out legacy tonnage
In 2024, Höegh Autoliners sold and delivered two vessels to their new owners, Höegh Chiba, and Höegh Kobe, both built in 2006. With the introduction of the Aurora Class vessels to the fleet, the company used this opportunity to optimize its fleet from both commercial and sustainability perspectives. The vessel sales are anticipated to have a positive contribution to achieving the decarbonisation targets.
One vessel (Höegh New York) was declared sold during the year and will be delivered to her new owners in Q1 2025. This sale is also expected to have a positive contribution to the decarbonisation targets.
Vessels that exceed their expected lifetime of 30 years are generally considered as candidates for recycling. In line with our decarbonisation plan, all candidate vessels will undergo a thorough assessment before any recycling decisions are made.
Going forward, Höegh Autoliners continues to be strongly committed to achieving its decarbonisation targets and will continue to explore innovative ways and new partnerships to optimize its current energy efficiency, and to further reduce their environmental footprint.
Metrics and targets
Targets related to climate change mitigation and adaptation
Höegh Autoliners has embedded two overarching climate-related targets into its corporate strategy through its corporate development goals, namely fleet transition and fleet efficiency:
For the medium term, Höegh Autoliners has set a target with the aim to reduce fleet carbon intensity by more than 30% by 2030, using a 2019 baseline. This target is an intensity target. The scope includes all vessels owned or technically managed by the Höegh Group. We have selected 2019 as the baseline year because it is the most recent full year with available global GHG emissions data under normal operations, verified by externally audited IMO DCS data. Please refer to entity specific measures below for more details.
Höegh Autoliners has set a target to reach net-zero in vessel operations by 2040. This target is an absolute target. The scope covers all vessels operated by the Group in the reporting year and includes the life cycle emission of fuels consumed.
We have set 2023 as the base year for our net-zero ambitions covering all operated vessels, as it is the first year we reported a complete carbon inventory across all scopes and calculated our scope 1 and scope 3 category 3 emissions using our current methodology.
The target is designed to support the policies and procedures related to our own operations, addressing climate change impacts, managing risks and opportunities, and ensuring compliance with global regulatory requirements, such as IMO regulations.
Energy consumption and mix
In 2024, total energy consumption remained relatively stable compared to 2023, with an increase of less than 1%. This stability is a result of a consistent fleet size year over year, resulting in a minimal change in fuel consumption. Additionally, the introduction of Aurora Class vessels in 2024 incorporated LNG into our fuel mix.
Energy consumption
| Unit | 2024 | 2023 | |
| 1. Fuel consumption from coal and coal products | GWh | - | - |
| 2. Fuel consumption from crude oils and petroleum products | GWh | 1 748 | 1 726 |
| 3. Fuel consumption from natural gas | GWh | 15 | - |
| 4. Fuel consumption from other fossil sources (Marine diesel oil) | GWh | 264 | 289 |
| 5. Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources | GWh | 1 | 1 |
| 6. Energy consumption from fossil sources (sum of 1 to 5)1 | GWh | 2 028 | 2 016 |
| 7. Consumption from nuclear sources | GWh | - | - |
| 8. Fuel consumption for renewable sources | GWh | 51 | 53 |
| 9. Consumption of purchased or acquired electricity, heat steam and cooling from renewable sources | GWh | - | - |
| 10. Self-generated non-fuel renewable energy | GWh | - | - |
| 11. Energy consumption from renewable sources (sum of 8 to 10) 2 | GWh | 51 | 53 |
| TOTAL ENERGY CONSUMPTION (sum 6, 7 and 11) | GWh | 2 079 | 2 069 |
| 1 Total energy consumption from fossil sources: Energy consumption from fossil sources includes fossil-based energy used in Höegh Autoliners operations. This includes fuel oil, marine diesel oil, liquified natural gas (LNG), and the consumption of purchased or acquired electricity, heat, steam, and cooling derived from fossil sources. 2 Total renewable energy consumption. |
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Accounting Policies - Energy consumption and mix
Consolidation: Energy consumption data is collected, categorized by type, and reported in megawatt-hours (MWh) according to IMO guidelines for energy consumption calculations.
Total energy consumption from fossil sources: Energy consumption from fossil sources includes fossil-based energy used in Höegh Autoliners operations. This includes fuel oil, marine diesel oil, liquified natural gas (LNG), and the consumption of purchased or acquired electricity, heat, steam, and cooling derived from fossil sources.
Total energy consumption from renewable sources: Energy consumption from renewable sources represents Höegh Autoliners consumption of biofuels.
Energy intensity
Due to Höegh Autoliners’ activities being classified as a high climate impact sector (NACE code H50.2) under the Commission Delegated Regulation (EU) 2022/1288, we are presenting our energy intensity and mix below.
Energy intensity based on revenue
| Unit | 2024 | 2023 | |
|---|---|---|---|
| Energy intensity 1 | GWh/net revenue | 1.52 | 1.43 |
| Share of fossil fuel sources in energy consuption | % | 98% | 97% |
| Share of renewable energy consumption 2 | % | 2% | 3% |
| Share of consumption from nuclear sources in total energy consumption | % | 0% | 0% |
| 1 Net revenue is reported in Note 2 - Financial statement. All of Höegh Energy consumption is considered as related to high climate impact sectors. 2 The share of renewable energy consumption is a result of consumption of approximately 8,450MT of sustainable B100 biofuel. | |||
Accounting Policies - Energy intensity and mix
Consolidation: Energy intensity refers to the ratio of total energy consumption to net revenue. The net revenue used in this calculation is detailed in Note 2 of the financial statements. All energy consumption is originating from sectors with high climate impact, as per (EC) No 1893/2006 (segments significantly contributing to GHG emissions due to its activities).
Gross Scopes 1, 2, 3 and Total GHG emissions
In 2024, Höegh Autoliners’ total emissions increased by 13% compared to 2023. The increase was primarily due to increased newbuilding activity, leading to higher emissions reported as part of our scope 3 emissions compared to 2023.
Gross scopes 1, 2, 3 and total GHG emissions
| Retrospective | Milestones and target years | |||||||
|---|---|---|---|---|---|---|---|---|
| Base year (2023) | 2023 | 2024 | % 2024 /2023 | 2025 | 2030 | 2040 | Annual % target/Base year | |
| Scope 1 GHG emissions | ||||||||
| Gross Scope 1 GHG emissions (tCO2eq) | 1 103 090 | 1 103 090 | 1 114 732 | 1% | N/A | N/A | 96% | N/A |
| Percentage of Scope 1 GHG emissions from regulated emissions trading schemes (%) | N/A | N/A | 15% | 0 | N/A | N/A | N/A | N/A |
| Scope 2 GHG emissions | ||||||||
| Gross location-based Scope 2 GHG emissions (tCO2eq) | N/A | 3991 | 463 | 16% | N/A | N/A | N/A | N/A |
| Gross market-based Scope 2 GHG emissions (tCO2eq) | N/A | 4131 | 478 | 16% | N/A | N/A | N/A | N/A |
| Significant Scope 3 GHG emissions | ||||||||
| Total Gross indirect (Scope 3) GHG emissions (tCO2eq) | N/A | 728 407 | 950 364 | 23% | N/A | N/A | N/A | N/A |
| 1) Purchase goods and services | N/A | 123 990 | 107 857 | -13% | N/A | N/A | N/A | N/A |
| 2) Capital goods | N/A | 361 6801 | 598 620 | 66% | N/A | N/A | N/A | N/A |
| 3) Fuel and energy-related activities (not included in Scope 1 or Scope 2) | 240 0761 | 240 0761 | 241 265 | 0% | N/A | N/A | 90% | N/A |
| 6) Business travels | N/A | 2 661 | 2 622 | -1% | N/A | N/A | N/A | N/A |
| Total GHG emissions | ||||||||
| Total GHG emissions (location-based) (tCO2eq) | N/A | 1 831 8961 | 2 065 560 | 13% | N/A | N/A | N/A | N/A |
| Total GHG emissions (market-based) (tCO2eq) | N/A | 1 831 9101 | 2 065 574 | 13% | N/A | N/A | N/A | N/A |
| 1 Restated 2023 numbers due to improved reporting processes | ||||||||
Accounting Policies - Gross scopes 1, 2, 3 and total GHG emissions
Consolidation: Greenhouse gas (GHG) emissions information is consolidated using the control approach, where Höegh Autoliners accounts for 100% of emissions from operations under our control. Emissions reporting follows the Greenhouse Gas Protocol and relevant ISO standards, covering:
• Direct emissions from fuel combustion in our operations (Scope 1)
• Emissions related to electricity consumption (Scope 2)
• Indirect emissions throughout our value chain (Scope 3)
GHG emissions data are presented in CO2 equivalents (CO2eq) and include all operating vessels for the calendar year (January 1 to December 31, 2024). Consumption data for vessels under the ISM responsibility of the Höegh Autoliners Group is verified by the class society, adding an additional layer of quality assurance.
EMISSION CALCULATIONS:
The GHG emissions calculations use relevant emission factors related to fuel and energy consumption. These factors are in accordance with the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6, 2022), the Exiobase database, and the Third and Fourth IMO GHG Studies (2020).
Gross scope 1 emissions:
• Gross Scope 1 emissions encompass the sum of CO2, CH4, N2O, and HFC gases, all converted into CO2 equivalents. CO2, CH4 and N2O emissions are calculated based on fuel consumption. HFCs is calculated based on the reported consumption of refrigerants.
• Percentage of Scope 1 GHG emissions from regulated emissions trading schemes (%): this represents the proportion of Scope 1 GHG emissions covered by the EU Emissions Trading System (EU ETS).
Gross location-based scope 2 emissions:
• Gross location-based Scope 2 emissions include CO2 equivalents from electricity consumption in all Höegh Autoliners office locations, based on relevant location-based emission factors obtained from a third-party source. Electricity consumption in agent offices is not included in this consolidation.
Gross Scope 2 emissions – Market based:
• Gross market-based Scope 2 emissions include CO2 equivalents from electricity consumption in all Höegh Autoliners office locations, based on relevant market-based emission factors obtained from a third-party source. A residual mix factor is used, adjusted for any green certificate purchase. Electricity consumption in agent offices is not included in this consolidation.
Accounting Policies - Gross scopes 1, 2, 3 and total GHG emissions - continued
Gross Scope 3 emissions:
Gross Scope 3 Emissions include indirect emissions from Höegh Autoliners' value chain activities, both upstream and downstream. The GHG Protocol divides Scope 3 emissions into 15 categories. Based on our Scope 3 mapping, four categories are considered material, all related to upstream activities. Last year, two additional categories (5: Waste generated in operations and 7: Employee commuting) were calculated but found to be insignificant. We will continue to closely monitor and assess if additional categories should be included in our reporting going forward.
Excluded from the emissions reporting are the following categories:
• Category 4 – Upstream transportation and distribution. We do not transport nor distribute purchased products, or having third-parties to transport and distribute purchased products on our behalf.
• Category 5 - Waste generated in operations. Emissions derived from waste generated in operations were evaluated for our 2023 reporting and has for 2024 reporting been considered to be insignificant. It is therefore scoped out of the 2024 emissions reporting.
• Category 7 – Employee commuting. Emissions derived from employee commuting were evaluated for our 2023 reporting and has for 2024 reporting been considered to be insignificant. It is therefore scoped out of the 2024 emissions reporting.
• Category 8 – Upstream leased assets. Emissions from upstream leased assets are covered in scope 1 (Leased vessels), scope 3 (category 3)(Leased vessels) and scope 2 (electricity from leased office facilities).
• Category 9 – Downstream transportation and distribution. We do not produce any products requiring downstream transportation and distribution.
• Category 10 – Processing of sold products. We are not involved with selling any products.
• Category 11 – Use of sold products. We are not involved with selling any products.
• Category 12 – End-of-life treatment of sold products. This category will remain ‘not applicable’ until we report vessels sold for recycling.
• Category 13 – Downstream leased assets. We are not leasing any assets to any third parties.
• Category 14 – Franchises. We are not involved with any franchises.
• Category 15 – Investments. We are not involved with any investments.
Total GHG emissions: The total of gross Scope 1 emissions, gross Scope 2 emissions (both location-based and market-based methods), and gross Scope 3 emissions. Due to changes in GHG accounting methodologies, some 2023 figures have been restated. These changes primarily involve improved methods for estimating emissions from purchased goods and services (Scope 3, category 1), enhanced methods for estimating emissions from ship construction (Scope 3, category 1), and updated emission factors for the upstream production and distribution of fuel used in vessel operations (Scope 3, category 3).
| GHG emission intensity | Unit | 2024 |
| Total GHG emissions - location based per net revenue | 1,000 tCO2eq/USDm 1 | 1.51 |
| Total GHG emissions - market based per net revenue | 1,000 tCO2eq/USDm 1 | 1.51 |
| 1 Net revenue is reported in Note 2 - financial statements | ||
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Accounting Policies - GHG Intensity
GHG intensity: GHG intensity is calculated as the sum of gross Scope 1, Scope 2 (using the location-based approach), and Scope 3 emissions, reported as thousand tons of CO2 equivalents per USDm of net revenue. The net revenue used in this calculation is detailed in Note 2 of the financial statements.
Entity specific metric (Carbon intensity)
Höegh Autoliners’ short-term decarbonisation target is to reduce carbon intensity by more than 30% by 2030, using 2019 as the base year. To track performance against this target, we use the IMO’s Carbon Intensity Indicator (CII), specifically the “capacity gross ton distance” (cgDIST).
The base year was chosen as it represents the most recent full year with available global GHG emissions data under normal operations, externally verified through IMO DCS emission data.
In 2024, the cgDIST was measured at 4.98, down from 5.15 in 2023. This represents a reduction of approximately 10% from 2019 levels.
| Unit | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | |
| Capacity gross ton distance (cgDIST)* | Intensity | 4.98 | 5.15 | 5.13 | 5.26 | 5.07 | 5.53 |
Since 2019, we have reduced the fleet-wide carbon intensity by more than 10% primarily driven by energy efficiency measures such as technical upgrades and a more efficient trading network.
We have also started to see positive effects from the fleet transition with two Aurora class vessels entering operation in 2024. The trajectory towards 2030 is expected to be steeper over the years to come as ten newbuildings will enter operations, with the last four capable of running on ammonia.
Accounting Policies - Carbon Intensity Indicator (CII)
Carbon intensity indicator (CII): The carbon intensity is measured according to the IMO CII definition, which is the “capacity gross ton distance (cgDIST)”. It is calculated as gCO2/(GT*nm). This metric is annually validated by an external party as part of our loan agreement obligations.
Anticipated financial effects from material physical and transition risks and potential climate-related opportunities
Höegh Autoliners exercises its right, under the ESRS Phase-in allowances, to report on the anticipated financial effects from material physical and transition risks and potential climate-related opportunities, if any, from year 2.
