Annual Report2021 Euronav
Index
Key figures 4
About this report 6
Integrated report 6
Data measurement methods and assumptions 6
Assurance 7
Representation by the persons responsible for the
financial statements and for the management report 7
Shareholder letter 8
This is Euronav 12
Milestones 2021 12
Company profile 15
Where we operate 15
Shareholders diary 16
Financial calendar 2022 16
Vision and mission 17
The Euronav Group 20
Products and services 23
In-House ship management 25
Euronav ship management partners 26
How we create value 28
Company strategy 28
Innovation 30
Initiatives & partnerships 34
Stakeholder engagement 36
Activities and achievements 38
Overview of the market 38
Tanker markets 39
Fleet evolution 40
FSO and FPSO market 40
Euronav fleet 41
Overview of the year 2021 42
Events occurred after the end of the financial year
ending 31 December, 2021 47
2
Sustainability at Euronav 49
Letter from the CEO 50
Sustainability at Euronav 52
Environment 66
Social and human capital 96
Health 108
Safety 110
Our governance 116
Corporate Governance Statement 148
Special Report 188
The merits and dangers of divestment in the shipping
and energy sectors 188
Prospects for 2022 202
Fleet of the Euronav Group as of 31 December
2021 204
Owned VLCCs and V-Plus 204
VLCCs Bareboat 205
Owned Suezmax vessels 206
Owned FSO’s (Floating, Storage and Offloading) 207
Glossary 208
Annual report 2021
3
Key figures
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 2017 - 2021
(In thousands of USD)
2021
2020
2019
2018
2017
Revenue (A)
EBITDA (B)
EBIT
Net profit
419,770
85,796
(259,198)
(338,777)
1,210,341
914,711
582,582
494,882
864,019
544,268
473,238
540,668
202,966
112,230
231,513
(39,179)
(11,007)
273,451
43,579
1,383
TCE (C) year average
2021
2020
2019
2018
2017
VLCC
Suezmax
Spot Suezmax
10,273
29,721
10,157
52,902
38,644
36,579
34,834
37,747
24,119
21,827
30,481
15,784
26,405
22,131
18,002
In USD per share
2021
2020
2019
2018
2017
Number of shares (D)
201,677,981
210,193,707
216,029,171
191,994,398
158,166,534
EBITDA
EBIT
Net profit
In EUR per share
Rate of exchange
EBITDA
EBIT
Net profit
History of dividend per share
Dividend
Of which interim div. of
0.43
(1.29)
(1.68)
2021
1.1326
0.38
(1.13)
(1.48)
2021
0.09 EF
0.09
4.11
2.59
2.25
2.50
0.94
0.52
1.21
(0.20)
(0.57)
1.73
0.28
0.01
2020
2019
2018
2017
1.2271
1.1234
3.35
2.11
1.83
2020
1.40
1.40
2.23
0.84
0.46
2019
0.35
0.06
1.1450
1.05
(0.18)
(0.50)
2018
0.12
0.06
1.1993
1.44
0.23
0.01
2017
0.12
0.06
A The Company has decided to reclassify certain cost & revenue elements without impact on EBITDA, EBIT and net income.
B EBITDA (a non-IFRS measure) represents operating earnings before interest expense, income taxes and depreciation expense attributable to
us. EBITDA is presented to provide investors with meaningful additional information that management uses to monitor ongoing operating
results and evaluate trends over comparative periods. We believe that EBITDA is useful to investors as the shipping industry is capital
intensive which often brings significant cost of financing.
C Time Charter Equivalent.
D Excluding 18,346,732 shares held by the Company in 2021 (2020: 18,346,732 shares and 2019: 4,946,216 shares).
E The total gross dividend paid in relation to 2021 of USD 0.09 per share is the sum of the interim dividends paid in June 2021, September 2021,
November 2021 in addition to the proposed amount of USD 0.03 per share proposed to the Annual Shareholder's Meeting of May 19, 2022.
F Ratio is based on the actual exchange rate EUR/USD on the day of the dividend announcement if any.
4
Euronav Annual report 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2017 - 2021
(In thousands of USD)
31.12.2021
31.12.2020
31.12.2019
31.12.2018
31.12.2017
ASSETS
Non-current assets
Current assets
TOTAL ASSETS
LIABILITIES
Equity
Non-current liabilities
Current liabilities
TOTAL LIABILITIES
3,309,116
459,407
3,235,366
3,362,594
3,606,210
2,530,337
451,873
802,249
521,141
280,636
3,768,523
3,687,239
4,164,843
4,127,351
2,810,973
1,960,582
1,486,908
321,033
2,311,786
2,311,855
2,260,523
1,846,361
1,171,859
1,536,938
1,579,706
203,594
316,050
287,122
805,872
158,740
3,768,523
3,687,239
4,164,843
4,127,351
2,810,973
5
Euronav
About this
report
Integrated report
This 2021 report is the first Euronav integrated report. It is based
on the International Integrated Reporting Framework as
developed by the International Integrated Reporting Council
(IIRC). Throughout this report, we aim to provide insights
on how we create value for our stakeholders and society by
employing our corporate and sustainable strategies.
Euronav NV, its subsidiaries and joint ventures are referred to
as Euronav (or the Group) in this report. This report covers the
activities and performance of Euronav for the financial year
ended 31 December 2021 (FY2021). The report also includes
any material events that occurred after this date, up to the
date of publication.
The report outlines our corporate and sustainable strategy
and provides a baseline for measuring the progress we make
towards achieving our goals, linking with our most material
topics. Details of our material matters can be found on page
59 of this report. Detailed performance data is provided
throughout the report.
This report has been prepared in accordance with the
EU Directive on disclosure of non-financial and diversity
information. Our sustainability related disclosures have been
guided by the GRI (Global Reporting Initiative) Standards, and
SASB (Sustainability Accounting Standards Board). Euronav’s
sustainability strategy is also aligned to the United Nations’
Sustainable Development Goals (UNSDG). Further information
can be found on page 57. Euronav also disclosed information
on sustainable and responsible investments following the
Carbon Disclosure Project (CDP). The Company was guided by
EcoAct Climate Consultancy.
6
Data measurement methods and
assumptions
Euronav’s current organisational boundary for greenhouse gas
(GHG) reporting is defined based on the operational control
approach. Our reported GHG emissions data are calculated
based on the Greenhouse Gas Protocol: A Corporate
Accounting and Reporting Standard (Revised Edition).
Annual report 2021
Assurance
This report uses third party assurance in the following aspects:
• Our external auditor, KPMG Bedrijfsrevisoren- Réviseurs
d’Entreprises, provides assurance on the audited financial
results.
•
Each of our vessels’ fuel consumption and relevant activity
data have been verified by one of the following third
parties: Lloyds Register, Det Norske Veritas (DNV), American
Bureau of Shipping (ABS). These parties confirmed that
the data were collected and reported in accordance with
the methodology and processes set out in the ship’s Ship
Energy Efficiency Management Plan Part II (SEEMP Part
II) as required by Regulation 22A of Annex VI of MARPOL
Convention.
The internal audit team has maintained its continuous
oversight in the preparation of this Report to ensure that the
data provided is reliable.
Representation by the persons
responsible for the financial
statements and for the
management report
Mr Carl Steen, Chairman of the Supervisory Board, Mr Hugo De
Stoop, CEO and Mrs Lieve Logghe, CFO, hereby certify that, to
the best of their knowledge,
(a) the consolidated financial statements as of and for the
year ended 31 December 2021, which have been prepared in
accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union, give a true and fair
view of the assets, liabilities, financial position and results of
Euronav NV and the entities included in the consolidation.
(b) the integrated annual report includes a true and fair view
of the evolution of the activities, results and situation of
Euronav NV and the entities included in the consolidation, and
contains a description of the main risks and uncertainties they
may face.
7
Shareholder letter
Dear Shareholder,
In last year’s report I commented that 2020 was one of the
most unpredictable years ever seen in crude tanker markets.
However, I have to report that for 2021 crude tanker markets
arguably endured the most challenging trading conditions
for a generation. Freight rates remained under constant and
considerable pressure for much of this year, driven by three
factors. Firstly, recovery in global crude consumption was
sporadic and focused on developed world markets, with
COVID-19 restrictions periodically suppressing economic
activity. This restricted any ton-mile development. Secondly,
the global crude supply to tanker markets remained
constrained as OPEC+ production rises failed to be translated
into cargo flows until the third quarter. Lastly, it was largely
locally stored supply that was drawn down to satisfy
intermittent consumption growth, dampening further the
requirement for tonnage.
However, since the third quarter, the sequential improvement
in freight rates has come from a tapering of OPEC+ production
cuts, feeding through to cargo growth. In addition, the
consumption recovery expanded to emerging markets and
inventory levels reached a five-year low. The increased
recycling of older tonnage and rising prices for other energy
sources have boosted the relative pricing and demand for
crude. Tanker markets are therefore entering 2022 in a more
optimistic background coupled with some positive medium-
term drivers.
Competitive pricing and regular access to financing are critical
for all shipping companies. This challenge is particularly acute
for a company like Euronav, given our sole focus on the safe
transportation of crude oil. Euronav developed a new funding
source in April 2021 with a 3-year unsecured sustainability
linked revolving credit facility of EUR 80 million supported in
part by the Flemish Government. This was augmented with
a new corporate bond offering in September 2021, raising
USD 200 million at a lower coupon than our 2017 bond. This
oversubscribed placement underlines Euronav’s excellent
reputation and profile in shipping finance.
The Euronav platform remains robust,
with strong financial support and
continues to provide all stakeholders with
operational leverage to a freight rate and
tanker market recovery.”
8
Euronav Annual report 2021
in new engine technology and capability with our six
vessels currently under construction. At corporate level, our
sustainability credentials were endorsed through a number
of awards and upgraded ratings during the year. We continue
to focus our resources in this area and appointed a dedicated
Sustainability Manager who joined the group in May 2021.
The backbone of Euronav’s strategy has been to maintain
a strong capital structure with conservative leverage ratios
and sufficient liquidity. This has proved prescient to the
current challenging period of the tanker cycle. Our balance
sheet strength has allowed us to maintain such ratios. It also
permitted us to invest for the future at what we believe will be
a cyclical trough, and yet still maintain nominal cash dividend
distributions to shareholders during 2021.
Tanker market fundamentals are in a constructive phase. The
orderbook remains at 20-year lows, yet the fleet age is at 20-
year highs. Crude inventory levels are at five-year lows and will
require rebuilding with both oil supply and consumption set to
regain pre-pandemic levels during 2022. These factors should
lead into improved market conditions over the next 12 months,
with of course the caveat of future COVID-19 led restrictions
and the impact that the Russian invasion of Ukraine may have
on our markets.
The Euronav platform remains robust, with strong financial
support and continues to provide all stakeholders with
operational leverage to a freight rate and tanker market
recovery.
Yours sincerely,
Carl E. Steen
Despite the challenging trading environment Euronav has
continued to proactively invest in the future on a counter-
cyclical basis. During the first quarter we invested in eight new
eco-vessels (5 Suezmax, 3 VLCC) with Korean yards. These
ships will benefit from a Joint Development Program between
ourselves, leading engine manufacturer MAN, the largest
shipbuilder in the world, Hyundai Heavy Industries (HHI)
and classification societies Lloyd’s Register and DNV. This
collaboration will ensure that our vessels will have access to
the very latest technology upon delivery. At the time of writing,
newbuild prices are 20% higher than the purchase prices we
invested in during early 2021. This well-timed investment
represents a 15% renewal of our core fleet and will, we
believe, bring future competitive and sustainable advantage
to Euronav.
Mobility restrictions, brought into many parts of the world to
counter the spread of various COVID-19 variants, continued to
impact our shipping operations during the year. It is pleasing
to report that this disruption - when measured by overdue
crew contracts statistics - decreased considerably during 2021.
Compared to 2020, the tireless work by shipowners, industry
agencies and local regulators delivered a positive impact.
For Euronav, the number of overdue personnel per vessel
waiting more than 30 days, fell from 3.5x last year to near its
long-term normal level of 1x during 2021. The Supervisory and
Management Board would like, as always, to place on record
our gratitude and thanks to all our seafarers and operational
staff for their dedicated service during very challenging
conditions over the past 12 months.
Unfortunately, crude tanker shipping can be a dangerous
and hazardous business and severe weather conditions
exacerbate occupational risks. Tragically we lost two of our
colleagues during 2021 to an incident at sea. The thoughts and
condolences from everyone at Euronav goes to the families of
our lost colleagues.
In operational terms our commitment to sustainability in 2021
was reflected with a number of successful trials of bio-fuels on
commercial voyages. This supports our active investment
9
Euronav
10
Annual report 2021
This is
Euronav
Milestones 2021 12
Company profile 15
Where we operate 15
Shareholders diary 16
Financial calendar 2022 16
Vision and mission 17
The Euronav Group 20
Products and services 23
In-House ship management 25
Euronav ship management partners 26
Euronav
This is Euronav
Milestones 2021
11 January 2021
Euronav became a signatory
of the ‘Neptune Declaration
on Seafarer Wellbeing and
Crew Change’.
24 February 2021
Euronav held its second virtual naming ceremony for the
inauguration of Doris and Dickens.
27 January 2021
Euronav was included in the Bloomberg Gender-Equality
Index (“GEI”) for the fourth consecutive year and managed to
improve its score.
3 February 2021
Euronav entered into an agreement for the acquisition through
resale of two eco-Suezmax newbuilding contracts.
1 March 2021
Euronav became a member
Anti-
the Maritime
of
Corruption Network.
12 April 2021
Euronav signed an EUR 80 million unsecured sustainability
linked revolving credit facility.
22 April 2021
Euronav entered into an agreement for the acquisition through
resale of two VLCC newbuilding contracts (with the option to
add a third).
7 June 2021
The Suezmax Filikon (2002 – 149,989 dwt) was sold for USD
16.3 million and delivered to her new owners on June 4th.
23 February 2021
Euronav has entered into a sale and leaseback agreement for
the VLCC Newton (2009 – 307,284 dwt).
6 July 2021
Euronav announced a Joint Development Program to help
accelerate the development of dual fuel Ammonia (NH3) fitted
VLCC and Suezmax vessels.
12
Annual report 2021
6 July 2021
Euronav confirmed that it has entered into new contracts for
the construction of 3 Suezmax newbuildings and that it had
lifted the option to build a third VLCC.
7 October 2021
Euronav successfully completed a B30 biofuel test on the
Suezmax Statia (2006 – 150,205 dwt).
2 September 2021
Euronav Luxembourg S.A., a wholly owned subsidiary of
Euronav NV, announced a successful placement of USD 200
million senior unsecured bonds.
28 September 2021
Euronav became a signatory of the ‘Call to Action for Shipping
Decarbonization’.
18 November 2021
Euronav successfully concluded a four month trial of a B50
biofuel blend on the Suezmax Marlin Sardinia (2019 – 156,607
dwt).
9 December 2021
Euronav was awarded a B score for
taking coordinated action on climate
issues by the Carbon Disclosure Project
(CDP).
14 December 2021
Euronav held its third virtual naming ceremony to welcome
Cedar and Cypress.
13
Webber
Research ESG
Scorecard 2021
Sustainability
27 %
reduction in carbon emission
intensity from 2008
$ 73.5 M & 80 M
sustainable linked loan
CDP
B-rating
2021
Bloomberg Gender-
Equality Index
Operational excellence
Euronav’s financing
0.40
41 %
with integrated
sustainability
component
lost-time Incident Frequency Rate
81
number of female
seafarers
162
female company wide
Company
3,194
seafarers
200
shore personnel
30/17
nationalities offshore/onshore
2
V-Plus
41
VLCC
27
Suezmax
2
FSO
Financial (in thousands of USD)
78
total number of vessels
1,943
port calls
18,313,560
deadweight tonnage
25,952
operating days
63
countries visited
9.64
fleet age
(compared to global tanker average)
4,560,945
total nautical
miles travelled
78,994,537
metric tonnes
safely delivered
1,960,582
equity attribute to equity
holders of the corporation
419,770
Revenue
259,198
EBIT
85,796
EBITDA
3,768,523
total assets
-1.68
loss/gain per share
0.09
dividends
per share
Company profile
in Belgium,
Euronav is a market leader in the transportation of crude
oil. As the world’s largest, independent quoted crude tanker
platform, on 31 March 2022, Euronav owns and manages
a fleet of 72 vessels (see Euronav fleet p 41). The company,
in Antwerp.
incorporated
Worldwide Euronav employs approximately 200 permanent
personnel on shore and has offices throughout Europe and
Asia. Around 3,200 people work on the vessels. Euronav has
progressed from a family operation with 17 vessels, to a strong
international player listed on Euronext Brussels and on the
NYSE under the symbol ‘EURN’.
is headquartered
The need to operate a safe and reliable fleet has never been
more crucial and it is the most important strategic objective
for the Company. Euronav aims to be an efficient organisation
and strives to deliver the highest quality and best possible
service to its customers.
Annual report 2021
Euronav has a long-term strategy through-cycle-profitability by
adapting its balance sheet leverage and liquidity position in
accordance with the sources of its revenues which can be fixed
(long-term FSO Income and/or TC portfolio) or floating (pool
and spot) revenues. Sustainability is a core value at Euronav
as it ensures the long-term health and success of our people,
our business and the environment we work in. It involves a
commitment to safety and environmental protection practices,
as well as an innovative approach to the use of technology and
information.
By employing officers who graduated from the most reputable
maritime academies in the world, on board a modern fleet,
Euronav aims to operate in the top end of the market. The
skills of its directly employed seagoing officers and shore
based captains and engineers give a competitive edge in the
maintenance, as well as in the operations and delivery of
offshore projects.
3,768,523
-1.68
0.09
Where we operate
15
Euronav
Shareholders diary
Financial calendar 2022
12 May 2022
Announcement of first quarter results 2022
9 August 2022
Half year report 2022 available on website
19 May 2022
Annual General Meeting of Shareholders
27 October 2022
Announcement of third quarter results 2022
04 August 2022
Announcement of second quarter results 2022
02 February 2023
Announcement of fourth quarter results 2022
The Euronav share
Figure 1: Share price evolution USD 2021
Figure 2: Daily volume traded shares 2021
16
Annual report 2021
Vision and mission
Vision
For our shareholders and capital providers
•
•
•
To lead the global crude oil tanker industry responsibly.
To seize every opportunity to reshape our industry in an
era of unprecedented changes.
To create significant
long-term value by strategically
planning financial and investment decisions while efficiently,
consistently and transparently acting as good stewards of
capital.
To promote and support sustainable programs
minimising the environmental impact of our industry.
in
For our employees
Mission
For our society
To deliver an essential source of energy in ways that are
economically, socially and environmentally viable now and in
the future.
For our clients
To operate in a manner that contributes to the success of their
business objectives by providing flexible, global, high-quality
and reliable services.
To attract, inspire and enable talented, hard-working people
to develop themselves in order to contribute to our business
and its vision in a challenging and rewarding environment.
Our culture, ethics and values.
Euronav is an integrated shipping services provider with high
quality standards and ambitious goals. To empower its people
to meet these challenges, Euronav’s identity is characterised
by:
17
Euronav
18
• Common values with local authority to act;
• High involvement and flexibility in which much of the
work is carried out by cross-functional, cross-branch, self-
directed teams;
• Clarity in roles, expectations and authorities;
• Professional growth and development opportunities
aligned with business needs;
• Quality and professionalism in matters large and small;
• Communication and culture cultivated by example.
We encourage social responsibility and have values of fairness
and responsibility embedded in our operating ethos. We are
an equal opportunity employer. People are selected, rewarded
and advanced based on performance and merit. We act to fully
comply with all applicable laws and regulations in the markets
in which we operate. Euronav strives to be an exemplary
employer among its peers and participates in forums for an
open exchange of best practices.
Values
Undeniably, a good company culture needs a common
language that allows their employees to truly understand each
other and how to behave in the business. At Euronav, the six
core values were defined together with the employees. Divided
in teams, the employees received 3 questions to work on:
1.
In which values you recognize yourself.
2. Which are the values that define the business today.
3. Which are the values you think should define the business
today and in the future.
Together as a team at Euronav we discussed, grouped and fine-
tuned those six values.
During 2021, we have assigned concrete behaviours to each
of the above values. These describe the way we do business,
how we interact with each other and how we work together
at Euronav in order to grow as a company and as individuals.
The ultimate goal of our core values is to align our organisation’s
actions and attitudes towards internal as well as external
stakeholders in such a way that we can successfully execute
our corporate strategy and realise our corporate objectives.
Annual report 2021
Integrity
Excellence
Cooperation
Inspiring
Adaptability
Sustainability
The behaviours of our 6 core values are the following:
4.
1.
Integrity: to be transparent and to communicate in an
open and clear way, to be honest, to treat each other
with respect, to be discrete with confidential or sensitive
information, to take responsibility for decisions, actions
and to show consistency between words and action.
2. Excellence: to thrive for perfection, to withstand adversity
and bounce back from difficult situations, who take
initiative and ownership.
3. Cooperation:
to work
together within and across
department, improving the collaboration between ship
and shore, actively contributing and informing others to
achieve company goals, communicating in an open way
and take into account the opinion of others.
Inspiring: to promote and carry out the vision and mission
of the organization both internally and externally, to
understand how the department strategy fits into the
global strategy and to remain curious, never stop learning
and to anticipate the challenges of tomorrow.
5. Adaptability: adapt to constantly changing circumstances,
to focus on improvement and initiate proposals for change,
to be flexible and to respond quickly and appropriately to
change.
6. Sustainability: to think about the wider impact of the
actions taken on society, the environment, and the
company.
19
The Euronav Group
Figure 3: Current structure of the Euronav Group
20
Euronav Annual report 2021
Euronav Ship Management SAS
Euronav Ship Management SAS, with the head office in Nantes,
France, and a branch office in Antwerp, Belgium, is besides
the traditional shipping activities responsible for Euronav’s
offshore projects and the management of vessels for the
offshore industry. That includes tender projects, conversion
works, as well as performing the management of these vessels,
including crewing, technical procurement, accounting and
quality. The Nantes office and the Antwerp office also provide
crew management for Euronav’s trading oil tankers.
Euronav Ship Management Hellas Ltd.
Euronav Ship Management (Hellas) Ltd., was established in
2005 in Piraeus, Greece, and moved to offices in the centre of
Athens in 2017. It is a branch office of a fully owned subsidiary
of Euronav NV that engages in the ship management of the
ocean-going oil tankers of Euronav and the supervision of the
construction of newbuildings. Ship management includes
crewing, technical support, procurement, accounting, health,
safety, environmental protection and quality assurance, legal
advice, claims handling support, as well as fleet IT support.
Euronav (UK) Agencies Ltd. & Euronav NV,
London branch
Located in the heart of London, Euronav (UK) Agencies Ltd.
used to host the commercial agency of the Euronav Group.
Having a London presence enables Euronav to work closely
international
with the major London-based clients and
brokering houses. Since 2020, most commercial activities are
organised through a newly established London-based branch
office of Euronav NV.
Euronav Hong Kong Ltd.
Euronav Hong Kong Ltd. is the holding company of three wholly
owned subsidiaries and four 50% joint venture companies
(one of which is in process of winding up). The wholly owned
subsidiaries that fall under Euronav Hong Kong Ltd. are
Euronav Ship Management (Hellas) Ltd. (see short summary
above), Euronav Singapore Pte. Ltd. and E.S.M.C. Euro-Ocean
Ship Management (Cyprus) Ltd., a ship management company
that handles the crew management of the FSOs. Since 30 June
2020, Euronav Luxembourg SA is no longer a subsidiary of
Euronav Hong Kong Ltd., but wholly owned by Euronav NV.
21
Euronav
TI Asia Ltd. and TI Africa Ltd., 50% joint venture companies
with a company which belongs to the International Seaways
(INSW) group, are the owners of respectively the FSO Asia and
FSO Africa, both currently employed at the Al Shaheen field
offshore Qatar. The 50% joint venture company Kingswood
Co. Ltd., with a company which belonged to the Oak Maritime
Group, fully owned Seven Seas Shipping Ltd., which following
the termination of the relevant joint venture, sold the VLCC to
Euronav NV in 2018. Meanwhile both Kingswood Co. Ltd. and
Seven Seas Shipping Ltd. are dissolved as of 15 May 2020.
In November 2019 two joint venture agreements were signed
with Ridgetuf LLC resulting in the two 50% joint venture
companies Bari Shipholding Limited (owner of the Suezmax
Bari) and Bastia Shipholding Limited (owner of the Suezmax
Bastia). On 30 September 2020 the Suezmax Bastia was
successfully sold and delivered to the third party buyers,
Messrs. Seven Island Shipping Limited.
Euronav Shipping NV
Following the acquisition of 15 VLCCs in January 2014, Euronav
Shipping NV and Euronav Tankers NV were incorporated as
subsidiaries of Euronav NV, in January and February 2014
respectively. The Euronav Group gradually centralised its ship
management activities within Euronav Shipping NV. Over the
course of 2019, the two French subsidiaries Euronav SAS and
Euronav Ship Management SAS (including its Antwerp Branch),
as well as the Hong Kong subsidiary Euronav Hong Kong Ltd.
were transferred to Euronav Shipping NV. With the purpose
of further simplifying and standardising the group structure,
Euronav Shipping NV and Euronav Tankers NV merged with
effective date 1 July 2021, with Euronav Shipping NV being the
surviving corporation.
22
Euronav MI II Inc.
In the fourth quarter of 2017, Euronav NV incorporated a
new wholly-owned subsidiary, Euronav MI Inc., a company
incorporated and existing under the laws of the Republic of
the Marshall Islands, for the purposes of the upcoming merger
(the ‘Merger’) with Gener8 Maritime Inc. (‘Gener8’). Pursuant
to the merger agreement entered into between Euronav and
Gener8 on 20 December 2017, Euronav MI Inc. merged with
and into Gener8 upon closing of the Merger on 12 June 2018,
with Gener8 being the surviving corporation wholly owned
by Euronav NV. At the same time, the name of the surviving
corporation was changed into Euronav MI II Inc.
As the ultimate parent company of the Gener8 group prior to
the closing of the Merger, Euronav MI II Inc. still owns certain
direct and indirect subsidiaries, most of which served as special
purpose ship-owning companies within the Gener8 group.
Following the sale of the assets held by them (to Euronav NV
or, in case of non-core assets, to third party buyers) Euronav is
in the process of simplifying the group’s corporate structure by
liquidating the said subsidiaries.
Tankers UK Agencies Ltd. (TI Pool)
In 2017 the corporate structure of ‘Tankers International Pool’
(TI Pool) was rationalised. Under the new structure, the shares
of Tankers UK Agencies Ltd. (TUKA), fully held at the time by
Tankers International LLC (TI LLC), an entity incorporated
under the laws of the Marshall Islands, have been distributed
to the two remaining founding members of the TI Pool (namely
Euronav NV and International Seaways Inc), to form a 50-50
joint venture.
Additionally, a new company, Tankers International Ltd. (TIL),
was incorporated under the laws of the United Kingdom,
and is now fully owned by TUKA. TIL became the disponent
owner of all of the vessels in the TI Pool, as all the vessels are
now time chartered to TIL at a floating rate equivalent to the
average spot rate achieved by the pool multiplied by the pool
point assigned to each vessel. This new structure allowed the
TI Pool to arrange for a credit line financing in order to lower
the working capital requirement for the Pool participants
which potentially can attract additional pool participants.
Euronav NV, Antwerp, Geneva Branch
In April 2019 Euronav NV established a branch office in Geneva
(Switzerland), Euronav NV, Antwerp, Geneva Branch. This new
branch office was set up in anticipation of the coming into
force of IMO 2020 and focuses on procurement of compliant
fuel and related services.
Products and services
Tanker Shipping
Euronav is a vertically integrated owner, operator and manager,
able to provide complete shipping services in addition to
the carriage of crude oil on its fleet of modern large tankers.
The crude oil seaborne transportation market is cyclical and
highly volatile, requiring flexible and proactive management
of assets in terms of fleet composition and employment. On 31
March 2022 the Euronav core fleet (owned and operated) has
an average age of 9.6. years. Euronav operates its fleet both on
the spot and the period market.
VLCC Fleet
The Tanker International (TI) Pool
Euronav is a founding member of the TI Pool, which
commenced operation in January 2000. The TI Pool was
established by Euronav and other leading tanker companies to
meet the global transportation requirements of international
oil companies and other major charterers. The TI Pool
operates one of the largest modern fleets available in the
world. 40 Euronav VLCCs participated in the pool on 31 March
2022. Euronav’s entire owned VLCC fleet flies Belgian, Greek,
French, Liberian and Marshall Islands flag.
By participating in a pool, Euronav and its customers benefit
from the economies of scale inherent to such an arrangement.
Furthermore, the TI Pool has been able to enhance vessel
earnings by improved utilisation (increased proportion of
laden days versus ballast days) through use of combination
voyages, contracts of affreightment and other efficiencies
facilitated by the size and quality of its modern VLCC fleet. By
operating together, the TI Pool always aims to have a modern
high quality VLCC available in the right place at the right time.
Suezmax Fleet
Euronav’s 100% owned Suezmax fleet flies the Belgian, Greek
and Liberian Flags. Its vessel in 50%-50% joint venture is
registered under the flag of the Marshall Islands. The use of
a national flag, together with operational and maintenance
standards in terms of age and performance that are higher
than the industry norm, enables Euronav to employ part of its
fleet on time charter. Euronav’s strategy to employ a part of its
Suezmax fleet on long-term time charter allows the Company
to benefit from a secure, steady and visible flow of income.
Another part of the Suezmax fleet is traded on the spot market.
On 31 March 2022 Euronav owns 25 Suezmaxes (with three
Annual report 2021
Figure 4: Average age profile of our fleet
> 5 years old
5-10 years old
10-15 years old
15+ years old
additional newbuildings that will be delivered in Q1 2023 and
Q1 2024) and currently employs 27 Suezmax vessels, of which
21 are traded in the spot market.
FSO and FPSO market
FSO’s are floating storage and offloading units for areas where
the offshore production platforms have no or insufficient
storage capabilities (fixed platform, MOPU, SPARr, TLP, semi-
sub), and no pipeline infrastructure to the shore or another
terminal. They are ideal because of their very large storage
capacity and ability to be moored in almost any water depth.
With no process topsides (as with FPSO’s), they are relatively
simple to convert.
An FPSO is a floating production system that receives fluids
(crude oil, water,…) from a subsea reservoir through risers,
which then separate fluids into crude oil, natural gas, water and
impurities within the topsides production facilities onboard.
Crude oil stored in the storage tanks of the F(P)SO is offloaded
onto tankers to go to market or for further refining onshore.
FSO’s provide field storage (ranging from 60,000 to 3 million
barrels) and offloading in a variety of situations. Most of them
store oil although there are a few LPG or LNG FSOs.
23
37%0%33%30%7%51%30%12% The cost of a converted FSO ranges from USD 30 million to USD
200 million, depending on the size, field location, mooring and
design life. A newbuild FSO can range from USD 100 million to
USD 300 million.
There is an established market for leasing FSOs, which can
help commercialise remote or marginal fields. The offshore
industry is a highly technical one with many risk factors but
with an equally high reward.
Euronav’s initial exposure to the FSO market was with VLCC
deployments in the Gulf and in West Africa back in 1998.
Euronav started engaging in the Maersk Oil Qatar (MOQ)
project because of the specific assets that it owned in joint
venture with International Seaways Inc. (INSW): two of the only
four V-Plus vessels (also known as ULCCs - Ultra Large Crude
Carriers) that exist in the world, the TI Asia (which belonged to
Euronav) and the TI Africa (which belonged to OSG, but now
to INSW). In 2017 the field operations of Al-Shaheen (Qatar)
were transferred from MOQ to NOC (North Oil Company – see
below) and the FSO contracts were extended until 2032.
In November 2020, Euronav's joint venture with International
Seaways signed a ten year contract extension for the FSO
Asia and FSO Africa. This is a direct continuation of their
current contractual service with North Oil Company (NOC),
the operator of the Al-Shaheen oil field since 2017, whose
shareholders are Qatar Petroleum Oil & Gas Limited and Total
E&P Golfe Limited. The extended FSO contracts now run until
21 July 2032 and 21 September 2032 respectively.
The FSO Africa and FSO Asia are both high specification and
long duration assets. Both units started service at the Al-
Shaheen field in 2010 with a potential service life (without
major modifications) to 2042.
logistical
Offshore units are unique because of their
requirements and additional engineering of the designing,
transporting, installing and operating facilities in the remote
offshore environment as opposed to onshore production or
storage plants. Each unit is specifically designed for the field's
environmental and geological characteristics.
Al Shaheen crude oil is exported from a Single Buoy Mooring
(SBM) system, which can be seen on figure 5, and stored in the
FSO Africa and FSO Asia.
Buoy Mooring FSO AFRICA and FSO ASIA
Europe and Oceania (both fully owned by Euronav) are the
only two remaining unconverted V-Plus vessels worldwide.
Euronav strongly believes that the long-term employment
of these, not yet converted units, lies in the offshore market.
Most of the new oil field discoveries are made offshore and
many of them are gigantic oil fields (Brazil, West Africa,
Australia) which should require very large FSOs. Euronav
therefore believes that there will be a demand for these
units by offshore field operators.
Figure 5: Buoy Mooring System
Source: Marine Insight - Image credits: riverlakesolutions.com
Euronav Annual report 2021
In-House ship management
The majority of the fleet is managed by three wholly-owned
subsidiaries: Euronav Ship Management SAS, Euronav SAS
and Euronav Ship Management (Hellas) Ltd.. Euronav has also
established an office in Singapore, Euronav Singapore Pte Ltd.,
to enhance the support of services offered to the vessels that
frequently call at Asian ports.
training and development, encouraging
Euronav practices genuine performance planning and
appraisal,
the
promotion from within, whilst also offering opportunities to
competent professionals to join the Company. Its policies aim
to enhance and reward performance, engage its people and
attract and retain key talent.
Euronav’ s personnel
includes seagoing officers, crew,
shore-based staff, skilled and experienced captains and
marine engineers, as well as maritime university and college
graduates. This gives the Company a competitive edge in high
quality maintenance and operation of the vessels, as well as
project development and execution.
Euronav manages the vast majority of its fleet of modern crude
oil carriers in-house, ranging from Suezmax to Very Large and
V-Plus (also known as Ultra Large Crude Oil Carriers) and
FSO (Floating Storage and Offloading). Euronav’s fleet trades
worldwide in some of the most difficult weather conditions
and sea states, such as the North Atlantic and East Canada,
and for charterers with the strictest requirements. The vessels
are equipped with sophisticated management software
and communication systems that enhance the vessel and
shore team collaboration. The vessel’s crews are in constant
interaction with the shore staff through regular onboard visits,
briefing and debriefing discussions upon signing on and off,
conferences ashore and onboard, and training sessions.
The ships broadband satellite communication
facilities
provide internet connectivity which offers the opportunity
for live communication with the shore staff at any time.
The management team, superintendents,
internal and
external shipping auditors, customers, as well as national
and international regulatory bodies assess vessel and crew
performance. Euronav has excellent relations with all oil
majors. The organisation, and the vessels, have successfully
passed numerous internal and external audits, oil major
Tanker Management and Self-Assessment (TMSA) reviews and
vetting inspections, as well as port state control inspections.
All our services are provided with the ultimate regard for the
health, safety, security, environmental and quality standards
applicable to the maritime transportation industry. Euronav is
committed to and aims for safety, environmental protection,
security and excellence of the fleet’s operations. We are
devoted to a culture of teamwork where people work together
along with defined duties and responsibilities for the overall
success of the Company, on shore and at sea.
Euronav maintains an integrated ship management approach
with the following qualities:
• Proven experience in managing oil tankers;
•
Experienced officers and crews with professional
credentials;
• Professional relations based on merit and trust;
• Commitment to improving the quality of life at sea and
crew wellbeing;
•
Safety and quality assurance including training, auditing
and vetting;
• Design and maintenance standards for increased safety
and operational performance as well as asset value;
• Modern and effective computer-based management and
training systems;
• Human resources policies with an emphasis on people
working together for common goals;
• Hands-on technical management backed by the latest
software platforms and communication systems;
• Commitment to long-term asset protection and upgrade;
• Open communication and transparency in reporting.
Full range of services
The Euronav Group provides a full range of ship management
services:
•
•
Full technical management;
Fleet personnel comprising experienced motivated
officers and crew;
• Comprehensive integrated health, safety, quality and
environmental protection management system; certified
for ISM, ISO 9001, 14001, 45001, 50001;
25
•
Insurance claims handling;
• Global sourcing of bunkering, equipment and services for
optimum synergies, pricing and quality;
•
Financial, information technology, human resources and
legal services to support the Group’s assets’ values and
operations;
• Project management for:
– Newbuilding supervision, including pre- and post-
Euronav utilises a set of clearly defined leading and lagging
Key Performance Indicators (KPIs) for its ship management
services as well as standardised inspection reports which are
thoroughly evaluated to facilitate the measurement of:
• Health & Safety performance;
•
•
Environmental performance;
Security (including Cybersecurity) performance;
contract consultancy and technical support;
• Crew and shore staff retention and well-being;
– FSO conversions;
– Dry-dockings, retrofits and upgrade of assets for
compliance with new rules and regulations and/or
improved operational efficiency;
• Commercial management;
• Operational (post- fixture) management.
•
IT & Innovation solutions;
• Navigation performance;
•
•
•
Vessel reliability;
Vessel energy efficiency;
Vetting and port state controls;
• Planned and condition-based maintenance;
• Dry-docking planning, upgrades and repairs ;
• Procurement efficiency;
• Operational competitiveness;
Quarterly management review meetings, bi-monthly table
top exercises, monthly safety and environmental protection
meetings, bi-weekly management coordination meetings and
weekly fleet management coordination meetings monitor the
trends and set the course of action.
Euronav ship management
partners
In addition to the in-house managed fleet, Euronav maintains
close relations and cooperation with high quality external ship
managers that manage part of the fleet. A dedicated Euronav
team is managing the relationship and ensures that the
services rendered to Euronav vessels are in accordance with
Euronav standards. The relationship offers opportunities for
interaction and sharing of experience between the Euronav
Ship Management and Ship Management partners, while at
the same time providing flexibility for potential expansion.
26
Euronav Annual report 2021
How we
create value
Company strategy 28
Innovation 30
Initiatives & partnerships 34
Stakeholder engagement 36
Activities and achievements 38
Overview of the market 38
Tanker markets 39
Fleet evolution 40
FSO and FPSO market 40
Euronav fleet 41
Overview of the year 2021 42
Events occurred after the end of the
financial year ending 31 December, 2021 47
27
Euronav
How we create value
Company strategy
The aim of our company strategy is to pursue long-term value creation and alignment with the core purpose and values of
Euronav, taking into consideration the interests of all stakeholders. There are four key pillars supporting the execution and
implementation of our strategy.
28
Annual report 2021
Governance
Operational expertise
The Supervisory Board is the ultimate supervisory body of
the Company. It is responsible for the general policy and
strategy of the Company and has the power to perform
all acts that are exclusively reserved to it by the Code of
Companies and Associations. The Supervisory Board drafts
all reports and proposals in accordance with books 12 and 14
of the Code of Companies and Associations. It supervises the
Management Board in making decisions related to the day-
to-day management of the Company. Euronav believes that
strong governance standards are key to driving the delivery
of shareholder value. Both Supervisory and Management
boards apply the highest standards of ethics, diversity and
governance.
Financial strength
Euronav operates in a deeply cyclical industry. There are many
macro factors beyond our control, such as a fragmented supply
side and around 20 to 30 customers for our commoditised
service. Consequently, the Company manages its balance
sheet in a very conservative manner. We apply what we call a
liquidity runway of two years to our balance sheet. This means
that we have sufficient or adequate liquidity to manage our
business through two years of sustained low freight rates.
Within our financial structure we also have a self-imposed
limit of 50% maximum leverage on a loan to value basis. Our
capital allocation strategy is to invest during the cycle where
possible on a counter cyclical basis as per figure 6. Net Income
derived from our asset base during the cycle is distributed
each quarter as a dividend or share buy back with a minimum
of USD 12 cents per share per annum, given the fixed income
contribution from assets such as the FSO.
integrated approach
Euronav adopts an
the
management of our fleet. Whilst we outsource around
12% of our fleet management we keep the majority of this
management in house. Ship management is operated out of
our Athens office.
towards
Sustainability
Sustainability is a core value at Euronav as it ensures the long-
term health and success of our people, our business and the
environment we work in. It involves a commitment to safety
and sound environmental practices, as well as an innovative
approach to the use of technology and information. In short,
Sustainability is part of Euronav’s DNA. In 2005 we set our
company motto as “the ocean is our environment”. With the
accelerating forces of a global energy transition this motto
and application of sustainability across all facets of our tanker
business has never been more important.
In the eyes of management at Euronav, sustainability
does not just mean operating the business to the highest
ethical standards possible with a strong focus also on
decarbonisation. When a business model disproportionately
places the focus on non-financial management it is not
credible as a going concern. It is not therefore financially viable
and will be of little use to its customers or stakeholders, We
pride ourselves on managing our operations on a sustainable
basis and increasingly within the guidelines or frameworks set
by initiatives such as the Poseidon Principles.
29
Figure 6: Managing through the cycle
Innovation
Approach
As a market leader, we see it as our role to be a pioneer in
the maritime industry, being innovative in every facet of
our business. One of our underlying drivers is to become a
frontrunner in leveraging digitalisation, while improving the
Company’s way of working.
Digitalisation and innovation are at the heart of Euronav’s
company strategy and ensure our future relevance and
competitiveness.
As a market leader in our segment, we acknowledge our
responsibility to support innovation towards decarbonising
the transportation of oil, while protecting and building value
with the capital our shareholders have entrusted us with.
Innovation is also the bedrock of our fleet management,
with investments in the latest technologies and the ordering
of eco-vessels, driving improvements to meet our ambitious
emissions targets for the next five years.
Euronav has its own IT Innovation team that, with the support
of carefully selected external partners, strives for excellence
and top-notch innovative solutions. In recent years, several
projects were launched within the organisation, both on-
board our vessels and in the Euronav offices.
FAST
The best example of such a company-wide, close cooperation
is the Fleet Automatic Statistics and Tracking or “FAST” project.
FAST is an ambitious and innovative digitalisation project.
It enables us to take the next step towards improved fleet
performance and fuel efficiency by utilising real-time sensor
data and improving communication and collaboration between
ships and shore. We essentially turn our vessels into ‘smart’
vessels.
FAST is a centralised, cloud-based platform integrated across
our vessels and shore offices, receiving sensor data on board
and instantly showing the condition and performance of vessels
to teams at sea and on shore. The sensor data and resulting
analytics improve efficiency, enable more collaboration between
vessel and shore, reduce operational costs, and increase energy
savings to realise our decarbonisation targets.
Our teams can validate the data where needed, access raw
data for deeper analysis, and combine this with additional
information and events for a further enriched view. This will
help us improve overall fleet performance by developing and
sharing advanced insights and move our business – and entire
industry - forward into more data-driven decision making.
For the FAST platform to work the vessels need to be digitally
standardised. They all in some degree need to have new data
collectors, an extension of the number of sensors on board,
new IT infrastructure and security. Installation of hardware
30
Euronav Annual report 2021
Our teams are developing AI models (Artificial Intelligence) and
in-depth analysis on the performance of our main engines,
auxiliary engines and boilers, and are comparing performance
between sister vessels and even other vessels over time.
As the project has progressed, Masters and shore staff have
suggested many additional functionalities which offer tangible,
traceable benefits which we intend to incorporate into the
system during 2022. In addition, we plan to further develop on
“Voyage Optimisation” projects, fuel and lube oil consumption
monitoring and technical performance dashboards (KPI’s) with
a clear return on investment over the next few years.
We hope that COVID restrictions will be lifted soon and that
we can deploy FAST across all remaining vessels in 2022.
began in 2020 but was interrupted by COVID-19. The global
pandemic delayed the implementation of the hardware on
our vessels as our IT personnel could not travel to dry-docks
or go on board. Consequently, much of the roll-out was
done remotely, and our time frame was affected. At the time
of publication of this report 26 vessels are live with the new
platform.
On completion of the project, the FAST platform will provide:
•
Real time fleet overview;
• Historical data;
• Multiple dashboards ;
•
•
Smart alerts and notifications;
Improved (smart) onboard reporting;
The platform is developed by a large team with a wide variety of
competencies, consisting of Euronav’s Fleet IT working together
with Euronav’s technical, HSQE and operations departments, as
well as external IT partners that are experts in their field, Subject
Matter Experts and FAST ambassadors. These ambassadors
are Masters, Chief Engineers and Senior Officers of Euronav
that provide valuable insights for the design and development
of FAST that will ultimately contribute to change management
and real adoption.
31
Figure 7: FAST dashboard
32
Euronav Annual report 2021
our competitors and all possible solutions in the market, we
decided to deploy label printers and mobile smartphone/
scanners on the vessels. This allowed the crew to:
a. print and attach QR codes spares as they are received ; and
b. at any time easily find a spare in the database by scanning
the QR code, for stocktaking or recording where spares are
used during maintenance;
We have made a lot of progress since the launch in February
2020 of IMIP. Currently all 57 in-house managed vessels are
included into IMIP. On 31 March 2022, thanks to the hard work
of our seafarers, 32 out of our 57 in-house managed vessels
have already completed the clean-up process.
We can already see the impact of IMIP by looking at the
inventory value. The value identified for the completed, and
the ongoing vessels’ executing inventory clean-up activity
(i.e. identifying in each warehouse location the actual ROBs),
amounts to 14.6 MUSD spares onboard, that previously
have not been registered in the inventory system. Inventory
management is complemented by frequent training and also
closely monitored by tailor-made dashboards.
Robotics Process Automation
In 2020 we launched our first Robotics Process Automation
(RPA) projects. RPA is a software technology in which software
robots are programmed that automate repetitive actions.
Many RPA processes currently operate with minimum oversight
and administration and deliver valuable assistance to shore
employees as well as Captains on board. They also carry out
mundane and repetitive IT tasks that were previously time
consuming and caused frustration. RPA has contributed to
FTE savings and streamlining procedures in the Procurement,
Accounting and Crew departments. Current automations
include updating airway bills, auto-validation of scanned
invoices, auto-creation of Requests-for-Quote and Purchase
Orders, auto-creation of lubricants requisitions, and more.
In 2022, we will continue to explore RPA opportunities as
increasing awareness of their benefits spreads across all
departments.
Inventory Management Project
Inventory management is a cumbersome, yet crucial task on
board ships. It is key from both an operational and a financial
perspective to have a correctly updated inventory and control
of what the vessels have on board as spare parts.
The Inventory Management Project (IMIP) is fully supported by
new technologies. After carefully analysing the choices of
33
Euronav
34
Initiatives & partnerships
Plug and play
In April 2021 Plug and Play, the world’s largest innovation
platform, announced the launch of their first maritime open
innovation platform in Antwerp, together with five founding
partners: Euronav, City of Antwerp, CMB, DXC Technology, and
Port of Antwerp. Plug and Play Maritime aims to nurture an
innovative start-up ecosystem centred around the seafaring
sector. The purpose of the program is to connect international
start-ups with the Founding Partners to pilot their technologies
and drive the future of maritime as world-class leaders of R&D
and innovation. Plug and Play Maritime will be situated at the
pre-campus of Maritime Campus Antwerp.
CEO Hugo De Stoop
“This is at the heart of our
sustainability program to
ensure our future relevance and
competitiveness. Engaging in
innovative ecosystems such as
that of Plug and Play, together with
the founding partners, is critical to
achieve our long-term ambitions. The
Plug and Play platform will enable us
to leverage our R&D capabilities and
set up structural collaborations with
start-ups and the wider ecosystem to
drive mutual growth and benefits. We
must invest in new technologies to
further digitalise our industry but also
to make shipping cleaner and more
efficient.”
To officially kick-start the program, Plug and Play set-up a
virtual event in June 2021. Attendees received an overview of
Plug and Play’s activities and were introduced to the Founding
Partners. In the introduction to a panel discussion on “The
Future of Maritime” between representatives of the Founding
Partners, Hugo De Stoop shared his vision and mission to make
Euronav a forerunner for innovation in shipping. Participants
also had an opportunity to get to know some start-ups, who
showcased a range of solutions ranging from clean fuels and
energy, to Big Data and the Internet of Things, future logistics,
efficient Shipping, autonomous vessels and sensors.
Annual report 2021
Following the official launch in June 2021, Euronav and
the other Founding partners continued their Plug and Play
Maritime journey with a 12-week open innovation program,
which is run twice a year.
The open innovation program is the basis of Plug and Play
Maritime. Each program welcomes more than 20 selected
international start-ups that are addressing the specific
technological needs of the Founding Partners. The objective
is to have start-ups and businesses units of the partners work
together on pilots and proof of concepts, leading towards
production-ready implementations. The goal is to have at least
one joint project completed for each startup, to be showcased
at the EXPO Day, the final event at the end of each program.
The Plug and Play (PnP) Maritime Selection Day and official
Kick-off event took place on October 6th 2021. In the run-up to
this event, Euronav worked closely together with PnP Maritime
to review numerous tech companies and their solutions. The
purpose of the selection day was to grade the start-ups and
define which ones we believed could be interesting, after
further investigation, to initiate a pilot project with.
Maritime Campus Antwerp (MCA)
Euronav is a partner of the Maritime Campus Antwerp (MCA)
The aim of MCA is to build coalitions within and outside the
maritime industry with a global focus on innovation and
sustainability. It brings the worlds of industry, technology,
business and innovation together.
is an ecosystem where different
The MCA community
stakeholders (public, private, research and individuals) are
engaged with innovation in the maritime sector. In the MCA
community everyone is brought together and informed in
order to define the key areas of interest.
Those areas of interest will be turned into more focused (open)
innovation challenges by engaged MCA members and other
relevant partners. The open innovation challenges can be
presented to a broad spectrum of parties to garner input and
cooperation.
MCA campus provides facilities and services, creating a
stimulating innovation environment in a lively new hotspot of
Antwerp, Belgium. Currently, MCA is transforming an old
industrial area in Antwerp into a future-proof, maritime and
innovative site with respect for the balance between economic
activity and nature. Upon finalisation, Euronav will move to
the MCA site. The campus gives us the arms and ammunition
to make Antwerp a European leader in shipping innovation.
More information can be found on the website: https://mca.
be/nl
Joint Development Program
Euronav NV has announced a Joint Development Program
(JDP) with the largest shipbuilder in the world, Hyundai Heavy
Industries (HHI) and classification societies Lloyd’s Register
and DNV, to help accelerate the development of dual fuel
Ammonia (NH3) fitted VLCC and Suezmax vessels. The initial
term of the JDP will be three years.
Shipping is in an intense period of change. It needs to
apply new technologies, whilst simultaneously addressing
challenging emission reduction objectives and maintaining
the highest safety standards. The Joint Development Program
brings together specialist parties and ensures that Euronav
and its partners maintain control over what developments
are pursued, responding to the need to apply new
technologies, whilst simultaneously addressing challenging
emission reduction objectives and maintaining the highest
safety standards in a fluctuating market. The aim is to build
optionality into an era of rapid change and so limit the risks
associated with ‘stranded assets’ and make vessels sufficiently
fungible to take us through the next decade. The program
will ensure that Euronav and its partners gain control, yet
retain flexibility in constructing future specifications for a new
generation of crude tankers. Emissions compliance is critical
to Euronav’s stakeholders.
The current project and others across the sector are part of an
essential starting point for the build-up of a market for zero-
carbon bunker fuels. And with shipbuilding capacity likely to
be constrained for the construction of large crude tankers until
at least 2025, Euronav believes this will deliver the company
a competitive advantage within its existing sustainability
structure.
35
Euronav
Stakeholder engagement
36
Half Year Report
37
Euronav
Activities and achievements
Overview of the market
The return of oil consumption at a global scale was always
going to be a key driver to freight market recovery in 2021. As
we started seeing COVID-19 vaccinations being administered
throughout the world we entered the year full of hope that a
recovery was imminent.
This did not happen at the pace we had hoped for. The first
half of 2021 was still impacted by a static and relatively low
oil consumption averaging just 96 million barrels per day. This
compares to pre-COVID highs of more than 105 million barrels
in the latter months of 2019. As the world began to regain
some control over the virus towards the middle of the year, we
saw restrictions being eased. This allowed for more movement
both locally and globally. However, persistent local outbreaks
of COVID-19 continued to curb economic activity, thus slowing
the return to the full pre-pandemic consumption levels. In
the second half of the year there were sudden and extreme
price rises for fuels such as gas and coal. This prompted some
substitution into oil and an increase in oil demand. While
estimates vary, this event has resulted in an additional oil
demand of 1 million barrels per day.
The year also saw global oil inventories decline significantly,
and all major OECD (Organisation for Economic Co-operation
and Development) hubs saw commercial crude oil stocks fall
below the 5-year range. In addition, it was announced at the
end of the year that major demand centres would join efforts
and release strategic reserve barrels. This would push any
restocking, and therefore any benefits to the crude tanker
markets, further into the future. In a coordinated message the
US, China, India, Japan, South Korea and the UK committed to
releasing varying levels of crude from their reserves.
Oil supply is another important factor in the recovery of the
freight market. Unilateral oil export cuts from OPEC and its
allies remained in place during the first part of the year. Even
when we saw improvements to the demand side, the OPEC
alliance was reluctant to step in and fill the gap. This restricted
the cargo base available for commercial transit. A tapering
of production cuts began in May 2021 and the OPEC alliance
has gradually added more oil supply to the market since. This
started to become visible to the tanker market going into the
fourth quarter of 2021, as cargo numbers started to reflect the
recovery in the oil market. The Arabian Gulf in particular is
seeing crude cargo liftings on VLCCs approach the levels seen
before the pandemic. However, the full effects are still to be
seen in the broader market.
On the vessel supply side of the equation, the market
remained oversupplied of tonnage. Historical precedents
suggest that during periods of challenging freight rates tanker
owners are induced to recycle their older tonnage, therefore
reducing the global trading fleet. While we saw some fleet exits
during the year, this was not to the extent that history may
have predicted. Some analysts suggest that older tonnage has
instead been used for 'illicit trade' that has developed around
sanctioned cargoes, and therefore out of bounds for the
regular commercial trade. A question remains as to whether
these vessels will ever rejoin the commercial fleet, be it due
to old age or because of now being earmarked as unlawful
tonnage.
As for the contracting of new tonnage, there is a different story
for the first and second half of the year. In the first half of the
year the market saw 26 new VLCC orders, many with dual-fuel
38
Activities and achievements
Annual report 2021
capabilities. The Suezmax sector has not seen the same level
of contracting, with just a handful of new vessels ordered in
the first half. The dual-fuel commitment from owners reflects
the growing structural focus on emissions reduction from
participants across the industry, from investors to charterers,
to financiers. This will in turn increase pressure on older,
higher emission tonnage with the potential to drive a strong
phaseout programme soon. In the second half of the year no
new orders were placed in either segment. Alternative shipping
sectors, such as container liners and dry bulk carriers, have
experienced an earnings boom through 2021 and much of the
extra cash has been invested in new tonnage of these types.
This left tanker owners unable to compete with increasing
newbuilding prices and many yards are now full until 2025.
The new supply picture until then is therefore very clear and
supportive of an improving tonnage balance in the near to
medium term.
Freight markets have remained flat and low through the year.
While we have seen some improvements in oil demand we
are still not quite at the level we were at pre-pandemic. As
OPEC began to taper production cuts we have seen more
cargoes flow into the market. However, they flow into a market
that remains oversupplied with tonnage, and when owners
compete for limited business the freight market remains
depressed.
Tanker markets
Full Year
2021
Full Year
2020
11,300
54,600
46,500
42,200
(In USD per day)
VLCC
Average spot rate
(in TI pool)*
Average time charter
rate**
SUEZMAX
Average spot rate***
11,100
39,400
Average time charter rate
29,800
29,600
TCE calculations have been revised taking into
consideration the new Profit and Loss presentation
*Euronav owned ships in TI Pool (excluding technical
offhire days and TI Administration costs)
**Including profit share where applicable
*** Including profit share where applicable (excluding
technical offhire days)
39
Fleet evolution
Figure 9: Suezmax Development
Source: Clarksons
The crude tanker markets experienced modest fleet growth
during 2021, with the Suezmax fleet expanding by 2.5% and the
VLCC fleet by 3.4%. Before the COVID-19 pandemic fleet growth
numbers of this scale would be easily matched by a similar
increase in the demand for ships.
The Suezmax market saw 20 newbuildings delivered while 6
active vessels were removed from the trading fleet. As a result, a
total of 577 Suezmax vessels were trading on the market at the
end of the year. The average age of this fleet is 11.1 years, and
30% of the segment is aged 15 years or older. The fleet is ageing,
and there were only a few fresh newbuildings ordered during
a year that saw tanker owners cash-strapped and funding for
new shipping capacity flowing into alternative markets such as
container ships and bulk carriers. The market recorded just 8 new
Suezmax orders in 2021.
The growth in the VLCC market came from 35 deliveries
combined with 8 vessel exits. Some reports during the year
have highlighted larger removal numbers. But we have found
that these reports do not always materialise and the vessels
continue to trade. The VLCC fleet comprises 831 vessels with
an average age of 10.1 years at the end of 2021. This segment
too is on average older than we have seen for several decades.
In terms of ordering activity, 26 new VLCC orders were placed
in 2021, all of them in the first half of the year and the majority
by long-established owners. This is contrary to the strong
speculative ordering activity that took place in the years leading
up to the introduction of the IMO 2020 fuel regulations, when
many new and unknown owners entered the VLCC shipbuilding
space. Regulatory uncertainty remains a limiting factor for a
resurgence in tanker ordering. The market is yet to settle on
what the future of propulsion systems will look like and many
owners are reluctant to lock in large capacity for the time being.
With low order activity and an ageing fleet profile, we are
entering a period of potentially very limited fleet growth for
both tanker segments over the next couple of years.
Figure 8: VLCC Development
Source: Clarksons
FSO and FPSO market
By the end of 2021 there were 400 floating production systems
in service or available worldwide, among which were 165
FPSOs*and 100 FSOs* (91 Oil, 9 LNG). This does not include 26
FPSOs that are available for reuse. In addition, there are two
FPSOs that are out of service for extended repairs.
In total 38 production floaters, 9 FSOs and 2 MOPUs are
currently on order, which is four less than early this year. New
orders are likely to keep up with the 10 deliveries scheduled in
2022. Consequently, the backlog is expected to remain in the
high 30s or to increase slightly to the low 40’s as it was in 2021.
Currently, there are 183 floater projects in the appraisal,
planning or bidding, or final design stage that may require
a floating production or storage system. Of these projects,
63 are in the bidding or final design stage, and another 80
floater projects are in the planning phase. For these planned
projects, the major hardware contracts are planned between
2023 to 2024. However, studies are still ongoing to assess the
economic viability of the projects, particularly those in deep
water and harsh environments. Finally, 40 projects are in the
appraisal stage.
The most active region for future projects would be Africa with
a total of 39 potential floater projects planned, followed by
Southeast Asia with 33 projects. Brazil has 30 projects that may
require 44 floaters, as fields like Buzios and Mero will require
multiple units. The remaining regions have fewer potential
projects, including Gulf of Mexico (20), Northern Europe (17),
Australia (12), Southwest Asia/Middle East (9), South America
and the Mediterranean (7 each), China and Canada (4), and
West Africa (1).
Over 70% of the facilities responsible for production floater
fabrication and conversion are based in Asia. Cosco and
Daewoo are the busiest yards each with at least five projects
underway.
40
*Floating storage and offloading / floating production storage and offloading market.
Euronav Annual report 2021
Euronav fleet
Figure 10: Euronav’s tonnage profile, including on charter on 31 March 2022
FSO
V-Plus
VLCC
Suezmax
Owned: 2 (both owned in 50%-50% joint venture)
dwt: 864,046 | Average age: 19.1 years
Owned: 2
dwt: 883,122 | Average age: 18.5 years
Fully owned: 41
Newbuildings to be delivered: 3
dwt: 12,475,783 | Average age: 7.84 yrs
Fully owned: 27 (whereof one owned in 50%-50% joint venture)
Newbuildings to be delivered: 3
dwt: 4,090,609 | Average age: 10.89 yrs
2021 Total Operating fleet
72
Vessels
6
Under construction
9.64
Average age
18,776,610
dwt of active fleet
*Our remaining three VLCC and three Suezmax newbuildings, currently under construction, are not included in the above calculations. As they are
due for delivery in 2023 and 2024. The majority of Euronav’s VLCC fleet is operated in the Tankers International Pool (the ‘TI Pool’) in the voyage
freight market. The TI Pool is one of the largest modern fleets worldwide and comprises 57 vessels on 31 March 2022, of which 40 are owned by
Euronav.
Figure 11: Euronav Fleet - Core VLCC fleet youngest amongst large peers
VLCC
Suezmax
Core VLCC
Fleet
37x Japan/Korean built
Average age 6.7 years
(DHT 8.6 yr FRO 6.9 yrs)
Core VLCC
Fleet
18x Japan/Korea built
Average age 10.89 yrs
Future Growth 3x newbuild 2022/23
Future Growth 5x newbuild 2022-24
Forward Sold 8x Chinese built 13.7 yrs Forward Sold
4x Valero to 2025
ULCC
FSO (JV)
Storage
optionality
Built life 40 years
Average Age 18,5
Contracted to
2032
Current contract to Q3
2022 than 10 year
extension starts
The vast majority of Euronav’s
vessels are managed in-house, which
positions its fleet at the top of the
market for tanker assets and services.
The benefits that are derived from
in-house management lie in asset
maintenance, enhanced customer
risk management.
service and
Charterers are more
than ever
seeking to do business exclusively
with superior quality operators,
whether through fixed rate long-term
business or principally in the spot
market.
41
Overview of the year 2021
The first quarter
In the market
For the first quarter of 2021, the Company experienced a net
loss of USD 71 million or USD 0.35 per share. In comparison, in
the first quarter of 2020 the Company’s net profit was USD 225.6
million or USD 1.05 per share. Proportionate EBITDA (a non-IFRS
measure) for the same period was USD 33.1 million, where in
the first quarter of 2020 this was USD 335.1 million. The average
daily TCE obtained by the Company’s fleet in the TI Pool was
approximately USD 14,000 per day, whereas in the first quarter
of 2020 this was USD 72,750 per day. The TCE of the Euronav
VLCC fleet fixed on long-term charters, including profit shares
when applicable, was USD 39,500 per day (in the first quarter of
2020: USD 37,000 per day). The average daily TCE obtained by
the Suezmax spot fleet was approximately USD 11,500 per day.
In the first quarter of 2020 this was USD 59,250 per day. The TCE
of the Euronav Suezmax fleet fixed on long-term time charters,
including profit shares when applicable, was USD 29,500 per
day (first quarter 2020: USD 30,250 per day).
January
Euronav
In January 2021, Euronav took delivery of the first two of four
newbuildings, Delos (2021 – 300,200 dwt) and Diodorus (2021
– 300,200 dwt), which were purchased in February 2020.
On 11 January 2021, Euronav became a signatory of the
‘Neptune Declaration on Seafarer Wellbeing and Crew Change’.
The declaration is a global call to action that addresses the
ongoing crew change crisis caused by the COVID-19 pandemic.
It focuses on concrete actions that can facilitate crew changes
and keep vital global supply chains functioning. The maritime
stakeholder initiative was officially launched during the World
Economic Forum’s Davos Agenda Week, that took place in the
week of January 25th, 2021.
On 27 January 2021, Euronav was included in the Bloomberg
Gender-Equality Index (GEI) for the fourth consecutive year and
managed to improve its score. The GEI provides transparency
in gender-based practices and policies at publicly listed
companies, increasing the breadth of environmental, social,
governance (ESG) data available to investors. Euronav is one
of 380 companies across 11 sectors, headquartered in 44
countries, that are included in the index in 2021.
• DHT Leopard (VLCC, 2016) chartered by Occidental for 11
months at USD 29,000 per day;
• Barakah (VLCC, 2021) chartered by Trafigura for 12 months
at USD 34,000 per day;
•
•
Amantea (VLCC, 2021) chartered by Unipec for 12 months
at USD 30,000 per day;
Silverway (Suezmax, 2017) chartered by Vitol for 6 to 12
months at USD 16,000 per day.
February
Euronav
On 3 February 2021, Euronav entered into an agreement for the
acquisition through resale of two eco-Suezmax newbuilding
contracts for an en-bloc price of USD 113 million. The vessels
are currently under construction at the Daehan Shipyard in
South Korea. They are the the latest generation of Suezmax
eco-type tankers and have the structural notation to be LNG
Ready with potential for Ammonia capability to be added.
Both vessels were delivered in January 2022.
On 23 February 2021, Euronav entered into a sale and
leaseback agreement for the VLCC Newton (2009 – 307,284
dwt) with Taiping & Sinopec Financial Leasing Ltd. Co. The
vessel was sold for USD 36 million. The transaction produced
a capital gain of about USD 2.4 million. After repayment of
the existing debt, the transaction generated USD 19 million
free cash. The vessel was delivered to their new owners on 22
February 2021.
In the market
•
TBD Nissos Koufonissi (Suezmax, 2021) chartered by
Trafigura for 6 months at USD 16,300 per day;
• DHT Mustang (VLCC, 2018) chartered by Chevron Houston
for 6 months at USD 27,500 per day;
•
Agios Nikolas (VLCC, 2019) chartered by Occidental for 11
months at USD 28,500 per day;
• Gem No.5 (VLCC, 2017) chartered by Clearlake Shipping
Pte Ltd for 12 months at USD 28,500 per day;
42
Euronav • Kriti King (Suezmax, 2021) chartered by Vitol for 12 months
at USD 21,250 per day;
•
Spyros (Suezmax, 2020) chartered by Zodiac Maritime
Limited for 2 years at USD 24,500 per day.
March
Euronav
On 1 March 2021, Euronav became a member of the Maritime
Anti-Corruption Network (MACN). The MACN was established
in 2011 to document corrupt acts and attempted corrupt
acts in ship’s encounters with port authorities, and to assist
the industry in the reduction and prevention of corruption.
So far 169 other like-minded shipping companies and other
companies in the maritime industry have joined the MACN.
On 4 March 2021, Euronav took delivery of the third
newbuilding Doris (2021 – 300,200 dwt), which was purchased
in February 2020.
On 19 March 2021, Euronav took delivery of the fourth
newbuilding, Dickens (2021 – 300,200 dwt), which was
purchased in February 2020.
In the market
• DHT Peony (VLCC, 2011) chartered by Trafigura for 6
months at USD 18,000 per day;
• Classic (Suezmax, 2005) chartered by BPCL for 12 months
at USD 18,000 per day;
• Halcyon (VLCC, 2020) chartered by Clearlake Shipping Pte
Ltd for 12 months at USD 33,500 per day;
• DHT Bauhinia (VLCC, 2007) chartered by Trafigura for 6
months at USD 18,000 per day;
•
•
•
FPMC C Noble (VLCC, 2012) chartered by Zhenhua for 12
months at USD 20,500 per day;
TBD Yuan Rui Yang (VLCC, 2022) chartered by Koch for 3
years at USD 39,000 (dual fuel no scrubber);
Seaduke (VLCC, 2021) chartered by Trafigura for 12 months
at USD 35,000 per day.
Annual report 2021
43
Euronav
The second quarter
For the second quarter of 2021, the Company realised a net
loss of USD 89.7 million or USD 0.44 per share. In comparison,
the Company had a net profit of USD 485.2 million or USD 2.26
per share during the first half of 2020. Proportionate EBITDA (a
non-IFRS measure) for the same period was USD 22.6 million,
whereas in the first half of 2020 this was USD 697.3 million. For
the second quarter of 2021 the average daily TCE obtained
by the Company’s fleet in the TI pool was approximately USD
11,250 per day (second quarter 2020: USD 81,500 per day).
The TCE of Euronav VLCC fleet fixed on long-term charters,
including profit shares when applicable, was USD 51,250 per
day. During the second quarter of 2020 this was USD 39.250
per day. The average daily TCE obtained by the Suezmax spot
fleet was approximately USD 10,500 per day (second quarter
2020: USD 60,750 per day). The TCE of the Euronav Suezmax
fleet fixed on long-term time charters, including profit shares
when applicable, was USD 29,750 per day (second quarter
2020: USD 29,750 per day).
April
Euronav
On 12 April 2021, Euronav announced that the Company had
signed an EUR 80 million unsecured revolving credit facility.
This new facility, which was significantly oversubscribed, was
concluded with a range of commercial banks and the support
of Gigarant, with sustainability and emission reductions as a
component of the margin pricing. This brought the facilities
with an integrated sustainability component to 31.5% of
Euronav’s total financing.
The facility has a duration of a minimum of 3 years, with two
1-year extension options. A range of measurable sustainability
features such as year-on-year reduction in carbon emissions
starting from 2021 will be supported by compliance with the
Poseidon Principles.
On 22 April 2021, Euronav announced that it had entered
into an agreement for two VLCC newbuilding contracts with
the Hyundai Samho yard. The vessels will be LNG Ready and
consequently there is an ability to cut CO2 emissions compared
to current market standards. Furthermore, Euronav is working
in cooperation with the yard and classification society to
include an Ammonia Ready notation with the potential to
reduce CO2 emissions to zero when technology, logistics and
the regulatory framework allows for it. The vessels will be
delivered during the first quarter of 2023, costing USD 186
million en-bloc, and will include USD 4.2 million in additions
and upgrades to the standard specifications.
In the market
•
Yakumosan (VLCC, 2008) chartered by Koch for 12 months
at USD 20,000 per day;
• C. Challenger (VLCC, 2013) chartered by Koch for 2 years at
USD 29,500 per day (extension);
•
Energy triumph (Suezmax, 2018) chartered by Vitol for 14
months at USD 20,000 per day plus profit share.
May
In the market
• Crude Zephyrus (Suezmax, 2021) chartered by Stena bulk
for 24 months at USD 25,000 per day plus profit share;
• Crude Lavante (Suezmax, 2021) chartered by Stena bulk
for 24 months at USD 25,000 per day plus profit share;
•
FPMC C Melody (VLCC, 2011) chartered by ZhenHua Oil for
12 months at USD 21,500 per day;
44
Annual report 2021
•
•
Landbridge Fortune (VLCC, 2016) chartered by Koch for 3
years at USD 36,000 per day;
Elandra Elbrus (VLCC, 2020) chartered by Statoil for 12
months at USD 33,500 per day.
June
Euronav
On 7 June 2021, Euronav announced that it had sold the
Suezmax Filikon (2002 – 149,989 dwt) for USD 16.3 million. A
capital gain on the sale of approximately USD 9.3 million was
recorded in the second quarter. The vessel was delivered to
her new owners on June 4th.
Furthermore, Euronav contracted three firm Suezmaxes for
a total cost of USD 199.2 million (USD 66.4 million each). The
vessels will be delivered in the third quarter of 2023 and the
first quarter of 2024. Euronav also lifted the option to contract
a third VLCC newbuilding, that will be delivered in the second
quarter of 2023.
In the market
• Papalemos (VLCC, 2018) chartered by LMCS for 3 years at
USD 36,000 per day;
• Navigare Terra Mater (VLCC, 2017) chartered by Trafigura
for 3,5 years at USD 36,000 per day;
the Company’s VLCC fleet in the TI Pool was approximately
USD 9,000 per day, whereas in the third quarter of 2020 this
was USD 42,000 per day. The TCE of the Euronav VLCC fleet
fixed on long-term charters, including profit shares when
applicable, was USD 50,250 per day. In the third quarter of
2020, the amount was USD 48,750 per day. The average daily
TCE obtained by the Suezmax spot fleet was approximately
USD 10,250 per day (third quarter 2020: USD 23,500 per day).
The TCE of the Suezmax fleet fixed on long-term time charters,
including profit shares when applicable, was USD 29,500 per
day (third quarter 2020: USD 29,500 per day).
July
On 6 July 2021 Euronav announced a Joint Development
Program (JDP) with the largest shipbuilder in the world,
Hyundai Heavy Industries (HHI) and classification societies
Lloyd’s Register and DNV, to help accelerate the development
of dual fuel Ammonia (NH3) fitted VLCC and Suezmax vessels.
The initial term of the JDP will be three years. More information
on the Joint Development Program can be found on page 35.
On 6 July, Euronav confirmed that it has entered into new
contracts for the building of 3 Suezmaxes and that is has
lifted the option to build a third VLCC as per the Company’s
announcement made on 22 April 2021. All these newbuildings
will be delivered in a staggered timing, enabling all parties
involved to make concrete progress towards the development
of ammonia-fitted tankers.
•
Evagoras (Suezmax, 2003) chartered by LMCS for 12
months at USD 15,000 per day;
In the market
• Orient M (Suezmax, 2022) chartered by Chevron for 3 years
at USD 29,000 per day;
•
Eagle Vancouver (VLCC, 2013) chartered by Petronas for 12
months at USD 30,000 per day;
• Kanaris 21 (Suezmax, 2021) chartered by Vitol for 6 months
at USD 14,500 per day;
• Captain Lyristis (Suezmax, 2020) chartered by Vitol for 6
months at USD 14,500 per day;
•
•
•
Vladimir Tikhonov (Suezmax, 2006) chartered by Rosneft
for 6 months at USD 21,500 per day;
Zeus (Suezmax, 2021) chartered by Unipec for 12 months
at USD 21,000 per day;
TRF Horten (VLCC, 2018) chartered by Unipec for 12
months at USD 24,500 per day.
August
In the market
The third quarter
For the third quarter of 2021, the Company realised a net loss
of USD 105.9 million or USD (0.53) per share. In comparison,
in the third quarter of 2020 there was a net profit of USD 46.2
million or USD 0.22 per share. Proportionate EBITDA (a non-
IFRS measure) for the same period was USD 9.1 million (third
quarter of 2020: USD 151.8 million). The TCE obtained by
• Kasagisan (VLCC, 2006) chartered by IOC for 12 months at
USD 22,000 per day;
•
Sea Emerald
(VLCC, 2019) chartered by Sinochem
International Oil Co for 12 months at USD 28,000 per day;
• Nordic Tellus (Suezmax, 2018) chartered by Chevron for 12
months at USD 17,000 per day.
45
Euronav
September
Euronav
On 2 September 2021 Euronav Luxembourg S.A., a wholly
owned subsidiary of Euronav NV, announced a successful
placement of USD 200 million senior unsecured bonds. The
bonds are guaranteed by Euronav NV, mature in September
2026 and carry a coupon of 6.25%. DNB Markets, Nordea,
SEB and Arctic Securities AS acted as joint bookrunners in
connection with the placement of the bond issue.
On 28 September 2021 Euronav announced that it had become
a signatory of the ‘Call to Action for Shipping Decarbonization’.
Together with already more than 230 members from the entire
maritime ecosystem the Company urges governments and
global shipping industry leaders to commit to decarbonising
international shipping by 2050. The ‘Call to Action for Shipping
Decarbonization’ has been developed by a multi-stakeholder
taskforce convened by the Getting to Zero Coalition – a
partnership between the Global Maritime Forum, the World
Economic Forum, and Friends of Ocean Action.
In the market
• Nave Photon (VLCC, 2008) chartered by Trafigura for 6
months at USD 8,000 per day;
• Kokkari (VLCC, 2008) chartered by Trafigura for 7 months at
USD 10,500 per day;
• Kashimasan (VLCC, 2007) chartered by Trafigura for 6
months at USD 10,000 per day;
(Suezmax,
by
for 7 months at USD 12,500 per day.
chartered
2009)
•
Serenea
Trafigura
46
The fourth quarter
For the fourth quarter of 2021, the Company experienced
a net loss of USD 72.2 million or USD 0.36 per share (fourth
quarter 2020: a net loss of 58.2 USD million or USD 0.29 per
share). Proportionate EBITDA (a non-IFRS measure) for the
same period was USD 38.5 million (fourth quarter 2020: USD
50.3 million). The TCE obtained by the Company’s fleet in the
TI pool was for the fourth quarter approximately USD 12,500
per day, whereas in the fourth quarter of 2020 this was USD
20,500 per day. The TCE of the Euronav VLCC fleet fixed on
long-term charters, including profit share when applicable,
was USD 46,900 per day (fourth quarter 2020: USD 44,700 per
day). The TCE obtained by the Suezmax spot fleet, including
profit shares when applicable, was approximately USD 11,300
per day for the fourth quarter (fourth quarter 2020: USD 12,300
per day). The earnings of the Euronav Suezmax fleet fixed on
long-term charters, were USD 30,400 per day. In the fourth
quarter of 2020, this was 29,300 per day.
October
Euronav
On 7 October 2021 Euronav announced that it had, as one of
the first in the oil tanker industry, successfully completed a
B30 biofuel test on a Suezmax, the Statia (2006- 150,205 dwt).
The trial with the biofuel blend from energy supplier BP was
successful. Lower carbon fuels will play an important role on
the journey towards shipping decarbonisation. Therefore,
Euronav is committed to accelerate the transition to lower
carbon alternatives by testing the operational readiness
and emission reduction potential of biofuels in a context of
strategic partnerships.
The Suezmax Statia tested approximately 360 MT of the B30
biofuel blend during a two-week trial in September, while the
vessel was in commercial operations on its way to Angola. The
trial of the blend was successful and showed no significant
differences in operations or any malfunctions that could lead
to a breakdown. No indications of adverse impact to the main
engine and auxiliary diesel generators were found. There was a
total emissions reduction of 25.8% during the voyage that the
fuel was burned.
In the market
• Mercury Hope (VLCC, 2011) chartered by Trafigura for 6
months at USD 21,000 per day;
• Olympic Luck (VLCC, 2010) chartered by Unipec for 6
months at USD 23,000 per day;
• Olympic Luna (VLCC, 2017) chartered by Statoil for 6
months at USD 27,000 per day;
• Orient M (Suezmax, 2022) chartered by Trafigura for 36
months at USD 27,500 per day.
Annual report 2021
November
Euronav
On 18 November 2021 Euronav announced that it had
successfully concluded a four month trial of B50 biofuel blend
on its Suezmax Marlin Sardinia (2019 – 156,607 dwt). The
biofuel by marine fuels supplier TFG Marine (the bunkering arm
of Trafigura), was tested on its longevity and durability over a
period of four months. This second trial confirms the potential
of biofuel and the crucial role it plays in the decarbonisation
of shipping.
In the market
• Babylon (VLCC, 2020) chartered by Koch for 3 years at USD
35,500 per day;
•
•
Silverstone (VLCC, 2020) chartered by Koch for 3 years at
USD 35,500 per day;
Tonegawa (VLCC, 2018) chartered by Trafigura for 3 years
at USD 32,000 per day (extension);
• Universal Winner (VLCC, 2018) chartered by Trafigura for 3
years at USD 34,000 per day;
• Milos (Suezmax, 2016) chartered by Vitol for 6 months at
USD 23,000 per day.
• Olympic Fighter (Suezmax, 2017) chartered by UML for 6
months at USD 26,000 per day;
• Olympic Friendship (Suezmax, 2017) chartered by Chevron
for 6 months at USD 26,000 per day;
Events occurred after the end
of the financial year ending 31
December, 2021
• Nordic Cygnus (Suezmax, 2018) chartered by Equinor for
12 months at USD 20,000 per day with an additional 12
months option;
• Gem No.1 (VLCC, 2016) chartered by Trafigura for 3 years at
USD 34,000 per day;
• Ulysses (VLCC, 2016) chartered by Trafigura for 3 years at
USD 29,000 per day;
• DHT Harrier (VLCC, 2016) chartered by Trafigura for 36
months at USD 34,000 per day;
• New Victory (VLCC, 2017) chartered by CPC for 6 months at
USD 33,500 per day.
December
Euronav
On 9 December 2021 Euronav received a ‘B’-score from the
Carbon Disclosure Project (CDP) for its actions against climate
change. Euronav has submitted its sustainability credentials to
the CDP platform for the second time, as part of an ongoing
commitment to increase the company’s transparency in this
area. Euronav’s score is higher than the marine transport
sector ‘C’ average.
On 14 December 2021 Euronav held its virtual naming
ceremony to welcome Cedar and Cypress.
In January 2022, two newbuilding Suezmaxes, Cedar and
Cypress, joined our fleet. Cedar was delivered on the 7th
of January and Cypress on the 20th of January. Both were
constructed at Daehan Shipbuilding (DHSC) in South Korea.
On 26 January 2022, Euronav announced that the Company
will book a USD 18 million capital gain on disposal of assets
upon the redelivery of 4 VLCCs, which occurs at the maturity of
a five-year sale and leaseback agreement. The four VLCCs are:
the Nautilus (2006; 307,284 dwt), Navarin (2007; 307,284 dwt),
Neptun (2007; 307,284 dwt) and the Nucleus (2007; 307,284
dwt). As the first ship was redelivered on 15 December 2021,
USD 4.5 million was booked in the fourth quarter of 2021,
whereas the remaining USD 13.5 million was booked in the
first quarter of 2022.
for
(GEI),
Index
On 27 January 2022, Euronav was included in the annual
Bloomberg Gender-Equality
the fifth
consecutive year. The GEI provides transparency in gender-
based practices and policies at publicly listed companies,
increasing the breadth of environmental, social, governance
(ESG) data available to investors. Euronav is one of 414
companies with a combined market capitalisation of USD 1
trillion, headquartered in 45 countries and regions across 11
sectors, that are included in this year’s index. The Company’s
score is 62.84%, which is higher than the average score of the
Transportation and Logistics sector of 47.61%.
In the market
•
Silverstone (VLCC, 2020) chartered by Koch for 3 years at
USD 35,500 per day;
On March 18, 2022, the Company announced that the Financial
Supervisory Authority of Norway has approved the base
prospectus with appendices prepared by Euronav Luxembourg
S.A. (“Euronav Luxembourg”) in connection with the listing on
47
Euronav
the Oslo Stock Exchange of Euronav Luxembourg’s USD 200
million senior unsecured bonds, due September 2026. The
USD 200 million senior unsecured bonds, issued by Euronav
Luxembourg and guaranteed by the Company, are listed on
the Oslo Stock Exchange as of March 22, 2022.
Recent developments in the Ukraine region and continuing
conflicts in the Middle East have contributed to further
economic instability in the global financial markets and
international commerce. At the time of writing this report
outcome was not clear and the Company acknowledges that
any escalations between the North Atlantic Treaty Organization
countries and Russia could result in retaliation from Russia
that could potentially affect the shipping industry.
In February 2022, President Biden and several European
leaders announced various economic sanctions against
Russia in connection with the aforementioned conflicts in
the Ukraine region. These sanctions may adversely impact
our business, given Russia’s role as a major global exporter
of crude oil and natural gas. Our business could also be
adversely impacted by trade tariffs, trade embargoes or other
economic sanctions that limit trading activities by the United
States or other countries against countries in the Middle East,
Asia or elsewhere as a result of terrorist attacks, hostilities or
diplomatic or political pressures.
On March 8, 2022, President Biden issued an executive order
prohibiting the import of certain Russian energy products into
the United States, including crude oil, petroleum, petroleum
fuels, oils, liquefied natural gas and coal. Additionally, the
executive order prohibits any investments in the Russian
energy sector by US persons, among other restrictions.
The invasion and subsequent war between Russia and Ukraine
will impact our business in the following areas:
Freight rates – due to the self-sanctioning being performed
by oil traders, refiners, and shippers of Russian petroleum
products, the market evolved towards longer tonnage and
shorter cargoes. This has put pressure on freight rates in the
VLCC and Suezmax segments as there are now more ships
than cargoes available in the market in the short term. The
longer term prognosis is that ton miles may increase due to
the adjustment of trade flows to compensate refineries and
markets for the lack of Russian oil flows. There can also be
an increase in a sanction fleet tonnage to move the required
Russian oil cargoes from the west to markets in the east.
The Company has suspended its operations with Russian
customers, which represents an insignificant portion of the
Company’s turnover (below 5%).
48
Bunker Fuel Cost – due to the risk within the market, and the
self-sanctioning of Russian oil flows, the price of marine fuels
has increased and will continue to be high for the foreseeable
future. This is due to Russia supplying bunker markets with 20%
of the global fuel demand in HSFO, VLSFO and MGO markets.
These price increases will negatively impact the cost structure
of the vessels, making it more expensive to ship freight on
long haul voyages. The spread between HSFO and VLSFO was
at a high level pre-invasion, but has begun to correct as the
removal of Russian origin HSFO from the market has begun to
tighten up supplies in Europe and in the Mediterranean.
Cybersecurity risks have increased and the Company took
additional measures.
Crew issues – as we do have officers and crew that are from
Russia and Ukraine, the current conflict makes the ability to
perform regular crew changes problematic, as travel may
not be available nor the ability to repatriate a crew member
to his or her home. This could impact the smooth operations
of vessels, as new officers and crews which may not have the
familiarity of the vessel are joining. This could result in an extra
crew cost on a yearly basis of max USD 500.000.
Going forward, it remains difficult to estimate the future impact
of this war situation in the economies where we are active, and
hence difficult to quantify the impact these factors might have
on our financial results.
On April 7th, 2022 the company announced that Euronav and
Frontline have signed a term sheet that has been unanimously
approved by their Supervisory Board and Board of Directors,
respectively, on a potential stock-for-stock combination
between the two companies, based on an exchange ratio of
1.45 FRO shares for every EURN share resulting in Euronav and
Frontline shareholders owning approximately 59% and 41%,
respectively, of the combined group.
The combination remains subject to agreement on a
transaction structure, confirmatory due diligence, agreement
on the terms and conditions of the potential combination
agreement, applicable board, shareholder, customer, lender
and/or regulatory approvals, employee consultations and
other customary completion conditions.
Annual report 2021
Sustainability
report
Letter from the CEO 50
Sustainability at Euronav 52
Environment 66
Social and human capital 96
Health 108
Safety 110
Our governance 116
Corporate Governance Statement 148
49
Letter from the CEO
Welcome to our 2021 sustainability report.
Sustainability is something we believe is central to our
DNA as a company. However, it is not a static concept but a
dynamic one which, as the past year has shown only too well,
It needs constant adaptation and application to changing
circumstance. Our customers, suppliers and financiers are all
demanding a firm commitment to the highest sustainability
standards available. Euronav intends to meet or beat these
benchmarks wherever possible.
Good governance is key to any application of a sustainable
business model. Euronav has always applied the highest
ethical and social standards toward our business dealings.
Euronav is about more than slogans. We strive to provide
a creative, supportive and stimulating environment for all
of our staff to work in. Euronav is one of the biggest quoted
shipping platforms in the world, which brings with it both
responsibility and opportunity to drive the energy transition
forward by acting like a green champion wherever possible. It
was therefore extremely pleasing to be ranked second out of
52 shipping companies in the Webber Research ESG scorecard
for 2021
(https://www.euronav.com/media/66430/webber-
esg-scores-2021.pdf). This is the only authoritative survey of
corporate governance in shipping. Since its initiation in 2016,
Euronav has always been ranked in the top quartile. This
recognition is gratifying and reflects the hard work of all our
staff, resulting in a continuous upward progression.
The crew-change crisis which grew from rapid and stringent
COVID-19 restrictions, peaked in 2020. These restrictions have
eased since then, but many of the difficulties for seafarers
remain. The shipping sector is often undervalued in its efforts
to promote the vital role seafarers play. The mental health and
wellbeing of the crew has become a primary consideration,
along with facilitating timely crew changes in the face of
ongoing COVID-19 restrictions.
Finance is key to deliver on our sustainability objectives.
Providers of finance, be they commercial banks, equity or bond
investors, can and should provide sustainability requirements
as part of their “contract” with the corporates they finance. We
are pleased to report further progress for Euronav in this area.
Firstly, the finance team continued to increase the proportion
of our credit facilities with sustainability features to over 41%
(31.5% in 2021). Secondly, a new EUR 80 million unsecured
sustainability linked revolving credit facility, including funding
from the Flemish Government, was secured with a syndicate
of lenders. This funding is subject to strict emission targets
but also allows Euronav to match a large part of our cost
base in the Euro currency, in what is almost entirely a dollar-
denominated business. This example illustrates how good
business sense can also be good for sustainability. Lastly,
in terms of diversifying our funding sources, our continued
presence on bond markets is vital. In September 2021 we
raised USD 200 million senior unsecured bonds, maturing
in September 2026. This bond was oversubscribed and on a
lower interest rate than the USD 200 million bond maturing
in May 2022. Retaining such a bond gives us flexibility and
diversity in our future funding and provides a vehicle to which
we can continually add sustainability factors. In this way,
bondholders can track and measure our progress.
The Poseidon Principles provide a global framework for
responsible ship finance. They enable financial institutions to
integrate climate considerations into lending decisions and in
this way, promote international shipping’s decarbonisation.
Euronav was part of the original drafting of these principles
and believes strongly in the initiative. We are pleased to see
further progress has been made over the past year under
Michael Parker’s excellent stewardship. Since its inception,
the Poseidon Principles has grown to cover around 70% of
all bank lending to shipping in less than 3 years. The initiative
is now looking to drive its emission reduction objectives at a
deeper and faster pace than the IMO. We welcome the positive
50
Euronav Annual report 2021
drive the Poseidon Principles have brought for shipping in its
decarbonisation strategy, and the example it sets for other
industrial sectors .
Divestment is a subject we are very focused on as a company
engaged in the safe transportation of crude oil around the
world. The recent focus on the cost and potential dislocation
from the energy transition has drawn attention to the
constructive role fossil fuels can deliver during the transition.
Euronav is not against divestment as a valid tool for investors
and finance providers. However, we strongly believe that it
is a blunt instrument which should only be used sparingly.
Encouraging “champions” in each sector to deliver positive
societal and environmental goals is a framework that should
be adopted more widely. We have chosen this year to focus
on divestment as a theme for our special paper (see page 187.
Euronav intends to be one such “champion” in the tanker
sector and we will continue to use our platform, as we have
since 2013, in writing such papers to stimulate debate and
discussion. We welcome feedback to these pieces.
In 2021 I attended two major events that brought together
players in the marine industry. The 2021 Global Maritime
Forum Summit, that took place in October, top decision
makers, thought
from across the
leaders and experts
maritime spectrum and beyond gave particular attention to
three issues under the theme ’Reaching the Tipping Point’ :
‘Decarbonisation of shipping’, ‘Ensuring workforce wellbeing
and diversity’, and ‘License to operate’. In November, the
International Chamber of Shipping (ICS) organised the CEO/
Board level conference ‘Shaping the Future of Shipping’ in
Glasgow, alongside COP26, the 2021 United Nations Climate
Change Conference. This momentum created a single
point of contact for the whole shipping community where
it showcased its thought leadership on decarbonising the
industry to the COP26 delegates. I was proud to attend these
global gatherings and to represent both Euronav and tanker
shipping in such important forums. Shipping needs to come
out of the shadows and make its case more proactively and
forcibly in the sustainability debate.
By being part of the discussion we can generate positive
change and deliver our part of the bargain. Shipping must
ensure it delivers on its credentials to ensure we remain part
of the debate.
Euronav’s sustainability platform continued to build during
2021. We again achieved a ‘B’-score for the Carbon Disclosure
Project (CDP), reflecting our commitment and action so far
on climate change. Other initiatives such as our retained
membership of the Bloomberg Gender-Equality Index (GEI)
and further operational progress with biofuels trials illustrates
the expansion of our platform. Our dedicated Sustainability
Committee has been in place since 2019 and is unusual, as it is
composed of both Executive and Supervisory board members.
Our new Sustainability Manager, Konstantinos Papoutsis,
appointed in May 2021, has advanced our capability during
the year, allowing Euronav to set a framework for specific
emission targets. We look forward to outlining these in more
detail going forward.
The energy transition remains one of the most pressing and
significant challenges facing the crude tanker shipping sector.
Euronav's focus on leading a sustainable and responsible
platform will, we believe as a company, bring tangible benefits
to all our stakeholders along with wider society. Shipping
is in many ways one of the strongest platforms to achieve
decarbonisation, already being 87 times more efficient than
aviation in terms of emissions. Euronav looks forward to
delivering on that challenge.
Euronav is not the finished article or anywhere near the
completion of our sustainability journey. That is both a
challenge and an opportunity. However, keeping sustainability
at our core along with our disciplined approach will deliver
over the medium-term. As CEO of this company I am proud of
the progress made so far, but even more stimulated by the very
opportunity we possess within our own capability to deliver
further.
Hugo
51
Euronav
Sustainability at Euronav
Our approach to sustainability
Sustainability has been embodied in the DNA of the Company
long before financiers of businesses and regulators began
dealing with it. Sustainability is one of Euronav’s core values
that are embedded in our business routines, both onshore and
offshore. Sustainability at Euronav goes beyond emissions,
climate change and environmental pollution. It is also about
delivering a caring, respectful and supportive environment to
our employees, prioritising safety at all levels of our business,
and ensuring accountability on these objectives. It is vital
to understand that the decarbonisation of shipping is an
inclusive process that can only be achieved if we guarantee
the well-being of our people, embrace different cultures and
safeguard optimal operating conditions. Consequently, none
of our current challenges are achieved if they are treated
separately.
Our concept of sustainability is based on three pillars:
Environment, Social and Governance. We frame our decisions
in terms of environmental, social, and human impact for the
short-, medium- and long-term. We value all three pillars
equally and have established a governance framework that
underpins engagement and compliance, both internally and
with our suppliers, customers, associations, partnerships
and governmental agencies. The corporate framework is set
up to promote effective environmental and climate change
strategies, that are supported by community engagement
policies and based on our corporate business conduct
and principles. However, it must be made clear that an
ESG framework is effective only if it relies on a solid and
sound financial foundation that can directly support the
implementation of each of the aforementioned pillars. As
such, economic sustainability is a prerequisite for a successful
sustainability strategy overall.
Building on our past for our future: we were a key partner in
deriving the Poseidon Principles and are proud signatories,
pledging to actively reduce our carbon emissions as part
of the IMO guidelines, with an aim to surpass them. As a
member of the Getting to Zero Coalition between the Global
Maritime Forum and World Economic Forum, we demonstrate
our commitment to an industry-wide collaboration, driving
shipping decarbonisation at scale. Our Joint Development
Program (JDP) with Hyundai Heavy Industries (HHI) and
classification societies Lloyd’s Register and DNV, shows we are
focusing on unlocking the potential of targeted partnerships,
something that will further extend our knowledge of the
industry in which we operate. Finally, our above-industry
average 'B ’score from the Carbon Disclosure Project (CDP)
proves that we foster accountability, transparency and foresight
with regards to climate related risks and opportunities.
Our corporate values define our sustainability business. The
long energy transition requires cooperation, if the shipping
sector wants to accelerate this and wants to inspire by
setting a good example. We need to build capabilities that
accommodate future uncertainties and enable transformation
into an adaptable organisation that materialises risks into
opportunities. Resources are not unlimited, but opportunities
can be, and Euronav embraces self-sufficiency while creating
value for our shareholders and stakeholders. Integer and
transparent is how we see our way forward as we need to be
conscious on the impact we leave behind, on the environment
and on communities. Finally, excellence should govern our
navigation to unexplored waters where information and
data will determine the champions into that new world of
digitalisation.
52
Annual report 2021
53
EGS78,994,5374,560,945TRC Frequency Rate41% financing with sustainability componentUSD 80 M and 73.5 M sustainability loanCDP B rating Reporting frameworks
The disclosures in this report provide investors and other stakeholders with material sustainability or ESG information. This
report has been carefully prepared following the principles of the Global Reporting Initiative (GRI) and the Marine Transportation
framework established by the Sustainability Accounting Standards Board (SASB). Euronav’s sustainability strategy is also aligned
with the United Nations’ Sustainable Development Goals (UN SDG). Further information can be found on page 57. Euronav also
disclosed information on sustainable and responsible investments following the Carbon Disclosure Project (CDP), and guided by
EcoAct Climate Consultancy. The report and data cover the period from 1 January to 31 December 2021.
Sustainability key figures
Climate risk and climate footprint
Metric
Unit
2021
2020
Reference standard
Scope 1 GHG emissions
Metric tonnes CO2-eq.
2,411,352
3,082,765
TR-MT-110a.1
Scope 2 GHG emissions
Metric tonnes CO2-eq.
199
GHG emission intensity
Ratio e.g. g CO2e / TKM 3.55
232
3.36
GRI 305-2
GRI 305-4
GHG emission management
See page
p 66-94
p 108-113
TR-MT-110a.2
Scope 3 GHG emissions
Metric tonnes CO2-eq.
804,693
638,578
Energy mix
(1) Total energy consumed;
(2) percentage heavy fuel oil;
(3) percentage renewable
Gigajoules,
Percentage (%)
1) 30,298,088
2) 57%
3) 0.07%
1) 41,067,762
2) 87%
3) 0%
TR-MT-110a.2
TR-MT-110a.3
Annual Efficiency Ratio (AER) gCO2 / TNL
2.26
2.42
Non-SASB: optional
Air quality
Air emissions of the following
pollutants:
(1) NOx (excluding N2O),
(2) SOx
Ship recycling
Metric tons (t)
1) 69,666.5
2) 6,863
1) 83,899.3
2) 8,558
TR-MT-120a.1
Responsible ship recycling
0
0
Hong Kong Conven-
tion EU Ship Recy-
cling Regulation
Ecological Impacts
Percentage of fleet
implementing ballast water
(1) exchange and
(2) treatment
Percentage
TR-MT-160a.2
1) Exchange: 36%
2) Treatment: 64%
1) Exchange: 53.6%
2) Treatment: 46.4%
Number and aggregate
volume of spills and releases
to the environment
Number, Cubic meters
(m3) or Metric tonnes
0
0
TR-MT-160a.3
54
Euronav
Annual report 2021
Accidents, Safety and Labour Rights
Metric
Unit
Lost time incident
rate (LTIR)
Diversity of
Workforce
Rate (lost time inci-
dents) / (1,000,000
hours worked).
Percentage
2021
0.4
2020
0.6
Shore:
58% male, 42% female
Sea:
97.4 % male, 2.6% female
Supervisory Board:
60% female
Shore:
55% male, 45% female
Sea:
97.6 % male, 2.4% female
Supervisory Board:
50% female
Reference standard
TR-MT-320a.1
GRI 405-1
Labour rights
See page
p 96
p 103
GRI 102-41
Business Ethics
Port state control
Number of
(1) deficiencies and
(2) detentions received from
regional port state control (PSC)
organisations.
Corruption risk
Number of calls at ports or net
revenue in countries that have the
20 lowest rankings in Transparency
International’s Corruption
Perception Index
ESG Governance
Policies and targets
Description of main
policies and targets:
Number
1) Deficiencies: 15
2) Detentions: 0
1) Deficiencies: 18
2) Detentions: 0
TR-MT-540a.3
Number
12
24
R-MT-510a.1
See page
p 116-119
p 99 - 105
GRI Disclosure of
Activity metric
Unit
Number of shipboard employees
Number
2021
3,194
2020
2,780
Reference standard
TR-MT-000.A
Total distance travelled by vessels Nautical miles
4,560,945
4,731,775
TR-MT-000.B
Operating days
Days
25,952
25,312
TR-MT-000.C
Deadweight tonnage
Thousand dead-
weight tons
18,776,610
17,806,233
TR-MT-000.D
Number of vessels in total
shipping fleet
Number
72
77
TR-MT-000.E
Number of vessel port calls
Number
1,943
1,881
TR-MT-000.F
55
UN Development Goals Euronav
In 2015, the United Nations launched 17 Sustainable Development Goals (SDGs) to end poverty, fight inequality and injustice,
and tackle climate change by 2030. Euronav’s sustainability policy aligns with the purpose of a ‘shared blueprint for peace
and prosperity for people and the planet, now and into the future’. To that end, the Company is proud to be engaged with
the UN Sustainable Development Goals and we believe we can have influence over the delivery of ten of the UN SDGs as
illustrated below.
56
Euronav
Annual report 2021
•
•
Ensuring good health and well-being for our seafarers within the 2-year mobility constraints
due to the pandemic by making professional psychological support available and providing
e-payments.
Ensuring a good and healthy on board work environment with high quality catering services
and targeted actions centred around wellbeing.
• Rolled out a resilient working framework with respect to work/life balance of onshore
employees and in line with governmental mandates.
•
In recent years, Euronav has managed multiple projects under the umbrella ‘Euronav on the
move’ to encourage staff across all our locations to incorporate exercise into their everyday
work life.
ESG Alignment:
Human Capital
Social Responsibility
•
•
•
Inclusion in the Bloomberg Gender-Equality Index for a fourth consecutive year.
Fair and equal treatment of female and male employees on shore and at sea in terms of
remuneration, senior roles and key responsibility functions.
Euronav has had substantial female representation since 2012. In 2021, the Company has a
60% female representation in the Supervisory Board members, 48% representation in the
onshore workforce and a growing representation offshore. Euronav has a roster of 66 female
officers and cadets and we expect to have them promoted to Senior Officers ranks shortly.
ESG Alignment:
Human Capital
Social Responsibility
•
Investment in pilot projects to eliminate the use of single-use plastics (SUP) on Board. A
project that aims at introducing water filtration systems is coupled with another one where
water drums are used on board. Both intend to secure clean, potable water on board while
demonstrate our responsibility towards the conservation of global water resources.
ESG Alignment:
Environmental Responsibility
Social Responsibility
•
•
Euronav is a member of the Getting to Zero Coalition, which is committed to having
commercially viable deep sea zero emission vessels powered by zero emission fuels into
operation by 2030.
Euronav also partnered with Huyndai Heavy Industries shipyard, DNV and Lloyd’s Register
classification societies to foster acceleration of ammonia-fuelled vessel.
ESG Alignment:
Environmental Responsibility
57
• High retention rates, more than 87.7 % for shore and 95.94% for sea staff, reflecting our
position as a stable and premium employer.
•
Euronav employs approximately 3,200 seafarers with the offshore remuneration on
average 5 times higher than their respective country’s per capita GDP.
• Collective Bargain Agreement applied for the vessels sailing under French, Belgian and
Greek flag , signed between the shipowners and seafarers unions, ITF (International
Transport Federation) terms and conditions for seafarers of non-national, EU or pool
members.
•
Euronav contributes to safe shipping of crude oil, an energy source of which the
derivatives are essential for every day social and economic activities until substitutes
are found or carbon emissions can be captured.
ESG Alignment:
Human Capital
Social Responsibility
•
•
•
Low average fleet age ensuring lower and better use of energy.
Vessels are reused/repurposed when they reach a certain age ensuring a – as circular as
possible – treatment of their capacity.
Energy efficiency innovations applied onboard to achieve lower emissions and optimal
voyage performance.
ESG Alignment:
Corporate Governance
Environmental Custodian
•
Investment in pilot projects to eliminate the use of single-use plastics on board .
• Reducing waste on board of vessels and rigorously applying partnership initiatives.
• Working with suppliers to ensure sustainable packaging, ban of single use plastic on
board or transitioning to eco-friendly/bio-gradable packaging items.
ESG Alignment:
Environmental Responsibility
•
•
Reduction of sulfur emissions by another 20% between 2020 and 2021.
Reduction of total 2021 Scope 1, 2, 3 GHG emissions by 14% vs 2020.
• Climate disclosure in the context of the Carbon Disclosure Project (CDP), in which we
obtained a ‘B’score with our 2021 submission, indicating performance beyond average
industry standards.
•
•
Euronav has agreed to annual reductions in emissions as part of our commitment to the
Poseidon Principles and as agreed with lenders as part of sustainability linked loans ( USD
713 million in 2020, USD 90 million and USD 73 million in 2021).
Fully-fledged decarbonisation strategy in place covering various fuel pathways, including
an energy efficiency planning for our fleet laying down a ‘Net-Zero’ ambition for 2040 or
later, and certainly in or before 2050.
ESG Alignment:
Environmental custodian
58
Euronav Annual report 2021
•
•
•
•
‘The ocean is our environment’ has been manifested by targeting zero oil spills
supported by our International Tanker Owners Pollution Federation ( ITOPF)
membership. This non-profit organisation promotes and supports effective response
to marine spills of oil.
Limited use of scrubbers at inland waters and sanctuaries to avoid acidic water
discharge.
Increasing ballast water management with a growing number of vessels adopting
treatment systems.
Strong supporter of the Great Whale Conservancy(GWC) which safeguards safe ocean
passages for whales through vessels adopting operational measures that support
GWCs mission.
ESG Alignment:
Environmental custodian
• Broad and substantial cooperation is required in order to drive sustainability strategy
due the global nature of shipping amongst all its participants. Euronav engages
with a range of initiatives that are designed to protect, promote and enhance the
ocean environment for today and tomorrow such as the Getting to Zero Coalition,
Sea Cargo Charter, HELMEPA, and more. The activities of these initiatives are
described later in the report. External engagements make it possible to increase our
community’s impact on marine and maritime related networks that take actions
to improve the ocean environment. The more resources are allocated within these
networks, the more powerful their impact can be.
ESG Alignment:
Corporate Governance
Materiality
Materiality assessment - process
development
(SDGs) set by the United Nations SDGs and how we define our
corporate sustainability strategy.
One of the key strategic considerations
for Euronav’s
sustainability strategy is to assess and define the topics
that represent our organisation’s most significant impact
on the economy, environment, and people. Each year our
company prioritises these topics, called ‘material items’,
within our sustainability strategy. This exercise is also defined
as a ‘materiality assessment’ to support our sustainability
reporting. An important element of this materiality assessment
is also to understand the concerns of our stakeholders,
both internal and external, such as charterers, suppliers,
classification societies and financial institutions. That is
critical, as it determines how our Company is capturing key
perspectives that tie with the Sustainable Development Goals
Each materiality assessment cycle is valid for one year, after
which a new assessment of the material items is conducted.
This is to ensure that our overview is in line with the ongoing
trends and important topics reflecting the organisation’s
economic, environmental and social impacts, or influencing
the decisions of our stakeholders. In Euronav’s Sustainability
Report of 2020, we set the foundation for a thorough and
multi-stakeholder oriented materiality assessment. In this
year’s report, we elaborated further on last year’s foundation,
incorporating a more digital and diverse assessment
framework that reflects shipping risks and opportunities even
more transparently.
59
Our approach: we collaborated with the Vrije Universiteit
Brussel (VUB), using their top-notch decision making process
called Multi-Actor Multi-Criteria Analysis® tool, built by Mobilise,
part of the MOBI-Research Centre VUB; and we expanded and
refreshed our stakeholder network (both external and internal)
that was involved in the materiality assessment.
a) We engaged with a diverse mix of stakeholder groups
following an inclusive process regardless of gender, age,
nationality and religion to capture the latest ESG trends
and to incorporate all voices.
b) We introduced four new criteria in our analysis to better
illustrate the angle with which material items have been
assessed (financial, environmental, social and operational
criteria).These perspectives are also highlighted in the
context of the GRI reporting framework for materiality.
Figure 1: Sustainability impact areas
Summary of the process followed
IDENTIFY: Relevant sustainability material items, addressed
in previous materiality assessments, were reviewed to finalise
a list of ESG-related topics.
1. Validating the set of UN SDGs with which Euronav
complies
2. Securing that the set of material items listed below
corresponds to our associated SDGs framework:
Innovation
Ethics & Anti-corruption
Access to sustainable finance
•
• Health & Safety (mental health included)
Emissions
•
• Regulation
•
• Waste & Recycling
•
• Divestment risk
•
• Clean energy
• Climate change risk & disclosure
• Cyber security
• Diversity and Inclusion
•
•
• Marine pollution & biodiversity
Seafarer operating conditions
•
Employment conditions
Taxonomy
Lobbying
3. Defining the objectives of the assessment and reporting
scope and criteria
4. Defining the stakeholder groups to engage
5. Selecting the right tool that fits the exercise’s
requirements and the development of the framework
PRIORITISE: Two online surveys were shared with Euronav
internal and external stakeholders globally. Respondents were
asked to rate the level of importance between different criteria
and different alternative material items.
6. Engaging with different
stakeholder groups and
information collection via the online tool
VALIDATE: Based on the survey results, all items were plotted
on a materiality matrix, which was reviewed by Euronav’s
sustainability team in order to validate the relative and
absolute importance of each item for the Company.
7. Feedback analysis and conclusions
After creating the online tool and adapting it to materiality
assessment requirements, we reached out to the selected
internal and external partners. The respondents assessed
the importance of the four criteria (financial, environmental,
social, operational) and subsequently assessed the different
material items against each separate criterion. We received
questionnaires representing a number of associated internal
and external stakeholders . The visualised outcome of the
materiality assessment is depicted in figure 1.
60
Euronav Annual report 2021
Materiality Radar
As the materiality assessment in figure 2 shows, both Euronav
associates and external stakeholders are in principle aligned
on the importance of the four different criteria: financial
performance, environmental impact, operational implications
and society uptake. The outcome of our partners’ analysis
indicates that financial performance and environmental
impact are equally important for the materiality analysis. On
the contrary, the analysis of Euronav associates demonstrates
that financial performance is slightly ahead vs. environmental
impact as weighted criterion. Both analyses put the operational
implication in third place and society uptake in fourth place.
Two messages that can be conveyed are:
a) Environmental sustainability tends to be raised as an
important element and be treated equally to the, always
critical, financial performance. This shows that both Euronav
and external stakeholders place special emphasis on these
areas of impact.
b) The gap between the first (financial) and last (society)
criterion is relatively narrow. This can be interpreted as
the decline of the overarching dominance of financial
performance over any other perspective. The new reality
illustrates that other aspects such as social take-up of a
company’s activities or the operational implications also
receive strong importance within the industry.
Some takeaways with regards to the materiality assessment:
•
Fundamentally, Euronav is aligned with the Company’s
external stakeholders on the key material items for 2022;
• High materiality items include innovation, regulation,
ethics and anti-corruption for both internal Euronav and
external stakeholders;
•
Equally important for Euronav and its external stakeholders
are: health and safety, emissions, employment conditions,
clean energy, climate change risk and disclosure, and
seafarer operating conditions;
Figure 2: Materiality Radar
61
InnovationHealth & SafetyEmissionsRegulationWaste & recyclingEthics & anti-corruptionDivestment riskLobbyingTaxonomyCyber securityClean energyEuronavExternal stakeholdersLow-materiality - trackingHigh materiality - actionMid-materiality - priority Figure 3: Materiality alignment with UN SDGs
•
•
Access to sustainable financing is not included in the key
material items for 2022, which indicates that sufficient
liquidity is still available. In the future we might see that
access to sustainable finance will become more critical,
especially if the sustainability criteria become more
stringent and if a larger amount of available financing
relies on sustainable criteria;
Euronav is already acting on the mutually identified high-
materiality items: innovation (FAST project), regulations
(monitoring IMO and EU regulations through our platform
and the Belgian Shipowners’ Association), and ethics and
anti-corruption which are pillars of our governance model
in place), access
• Moreover, Euronav is already taking concrete actions
regarding the items addressed as priority: emissions
(energy-efficiency measures
to
sustainable finance (more than USD 800 million of
sustainability linked loans), employment and seafarers
operating conditions (demonstrated care and respect
through our leadership stance in the COVID-19 crisis),
and clean energy (established the Joint Development
Program together with Hyundai Heavy Industries (HHI)
and classification societies Lloyd’s Register and DNV, to
help accelerate the development of dual fuel Ammonia
(NH3) fitted VLCC and Suezmax vessels).
Euronav Active engagement with financial institutions on ESG
EU Taxonomy
The financial institutions are one of the main liquidity providers
for the shipping industry. In the context of the plans of the
European Union to move towards a low-carbon economy,
and due to the new EU transition engine called Green Deal,
there are new directives and regulations that introduce
incorporation of
‘sustainable financing’ along with the
corporate sustainability reporting and compliance regulations.
Sustainable investing assets are expected to account for more
than USD 40 trillion asset management globally by the end of
2022. Banks, for instance, will have to report their own green
asset ratio, more specifically how much of their assets’ funded
by banks align with the so called ‘green assets and activities’.
The Poseidon Principles are another example where financial
institutions need to report the climate-aligned shipping
portfolio. In order to strengthen consistency, the EU has
inaugurated a framework that defines the economic activities
that are considered ‘green’ to encourage investors to respond
on regulated definitions, which in turn will be taken up by
markets as well. A definition of what is "green" is needed to
channel private investment to where each country's needs are
greatest in terms of meeting their net zero target.
Figure 5: Sustainable finance package - Directing
finance towards European Green Deal
Source: UBS Global Research - 20 January 2022
Euronav has been proactive in positioning for the future with
our financing profile. During 2020, Euronav began converting
existing facilities into revolving credit facilities with specific
targets for emissions reduction. These loans include terms with
clear targets to reduce our Greenhouse Gas (GHG) emissions
over their duration. The targets are effective immediately,
with compliance over the first 12 months being rewarded
with a reduced interest coupon of five basis points. This will
be independently measured and verified. The Company
welcomes this ‘means tested’ approach to our financing
structure and anticipates future funding of the company to be
similarly subject to such frameworks.
As Sustainability is one of our core values, Euronav approaches
each financing opportunity through a ‘sustainable lens’,
together with its consortium of partner banks that share the
same values. Euronav has further closed sustainability linked
loans during 2021.
In Q2 of 2021, Euronav announced that it had signed an EUR
80 million unsecured revolving credit facility with sustainability
features. This new facility was concluded with a range of
commercial banks and with the support of Gigarant. In
December 2021 Euronav secured an additional USD 73.5 million
sustainability linked loan at LIBOR to finance two newbuilding
Suezmaxes that came on the water in Q1 2022. The loan was
concluded with DNB and includes sustainability and emission
reductions as a component of the margin pricing. The conclusion
of this funding brings facilities with an integrated sustainability
component to 41% of Euronav’s commercial bank financing at
the end of 2021. A range of measurable sustainability features
such as year-on-year reduction in carbon emissions starting
from 2022 will be supported by compliance with the Poseidon
Principles.
Figure 4: Facilities with an integrated
sustainability component
Euronavʼscommercialbankfinancing facilities with an integrated sustainability componentCorporate Sustainability Reporting Directive (CSRD)Sustainable Finance Disclosure Regulation (SFDR) Euronav
Figure 6: EU Taxonomy criteria
Source: Euronav
The EU Taxonomy regulation creates the world’s first
classification system for sustainable economic activities,
which will develop a common language for investors and
companies about financing assets, activities or goods. It
applies as of January 1st, 2022, In order to be taxonomy
aligned, an economic activity must:
a) Substantially contribute to one of six key environmental
objectives
b) “Do No Significant Harm” (DNSH) to any of the objectives
c) Meet minimum social safeguards
Apart from satisfying the above-mentioned technical selection
criteria, the economic activity must also meet minimum social
safeguards and must not conflict with any of the other four
objectives: water protection, transition to a circular economy,
control of pollution and healthy ecosystems.
Euronav being subject to the Non-Financial Reporting Directive
(NFRD) regulation is expected to report eligibility criteria in the
course of that report. The Company’s activities that render it
eligible are associated with the following codes in the Statistical
Classification of Economic Activities, commonly referred to as
as NACE (Nomenclature des Activités Économiques dans la
Communauté Européenne):
•
•
Euronav is involved in sea and coastal freight water transport
The Company is also active in leasing of water transport
equipment.
• Our ship management branches across the globe
provide support services for the vessels of Euronav.
For next year’s FY22 report, Euronav will report its alignment
with regards to EU Taxonomy. However, according to
Regulation (EU) 2020/852 of the European Parliament and EU
Council (the ‘Taxonomy Regulation’) which came into force on
12 July 2020, a common disqualifier for maritime transport
is where vessels are dedicated to the transport of fossil fuels.
This applies for a number of activities that match Euronav’s
services and core activities: sea and coastal freight water
transport, retrofitting of sea and coastal freight, passenger
water transport, and infrastructure for water transport.
In accordance with our decarbonisation strategy and our
energy-efficiency planning, we will set forth a twofold ambition
which covers:
64
a) Our main assets
b) Our services and activities
With regards to our assets, which are the vessels we operate
for our shipping activities, Euronav will gradually decarbonise
the profile of the fleet by assessing and applying energy
efficient technologies such as advanced anti-fouling paint,
engine upgrades, hull and propeller improvements, wind-
assisted propulsion, air lubrication, and other technologies
that we will have tested. Each vessel possesses her own Energy
Efficiency Plan in the context of SEEMP (Ship Energy Efficiency
Management Plan). Moreover, we will maintain a premium
operational performance by implementing the most advanced
voyage optimisation practices (speed reduction and/or just-
in-time voyage planning and routing). Coupled with digital
innovation, these will drive further every-day emission
reduction. In addition, we will continue to rejuvenate our fleet
with a ‘cleaner’ fleet portfolio in the medium- and long-term
by aiming at the deliveries of more eco-friendly vessels. Finally,
we will reap the rewards of our established partnerships to
pioneer the implementation of alternative propulsion systems
using lower or zero emission fuels, especially after mid-2020's.
These will be our main levers to increase the sustainability
performance of our assets and drive our net-zero target.
Concerning the core activity for our clients, currently shipping
crude oil, we will continue to respond to the demand of the
highest-traded energy source in the world as long as demand
makes crude oil supply commercially viable in the absence
of substitutes. We also take into consideration the fact that
the ongoing energy transition might dictate a diversification
of the fleet mix, where new ships might be built that are not
dedicated to shipping a specific energy source, or that shipping
companies might have different types of cargo vessels in their
portfolios, like biofuels or waste water. Euronav is closely
monitoring the energy transition, and other opportunities that
may arise in the future; and is investigating all the different
options together with our shareholders and established
partnerships, if and when necessary.
There are a lot of opportunities to improve the current
version of EU Taxonomy regulation towards a more inclusive
and fair taxonomy classification. Shipping companies that
invest in fleet rejuvenation with less polluting vessels, initiate
partnerships to stimulate and accelerate the production of
zero-emission fuels while they transport fossil fuels without
influencing their demand or production, should be included
under conditions in the taxonomy-aligned category. Such
conditions could entail a decoupling of assets used and
economic activities provided, or for energy carriers in the
maritime shipping a decoupling of energy used vs. energy
shipped (cargo). If a specific segment of the shipping market
Annual report 2021
is left behind and not included in the ‘green’ economic activity
framework, the risks are the following:
•
•
A market providing specific services might be disrupted,
jeopardising the employment, productivity and skill sets of
labour force devoted to a market segment, with sigificant
social impact.
A lack of financial stimulus to participate in shipping
decarbonisation might
lead to an acceleration of
divestment of fossil fuel investments which will not lead
to decarbonising the sector but to less transparent asset
utilisation. In fact, assets committed to divestment have
skyrocketed from USD 52 billion in 2014 to more than
USD11 trillion today. (https://www.linkedin.com/pulse/
eu-taxonomy-sustainable-finance-its-expected-impacts-
hald-mortensen/, https://ec.europa.eu/info/sites/default/
files/business_economy_euro/banking_and_finance/
documents/190618-sustainable-finance-teg-report-
taxonomy_en.pdf)
to support
investors’ decisions about
Euronav believes that EU Taxonomy is the right first step
needed
‘green’
economic activities and supports the efforts made for
financial portfolios to grow their climate-aligned investments.
However, we believe that European green transition should
be more inclusive by introducing a regulatory framework that
incentivises all actors to pursue in the same direction.
65
Euronav
Environment
Approach to environment
Euronav acknowledges the magnitude of the climate change
challenge and the air pollution as a result of human activity,
and the key role that the Company can play by achieving
sustainable change. The Company has set a decarbonisation
strategy that not only aligns with the emission reduction
targets of IMO 2030 (40% reduction in GHG emissions) and
IMO 2050 (70% GHG emissions reduction), but even exceeds
them. ‘IMO 2030 strategy’ aims at reducing CO2 emissions per
transport work, as an average across international shipping,
by at least 40% by 2030, with the intent to pursuing efforts
towards 70% by 2050, compared to a 2008 baseline.
Euronav fully supports both policy objectives, as reflected
in our commitment to various initiatives related to tackling
greenhouse gases and air pollutants (Getting to Zero
Coalition, Global Maritime Forum, Poseidon Principles), direct
corporate actions (reducing fleet age and carbon footprint),
and with tangible technical support to a number of external
R&D initiatives focusing on reducing emissions. We envision
in all high-level climate-related platforms
participation
or forums where regulations or solutions for shipping as
discussed. As mentioned, our CEO Hugo De Stoop participated
in two such gatherings in 2021. He attended the 2021 Global
Maritime Forum Summit in October, and ‘Shaping the Future
of Shipping’ in November in Glasgow. The latter being
organised alongside COP26 by the International Chamber of
Shipping (ICS). Moreover, we are accountable by disclosing
our impact on the environment and society responsibly and
transparently through the CDP climate-related disclosure
platform. In addition, Euronav is currently testing the use of
biofuel blends during our voyages to better understand the
positive environmental impact and operational stability. This
is another tangible opportunity to demonstrate environmental
responsibility. And that is only the beginning.
66
impact does not only
2021 has been extraordinary with the impact of the COVID-19
pandemic, but global trade and ship numbers have seen a
steady increase over recent years. In parallel, there have
been economies of scale with larger, more efficient vessels.
On a per-ship basis, emissions of harmful substances,
pollutants and greenhouse gases from vessels have been
reduced. This allows shipping to assert its position as the
most environmentally friendly and most energy efficient
mode of transport, shipping huge volumes of cargo with
minimal proportional environmental impact. For Euronav,
the environmental
include the
emissions and air pollution taking place above sea level but
also the marine ecosystems thriving below sea level. We are
proud to support the Great Whale Conservancy and have
implemented measures to ensure safe passages for vessels
and whales, demonstrating our continued focus on marine
biodiversity. Additionally, we are investing in closed-loop
or circular-based economy where possible: from the ban of
single-use plastic cups at offices, to the ban of single-use
plastic on board our vessels, or the ordering of sustainable
packaging for the spare parts during our dry docks. We are
already working with our suppliers to mitigate the use of
plastic on board and to promote filtered potable water.
Circular economy goes hand in hand with the blue economy
and helps the marine ecosystems to thrive with the least
possible impact from human activity.
Informed decision-making that relies on qualitative data is
a catalyst for optimised voyage performance and reduced
emissions. Digital transformation plays a critical role
through timely data acquisition and enhanced fleet and
operations monitoring. That, in turn, leads to optimised
voyage performance and routing which saves emissions
and costs without compromising the level of service for our
Annual report 2021
clients. On the contrary. It adds punctuality, knowledge,
and transparency on environmental, operational and safety
aspects. Euronav has also embraced digitalisation and
innovative technologies (digital twins, wind propulsion,
etc.) and will not derail from investing in research and
development that will help form our strategy, transform our
operations, build knowledge and capabilities and secure
safer, more environmentally-friendly shipping operations.
We are confident that we are very well positioned to welcome
a new era in maritime transport which will be dictated by
market uncertainty, especially regarding energy sources
being shipped and fuels used in vessels’ propulsion systems.
A long and expensive energy transition is imminent, which
will require substantial investments in modern newbuildings,
retrofits and the development of new types of fuels offered
at scale. Such investment needs can only be achieved via
close and cross-industry collaboration to drive the necessary
cost sharing. As such, we, as a sector, should overcome any
obstacles that impede broader collaboration and be willing
to unleash an information sharing mentality.
Last but not least, we must invest in our people, both shore
inclusive decarbonisation
employees our seafarers. An
strategy should leave no one behind. The new era will bring
new skill set requirements and therefore tailored trainings,
demonstrations, and a new type of enhanced well-being
on board where people skills and digital automation will
complement each other to ensure the highest level of safety
and optimal voyage performance.
Finally, we have set up a sustainability platform aiming at
curbing our environmental impact through:
•
Active Fleet Energy Management i.e. the development of
a plan and the implementation of measures to reduce
emissions and fuel consumption;
• Progressive fleet rejuvenation policy;
• GHG emissions and air pollution monitoring and
management;
•
•
Testing new types of alternative fuels starting from biofuel
blends;
Voyage performance management through Sea-to-Shore
information sharing;
• Waste management and plastic recycling practices when
on passage;
Climate change
Shipping’s position on emissions
Shipping is responsible for around 2.7% of total GHG emissions
which is comparable on a nation state basis to that of Germany
for a global industry. However, when transporting goods,
services, or people, the footprint shipping leaves compared to
other major transportation methods is very competitive. It is
87x more efficient than aviation, 23x more efficient than road
transportation and 5x more than rail in terms of emissions. The
global regulator for shipping (the IMO) is committed to drive
emissions intensity on CO2 emissions lower by 40% by 2030.
Shipping has an outstanding platform and opportunity to
become a low carbon solution for transportation needs over
the next multi-decade move toward decarbonisation.
67
Figure 7: Shipping - low relative emissions
Source: IMO GHG study 2009. Notes: 1) Energy-efficient transport is much dependent on the load factor, vehicle efficiency
and cargo type; heavier cargo and larger vehicles will improve the cargo/vehicle weight ratio, resulting in better CO₂/ton-km
values; 2) Air = Boeing 747, Road = Truck > 40 ton, Rail = 3-4 hp / short-ton, Shipping = Average of very large container vessel
(3 gCO₂/ton-km), oil tanker (6), bulk carrier (8); 3) Estimations assuming current energy mix
Detailed emissions fleet
GHG Emissions monitoring
Since 2017, Euronav has been paving the way with climate-
related performance transparency in the large tanker market,
Figure 8: Euronav Total Carbon Emissions
providing full scope 1, 2 and 3 disclosure of our carbon
emissions and footprint. Carbon emissions are verified by the
external audit agency, EcoAct, and we work towards including
all possible streams of emissions under Scope 1, 2 and 3.
Figure 8 provides an overview of the key operational climate
change emissions and their accounting frameworks.
Type of emissions
2017 tCO₂e 1
2018 tCO₂e
2019 tCO₂e
2020 tCO₂e
2021tCO₂e
Scope 1 (Direct)
3,280,230
2,944,387
3,129,547
3,082,765
2,411,352
Scope 2 (Indirect Energy)
Scope 3 (Indirect Other)
TOTAL
400
424
248
232
199
635,830
583,547
625,565
638,578
804,693
3,916,460
3,528,045
3,755,360
3,721,576
3,216,245
% Change
2021 vs 2020
-22 %
-14 %
26%
-14 %
1. Certain aspects of the organisation’s operations have been excluded, due to a lack of data availability. These account for less than
0.3% of total emissions so are not considered material. This includes electricity from two one-person offices and business travel from
Anglo-Eastern Ship Management. The reported figures for CO2 and other GHG emissions for 2018 in relation to the 21 ships purchased
as part of the “Gener8 merger” are not the actual ones but they are “annualised” for comparison purposes.The reported figures for
2017 have been “rebaselined” for year- on- year comparison purposes with the 2018 figures.
68
Shipping — low relative emissions425AirRoadRailShippinggCO2/ton-km(1,2,3)80355500150100200250300350400450Euronav Annual report 2021
Scope 1:
Scope 2:
Scope 3:
GHG emissions from
Euronav’s assets that are
controlled directly by
the company, including
the combustion of fuel
from company vehicles
and vessels, and building
operations.
GHG emissions from
imported energy, such
as purchased electricity,
heat or steam.
GHG emissions from
non-owned sources
that are related to the
company’s activities.
This includes business
travel, the well-to-tank
emissions related to the
production/processing
of bunker fuels, and
the transmission and
distribution of electricity.
Figure 9: Key operational data
EEOI gCO2/TNM
AER gCO2/TNM
OEI gCO2e/T.KM
2018
4.6
2.37
3.07
2019
4.96
2.36
3.36
2020
4.91
2.42
3.34
2021
5.01
2.26
3.55
EEOI/Energy Efficiency Operational Index: Sea going fleet emissions (gCO2) per unit of transport work (cargo ton miles)
AER/Annual Efficiency Ratio: Sea going fleet emissions (gCO2) per ton of ships deadweight times total miles run in the period
OEI/Organisational Emissions Intensity: All Euronav emissions (scope 1, 2, 3) per unit of transportation work (cargo ton kilometres)
Source: all calculations by Ecoact
69
Figure 10: Euronav’s CO2
footprint 2021
Below is a potential explanation for a sharp drop in Scope 1
and sharp increase in Scope 3 emissions coupled with an
increase in the operational intensity (Figures 8 and 9):
•
Increased share of Time - Chartering (Out) which eventually
shifts emission intensity from Scope 1 to Scope 3. This is
substantiated also by the rise of Scope 3 emissions for
2021.
• Overall lower operational intensity dictated by weaker
market.
•
•
Additional ballast voyages which can be explained by the
increased carbon intensity: the formula includes total fuel
consumption (laden and ballast) in numerator where only
laden throughput is illustrated in denominator (T.KM).
Increased number of dry-docks followed by application of
energy-efficiency technologies (anti-fouling coating and
VFDs) are also indicative of a portion of CO2e reduction
recorded in 2021.
More over we have observed a deeper drop in tonne-nautical
miles betweenn 2020 and 2021 compared to the laden
emissions and as such the EEOI has been increased in 2021.
EEOI trajectory as followed the reduced operational intensity
of the year 2021 illustrated in its cargo-distance travelled.
Extended Scope 3 emissions
Euronav is already reporting Scope 3 GHG emissions which
include non-owned sources that are related to the company’s
activities. This also includes business travel, well-to-tank
emissions related to fuel processing, and the transmission and
distribution of electricity. Euronav relies on our core partners
for the provision of materials and spare parts for our vessels. To
this end, we aim at tracking our end-to-end value chain impact
via the introduction of a new value chain engagement model
which foresees proactivity and policy alignment. Euronav
would like to broaden its existing Scope 3 assessment by
including additional items in the analysis, including emissions
from service and maintenance activities, coating and the
investigation of upstream emissions from building vessels.
70
Euronav Annual report 2021
Carbon Disclosure Project (CDP)
The CDP is a global non-profit
organisation that has run the
world’s
leading environmental
disclosure platform for over 20
years. In 2021, more than 13,000
companies worldwide shared data
on their environmental
impact
in relation to climate change,
forests, and water with the CDP. Gaining a second accredited
score from CDP in 2021, following a B score in 2020, was
another milestone in our emissions disclosure and climate
change strategy journey. CDP has the world’s largest, most
comprehensive set of companies’ environmental data, and
is used by investors and purchasing organisations to make
informed decisions, reward high-performing companies, and
to drive action.
Figure 11: Category scores benchmarking CDP
The CDP score ranges from A to D-, with A being the best
possible rating, and is based on independent assessment
against the scoring criteria of the CDP. Just like last year, the
B score obtained puts Euronav in the ‘Management band’.
Companies in this band are undertaking further steps to
effectively reduce emissions,
indicating more advanced
environmental stewardship. Euronav’s score is higher than
the marine transport sector average of C. Euronav maintained
its 'A' score on 'Emissions reduction initiatives' and vastly
improved its 'Governance' score from a 'D' rating to an 'A' rating
in 2021. This is a great achievement given that the CDP has
raised the bar for qualification scores for climate leadership.
The ‘Business strategy’, ‘Opportunity disclosure’ and ’Risk
disclosure’ ratings fell from ‘A-‘ to ‘B’. ‘Risk management’
decreased from ‘A’ to ‘B-‘, and for ‘Targets’ Euronav received
a’ D’ score.
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(cid:31)
(cid:30)
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(cid:30)(cid:29)
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(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:30)(cid:23)(cid:22)(cid:26)(cid:27)(cid:22)(cid:21)(cid:30)(cid:21)(cid:27)(cid:20)(cid:27)(cid:22)(cid:19)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:26)(cid:27)(cid:24)(cid:23)(cid:22)(cid:22)(cid:23)(cid:29)(cid:21)(cid:22)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:26)(cid:24)(cid:26)(cid:23)(cid:26)(cid:27)(cid:22)(cid:21)(cid:20)(cid:20)(cid:21)(cid:29)(cid:19)(cid:20)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:25)(cid:23)(cid:22)(cid:26)(cid:22)(cid:24)(cid:21)(cid:27)(cid:20)(cid:19)(cid:18)(cid:17)(cid:22)(cid:29)(cid:29)(cid:22)(cid:29)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:30)(cid:29)(cid:25)(cid:24)(cid:23)(cid:29)(cid:22)(cid:21)(cid:20)(cid:31)(cid:30)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:27)(cid:23)(cid:22)(cid:21)(cid:24)(cid:20)(cid:19)(cid:18)(cid:29)(cid:20)(cid:26)(cid:28)(cid:17)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:26)(cid:24)(cid:28)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:28)(cid:29)(cid:27)(cid:26)(cid:28)(cid:25)(cid:24)(cid:23)(cid:22)(cid:21)(cid:20)(cid:19)(cid:29)(cid:27)(cid:26)(cid:25)(cid:29)(cid:26)(cid:29)(cid:19)(cid:29)(cid:18)(cid:19)(cid:29)(cid:17)(cid:23)(cid:28)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:29)(cid:29)(cid:25)(cid:29)(cid:24)(cid:23)(cid:22)(cid:24)(cid:26)(cid:21)(cid:20)(cid:25)(cid:19)(cid:25)(cid:18)(cid:28)(cid:27)(cid:22)(cid:27)(cid:17)(cid:28)(cid:22)(cid:16)(cid:25)(cid:15)(cid:16)(cid:22)(cid:27)(cid:27)(cid:28)(cid:27)(cid:21) Euronav
The full submission is available on Euronav’s website via the
following link: https://www.euronav.com/media/66570/2021_
climate_change_euronav_nv.pdf.
The CDP score for Euronav feeds our ESG strategy for this
year, along with the materiality assessment and our UN SDG
priorities. It is of utmost importance that Euronav develops
and finalises its decarbonisation targets according to our
short-term and long-term ambitions, complying at least with
IMO 2030 and 2050 trajectories. In addition, Euronav aims
at establishing a comprehensive value chain engagement
framework with our key vendors to track and mitigate the
scope 3 emissions that are triggered by our sourcing strategy.
Finally, having already established a strong internal ESG risk
management framework which includes climate-related risks
and opportunities, it is time to optimise our risk assessment
procedures by incorporating future scenarios as well. We are
confident that, if we keep a sharp focus on the aforementioned
items with room for improvements, while maintaining our
stable performance for the other categories, we will be able
either to secure our position or even aim higher.
There is a rising market demand for corporate environmental
transparency. More than 590 investors with over USD 110
trillion in assets, and 200 major buyers with USD 5.5 trillion in
procurement spend, requested corporate environmental data
through CDP in 2021. A record-breaking 13,000 plus companies
representing over 64% of global market capitalisation
disclosed through CDP. This is 35% more than last year, and
over 141% more than when the Paris Agreement was signed
in 2015. To help tackle the climate and ecological emergency,
the CDP has set out a new strategy for 2021-2025, with the aim
to achieve net-zero emissions and full nature recovery by 2050
Decarbonisation strategy
As the
in the
largest quoted crude tanker company
world, Euronav is uniquely placed to develop sustainable
business within the energy transition. Crude oil demand
and consumption will peak as the energy transition gains
momentum. Assuming the 1.5 °C Paris agreement pathway
is pursued collectively across the globe by each economic
operator, crude oil will continue to be essential for economic
growth, human mobility and industrial processes.
to build a
responsible, sustainable
large
Continuing
crude tanker platform will not only generate value for our
stakeholders, but also for the wider society and environment.
Looking forward, shipping is one of the strongest platforms to
achieve decarbonisation.
72
Shipping decarbonisation is a long-term process which will
allow shipping operations to gradually emit less and less
CO2 emissions together with fewer greenhouse gases and air
pollutants. The magnitude of that effort will be huge because
of a couple of parameters:
a) The speed of technological advancement in the domains
of alternative fuels and ship engine design;
b) Safety and logistical concerns regarding the upcoming
zero-emission fuels (e.g. toxicity, etc.);
c) The huge geographical coverage of operations due to the
global nature of shipping;
d) The regulatory complexity and need for consensus-
building amongst the approximately 180 member states
that comprise the International Maritime Organization,
and;
e) The level of investments required to develop the logistics
and bunkering infrastructure for the alternative fuels;
There are several other factors that impede a more aggressive
energy transition in the shipping sector and that should
be overcome in order to decarbonise the sector. Before we
proceed to what is required to decarbonise shipping, it would
be useful to understand why Euronav chooses to decarbonise
shipping sooner rather than later.
Finding our why
Shipping decarbonisation is an important responsibility and it is
essential we do not to deviate from our ambitions on this matter.
Sustainability is a part of our Company’s DNA, and is
incorporated in our day to day operations as well as in our
overall strategy. It means we need to achieve carbon neutrality
and remove our annual 3 million tons of CO2. Our economic
activity has an impact on the environment and as a result also
on society. And we take responsibility for the footprint we leave
behind. The shipping industry, from oil majors to charterers
and from our suppliers to our peer market players, has already
taken steps towards several emission reduction pathways. We
operate in an environment with uneven, yet existing emission
reduction pathways, and we will not be able to maintain a
required level of service if we do not adapt.
There are also growing signals that companies with a purposeful
strategy that addresses their social and environmental impact
tend to outperform those companies that lack such kind
of broad strategies. And that has a cascading impact, as
companies enjoy additional privileges such as reduced cost of
Euronav Figure 12: ESG stocks outperform the emerging markets benchmark
Source: MSCI
Annual report 2021
capital, enhanced access to (green) funding and commercial
advantage. Figure 12 indicates this trend.
In addition, and as an example, Larry Fink, CEO of BlackRock
( the world’s largest asset manager with over USD 10 trillion
under management), stated in his 2021 letter to CEOs that
“the pandemic has presented such an existential crisis that it
has driven us to confront the global threat of climate change
more forcefully and to consider how it will alter our lives”. He
emphasises that investors have already paid attention to stocks
that promote ESG and climate-related policies, and that they
have put them high on their agenda. Finally, investors are taking
active measures towards a sustainable future by introducing
climate-aligned or net-zero asset management where the
goal is that a proportion of assets has to be managed in line
with the net zero emission goal. The size of such assets under
management has skyrocketed to USD 37 trillion already in 2021.
Therefore, there are market, operational and cultural reasons
fuelling our efforts to decarbonise our shipping operations.
What are the prerequisites for reaching
decarbonisation?
Decoupling growth, trade, and impact requires real and tangible
actions across shipping value chains around the world:
a) Global regulation – enabling an environment that will set
the pace. For example, a brand new and more ambitious
IMO GHG strategy in conjunction with technical measures
such as CII – EEXI that drive ship’s technical profiles to
adopt lower emission fuels. However, because maritime
shipping is an international activity with global impact,
global solutions are needed.
b)
In line with the above, a Market Based Measure (MBM)
in the form of carbon pricing/tax/levy is necessary.
Such a measure will serve as an economic incentive
for operators to pursue less GHG-intensive policies and
reduce fuel consumption. The tangible outcome of a
MBM would be to bridge the competitive gap between
conventional fuels and low-carbon ones, the latter
now being much more expensive. The proceeds should
be channelled to support shipping decarbonisation
by funding the necessary research and infrastructure
development, and to support continuous access to
maritime transport services in low-income regions. This
would give them the opportunity to transition. And that
is an issue of paramount importance, as climate change
and the energy transition could have disproportionate
impacts in some of those regions.
c) A critical factor is how fast technology and infrastructure
will scale up. In this case, research can unlock further
potential to launch and scale sustainable fuel alternatives
and necessary landside infrastructure together with
bunkering hubs, especially upstream. If there is a delay in
ramping up the necessary infrastructure, zero-emissions
ships will not be able to sail everywhere.
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Normalised as of 06/30/2021Last price Euronav
d) Such a sizeable transition calls for a specific level of
financing. The assets that are exposed to carbon will
receive less and less capital. Hence, decarbonisation is an
essential investment and not an on-top cost impact. More
and more capital is funnelled to green funds, which results
in the reduction of cost of capital. That can become the
‘carrot’ for companies to improve their green profile and to
reduce their capital cost.
e) Data and analytics play a big role in our pathway to
decarbonisation. This is possible by using high quality,
readily available and standardised data such as data on
fuel consumption. Tailored technological solutions should
be developed to enable data exchange between sea and
shore, to monitor vessels performance, enable informed
decision-making and to reduce fuel consumption. Fresh
knowledge stemming from innovation ecosystems can
support.
f) Finally, it is critical to establish cross-sector partnerships,
especially with hard-to abate sectors. The extent of
the energy transition calls for broad alignment, where
different stakeholders in shipping can contribute. Such
an example of a collaboration can be found in the Getting
to Zero Coalition. To tackle Scope 3 emissions, supplier
engagement will also accelerate extended value chain
decarbonisation.
Figure 13: Key decarbonisation levers
Source: DNV 2021-Maritime Forecast 2050
Everyone has a role to play, with key stakeholders listed below:
a) Financial institutions – Stimulate by providing greener
finance to boost the transition of the industry;
b) Customers – By
triggering zero-emission shipping
demand, enabling them to reduce their own emissions;
c) Regulators – By creating an enabling environment to
support shipping decarbonisation.
Key decarbonisation levers
The main levers that can be pulled cross-industry to achieve
decarbonisation are:
•
•
Low/zero emission fuels used in alternative propulsion
systems – this has the highest impact on emissions;
Technical measures of a broad range, such as anti-fouling
hull coating or machinery improvements that limit the
engine capacity to exceed some speed ranges (design
and operational interventions). Such measures can have
a remarkable impact on fuel consumption and emissions
when properly combined ;
• Operational measures and digitalisation, such as speed
adaptations, just-in-time arrival, voyage optimisation, etc..
These are less costly actions compared to the levers above,
with an impact proportional to the degree of implementation.
74
Speed optimisation Voyage routing Vessel utilisationEuronav Propeller silicone coating
To improve energy-efficiency
and set better fouling controls
Equalising Ducts
To improve propulsion hydrodynamics
and increase propeller thrust
Hull coating
Implementation of anti-fouling
paints over hull area reduces drag
and improves fuel efficiency
Wind propulsion
(under investigation)
Wind assisted technologies
built on board to support
propulsion management
Propellor Boss Cap Fins (PBCF)
To improve propulsion hydrodynamics,
reduce shaft torque and improve fuel
efficiency
Variable Frequency Drives
Emission saving technology
applied to engine rooms to
control speed / acceleration
Air Lubrication (under investigation)
To reduce the resistance between
the ship’s hull and seawater using air
bubbles creating energy saving effects
Figure 14: Energy savings technology
Energy efficiency on board
Silicone anti-fouling
Energy efficiency is a focus area for Euronav, in particular the
efficient energy management of vessels, which in turn leads
to reduced fuel consumption and
improved operational
performance. Energy efficiency can be achieved with vessel
specifications during the design and construction of a
newbuilding, but also during the maintenance and upgrade
of a vessel, known as dry docking. Our on- and offshore staff
monitors the actions and measures already taken and their
related impact, so Euronav can integrate the latest aerodynamic,
hydrodynamic and engine upgrade technologies during the dry-
docks of the vessels. Interventions may involve hull anti-fouling
applications, systems monitoring, PBCFs, devices for propeller
efficiency improvement, wind propulsion technologies and
more. A variety of ship specific measures are described in a
comprehensive Ship Energy Efficiency Management Plan for
each vessel. Data sourced from manufacturers indicate that a
combination of the energy efficiency technologies on board –
excluding alternative fuels – could achieve up to a 20% increase
in energy-efficiency with proportional emission savings.
The anti-fouling system refers to a coating, paint or surface
treatment used on a vessel to control or prevent the attachment
of unwanted organisms.
General
Anti-fouling paints are applied on the hull of a ship, reducing
the accumulation of invasive aquatic species and maintaining
a smooth hull. The hull of a ship is a key piece of the ship
efficiency puzzle. The physical ability of a ship to cut through
waves in a streamlined manner is of paramount importance
to fuel economy. A fast-growing technology in its own right,
the latest hull coatings have shown considerable potential for
substantial eco-efficiency savings over the past few years. Most
hull coatings today are designed to reduce hydrodynamic drag
and to prevent the build-up of marine organisms. This also
leads to a variety of ‘fuel saving claims’, such as the reduction
of fuel burn as well as CO2 emissions.
Method and Measurement Framework
Euronav is either applying or investigating a variety of
energy efficiency measures. We will discuss two of the above
mentioned measures in more detail. These measures highlight
the importance that Euronav places on decarbonisation, that
begins with lower fuel consumption and thus, lower carbon
emissions.
The method used to identify the impacts of fuel savings from
premium coating is done by comparing two different coatings on
the same vessel, in two different service intervals. We compared
the fuel consumption of the first year after dry dock when the
basic coating was applied with the first year after the most recent
dry docking where the premium coating was applied.
75
Euronav
We have included the following vessels as an example to
demonstrate the framework used for ROI analysis purposes:
Vessel name
Year build
Type
Yard*
Hakata
2010
VLCC
Keppel Shipyard -
Tuas Yard
Hakone
2010
VLCC
Yiu Lian Dockyards
Hirado
2011
VLCC
Yiu Lian Dockyards
*Yard where hull coating was applied
Impact:
The framework to monitor energy savings compares two
different coatings on the same vessel. As mentioned before,
measurements were done during two different coating
periods with 5 years in between (there are 5 years between dry
dockings). This has provided useful insights. After analysing
the first two measured years of VLCC Hakata, we concluded a
total saving of 1265 MT.
Variable Frequency Drives (VFD)
The installation via retrofit of Variable Frequency Drives (VFD)
in the Cooling Sea Water Pump (CSWP) and Engine Room
Ventilation Fan (ERVF) according to a pre-scheduled plan.
76
General
Until recently, energy efficiency in auxiliary systems was not
taken into account during the design process or construction
of vessels. For this reason, the systems on existing ships are not
energy efficient and have not been fully optimised to minimise
overall fuel consumption. Many of the vessels that are currently
in production continue to be built with little emphasis on energy
efficient solutions. Moreover, shipyards typically do not focus on
long-term costs of vessel’s ownership. Unless owners define the
technologies to be included in the specifications, the vessel’s
energy efficiency capabilities will be limited, even though the
additional equipment pays back in savings well within one year.
The ship systems on board that are most suitable to improve
energy efficiency are systems with large pumps and fans that
are not required to run continuously and at full capacity. When
applicable, electric motors could be fitted with VFD to operate
pumps and fans more efficiently in partial loads during slower
sailing speeds, or with reduced ventilation requirements.
Pumps and fans on board vessels are often a vital application,
as the vessel can’t sail without them. There are a lot of different
pump applications on board: sea water cooling pumps, boiler
feed pumps, HVAC pumps, bilge water pumps, lubrications
pumps, fire pumps, waste water pumps, etc.. It is common for
pump applications to be over-dimensioned, simply because
the design criteria are set to meet the extreme conditions in
which the vessel may operate. For example, the cooling water
systems are generally designed for above normal sea water
temperatures.
A lot of energy is easily saved by letting pumps and fans be
controlled by a VFD, either standalone or with a pressure or
temperature sensor loop control. Using a VFD to adjust the power
demand to the operational conditions is the most effective
method to optimise the shipboard systems.
Impact
During the period of 1/6/2021 till 16/7/2021 the savings
from Sea Water Pumps and Engine Room Fans amounted to
approximately 14 tons of fuel, corresponding to 43 tons of CO2
emissions.
Moreover, the savings during discharging operations are not
included in the above figures. Based on a previous installation
on board of Hirado, we have observed 9 tons of fuel savings
(about 28 tons CO2 savings) per discharging operation. Savings
on discharging depends on the frequency with which the vessel
performs these discharging operations per year (estimation of 6
discharges per year for a VLCC).
Annual report 2021
In total, savings for a period of one and a half month are 23 tons of
fuel and 71 tons of CO2. At the estimated end of life of the Alboran
in 2036, the calculated return on investment is 1236%.
Euronav successfully concludes trial of B30 and
B50 biofuel blend on Suezmax vessels
Fuel development
The key element that will allow shipping in general, and the
large crude tanker segment specifically, to comply with the set
decarbonisation goals is the next generation of fuel that will power
vessels. From a commercial perspective, the capital intensity of our
sector (newbuild VLCC costing USD 100 million) and uncertainty
over a new fuel is preventing many ship owners from contracting
new vessels. This is beneficial for our market but is slowed down by
the absence of a clear ‘category killer’ i.e. a universally accepted fuel
that will comply with all the decarbonisation requirements.
According to the knowledge gained, Euronav believes it is unlikely
that one single fuel option will emerge in the short-term and that
multiple fuel types will be developed dynamically over the next 3-5
years, of which the greener and cost-efficient version will prevail in
the maritime industry for the next years.
Despite the multitude of types of fuels that are under the industry’s
magnifying glass, there are already alternative lower-carbon types
of fuels that can be used, even at scale. These are bio-blends.
Euronav is testing the waters to verify the impact and operational
readiness. Euronav has, for example, successfully completed B50
and B30 trials in 2021, which opens the way for more and more
sustainable fuels to be tested.
Euronav tested a B30 biofuel on a Suezmax, the Statia (2006-
150,205 dwt). Euronav bunkered 1,502 MT of a B30 biodiesel
blend manufactured by BP. The biofuel was composed of
30% advanced carbon neutral biofuel mixed with 70% of
a conventional VLSFO bunker fuel. Consumption of this
fuel resulted in a decrease of lifecycle (well-to-wake) CO2
emissions.
After a successful completion of a B30 biofuel blend test
on the Suezmax Statia (2006 – 150,205 dwt), Euronav
successfully concluded a B50 biofuel blend trial on its
Suezmax Marlin Sardinia (2019 – 156,607 dwt). The biofuel,
by marine fuels supplier TFG Marine (the bunkering arm of
Trafigura), was tested on its longevity and durability over a
period of four months. The trial showed no issues on any
of the engines or significant differences in operations. After
the trial the Suezmax switched back to using standard High
Sulfur Fuel Oil (HSFO). Both blends were supplied in the port
of Rotterdam, where there is a government incentive in place
to allow for cost effective blending of biofuels into marine
fuels (Incentive Scheme for Climate-Friendly Shipping).
Lower carbon fuels will play an important role on the journey
towards shipping decarbonisation. Euronav is committed
to accelerate the transition to lower carbon alternatives by
testing the operational readiness and emission reduction
potential of biofuels in a context of strategic partnerships.
Figure 15: Fuel potential
Source: MMM Center for Zero Carbon Shipping combined with own estimations
77
IMO and shipping decarbonisation
From a regulatory point of view, the International Maritime
Organization (IMO) established new targets to reduce CO2
emissions: a 40% decrease by 2030 and a 70% decrease
by 2050 in carbon intensity, compared to 2008 levels. They
also set targets for annual CO2 emissions from international
shipping, laying down a 50% reduction by 2050 vs. 2008.
Figure 16: Global fleet’s CO2 targets and trajectories
under IMO targets (million tonnes of CO2)
Source: Poseidon Principles
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own field and level of influence to bring about change. For
example, by introducing greener-fuelled engines to its fleet.
In addition, the exercise of introducing long-term targets
anticipates unknowable market conditions ten or even
twenty-five years ahead and so is naturally fraught with
uncertainty. These risks should be recognised and, where
possible, factored in when setting targets.
For this exercise, we will include Scope 1 and Scope 2
emissions and partially include Scope 3. The 99% of Scope
1 emissions are attributed to the fuels we burn in our vessels
for our operations (2020 data). The 95% of Scope 3 emissions
represent Well-to-Tank emissions (upstream) of the fuels that
we burn (2020 data and methodology) and that are covered by
our analysis. The list of assumptions include decarbonisation
parameters such as:
a. Emissions lifecycle: Well-to-Wake;
b. Main KPI: CO2 – we plan to expand to GHG level as soon as
additional knowledge about how methane weighs in GHG
and methane slip models are build;
c. Emission
factors sources: Emission
factors, LCVs &
fuel consumption: IMO MEPC245 (66), Regulation (EU),
2015/757 , Fuel EU Maritime Brussels, 14.7.2021 COM(2021)
562 final;
Other assumptions taken into account before building the
methodological framework are:
a. Future fleet size and commercial policy based on historical
data;
b. Frequency of dry-docks and retrofits;
c. Estimated vessel life span;
d. Corporate strategy regarding future fleet mix;
e. Market prerequisites;
-
- Market will offer zero-emission fuels at scale and
produced by bio processes or ways using renewable
sources of energy;
Carbon capture systems (either on board or on shore)
will be developed at scale and with a reasonable cost;
Energy sources used for auxiliary systems/boilers
will also be cleaner or substituted by zero emission
technologies;
Ship design, building and operations will result in
lower-emission performance.
-
-
The Marine Environment Protection Committee (MEPC) 75
introduced the Carbon Intensity Indicator (CII) applicable to
ships over 5000 GT. These vessels will be required to report
on carbon emissions from their operations. The CII provides
ship operators with a factor by which they must reduce CO2
emissions annually to ensure compliance with regulations.
The CII is based on the Annual Efficiency Ratio (AER), which is
used in the Poseidon Principles.
Euronav Decarbonisation strategy:
Methodological approach
To develop both short- and long-term future targets, we need
to develop a methodological framework that acknowledges
the constraints and assumptions on which they are based.
Many factors that are critical for shipping decarbonisation
are beyond our control and Euronav can only work within its
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Fuel pathways
Although there are plenty of levers to drive shipping emission
reduction, for the sake of our analysis we focus on the factor
that is the most critical and impactful, namely the types of
fuels used in the vessels’ propulsion systems. However, the
other available options like energy efficiency technologies or
operational measures can be used in conjunction with the
switch to cleaner fuels, driving additional emissions reduction.
To define the fuel pathways, we assumed five new fuel
pathways plus a do-nothing scenario. Such pathways entail
both drop-in fuels with newbuildings and retrofits.
1. Do-nothing scenario, where current types of fuel – Heavy Fuel
Oil and/or Very Low Sulphur Fuel Oil – will be used until 2050;
2. LNG pathway, where Liquified Natural Gas will be used
as a transitional fuel within the decade of 2020 until 2030.
We assume that when a proper amount of synthetic LNG
becomes available, this will be gradually ramped up as a
drop-in fuel to transform our fleet into a carbon neutral fleet;
3. Bio-fuels (B100) – where pure bio-fuels will be used as drop-in
fuels, with 100% bio-content (all bio-fuels taken into account,
besides bio-methanol which is tackled within methanol
pathway);
4. Ammonia (M), where it will rely on dual-fuel vessels and an
ammonia-ready platform, assuming LNG to act as a bridging
solution and then retrofitting to ammonia-ready vessels
when it becomes available.
Figure 17: Potential fuel pathways for Euronav
5. Ammonia (H), where there will be a direct switch from the
current option of HFO/VLSFO to Ammonia when it becomes
commercially available. That step implies a retrofit package
by then end of this decade or beginning of the 2030’s.
6. Finally, the methanol pathway where we assume deliveries
of newbuildings running on methanol and then the switch
to green/bio-methanol when it becomes commercially
available, with a reasonable cost and at scale.
In that regard, we assumed that zero-emission fuels will be
generated either via upstream carbon capturing systems -
able to absorb amounts of CO2 that will constitute the entire
fuel lifecycle as carbon neutral - or as a direct production of
zero-emission TtW fuels that are produced by zero-emission
upstream technologies or renewable energy.
Zero or close to zero-emission fuels (WtW) have been assumed:
1. Synthetic LNG via carbon capture solutions applied during
the production of fuels (WtT)
2. B100 biofuel
3. Green ammonia
4. Green methanol
We assume that zero-emission ready vessels will be delivered
to Euronav in 2027 at the earliest, regardless of the type of zero
emission fuel. We assume that Euronav will be in a position to
conduct vessel retrofits during drydocking to switch to develop
zero-emission propulsion in 2030 at the earliest. Both assumptions
are in line with the latest market intelligence about ammonia and
methanol fuelled engine manufacturing advancements.
79
Figure 18: Short-term decarbonisation milestones
GHG reduction per
voyage vs. VLSFO
Euronav short-term decarbonisation
milestones
The maritime industry has recognised the need to decarbonise
shipping operations and to broadly collaborate. Shipowners,
engine manufacturers, charterers, fuel producers, oil majors
and classification societies should go hand-in-hand and own
the energy transition ahead of us. In parallel, IMO and the
European Commission should design policies that unlock
that progress. Financial
funding
organisations should underpin these efforts by providing
the necessary resources and liquidity. The reason is that the
required energy transition will demand huge investments
that can only be undertaken under a shared responsibility.
Moreover, it will be mandatory for banks to report the climate-
aligned (Paris Agreement) portfolios to regulators dictating
that financial institutions could back it up.
institutions and other
From a shipowner’s perspective, Euronav wants to strengthen
its collaboration network to amplify the decarbonisation
potential. Euronav will focus on testing the waters of new or
existing types of lower carbon fuels to validate efficiency and
operational performance. The short-term steps anticipate
a step-by-step progress to carbon neutral voyages where
fuels, market and operational practices on the one hand,
and on the other hand, market surveillance of new types of
lower or zero emission fuels will pave the way. It is expected
that our commercial decisions regarding fleet rejuvenation
will tie with the market evolution that will define our vessels
commercialisation policies and newbuild characteristics.
In that regard, and provided that the assumptions are
confirmed by the market evolution and timing, Euronav:
1. Will have completed carbon neutral voyages
within the next five years – before 2027
Euronav will leverage existing market availability pertaining
to carbon neutral fuels, operational excellence, and tools
to secure the offering of carbon neutral voyages for our
clients. Next to that, we gain experience on the operational
implications of such fuels together with knowledge on market
mechanisms to neutralise the carbon effect of our operations.
Overall, such initiatives, once scaled, match our short- and
long-term decarbonisation ambitions.
We expect that between 2022 and 2023, Euronav will have
the chance to offer carbon neutral voyages by leveraging
existing market tools with carbon offset and certificates. This
can be achieved either by Euronav or through our Tankers
International pool services. These practices will provide the
necessary lessons about how such tools work and emphasise
the importance of the need to achieve carbon neutrality at
80
Euronav Annual report 2021
voyage level from the early stages. Furthermore, it will offer the
opportunity to any operators to offset their potential Scope 3
emissions via the use of such mechanisms that offset carbon
emissions of sea passages.
2. Will have ordered, and might have delivered
the first vessel capable of running on zero-
emission fuel or to be retrofitted in order to run
on zero-emission fuel – in 2027
Euronav can commit to investigating ordering zero-emission
vessels, provided that the market sufficiently progresses on:
a) the development of low/zero emission fuels with low/zero
climate impact;
b) manufacturing engines that can burn them;
c) ship design and ship building that tackles uncertainties on
the use of new types of fuels on board (i.e. safety concerns);
d) building logistics and bunkering infrastructure at known
bunkering hubs with bunkering capacity of zero-emission
fuels;
e)
introducing market-based measures (carbon tax) to bridge
the pricing gap between alternative and conventional
types of fuels offered at a reasonable price and at scale.
If the order is submitted by or before 2024, there is a chance
that Euronav has its first zero-emission vessel delivered by
2027.
Figure 19: Carbon intensity compliance - long-term
Source: Euronav
Euronav’s long-term decarbonisation
targets and net-zero ambition
The above short-term pathway will enable knowledge building
to secure a safer and smarter way to deliver on our long-term
ambition. With that:
1. Euronav commits to a 40% reduction in fleet-
broad carbon intensity vs. 2008 in or before
2030
Euronav has conducted in-depth research with assumptions
made regarding our levers to safely achieve a 40% reduction
in carbon intensity by 2030, compared to 2008 at fleet level.
This aligns with IMO’s 2030 intensity goal and with Poseidon
Principles trajectory. To-date Euronav has delivered a
27% reduction in AER between 2008 and 2021. Practically,
Euronav’s fleet-wide AER starting from 2008’s 3.10 g CO2/
dwt-nm is expected to land at 1.65 g CO2/dwt-nm by 2030
having decreased by 47% compared to 2008. If Euronav
continues intensity reduction at linear pace, we expect an 87%
reduction between 2008 and 2050. Applying the less ambitious
(Biofuel pathway) starting by
decarbonisation scenario
2021 and assuming a linear reduction, Euronav reaches zero
intensity at fleet level by 2047. All the rest fuel pathways which
have been tested entail a level of zero AER at fleet level before
that date. However, shipping decarbonisation will not be
linear and will rely on a mix of different technologies and fuels,
such as more eco-efficient engines, operational measures and
energy-efficiency technologies. There is a lot of ammunition
in our case, which renders the both 2030 and 2050 targets
achievable (figure 19).
2008
2022
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81
(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31) To understand the potential of the emission reduction
options, we mapped them under three important parameters:
their carbon impact, the time-horizon in which they will be
deployed and thirdly, our level of ownership for each one of
them. The latter entails the control that Euronav poses on
each lever until they are fully unleashed. For instance, the
accomplishment of our decarbonisation targets will not be
possible if the rest of the market players do not carry out their
own part of the responsibility.
The feasibility map (figure 20) indicates the position of the
four levers: fuels, fleet rejuvenation, operational measures,
and technical measures (energy-efficiency technologies).
The input of that analysis relies on our operational data and
perceptions. Key assumptions that determine their position
on the map:
a. Energy-efficiency measures depend on the compliance
with environmental regulations (CII and EEXI) of our
vessels, together with CAPEX decisions. Therefore, it can be
treated as an investment decision with a low dependence
on external factors.
b. Operational measures, like speed reduction, rely on the
operators’ decision regarding the spot market, and it
would have a greater impact if done collectively between
shipowners and charterers. As such, the initiative is not
under our full ownership.
c. Fleet rejuvenation is an impactful policy that applies to
all shipowners that one way or the other renew their fleet.
Hence, fleet rejuvenation will be within the control of the
Company. However, there is a commercial policy that
dictates that when a vessel is going to be out of operations
for various and broader market reasons, this affects such
commercial decisions.
d. Finally, the energy transition is a long process that
includes industry’ dynamics, multi-stakeholder networks
and multiple forces to coordinate and collaborate. It is
an area where Euronav moves the needle by establishing
partnerships that accelerate the development of zero
emission fuels. We drive the production of clean energy
sources only at the level of influence where we commit to
ordering vessels suitable for retrofits to an ammonia-ready
vessel when commercially available.
Figure 20: Feasibility Map
Source: Euronav
The light blue line in these figures represents the Poseidon
Principles V3.0 trajectory improved by an additional 2%
lower path. This has been our commitment for Euronav’s
sustainability linked loan of 2020, and it is more ambitious
than the IMO intensity trajectory in effect in the course of
2021. Energy efficiency technologies, like the ones included
in the graph, are driving AER downwards for approx. 10-20%,
depending on the mix of solutions implemented. If, for an
average Suezmax, we apply anti-fouling hull coating, anti-
fouling propeller coating, HE propeller, equalising duct, PBCFs,
VFDs and in case feasible, wind-assisted propulsion, we expect
a drop in the AER of the average Suezmax with about 18.5%,
from 3.26 in 2020 to 2.66 g CO2/dwt-nm in 2030. However, this
is not enough as the starting point for the Poseidon Principles
(-2%) trajectory is 3.19 and the landing point, which is our
target, is 2.36 g CO2/dwt-nm, which is illustrated through the
blue line.
The same applies for our VLCCs profiles, although we
encounter a lighter pressure to reduce our AER indicator
by 2030. The reason is that Euronav is already ahead of the
ambitious Poseidon Principles target of 2020. Following our
analysis, we will only be able to achieve our AER target if we
expand our strategy and include a mix of decarbonisation
options for both Suezmaxes and VLCCs. The latter is also
substantiated by Figure 19 where a range of available
decarbonisation options should be activated and only by then
Euronav expects to deliver on our 2030 goal. The shipping
market has already established partnerships that work on
such various decarbonisation directions.
Figures 21 and 22 mirror the outcomes of a directional
exercise illustrating how technical energy efficiency measures
can drive accomplishment of our short- and medium-term
intensity targets. Our hypothesis starts with drawing a Ship
Energy Efficiency Management Plan per ship where several
energy-efficiency solutions can be tested and implemented.
As it is within our control, and as there is a wide portfolio of
technologies, that is our number one lever to pull.
The analysis demonstrates that we will be able to attain our
Poseidon Principles (PP) (-2%) targets if we apply at least two
out of the four available levers, or most of them to certain
degree. Our analysis shows that for both Suezmaxes and
VLCCs average profiles, Euronav can outperform vs. the PP
(-2%) target if we deploy a balanced strategy of operational
measures aiming to reduce fuel consumption combined with
82
Euronav Figure 21: Suezmax trajectory - Baseline 2020
Source: Euronav
Annual report 2021
Figure 22: VLCC trajectory - Baseline 2020
Source: Euronav
energy-efficiency measures, the fleet rejuvenation plan for the
next few years and then, a gradual adoption of zero-emission
fuels. And this not much later than when respective vessels
become commercially available.
Figure 23 indicates the impact of each one of the four levers.
For the purpose of our analysis, all of the measures examined
were evaluated against a typical type of vessel, burning HFO,
and without any a-priori technical or energy intervention. The
reduction rates correspond to Euronav’s fleet specifications
and do not imply industry averages. They also illustrate the
impact between 2020 and 2030. For instance, the impact of
alternative fuels is expected to increase from the moment
more zero emission fuels are adopted by our fleet.
Figure 23: Impact of four levers on CO2 reduction
CO2 reduction
Suezmax
VLCC
Technical measures
- 18 %
- 20 %
Operational measures
- 13 %
- 20 %
Fleet rejuvenation
- 25 %
- 8 %
Alternative fuels
- 22 %
- 22 %
83
The impact magnitude presented in the table serves as another
proof that if a selected array of solutions is implemented, this
could result in the accomplishment of Euronav’s 2030 AER target.
If the list of all measures apply at their fullest, the final impact does
not equal the sum of the values above due to double counting
factors (e.g. energy-efficiency applied onto eco-efficient newbuild).
Figure 24 reflects Euronav’s strategic decision tree concerning the
decarbonisation options available with a time perspective. The
values represent averages between VLCCs and Suezmaxes.
The decision tree in figure 24 illustrates our decision-making
pathways until 2030, which are still with a degree of uncertainty
but less vague. The degree of uncertainty is especially present
between 2030 and 2050. But, acknowledging the risks and
opportunities for that period, we can commit to Euronav’s
shipping operations’ decarbonisation accordingly.
2. Euronav commits to Net Zero Scope 1 and 2
operations latest by 2050 with an ambition to
achieve that as of 2040 or later
We commit to have tapped all available opportunities in
our control to decarbonise our shipping operations by 2050.
However, our analysis demonstrates that net zero for Scope 1
and 2 can already be achieved by 2040 or later, provided that
the market dynamics we assumed deliver accordingly.
Figure 24: Decarbonisation decision tree
Source: Euronav
Therefore, our 2050 commitment remains but our ambition is for
2040 or later. In case of residual emissions that cannot be addressed
by the to-date known solutions, we aim to go after market solutions,
tools, and mechanisms that offset emissions introducing extra,
newly renewable energy into the grid where possible. Our efforts
will focus on limiting the amount of CO2 emissions under carbon
offsetting, below 10% of the total CO2 of 2020.
We will be able to include Scope 3 in our long-term
commitments, if we can complete our due diligence in
cooperation with our extended value chain partners and
suppliers. Together, we will identify the emission streams that
we indirectly trigger via our activities and operations, and
develop mitigation plans that will allow us to set our Scope 3
decarbonisation target.
As described before, we are going to tackle our Scope 1
emissions that account for 99% of total Scope 1 and 2
emissions. Scope 2 emissions mainly represent the energy
used at our offices for lighting, heating and other facility
services. Our commitment from all accounted departments
is that our office managers worldwide will align with national
renewable plans to pursue zero emission energy to use at
Euronav’s associated facilities when it becomes available,
and at a reasonable cost. That commitment will speed up our
Scope 2 decarbonisation efforts.
84
Euronav Figure 25: Euronav decarbonisation trajectory
Source: Euronav
Annual report 2021
85
Euronav
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Figure 26: Methodology risk overview
Source: Euronav
Methodology risk overview
thirty years ahead
involves a high degree
Planning
of uncertainty which
is usually tackled via extensive
methodological assumptions that rely on shaky hypotheses.
And that can be acceptable, if we factor in the complexity
of the work, and if all the potential risks that determine the
validity of assumptions are recognised beforehand. Figure 26
shows a range of technological, market, regulatory, and social
risks that accompany Euronav’s decarbonisation strategy
and that are also broadly recorded. These risks constitute the
factors that determine the degree of intensity and granularity
required by the energy transition.
Fleet modernisation - newbuilding strategy
invested
intensify
in several areas to
its
Euronav has
decarbonisation efforts, such as lower carbon fuels, operational
measures and technical energy efficiency
interventions.
One of the key decarbonisation levers for Euronav is its fleet
rejuvenation strategy. The strategy illustrates the pace and
quality of fleet rejuvenation in line with the energy transition
and focuses on the acquisition of vessels with energy
efficient engines. This will lead to an inherent reduction in
fuel consumption and lower CO2 emissions. For instance, a
comparison between two vessels, the Suezmax Maria (built
2012 - 157,523 dwt) and Suezmax Cedar (built 2022 - 157,523
dwt), demonstrated a reduction in daily fuel oil consumption
of the main engine by 20% with the same type of fuel and
reference speed 14.5 knots. The eco-design of new engines
brings a competitive advantage for Euronav and supports our
efforts towards the decarbonisation of our fleet operations.
Modern fleet
A modern shipping fleet is essential to manage the customers’
requirements and to comply with increasingly stringent
environmental, financial and safety regulations. The lower
the fleet age, the lower the fuel consumption will be. This
gives the fleet a competitive advantage over its peers, but it is
also crucial from an environmental perspective as it reduces
the amount of CO2 emissions per ton-mile that the fleet will
produce. A younger fleet and more advanced technology
favours emission reductions in shipping.
86
Annual report 2021
Figure 27: Comparison energy parameters older vessel vs newbuilding
Energy Efficiency Design
Index (EEDI)
Speed
Maximum Continuous
rating (MCR)
Normal Continuous rating
(NCR)
Daily fuel oil consumption
of main engine
Daily fuel oil consumption
of main engine
Maria (2012 - 157,523 dwt)
Cedar (2022 - 157,310 dwt)
3.256 gr/tnm
2.793 gr/tnm
15.9 knots at NCR, design draft,
with 15 % sea margin
14.5 knots at NCR, design draft,
with 15 % sea margin
18,660 kW at 91 rpm
15,690 kW at 71.4 rpm
16,790 kW at 87.9 rpm
10,905 kW at 63.2 rpm
66.9 tons/day at NCR
40.1 tons/day at NCR
46.4 tons VLSFO/day at 14.5 knots
36.8 tons HFO/day at 14.5 knots
Energy Saving Devices (ESD)
Was not standard specification
Wake Equalising duct, Propeller Boss
Cap Fin (PBCF- Bulbus Rudder more
efficient Bow and Sren design
Propeller
Rudder
Provisions for future Dual
Operation HFO or LNG
8,350 mm in diameter
8,900 mm in diameter
Semi-balance
No
Full Spade
Yes
87
Figure 28: Evolution of water ballast treatment systems installed on Euronav vessels
Source: Euronav
Ballast water treatment insights
resource consumption,
is essential to commercial shipping.
It
Ballast water
loss due to cargo operations
compensates for weight
or
thereby providing stability,
reducing stress on the hull and improving propulsion and
manoeuvrability. Globally, shipping vessels transport 3 to 5
billion tonnes of ballast water worldwide each year. However,
the water they pump in also contains a variety of indigenous
organisms, which are later released outside of their natural
habitats. While most transported species do not survive
when the ballast water is discharged, some thrive in their new
environment. With no natural predators, they outcompete,
displace or kill native species. In such cases, they pose
serious risks to local ecosystems, human health and regional
economies. They can cause severe and irreversible damage.
To minimise and ultimately eliminate the transfer of harmful
aquatic organisms and pathogens, shipping’s global
regulator, the IMO, adopted the Ballast Water Management
(BWM) Convention (full name: International Convention for
the Control and Management of Ships' Ballast Water and
Sediments, 2004). The BWM Convention applies to all ships
with ballast water capacity and is active in international trade.
This convention entered into force globally on 8 September
2017 and became mandatory for new vessels and those at
88
their next special survey (5, 10, and 15 years, then every 30
months after 15 years).
Euronav has continuously increased the number of its owned
tankers with Ballast Water Treatment systems within our fleet
over the past five years, as figure 28 illustrates. The adoption
of the technology to comply with this global convention
illustrates the affirmative and effective actions taken under
a global regulator that can bring substantial environmental
improvements.
Newbuildings and specifications
Newbuildings – VLCC
In April 2021 Euronav entered into an agreement with the
Hyundai Samho shipyard for two VLCC newbuilding contracts.
The vessels will both be delivered during Q1 2023, costing USD
186 million en-bloc, including USD 4.2 million in additions
and upgrades to the standard specifications. In June 2021,
Euronav has exercised the option to contract a third VLCC with
the same specifications. The vessel will be delivered in the
second quarter of 2023. The vessels will have the LNG Ready
structural notation and Euronav is working together with the
shipyard and classification society to include an Ammonia
Ready structural notation.
202101020305040Total equipped with BWTSVessels sold with BWTSSubtotal with BWTS2nd hand vessels with BWTSRetrofits of BWTSNewbuildings with BWTSFrom previous year202020192018201720162015Euronav Figure 29: Delivery schedule newbuildings
Annual report 2021
Retrofit:
•
4 vessels scheduled for retrofit Q1 2022 (Ilma, Ingrid, Iris
and Alsace)
Vessel recycling
Encountering the reality
Our goal is to get to the point where we can take full
responsibility for our assets along their whole life cycle. For
instance, a vessel reaches a point where its commercial value
significantly degrades – usually when ships reach 15 to 20 years
of age. Taking care of our ships goes beyond their commercial
life, by applying responsible recycling practices to the extent
of our control.
Ships are sizable structures that require a significant amount of
human effort when dismantling and recycling. Their equipment
consists of different types of materials and is sensitive to handle
due to its properties. In some cases, materials may have an
adverse effect on the environment due to their properties.
Therefore, global regulation and harmonisation of good recycling
practices are needed since shipping is a global activity.
Unfortunately, most ships are dismantled at sub-optimal facilities
where there is a lack of visibility when it comes to the prevention
Newbuildings – Suezmax
Euronav has contracted three firm Suezmaxes for a total cost
of USD 199.2 million (USD 66.4 million each). The vessels will
be delivered in the third quarter of 2023 and the first quarter
of 2024. The vessels will feature a degree of readiness to be
converted into dual-fuel fully fitted Ammonia ships at a later
stage, while retaining the possibility to convert them into dual
fuel LNG vessels, if it would make more commercial sense.
Since the end of 2019 Euronav has sold its interests in eight
older vessels (three Suezmaxes and five VLCCs) with an average
build date of 2005. The capital invested has been recycled into
twelve new large tankers, four of which are modern eco-VLCCs
on the water since Q1 2021, next to three modern eco-VLCCs
and five modern eco-Suezmaxes still under construction.
The vessels are due for delivery in 2022, early 2023 and the
first quarter of 2024. All newbuildings will be delivered in a
staggered timing, enabling sustained progress towards the
development of ammonia-fitted tankers, and the vessels
to benefit from the application of the Joint Development
Program established in July between Euronav and Hyundai
Heavy Industries (HHI) and classification societies Lloyd’s
Register and DNV. More information on the Joint Development
Programme can be found on page 35.
Scrubbers and Euronav
Retrofit vs newbuild
Fitted on Newbuildings:
•
4 VLCCs owned delivered in Q1 2021
•
•
2 Suezmax TC-In Q4 2020
2 Suezmax for delivery Q1 2022
• Option for scrubber on 3 newbuilding Suezmaxes,
delivery in Q4 2023 and Q1 2024
•
3 VLCCs for delivery Q1 2023
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Euronav
of environmental pollution during recycling, labour ethics, health
and safety standards and finally, anti-corruption practices.
identifiable. The prerequisites serve as the ship’s ID, are updated
regularly, and follow the ship’s ownership.
The shipping industry, and more specifically shipowners, are
trying to influence for more regulated practices, enhanced
visibility and monitoring of recycling practices. However,
until we are at that level, it’s our responsibility to embed
sustainability in ship recycling by promoting safe, climate-
resilient and socially acceptable ship recycling practices.
Where responsibility meets ambition
Euronav is committed to get to the point where it will recycle
all its vessels in a sustainable, safe and environmentally
friendly way and to conduct associated business in this area
in a socially responsible and ethical manner while always
applying all respective legal requirements. Euronav’s aim is
to prevent, reduce and minimise injuries, accidents and any
other adverse effects generated via ship recycling. We aim
at developing a fully-fledged ship recycling policy that will
implement our commitment to a responsible and circularity-
based approach.
Our principles
If we were the owner of an asset at the end of its life and there
was no alternative but to dismantle the ship, a decision to
recycle the vessel may be taken. As a ship owner, we aim to
take full “cradle to grave” accountability and have a strict
audit and inspection regime for approval of the ship recycling
facilities we utilise. We do not and will not compromise the
safety, environmental and human/labour principles where
anti-corruption and subcontracting visibility are gradually
getting into magnifying glass. These principles govern our
way of doing business and building partnerships.
Ship recycling is an important matter on which Euronav is actively
working, not only when the ship is ready for dismantling, but from
day 1 of the ship’s life. The green passport and/or other notations
(i.e. ENVIRO) are significant items of the recycling policy and are
documents that follow the entire life of a ship, beginning with its
construction. These documents need to be updated on a regular
basis by all different parties involved during the life cycle of a
ship. It contains information such as ship particulars, details on
the construction yard but, most importantly, information about
every product used during the construction and operation of the
ship. Because of the importance of the green passport within
the recycling policy, all Euronav newbuildings and the majority
of the ships in the fleet are carrying a green passport and/or
other notations (i.e. ENVIRO). Euronav complies with the latest
EU regulations that foresee the introduction of an Inventory of
Hazardous Materials (IHM) and a Maintenance Plan for each
ship. The type, quantity, and location of hazardous materials
are incorporated in that registry and HMs should be clearly
We have positioned the company as a top tier operator, and
we maintain a modern fleet. For that reason, we often sell our
ships way before their natural end of life for further trade or for
conversions – typically to Floating Storage and Offloading units
(FSO) or Floating Storage Production and Offloading (FPSO)
units. The responsibility should also be assumed for ships sold
to third parties for the purpose of recycling. Euronav needs to
establish a monitoring mechanism with shipyards ensuring
that the ship recycling facility acts in responsible manner
and applies similarly high ethical and socially responsible
standards. This will require an audit to be passed to Euronav’s
satisfaction of the relevant facility.
We also take an active participation in many industry forums
where we are promoting responsible ship recycling practices
on an industry level.
Euronav’s recycling principles, which will be applied to our
whole fleet, will represent a set of standard compliance actions
that adhere to all applicable regulations, but also best industry
practices and our ESG culture.
The costs of recycling a vessel with due respect for the
environment and the safety of the workers in specialized yards
is challenging to forecast as regulations and good industry
practice, leading to self-regulation, can dramatically change
over time. However, the Group considers the recent trends of
the steel industry and the outlook of future demand for scrap
steel now to be indicative of a positive residual value of its
vessels after consideration of disposal costs.
We note that last year’s scrap steel rates have reached
unprecedented high values of over $600 per Light Displacement
Tonnage (LDT). The Company’s prior view was that by the time
the vessels reach the end of their useful lives, their residual
values would likely be the same as their disposal costs. This no
longer appears to be the case and has led to a re-assessment
by management, resulting in a residual value estimate of
vessels rising from nil, net, to a residual value equal to the
lightweight tonnage of each vessel multiplied by a forecast
scrap value per ton after dismantling, less disposal costs such
as repositioning the vessel, commissions and preparation
fees, and after consideration of the impact of (changes in)
worldwide recycling regulations (EU regulation versus other)
and developments.”
Aligned with global regulations and
agreements
We are a prime supporter of the Hong Kong International
Convention (HKC) for Safe & Environmentally Sound Recycling
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Annual report 2021
of Ships, 2009 . We hope that the HKC will be entered into force
very soon. Euronav will continue to comply with all global,
regional and local relevant and applicable regulations to
safeguard that our vessels are recycled in a transparent and
audited fashion and follow up the entire recycling process.
embedded in our vendors’ evaluation policy, as well as tools
to ensure our suppliers provide services according to our Code
of Suppliers Conduct and aligned with our sustainability policy.
Sustainability in Euronav is being shaped within the Procurement
policy and can be demonstrated by the following objectives:
Sustainable Procurement
Sustainable sourcing strategy
Our focus is to build engagement and sound partnerships
with our internal and external collaborators who are key to our
core business and share similar principles regarding service
and product quality, safety and cost-efficiency. Two main
principles regard sustainability as an assessment criterion:
•
•
Vendor selection that is based on the most advantageous
combination of cost, quality and sustainability to meet
requirements, where sustainability entails an alignment
with the Company’s sustainability strategy and policy
through identifiable operational efficiency.
The compliance of goods/services with the Company’s
sustainability policy and the alignment of quality and
performance of goods and services with the Company’s
sustainability ambition.
To capitalise on the above mentioned principles, we have
developed an ESG Suppliers Assessment framework that is
•
Eliminate single-use plastics from all vessels by the end of
2022;
• Build and run an extended value chain engagement model
by the end of 2022;
•
•
•
Integrate sustainability KPIs and working with key
suppliers towards a lower-carbon value chain;
Tender energy efficient retrofits (e.g. antifouling paint
technology for reducing GHG footprint);
Engage ISO-14001 certification with key suppliers;
• Develop a framework to track and start mitigating Scope 3
emissions related to our ship management activities;
Euronav Supplier Sustainability Index (ESSI)
The Euronav Supplier Sustainability Index (ESSI) is a scorecard
used to track and measure the profile of Euronav’s ship
management suppliers. Euronav’s business values and
sustainability ambitions are illustrated by that Index. It is a
business enabler and a key tool to support Euronav’s sourcing
Figure 30: Euronav Supplier
Sustainability Index
Code of ethics policy
Sustainability
Reporting
ESG strategy
Orientation
Renewable energy
Waste management
Recyclability
Air quality
Plastic reduction
Emissions
Child labour
Forced labour
Human rights
Donations
Charity
Health & safety
Community
Engagement
Sustainability
Board diversity
91
strategy. In parallel, it communicates our expectations for
continuous improvement for sustainability performance of
our suppliers, while also identifying strategic relationships.
Our Company’s expectations regarding ESSI are:
•
•
•
To complete ESSI as in-depth as possible;
To engage the most relevant sustainability experts to
complete the questionnaire;
To provide relevant documentation to support their
feedback in the questionnaire.
Sustainable packaging
Packaging is one of the most significant issues of concern
due to its environmental impact and end-of-life cycle. If
addressed appropriately, changes in packaging practices can
have a large impact on the environment. Euronav encourages
“Eco-friendly” packaging, as it is easily recycled, and safer for
individuals and the environment. It is also known as green
packaging, or sustainable packaging. It uses renewable energy
and uses renewable or recycled materials as much as possible.
In 2021 we communicated our concern and vision to some of
our major suppliers, such as provisions providers, forwarders,
paints, lubricants and spares providers. They confirmed that
they encourage the use of green packaging and reduction of
waste and pollution caused by the warehouse facilities, and
are consistent with the requirements of the proper packaging
of the products they are supplying.
Euronav is currently developing an action plan to incorporate
green packaging strategies in the purchasing process by
setting up minimum requirements to suppliers for sustainable
packaging.
Ban on single-use plastics onboard
The European Commission established the Single-Use Plastics
(SUP) Directive, which took effect in the EU on July 2, 2021. The
directive bans certain SUPs for which alternatives are available.
A “single-use plastic product” is defined as a product that is
made wholly or partly from plastic and that is not conceived,
designed, or placed on the market to be used multiple times
for the same purpose. However, this is not only limited to the
EU. SUP elimination is a global evolution, and Euronav is fully
committed to green initiatives and sustainability because ‘the
ocean is our environment’.
As of June 24, 2021, Euronav no longer supplies SUP items
on board. These have been deactivated from the database
and have been replaced by biodegradable eco-friendly items.
To further eliminate the use of SUP products Euronav has
introduced two pilot projects. The first project investigates the
use of 18.9L water drums. The second pilot project focuses on
the entire freshwater system, through the introduction of water
filtration systems and water fountains. Aiming to a plastic-free
fleet, even more vessels will be supplied with water filtration
systems in the coming months, targeting the elimination of
SUP 100% by the end of 2022.
Overview initiatives and
collaborations
Getting to Zero Coalition
The Getting to Zero Coalition (GtZ), a partnership between
the Global Maritime Forum and the World Economic Forum,
is a powerful alliance of more than 150 companies within the
maritime, energy, infrastructure and finance sector, supported
by key governments and IGOs. The Coalition is committed
to getting commercially viable deep sea zero- emission
vessels powered by zero-emission fuels into operation by
2030, maritime shipping’s ‘moon-shot’ ambition. Euronav is
supporting the initiative by contributing to the development
of policies, promoting the initiative within our networks and
supporting the projects of GtZ.
Poseidon Principles
The Poseidon Principles (PP) are a framework for assessing and
disclosing the climate alignment of ship finance portfolios with
the policies and ambitions of the IMO to reduce greenhouse
gas emissions for shipping. Euronav assisted with the drafting
of the Poseidon Principles in 2019, as one of only two shipping
companies in the drafting committee, and applies them to our
funding structure.
There are four primary principles of underlining the agreement:
Assessment
Carbon intensity is measured by signatories on an annual basis
and the data shared with the associated financing institutions.
This will enable them to align their goals for combatting
climate change to their financial portfolios by demonstrating
a trajectory of reduction year on year. By thoughtfully applying
the methodologies established by the Poseidon principles
they will establish visible decarbonisation pathways for
shipping.
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Euronav Annual report 2021
Figure 31: AER Suezmax
Source: POSPRI and Euronav
Figure 32: AER VLCC
Source: POSPRI and Euronav
Accountability
Signatories will rely on classification societies or other
IMO recognised organisations, and mandatory standards
established by the
IMO for the provision of unbiased
information used to assess the report of climate alignment.
Enforcement
A standardised covenant clause will be made contractual for
new business activities to ensure access to high-quality data.
Transparency
Signatories will publicly acknowledge they are a signatory of
the Poseidon principles and they will publish the results of
the book portfolio climate alignment score of their business
activities on an annual basis in line with a technical guidance.
There are currently 29 signatories to the Poseidon Principles
where 27 of them are financial institutions, representing a
bank loan portfolio to global shipping of approximately USD
185 billion, more than 50% of the global ship finance portfolio.
The Poseidon Principles apply a maximum level of an AER or
Annual Efficiency Ratio every year for a company's shipping
fleet.
The Annual Efficiency Ratio divides the annual carbon dioxide
emissions of a ship by the product of the distance sailed, and
the deadweight of the ship. The Poseidon principles framework
requires shipping companies to reduce their AER year on year
as figure 31 illustrates. For the VLCCs the framework is seeking
AER to fall from 2.37 g CO2/ton-miles to 2.07 by 2025, as the
blue bars show. Euronav’s planned trajectory is ahead of this
schedule, represented by the green bars (figure 32).
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Euronav
CDP
Sea Cargo Charter
The Carbon Disclosure Project (CDP) is a global non-profit
organisation that has run the world’s leading environmental
disclosure platform for over 20 years. In 2021, Over 2,400
companies worldwide shared data on their environmental
impact in relation to climate change, forests, and water with
the CDP. Euronav has submitted its sustainability credentials
to the CDP platform for the second time in 2021 gaining a
‘B’ rating which is covered in more detail in the ‘Greenhouse
gas emissions’ section in this report. For more information:
https://www.cdp.net/en
ITOPF
The International Tanker Owners Pollution Federation (ITOPF)
is a non-profit organisation and a trusted source of objective
technical advice worldwide on preparedness and response
to accidental marine spills. Alex Staring, Euronav COO, sits
on their International board. ITOPF has responded to over
800 incidents involving oil or chemical spills worldwide.
Their highly skilled international team assists 24 hours a day,
365 days a year to provide impartial technical advice. ITOPF
provides a wide range of technical services to back up our core
role of responding to ship-sourced spills. For more information
https://www.itopf.org
Global Maritime Forum
Euronav is a founding partner of the Global Maritime Forum,
an
to
international non-profit organisation committed
shaping the future of global seaborne trade to increase
sustainable long-term economic development and human
well-being. Euronav joined the 2021 Annual Summit of the
Global Maritime Forum in London through the participation
of Euronav’s CEO Hugo De Stoop and Sustainability Manager
Konstantinos Papoutsis. For more info visit https://www.
globalmaritimeforum.org/.
Euronav is pleased to have been a key member of the Sea
Cargo Charter drafting group as part of our wider efforts to
actively and immediately reduce our GHG emissions. The Sea
Cargo Charter initiative is a partnership between some of the
world’s largest energy and commodity trading companies and
the shipping sector. This global framework favours climate-
aligned maritime transport for the integration of climate
considerations into chartering decisions. The Sea Cargo
Charter establishes a common baseline to quantitatively
assess and disclose whether shipping activities are aligned
with adopted climate goals and are consistent with the policies
and ambitions adopted by the IMO. For more information
https://www.seacargocharter.org
HELMEPA
The Hellenic Marine Environment Protection Association
(HELMEPA)
is the pioneering voluntary commitment of
Greek seafarers and ship owners to safeguard the seas from
ship-generated pollution, undertaken in Piraeus, on June
4, 1982. The association aims to acquire an environmental
consciousness under the motto ‘To Save the Seas’. Euronav is
an active member. We participated in the development of the
training programs and provide trainers for these programs. For
more information visit: https://www.helmepa.gr/en/
INTERTANKO
International Association of
The
Independent Tanker
Owners (INTERTANKO) is a trade association. It has served
as the voice for independent tanker owners since 1970 on
regional, national, and international levels. The association
actively works on a range of technical, legal, commercial and
operational issues that have an influence on tanker owners
and operators around the world. For more information visit
https://www.intertanko.com
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Annual report 2021
95
Euronav
Social and human capital
People approach
One cornerstone of the Euronav mission is dedicated to our
people: to inspire and enable talented, hard-working people
to achieve their career goals in a healthy, challenging and
rewarding environment. Throughout its shore-based offices
in Antwerp, Athens, London, Nantes, Geneva, Singapore,
and Hong Kong, Euronav has approximately 200 employees
(including contractors and temporary assignments). This
geographic span across Europe reflects a deep-rooted
maritime history and culture built up over generations.
Around 3,200 seafarers of many different nationalities work
onboard Euronav vessels. In an environment where there
is a shortening supply of competent seafarers, Euronav has
qualified and experienced masters officers and crew to man
all the vessels.
Euronav is devoted to a teamwork culture and an environment
where people work together for the overall success of
the Company, on shore and at sea. Euronav practices
genuine performance planning and appraisal, training and
development and promotion from within. Our policies aim
to enhance and reward performance, engage our people and
retain key talent. We celebrate the diversity in our workforce.
Many of our employees and officers have a wealth of long
service and experience in the business while others are new
entrants with fresh perspectives. This commitment and
stability enriched with diversity has enabled us to achieve
excellent results
industry.
Euronav people bring to the job a rich diversity of educational
and professional qualifications, including professionals with
nautical, engineering, finance, business administration,
legal and humanities backgrounds, who specialise in tanker
operations, crewing, marine and technical areas and shipping
corporate services. Virtually everyone speaks at least two
languages fluently and half the staff speaks three or more
languages.
in an extremely competitive
96
Euronav wants to positively impact the communities where
we live and work. We do this by building relationships
andinspiring philanthropy and goodwill both inside and
outside the Company. We actively encourage our staff to
initiatives and support employee
engage
involvement, be it volunteering, fundraising or donations
through options such
incommunity
as fund-matching or sponsoring specific events. A few of the
charities to which Euronav contributes financially, in line with
its policy, are described below.
Transparency and ethical behaviour
Code of conduct
Euronav adopted a Code of Conduct in order to assist all
persons acting on behalf of Euronav to act in an ethical way
and with respect of the applicable laws and regulations. The
Code of Conduct therefore ensures that Euronav employees
enhance and protect the good reputation of the Company,
more particularly
relationship with customers,
shareholders and other stakeholders, as well as with society
in general.
its
in
Staff Handbook
The Staff Handbook sets out guidelines for ensuring high
standards of ethical practices that need to be applied throughout
the Euronav community. These include policies, amongst
others, relating to working culture, employee retention and
turnover rates, remuneration and workforce diversity, regulated
working hours, regulation of labour supply and protection of the
workers against sickness, disease and injury.
Annual report 2021
200
total shore eployees
3,194
total seafarers
17
30
3,241
58,018
Nationalities shore
Nationalities sea
Training hours shore
Training hours sea
43/57%
Male/female shore
97.4 /2.6%
Male/female sea
87.70%
Retention rate shore
95.94%
Retention rate sea
0.40
0.92
Frequency rate LTI
Frequency rate TRC
Euronav on the move
4,077
activities
19,726
Euro collected
97
Collaborations and contributions
Charity policy
Sailor’s Society
Euronav does not make any contributions to political
parties of any affiliation. Euronav’s focus is on charitable
donations where the Company believes it can make a tangible
improvement to parts of society that we are engaged with,
or are close to. This is a dynamic area and we are constantly
assessing the efficacy and focus of our charitable efforts.
Euronav wants to positively impact the communities where
we live and work. We do this by building relationships and
inspiring philanthropy and goodwill both inside and outside
the Company. We actively encourage our staff to engage in
community initiatives and support employee involvement, be
it volunteering, fundraising or donations through options such
as fund-matching or sponsoring specific events. A few of the
charities to which Euronav contributes financially, in line with
its policy, are described below.
The Ocean Cleanup
For many years, Euronav has contributed funds to The Ocean
Cleanup. The Ocean Cleanup’s mission is to develop advanced
technologies to rid the world’s oceans of plastic. It began in
2018 with the development of the very first clean-up system for
the Great Pacific Garbage Patch. The Ocean Cleanup estimates
they will remove 50% of the Great Pacific Garbage Patch within
5 years of a full-scale deployment of 50 clean-up systems. Its
aim is to help preserve our environment: the ocean. In 2021 we
made a substantial financial aid to The Ocean Cleanup through
AtlasGo. Through their application that tracks physical and
mental activities, and sets them against a certain amount raised
for a good cause, we challenged our employees to exercise. For
more information visit https://theoceancleanup.com
The Sailors’ Society is a charity which operates globally
through a network of interdenominational Port Chaplains,
who support all seafarers irrespective of their background,
faith or nationality.
The busy Port of Antwerp is vital to European and global trade,
handling approximately 17,000 vessels every year. With so
many seafarers visiting the port, there is a need for access to
welfare services on a large scale. Euronav has donated funds
which will help the Sailors’ Society work with the Antwerp
port chaplain Marc Schippers. Marc visits vessels to offer his
assistance to the crew onboard. He takes practical items such
as phone cards to help seafarers to contact their families and
international news printed from the internet to connect them
with news from home. As well as practical assistance, Marc
offers a listening ear to seafarers, providing emotional support
when requested.
Using his Sailors’ Society vehicle, the Antwerp Port Chaplain
also offers seafarers free transport to wherever they need to
go, such as the nearest phone and internet facilities, the shops
or the doctors. This is a crucial service for visiting seafarers, as
their time ashore is often limited to just a few hours.
Valero Benefit for Children
The Valero Texas Open Benefit for Children Golf Classic, which
has been running since 2002, is a project of the Valero Energy
Corporation that raises money for children’s charities in the
communities where Valero has major operations. The 2016
Valero Texas Open Benefit for Children Golf Classic and the
Valero Texas Open contributed USD 10.5 million to children.
As in previous years, Euronav specifically requested for its
donation to be oriented towards children’s charities based in
Quebec where a large number of our vessels trade.
Great Whale Conservancy
The Great Whale Conservancy (GWC) is an Environmental NGO
that protects the world's great whales and their habitat and work
to return global populations to their pre-whaling abundance.
Their objective is to double blue whale numbers by 2050 by
significantly reducing ship strikes with a primary focus on the
Southern Oceans where the greatest number of blue whales
lived prior to the tragic era of industrialised whaling. For more
information: https://www.greatwhaleconservancy.org/
98
Euronav Training and development
Euronav practices performance planning and appraisal,
training and development and promotion from within. Our
policies aim to enhance and reward performance, engage our
people and retain key talent.
Euronav has built a comprehensive system of continuous
training programs and seminars both aboard and ashore.
This ensures a continued awareness among all personnel of
their day-to-day operational duties. The training needs are
identified during the appraisal process and the training plan is
prepared based on these needs. Training activities are carried
out in a training room or online through a computer-based
program.
Due to the COVID-19 crisis the percentage of employees that
followed a training in 2021 is very limited and therefore not
representative. In 2021 the total training hours of our shore
staff was 3,241, with a percentage of participation of 69%.
All our seafarers followed trainings in 2021, resulting in 58,018
hours of training in total.
Talent attraction
is always
looking for new talent to
Euronav
join our
company. On our website we display all shore-based career
opportunities within the company. There is a separate page for
crew applications. The shore vacancies are displayed on the
website and on our LinkedIn page.
Crew management
Annual report 2021
career. Advanced tools and tests are supplementing the entire
recruitment and promotion process to optimise results and
provide support and guidance to the seafarers.
A crew software platform is used by all crewing departments
to provide job opportunities to Euronav seafarers at any time,
allowing them to develop and retain competencies within the
Euronav Group.
To ensure that all vessels are staffed with qualified and
competent crew, a detailed training matrix has been developed
and evaluated annually. The training includes external and
in-house training above minimum statutory requirements,
as well as computer-based training. Conducted training is
being recorded and assessed, and training needs are further
evaluated during quarterly management review meetings. A
company-specific induction course is in place to familiarise new
joining and promoted crew with the Company, safety standards,
procedures, and rank specific generic tasks and duties.
Additionally, sea staff are provided with the opportunity for
shore-based trainings such as seminars, and conferences and
are kept in contact with the Company through newsletters and
regular communication, as well as opportunities to attend
office activities.
Euronav respects the rights and dignity of all seafarers and
acknowledges that everyone who is involved in shipping has
mental health and wellbeing needs. We take mental health
and wellbeing into consideration in all aspects of shipping
by establishing a set of actions in order to ensure crew care
and wellness. With the crew change crisis, affected by the
COVID-19 pandemic, external psychologists were consulted to
give advice.
Euronav Ship Management employs and offers career
opportunities to officers and crew of various nationalities from
Europe, Asia and America. Euronav also has a portion of its
fleet under third party managers which allows the Company to
accurately monitor sector best practices and cost optimisation.
The first part of the pre-joining process is the medical
screening of the crew on several criteria to ensure proper
health condition and fitness. Medical services monitor and
take care of all the crew medical requests and needs before
joining, and while being onboard.
The Euronav group recruits seafarers from all around the
world, providing opportunities for motivated professionals to
develop their careers on board our vessels.
The development of the crew is based on pre-established
rank-specific criteria, focusing on the cultivation of both
technical and personal
(leadership) skills. The crew
recruitment is done by a dedicated team that identifies
the applicants competences against those needed for the
available vacancies. Furthermore, the crewing department
also identifies training needs and requirements to advance
crew performance and enable growth opportunities for their
All crew are briefed for certain aspects (vessel condition,
planned events, vessel’s schedule, etc.) before flying to the
vessel either by the ship management team for the Senior
officers or by crew department and manning agents for the
junior officers and ratings. The same process is followed upon
crew disembarkation for receiving the valuable feedback of
the crew and agreeing on the next employment schedule.
Crew planning tools and rotation dashboards facilitate the
timely crew signing on and off process, minimising delays
to the possible extent, taking into consideration pandemic
restrictions and challenges.
99
Quarterly campaigns regarding crew mental health and
wellbeing are released through the company’s “Stay Safe”
magazine. Crew Victualling, Slop Chest, and Bonded store are
under continuous monitoring with the support of high-quality
catering providers who supervise proper and timely supplies
delivery on board the vessels at all times, while providing
guidance for menu planning and cooking recipes.
Onboard crew communications are supported with additional
free communications allowance to facilitate crew contact with
their families and relatives.
Introduction of e-wallet solutions to the crew allow for prompt
funds availability to the crew while they are on board. The crew
can access their funds without delays, having full control at
any time through the mobile app, access to major currencies
through the multi-currency account with competitive FX rates.
At the same time, the master is relieved from the risks and
exposure associated with the high cash balances on board the
vessels.
The crew portal gives availability to all crew onboard and
ashore (when on leave) to check their full status for sea service,
certification, planning, performance evaluation, training,
company’s events, travel arrangements, etc. in real-time.
Crew conferences are scheduled on an annual basis. In these
conferences, Senior Officers and shore management receive
updates about the Company and topics of mutual interest,
and have the opportunity to interact with each other. On top
of the crew conferences, topic-specific video conferences are
scheduled to allow for discussion, provide information, or
familiarise officers and crew with new concepts and projects.
Highlights:
• Crewing managers meeting is conducted on a virtual
basis every month due to pandemic situation
•
•
Implementation of crewing strategy with the
appointment of additional manning agent in the
Philippines
Enhancement of crewing software platform
utilisation including “hand over reports” of senior
officers
• Preparation and testing of a new performance
evaluation system for deployment in crewing
software platform
• Crew changes across the fleet, despite the current
limitations and restrictions worldwide (1305 on-
signers & 1342 off-signers)
• Organisation of virtual Senior Officers’ Conference on
22 and 23 November 2021
•
Appointment of recruitment manager and further
development of the recruitment team for closer
focus on sea staff recruitment and development
needs
• New induction procedures for seafarers
•
•
•
Implementation of new promotion process (173
promotions),
Sea staff certification for compliance with STCW
Manila Amendments 2010, with zero observations in
Commercial, Flag, PSC & Class inspections
Implementation of Masters’ and Chief Engineers’
progressive dedication to specific ships
• Close monitoring of Manning agents’ performance .
Introduction of Manning Agents KPIs
•
•
•
Implementation of additional psychometric test for
all newly hired Senior Officers and Cadets for all flags
Implementation of exit interviews for all Senior
Officers (In exceptional cases for all ranks, if deemed
necessary)
Implementation of e-wallet project for electronic
payments of seafarers
• Officers Shore Assignments - (total 12 shore
assignments)
100
Euronav Annual report 2021
Figure 33: Retention rate
Figure 34: Average experience with Euronav
(Sea service in years)
Figure 35: Average experience in tankers
(Sea service in years)
Figure 36: Average experience in rank
(Sea service in years)
95.94 %
Sea staff
retention rate
92.00 %
Senior officers
retention rate
94.00 %
Junior officers
retention rate
98.61 %
Ratings
retention rate
101
This commitment to equality is also reflected in the boardroom
where Euronav has had a female representation of more than
50% in the Supervisory Board since December 2019. The
Supervisory Board of Euronav currently consists of two men
and three women with varying yet complementary expertise.
The Supervisory Board has been made aware of the law of
28 July 2011 on gender diversity and the recommendations
issued by the Corporate Governance and Nomination
Committee following the enacting of the law with regard to
the representation of women on Supervisory Boards of listed
companies.
Figure 38 : Gender diversity within Euronav
Diversity and equality
We celebrate the diversity in our workforce. Many of our
employees and officers have a wealth of long service and
experience at Euronav, while others are new entrants with
fresh perspectives. Fostering long-term commitment and
stability, combined with a conscious effort to introduce new
talent to the Company, has enabled us to achieve excellent
results in an extremely competitive industry.
Figure 37: Nationalities within Euronav
17
Onshore
30
Offshore
Nationalities onshore
Albanian
Belgian
Canadian
Cypriot
Danish
Dutch
Egypt
Filipino
French
Greek
Indian
Norwegian
Romanian
Singapore
Turkey
UK
USA
2
58
1
1
2
2
1
2
6
Nationalities offshore
2
50
196
8
1
9
Indian
Indonesian
Italian
Jamaican
Montenegrin
Pakistani
104
2
1
1
4
1
3
1
117
46
1
1
2
9
American
Belgian
Bulgarian
Canadian
Chilean
Colombian
Croatian
Dutch
Ecuadorean
El Salvador
Filipino
French
Georgian
Greek
Guatemalan
Honduran
102
123
Panamanian
185
Polish
Portuguese
Romanian
Russian
Slovenian
Ukrainian
Venezuelan
2
2
70
75
1
154
1
4
3
123
1494
75
7
371
1
122
Female
Male
Euronav Annual report 2021
Figure 39: Generational diversity
18-29
30-39
40-49
50-59
60+
Onshore
Offshore
29
75
63
34
4
1056
1023
657
410
48
On shore, Euronav performs well. The Euronav Supervisory
Board is 60% female which is unusual in any context, least of
all in shipping. Just under 30% of the executive officers are
women and 20% of the senior management roles are taken up
by women. Almost half of our middle managers are women
and 83% of entry level positions are held by women. Half of
all revenue generating staff are female. We have taken some
steps. But don’t take our word for it, take that of the Bloomberg
Gender-Equality Index (GEI).
The Euronav community includes a rich diversity of educational
and professional qualifications to their jobs. The company
attracts professionals with finance, business administration,
legal and humanities backgrounds, as well as those who
have specialised in nautical, engineering, tanker operations,
crewing, marine and technical areas and shipping corporate
services. Virtually everyone speaks at least two languages
fluently and half the staff speaks three or more languages.
Gender Equality
Women in Shipping
The difficult working conditions, physical labour, and long
durations away at sea have traditionally made shipping a
male-dominated business. But it has also been particularly
slow to change. Real change takes time, and a step forward
is often met with a shove backward. The ‘boys club’ mentality
still exists and sexism, while rarely openly displayed these
days, is nonetheless still prevalent.
However, things are slowly changing, and a growing number
of players in the maritime sector are promoting balance on the
gender scale. Even the International Maritime Organisation
(IMO) plays a part. In 2021 The IMO adopted a resolution
proclaiming an International Day for Women in Maritime, to
be observed on 18 May every year. The IMO has been running
a Women in Maritime programme since 1988, a time when few
maritime training institutes even permitted female students.
Since then, the IMO has supported access to maritime
training and employment opportunities for women across the
maritime sector.
How is Euronav doing?
In our case, we need to distinguish between the female
representation on shore and onboard.
Index
The Bloomberg Gender-Equality
(GEI) provides
transparency in gender-based practices and policies at publicly
listed companies, increasing the breadth of environmental,
social, governance (ESG) data available to investors. The
reference index measures gender equality across five pillars:
female leadership and talent pipeline, equal pay and gender
pay parity, inclusive culture, sexual harassment policies, and
pro-women brand. This index is updated every January and
Euronav has once again been included for 2021, as it has been
since the index’s inception in 2018. In 2021 Euronav submitted
its 5th consecutive questionnaire resulting in a score of 62.84%,
which is higher than the average score of the Transportation
and Logistics sector of 47.61%.
Moreover, Euronav is one of only three Belgian companies
included in the GEI.
On board it is a different story for obvious reasons but as the
world progress towards gender-equality everywhere, the
situation is also moving in the right direction. Figures published
in a BIMCO/ ICS 2021 Seafarer workforce report show that
women still represent only 2.1% of the global seafarer workforce
(which is an increase of 45.8% since 2015). Within Euronav, in
2021, 2.6% of our crew members are women, among our Cadets
this is even 8.6%, but this is still too low.
103
Chief Officer Ms. Sofia Psychogyiopoulou
“In the year 2022, I have managed to be in the 2% of women
employed in shipping worldwide. The road to success was not
easy, but my stubbornness and love for my job,brought me to the
Chief Officer position today. When I started, I could not imagine
that I would get here, but the trust and support from my company
EURONAV, helped me from the very beginning. My journey began
in 2015 as Officer. The living conditions were difficult at first, as it
is a traditionally male-dominated profession. Nevertheless, with
patience and hard work, I quickly integrated into the environment
and earned the respect of my colleagues. I have travelled to many
places, met many cultures and seen incredible images at sea. This is
the beauty of my profession. Many said I would not make it. 'Where
are you going woman?' You see, the prevailing perception that
women’s priority is having a family. Well, I will tell you today that
what I have achieved and the reason I keep going is my family and
mostly my son. By telling my own story today, I want to encourage
other women to pursue their dreams, to believe in their strengths as
we are equal to men, and to DARE! I dared and succeeded!”
Complaints
Communication channels
Whistleblower policy
Investor relations
Euronav has adopted a Whistleblower Protection Policy to
protect individuals who want to lawfully raise a legitimate
concern. If an employee becomes aware of illegal or unethical
misconduct, Euronav strongly encourages them to report it
to Euronav through our regular channels of communication,
including the ‘On Board Complaint (or Grievance) Procedure’
for seagoing personnel. If an individual does not feel
comfortable reporting concerns to a supervisor, manager
or any other appropriate person within the Company, he or
she can use a free telephone service or web-based platform
that enables him or her to report a concern in complete
confidentiality. Euronav’s ‘SpeakUp’ service is hosted by
an independent third party, People InTouch, to ensure a
straightforward, confidential, secure, and convenient way of
reporting.
Euronav encourages individuals to identify themselves when
making a report to facilitate the investigation. However, any
person who does not want to be identified is entitled to
register a complaint confidentially and anonymously. The
Company treats all complaints in a confidential manner. The
Company does not in any manner discriminate against any
individual who has made a complaint in good faith. The full
Whistleblower policy can be found on Euronav’s website.
Euronav strives to communicate openly and transparently
towards our stakeholders on a regular basis. After each
quarterly earnings release, our Management Board presents
the quarterly results during a virtual conference call. This
conference call is followed by a Q&A. For investors and analyst
who are not able to attend, the script is later on published on the
Euronav website along with a PDF of the presentation. Euronav
also holds frequent investor and analyst presentations, as well
as virtual roadshows.
On our annual General Shareholder meeting, which is held
the third Thursday of May after the financial year, our key
shareholders cast their votes on important matters that can
affect our company.
All investor related information can be consulted on the
investor page on the Euronav website: https://www.euronav.
com/en/investors/
Communication towards employees
Euronav tries to communicate with its employees in a
direct and transparent way on a regular basis. To build
employee relationships, Euronav has continued to use, and
104
Euronav Annual report 2021
also implemented, new platforms to improve its employee
communication.
on pre-defined standard expected behaviours. Those expected
behaviours are different for managers and employees.
With quarterly Town Hall meetings, Euronav informs all
its employees on important matters happening within the
Company. After the presentations, time is reserved for all
employees to ask questions to the Management Board during
a Q&A. Other communication channels that are frequently
used by Euronav, are quarterly newsletters, internal mails,
intranet and the HR-platform, video messages from our CEO,
and if required internal physical meetings and/or teams calls.
Flexible working
Euronav cares greatly about its employees and actively
supports their wellbeing. It strives to create a collaborative and
stimulating work environment which caters to the different
staff needs, and encourages a healthy work-life balance by
offering flexible working arrangements, such as teleworking.
Euronav has expanded its home working policy in response to
the extreme impact of COVID-19 restrictions.
Performance management
At Euronav we evaluate the performance of our employees
through both formal and informal processes as it facilitates the
alignment of our employees, resources, and systems to meet
our strategic objectives.
In 2021 we integrated the performance review process into the
Euronav HR Portal SAGE, including our values to be assessed
Our bi-yearly formal process is allowing managers to know
when they must make adjustments to keep a business on
track. Managers continually monitor the defined objectives
and regularly engage with their teams to discuss progress in
meeting the targets
COVID-19
The wellbeing and health of our staff, seafarers, their families
and the broader community is Euronav’s priority. We applied
several precautionary measures across our offices and fleet in
order to protect our employees and seafarers in response to
COVID-19. We have restricted access to our offices around the
world and most of the staff have worked from home for most
of the year. There is also restricted access to our vessels when
they call at certain terminals.
The regulations in the different locations of the Euronav
offices were closely monitored, and the employees were kept
informed of restrictions or returns to the office. Furthermore, a
dedicated mail address was and is still used for COVID-related
questions. For our offices safety protocols, as decided by the
government, were applied. Self tests, mouth masks, hand
sanitisers and CO2 meters were available in the office. Euronav
decided not to put any of its employees under temporary
or permanent unemployment benefits, as we believe that
every single employee at Euronav plays a critical role in our
operations in the short- and the long-term.
105
Crew change crisis – a global maritime issue
The COVID-19 crisis continued to bring many challenges in
2021, but the Company’s main concern and challenge was
and still is the rotation of all Euronav seafarers with expired
contracts stranded at sea. This is not a crude tanker company
issue, but a global maritime industry issue. It is the largest ever
humanitarian and logistical crisis facing the maritime sector,
with the disruption affecting the lives and livelihoods of nearly
40% of the world’s estimated 1.647 million crew, including those
seafarers that are unemployed and unable to join their vessels.
Euronav has supported its employees from the beginning by
trying to communicate consistently with its crew members.
The will of any seafarer to be repatriated and return to his or
her family and loved ones is a right that Euronav undeniably
respects and supports. Euronav has been working closely with
many organisations and countries to facilitate the movement
of seafarers to and from their vessels. In January 2021, the
Company became a signatory of the ‘Neptune Declaration
on Seafarer Wellbeing and Crew Change’. The declaration is a
global call to action to address the ongoing crew change crisis
caused by the COVID-19 pandemic. It focuses on concrete
actions that can facilitate crew changes and keep vital global
supply chains functioning. Currently the Neptune Declaration
is signed by more than 850 signatories.
Key workers in other industries received special permission
to travel. This lead to lobbying on behalf of seafarers to be
afforded the same status and support during the pandemic.
Figure 40: Evolution delayed crew contracts for 2021
Euronav lobbied different ports to either help lift restrictions, or
to have the port communicate when restrictions may be lifted.
Throughout the crew change crisis, our CEO Hugo De Stoop
was our leading voice. He actively supported the stranded
seafarers and looked for a solution together with everyone in
the company and local authorities.
Vaccination schemes for international seafarers continue
to gain traction in many countries, including USA, Canada,
Belgium, France, UK, Spain, Norway, Netherlands, Italy,
Germany, Denmark, Croatia, Singapore, India, Indonesia,
South Africa, etc... This is a very positive development. Euronav
continues to actively encourage and support our seafarers
to take up vaccination opportunities as they are presented
onboard, at a Port of embarkation or disembarkation, as well
as in their home countries.
Crew change crisis – proactive response
from Euronav
The regular performance of crew changes was affected by the
COVID-19 regulations around the world, with crew change
clearance dependent on complex multi-regional regulations
of many countries. These complexities grew with the
lockdown restrictions associated with combating COVID-19.
This placed additional pressure on our capability to repatriate
crew and make necessary crew changes. Through the tireless
efforts of our operational staff, professionalism of our crew,
and lobbying efforts, Euronav made sustained progress in
managing our displaced crew as figure 40 shows.
(cid:25)(cid:26)(cid:27)
(cid:25)(cid:27)(cid:28)
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106
(cid:31)(cid:31)(cid:30)(cid:31)(cid:30)(cid:30)(cid:31)(cid:30)(cid:30)(cid:31)(cid:30)(cid:29)(cid:31)(cid:30)(cid:30)(cid:31)(cid:30)(cid:29)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)Euronav
Annual report 2021
Source: Riviera Maritime Media
HR accomplishments
Stamatis: Industry leader of the year award
In 2021 the Human Resources department has invested a great
deal of work in the following areas:
• Coping with increased recruitment needs of additional
hires and replacements and supporting the requirements
caused by departments’
to
understaffed workforce.
reorganisation due
• Managing the induction and integration of 22 new hires
working in a hybrid environment.
• Market research for a cost effective online tool for job
applicants tracking for shore staff vacancies.
•
Implementing new design for Performance Management
including Objectives evaluation and Competency
Assessments.
• Continuous follow up and further development of the HR
platform by the local HR teams to make it more efficient
for the staff including the creation of reports/dashboards.
•
•
Implementation of the Succession plan and process for
ESMH General Manager, including external assessments
and usage of a 360° tool.
Awareness and proper handling of the pandemic
evolution by the HR teams. Implementation in the office
of local Authorities’ restrictions for safety reasons and
maintaining/monitoring the relevant measures.
• Organisation of an off-site team building/reconnect event
to foster social cohesion.
In early November 2021, the tanker community gathered
in Athens for the Tanker Shipping & Trade Conference,
Awards and Exhibition. It was the first live gala dinner and
awards in two years to honour the tanker industry’s leading
lights. Key to the awards is that the winners are chosen by
the industry from nominations submitted by those in the
tanker industry. Our Euronav Ship Management (Hellas)
General Manager Stamatis Bourboulis, received the TST
Industry Leader Award. The tanker industry has recognised
him as having achieved new industry standards and has
chosen him because he exemplifies best management
practices. On reception of the award, Stamatis Bourboulis
gave his thanks and shared some kind words:
“I have encountered people that have
inspired me and have helped me
to develop both professionally and
personally. I believe the leader is as good
as the team. I would not be able to stand
here in front of you, if my colleagues on
board and ashore did not perform their
job with professionalism and to a very
high standard. I would like to dedicate
this award to them.”
We want to congratulate him for an award well deserved
and are thankful for his continuous commitment.
107
Euronav
Health
Our approach to health
The health of Euronav personnel both onboard and ashore is
a very important aspect of Euronav's Company Management
system. Our working environment is continuously monitored
for proper health conditions. Our health standards and
guidelines pay specific attention to important issues such as
general living conditions, crew wellbeing, physical exercise,
storage of food and nutrition practices. Medical advice and
assistance is available 24/7.
ISM Compliance
Euronav has developed a Health, Safety, Quality and
Environmental
(HSQE) Maritime Management System.
This
integrates health, safety, environment and quality
management into one seamless system that fully complies
with the ISM Code for the ‘Safe Operation of Ships and
Pollution Prevention’.
Ship management
Euronav Ship Management is involved in the operation and
management of vessels providing worldwide transportation
of cargoes by sea. As such, it recognises the inherent impacts
on people and the environment, which can result from its
activities. The Company therefore conducts its operations,
both ashore and on board the vessels under its management,
in a manner that protects health and promotes safety.
The Company holds health, hygiene and safety as first priority
in its operations, while it ensures that all employees execute
their work under safe and hygienic conditions.
108
Euronav
is therefore committed to take all reasonable
precautions and measures, during the operation of managed
vessels, in order to ensure safety at sea, prevention of human
injury or loss of life, and avoidance of damage to property.
The Company aims at health, hygiene and safety excellence
which is accomplished through several objectives that can
be found on https://www.euronav.com/hsq/health-safety/
health-hygiene-and-safety-policy/
Mental health
During COVID-19, Euronav has put more focus on the mental
health of its employees. The department heads have been
actively informed on what to do when noticing certain
symptoms of COVID fatigue. The Masters on the vessels have
received guidance for dealing with signs of crew members
under mental stress and were provided with the contact details
of professional experts cooperating with the Company for
possible assistance, which was conducted remotely whenever
needed.
Alcohol and drug policy
Euronav is fully committed to maintaining a safe and healthy
working environment by implementing a strict drug and
alcohol policy. Any violation of that policy, including illegal
possession, consumption, distribution or sale of drugs or
alcohol by any shipboard and shore personnel, shall lead
to instant dismissal and will expose the person to legal
proceedings.
Annual report 2021
Euronav on the move
Figure 41: Our atlasGo challenge in numbers:
In 2019 Euronav launched ‘Euronav on the move’. This is an
internal program created to fight sedentary behaviour. The
aim is to encourage employees to incorporate sports into their
workday and to participate in several sporting events, such as
local running competitions.
In 2021, we collaborated with atlasGO for the second time for
a 5-month sports challenge. AtlasGO is an application that
allows employees to register and track their activities. Every
activity was rewarded with an amount that has been given to
an environmental charity at the end of the challenge. In this
years’ challenge, Euronav got active for The Ocean Cleanup
and the Great Whale Conservancy.
114
participants
4,077
activities
25,671
km
3,829
hours
695
selfies and posts
7,216
virtual high-fives
€19,726
collected
109
Euronav
Safety
Health, Safety, Quality and
Environmental protection (HSQE)
Management System
Euronav’s HSQE management system aims to define the
context
for Safety, Occupational Health, Environmental
and Operational excellence. The core value of this system is
distilled in our general policy statement wherein excellence is
defined as "No harm to person, or the ship and no damage to
the environment or property, while providing quality services
to our clients".
The system has been consciously designed under the highest
standards, within the framework of ISM (International Safety
Management Code), MLC (Maritime Labor Convention), ISO
9001 (Quality Management Systems), ISO 14001 (Environmental
Management Systems),
ISO 45001 (Occupational Health
& Safety Management Systems) and ISO 50001 (Energy
Management Systems).
Ship and shore management is seen as a single and undivided
organism endeavouring to achieve our mission and vision
through common goals and continual improvement.
Our working environment is regularly monitored for proper
health conditions. Our health standards and guidelines pay
specific attention to important issues such as general living
conditions, crew well-being, physical exercise, storage of food
and nutrition practices.
Safety is paramount at Euronav
Approach
Euronav is committed to operating in accordance with the
highest standards of safety in the marine transportation
industry and employs competent and experienced crew
to ensure that its vessels are operated in a safe and
environmentally sound manner. By promoting an active
safety culture among its personnel, both ashore and aboard,
Euronav is committed not only to providing a quality service to
their clients, but especially to ensuring consistent protection
of the environment and working conditions. Focusing on
safety also means making sure the crew is qualified, regularly
trained, informed of current issues and looked after as far as
their health and wellbeing is concerned.
Incident Investigation
All incidents or accidents are subject to investigation. The
level of investigation depends on the severity but also on the
potential severity of the event to Health, the Environment, our
Reputation and the Asset.
Only key sea and shore staff who are fully trained for a marine
incident investigation and root cause analysis are engaged in
all levels of investigation.
Events, facts, data and interviews are analysed and the
immediate but also basic (system) causes are identified
through the well-established and structured Marine Systematic
Cause Analysis Technique (M-SCAT).
110
Annual report 2021
A set of appropriate corrective actions, but mainly preventive
for reoccurrence, have been set and shared, and are monitored
through their effective and full implementation.
a. There will be repercussions for people who have been
negligent, or who have refrained from asking advice prior
to undertaking a difficult task.
Blame free reporting
The company fully adheres to the ‘Just Culture’. Such culture
means that:
a. No one will be blamed for a mishap in which he/she had
only minor contribution.
b. No one will be blamed for a mishap for which the root
cause was far beyond his/her responsibilities, whilst his/
her involvement was only in the triggering factor of the
immediate cause, e.g. a man who was exhausted due to
intense workload, lost his alertness, and as a consequence
a major disaster happened.
c. No one will be blamed for an error that he/she made,
especially if he/she:
1. acted prudently and did the best of his/her possibilities,
2. had prepared himself/herself,
3. asked for advice, because he/she felt that the job was
possibly beyond his/her level of expertise.
That does not mean that we are not accountable for our deeds
though!
b. There will be repercussions for those who try to hide their
mistakes in performing their professional duties.
c. Someone who makes the same mistake again obviously
needs to be warned.
It is all based on the general principle that the Company
personnel are empowered: ‘We have been given a level
of authority in line with the responsibilities … and we are
expected to use that authority carefully’.
A blame free reporting framework is of paramount importance
for Euronav. A strict whistleblower policy as well as a
comprehensive complaint process under MLC, ensure that
there will be no retaliation for the reporting.
Participation, Consultation and
Communication – Raising Safety Standards
Our entire Safety Management System is free for change
proposals by all our employees. This is supported by the
belief that continual improvement is mainly supported by
our most valuable assets, our people. Proposals are reviewed
and assessed by subject matter experts and subsequently we
transform our processes where necessary towards achieving
our goals, mission and vision.
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Euronav
Both onboard and ashore a monthly Safety Meeting is held
with the participation of all levels of our employees. During
these safety meetings the opportunity is given to each and
every employee, directly or through elected representatives,
to share opinions, concerns, proposals and experiences.
Safety on board - ‘Come Home Safely’
campaign
Early 2019 Euronav launched the ‘Come Home Safely’ safety
campaign. The campaign was designed to:
Common ship and shore safety meetings are taking place
with the use of video streaming technology with the aim to
strengthen the bonds between ships and shore staff.
•
Recognise and value safety performance (on individual,
team and organisational level);
• Care for each other and keep an eye on safety;
Shipyard selection in terms of HSQE
assessment
• Be engaged and responsible;
• Have visible leadership;
Euronav selects reputable shipyards when performing the
vessels’ regular repairs. The selection is based on the shipyard’s
reliability, adherence to health, safety and environmental
protection standards, and of course their competitiveness.
Shipyards are evaluated regularly for being eligible for
potential business.
• Build a mature safety culture (drivers to elevate safety
behaviour, WHO, HOW?);
To highlight the importance of safety, and in the framework of a
new Euronav ‘Safety on Board’ campaign, Euronav distributed
posters on board the in-house managed Euronav vessels using
the tagline ‘Come Home Safely’.
Although our fleet is young, vessel recycling is an important
matter on which Euronav is actively working.
Stay Safe Magazine
The Inventory of Hazardous Materials (IHM) as well as relevant
class notations are significant elements of the recycling policy.
These documents follow the entire life of a vessel, beginning
with its construction, and are updated on a regular basis
during the life cycle of a vessel. All Euronav’s ships already
have IHM and most relevant class notations.
It’s already been two years since the first issue of our in-house
safety-oriented magazine ‘Stay Safe. Tailor made to our needs,
‘Stay Safe’ magazine is the herald of safety within Euronav,
aiming to inform, productively challenge and stimulate a
safety-conscious culture.
EURONAV SAFETY MAGAZINE | ISSUE 07 | Q3 2021
ABNORMAL
WAVES:
LARGE, UNEXPECTED, DANGEROUS
INCREASING ASSERTIVENESS AND SELF-CONFIDENCE
HEAD INJURIES | ELECTRICAL EQUIPMENT PROTECTION
ISSN 2732-625X
0 7
9 772732 625004
QUARTERLY EDITION
112
Approach to armed guards and
piracy
The safety and security of the Euronav sea and shore staff is a
primary concern for the Company. To that end, the Company’s
management team takes every necessary precaution to
ensure our shore and onboard staff are protected and able to
perform their duties safely and responsibly. The engagement
of armed guards, which is a measure of last resort, is based
on a specific security risk assessment and is often imposed by
the charterers of our vessels. If and when we engage armed
guards, we give very specific guidelines to protect all human
lives (seafarers and pirates), whilst acting to prevent any
attacks.
Preparing for emergencies
The main potential risk for the environment related to the
transport of crude oil is the accidental release of cargo into
the sea due to the breach of the vessel’s containment, as a
result of grounding, collision etc. Hence, the focus on safety
of transportation is paramount in our organisation. A wide
range of possible emergencies has been identified in the
Health, Safety, Quality and Environmental protection (HSQE)
Management System.
To deal with possible emergencies the following procedures
have been put into place:
•
•
•
Emergency and Contingency Manual (ECM) dealing with
all possible emergencies in addition to oil pollution;
Ship Oil Pollution Emergency Plan (SOPEP) dealing with
oil pollution emergencies and the response thereto;
Vessel Response Plan (VRP) dealing with oil pollution
emergencies and the response thereto in U.S. waters (as
required by U.S. law – OPA 90);
• California Contingency Plan (CCP) dealing with oil
pollution emergencies and the response in Californian
waters;
• Panama Canal SOPEP dealing with oil pollution
emergencies in Panama Canal;
•
Monthly security drills on board dealing with possible
security threats.
Euronav also organizes a range of Table Top Exercises on a
bimonthly basis, in which vessels, shore staff, class societies,
flag administrations and other third party members participate
as this may be deemed necessary.
Annual report 2021
113
Euronav
Training
A comprehensive list of about 150 courses of Computer
Based Training (CBT), combined to a detailed and tailor made
mandatory training matrix for in-house but also third party
supported trainings, ensures our people’s continuous learning
opportunities, preparedness and development.
proceeded to attend to the situation and they were both fatally
hit by a big wave that washed the ship’s deck. The incident was
investigated thoroughly in cooperation with all related parties
and measures were identified and communicated to the fleet
to avoid reoccurrence.
Figure 42: Group safety data
Our safety performance
Unit
2019
2020
2021
Fatal incidents
Lost Time Injuries
(LTI)
No
No
LTI Frequency
rate
Total Recordable
Cases (TRC)
No
TRC Frequency
rate
0
10
0
9
2
6
0.68
0.60
0.40
23
18
14
1.57
1.20
0.92
Manhours
No 14,606,292 14,946,000 15,155,256
In 2021 a fleet of approximately 70 worldwide trading tankers,
2 FSO located in Qatar and V-plus tankers used as storage
facilities, are included in the reporting.
The below occupational health and safety indicators are based
on the aforementioned fleet and the more than 3,000 sea staff
and contractors.
Sea staff: A person working on board a vessel, being members
of its crew, including captains.
Fatal incident: A work-related incident with fatal outcome.
Lost Time Injuries (LTI): Work-related injuries that result in
an individual being unable to carry out any of his duties or to
return to work on a scheduled work shift on the day following
the injury, including fatalities.
LTI Frequency (LTIF) rate: The number of Lost Time Injuries
per million exposure (manhours) hours.
Total Recordable Cases (TRC): The sum of LTI and less severe
injuries that results in an individual being unable to perform
a normally assigned work function during a scheduled work
shift and thus being given a less than normal assigned work
function on the day following the injury, or just require minor
medical attendance.
TRC Frequency (TRCF) rate: The number of Total Recordable
Cases per million exposure (manhours) hours.
Exposure hours (manhours): Number of persons on board x
days being on board x 24.
Occupational risks are of particular concern for Euronav,
especially if they lead to fatalities or permanent disabilities.
Therefore we consider that we should make a reference to the
tragic incident onboard “Arafura” which led to the loss of life of
two of our colleagues.
On the 11th September 2021, “Arafura” was sailing in the
vicinity of Cape Horn, Southern Atlantic Ocean, when during
heavy weather conditions an alarm indicating the presence of
water in the forward compartment of the ship was activated.
Two crew members, the Chief Officer and the Bosun,
114
Unit
2019
2020
2021
Fatal incidents
No
Lost Time Injuries (LTI)
No
0
10
0
9
2
6
LTI Frequency rate
0.86
0.60
0.40
Total Recordable
Cases (TRC)
No
23
18
14
TRC Frequency rate
1.57
1.20
0.92
Manhours
No
14606292
14946000
15155256
Annual report 2021
Security
Cybersecurity and data protection
Euronav is fully aware of the importance of information
security and data protection. The increase in security threats
required the company to undertake appropriate measures
to safeguard the confidentiality, integrity, and availability of
(personal) data and resources, both on shore and onboard of
its vessels.
Cybersecurity is a top priority within FAST, an ambitious and
innovative digitalisation project of Euronav. This includes
initiatives such as a cybersecurity awareness campaign
and a thorough cybersecurity roadmap and policy that
is implemented throughout the Company. To ensure the
protection of data Euronav implemented a GDPR Compliance
Strategy.
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Euronav
Our governance
Approach
The Code of Business Conduct and Ethics (the ‘Code’) has
been adopted by the Supervisory Board (the ‘Board’) of
Euronav NV (together with its subsidiaries, the ‘Company’)
for all of the Company’s employees, directors and officers
(‘Relevant Persons’).
The conduct of individuals in these guidelines relate to
the relationship with colleagues, customers, suppliers and
government agencies with equal importance. As a starting
point, Euronav should present itself as a professional and
responsible organisation. This Code sets out a set of basic
principles to guide Relevant Persons regarding the minimum
requirements expected of them.
116
Third party risk policy and anti-
corruption policy
Euronav is committed to conduct all of its business operations
around the world in an honest, fair, transparent and ethical
manner. The Anti-Corruption Policy is applicable to employees
and persons who act on behalf of Euronav. Euronav has also
become a member of the Maritime Anti-Corruption Network
(MACN).
In general, any third parties who intend to trade with Euronav
are subject to detailed scrutiny by the Internal Control
department. This also considers the appropriateness of the
business relationship in view of the Company’s Anti-Corruption
Policy, in addition to the Third Party Risk Policy. Any concerns
in relation to the Anti-Corruption Policy may be raised through
the Company’s Whistleblower Hotline Platform via https://
www.speakupfeedback.eu/web/euronav.
Transparency and accountability
Capital markets have existing structures and controls. These
provide a robust and sustainable framework for investors
to have confidence that executive management teams and
boards conduct themselves and execute strategy correctly
and in a measurable way. Several agencies play a role when
a company is listed as a publicly traded company. Stock
exchanges require high standards of accounting discipline
and regulatory compliance. Investors will also demand a
consistent application of best practice in terms of presentation
and detail of financial performance.
Third party specialist agencies measuring outputs on
governance, ethical standards and other non-financial items -
such as CDP (the Carbon Disclosure Project) - are
Annual report 2021
becoming increasingly important. The Poseidon Principles is
a transparent body that brings together industry participants
and practitioners directly, alongside the financiers of shipping,
in developing a core code of standards to comply with
shipping’s decarbonisation. The self-regulatory mechanism
behind this collective group provides full transparency for all
capital providers to the shipping sector.
Euronav, along with other responsible tanker operators, has
an obligation and duty to defend and promote our business
model and wider corporate reputation. Euronav believes
that by joining bodies such as the Poseidon Principles and
the Global Maritime Forum, along with initiatives such as
the Getting to Zero Coalition, the Company is contributing
actively and positively to improving shipping and crude tanker
shipping’s reputation by engaging with a diverse base of
stakeholders.
Figure 43: Euronav percentile ranking on Webber
ESG scorecard since 2017
Providing a leadership role and undertaking (voluntarily)
features such as the special report in our annual report are
examples of how we, as a specific industry sector, can improve
the transparency in the organisation of the industry.
Webber Research Ranking
Standards applied in other sectors in capital markets are not
always observed or applied in shipping as they could, or in
some cases should be. Webber Research organises a corporate
governance scorecard for quoted shipping companies since
2016. The thinking behind the approach is that over time
better returns are delivered by those companies with better
corporate governance and increasingly with higher ESG
credentials and disclosure.
117
Euronav was listed 2nd out of 52 shipping companies of various
sectors (containers, bulk, tankers) in the Webber Research 2021
ESG Scorecard. The company has always looked to uphold the
highest standards of corporate governance and disclosure.
Euronav is one of few companies within the public shipping
universe with disclosure on AER, EEOI, Scope 1 and Scope
2 emissions. The full report is accessible via https://www.
euronav.com/media/66430/webber-esg-scores-2021.pdf.
For
visit https://www.euronav.com/en/
further detail
sustainability/publications.
Internal Control & Risk
Management
Internal control can be defined as a system developed
and implemented by management that contributes to the
oversight of the activities of the Company, its efficiency
and use of resources in a manner that is appropriate to the
objectives, size and complexity of its activities.
Risk management can be defined as a structured, consistent
and continuous process aimed at identifying, assessing,
deciding on responses to, and reporting on the opportunities
and threats that may affect the achievement of the Company's
objectives.
A Risk Management Charter has been created and approved
by the Supervisory Board in furtherance of the Company's
commitment to building a strong risk management culture.
Clear roles and responsibilities have been drafted as well as
risk management procedures.
The risk register identifies an individual risk owner for each risk.
Risk owners review and certify their risks on a quarterly basis.
The results of this quarterly certification are being reported to
the Audit and Risk Committee by the Chief Risk Officer who is
responsible for the effective operation of the risk management
framework.
Euronav has also developed a ‘Health, Safety, Quality and
Environmental (HSQE) Management System’ which integrates
HSQE management into a system that fully complies with
the ISM Code for the ‘Safe Operation of Ships and Pollution
Prevention’.
To support the financial reporting, Euronav has a system of
internal control over financial reporting including policies
and procedures to accurately reflect the transactions and
dispositions of assets of the Company. The goal is to provide
reasonable assurance that transactions are recorded
in
accordance with generally accepted accounting principles
and that unauthorised acquisition or use or disposition of
the Company’s assets are timely detected. Compliance is
monitored by means of annual assessments performed by
the internal audit function. Their outcome is reported to the
corporate finance function, which presents a consolidated
report to the Audit and Risk Committee.
More details on the exact role and responsibilities of the Audit
and Risk Committee in relation to the internal control and
risk management systems can be found in the section on its
powers.
118
Euronav Annual report 2021
Euronav has established an internal audit function for the
purpose of reviewing and analysing strategic, operational,
financial and IT risks, to conduct specific assignment in
accordance with the annual internal audit plan, to conduct
investigations as needed and to report and discuss the findings
with the Audit and Risk Committee. The scope of the internal
audit is both on operations and on internal control over
financial reporting. The Internal Audit Department is staffed
with designated resources, resources from other departments
and external service providers for competencies that are not
available within the Company. Part of the internal audit work
on internal control over financial reporting is outsourced to
a qualified service provider (EY). The Internal Audit Manager
reports both to the CEO and to the Audit and Risk Committee.
Euronav has appointed KPMG as its external auditor to verify
its financial results and compliance with Belgian legislation.
The external auditor issues a report at least twice a year which
they present to the Audit and Risk Committee. The Audit and
Risk Committee has regular interactions with KPMG, including
closed sessions without management present. The external
auditor is also invited to attend the AGM to present their report.
Hedging policy
Euronav may hedge part of its exposure to cover changes in
interest rates on borrowings. All borrowings contracted for
the financing of vessels are on the basis of a floating interest
rate, increased by a margin. The Group does not hold or trade
derivatives for speculative purposes. Euronav uses derivative
financial instruments such as foreign exchange forward
contracts, interest rate swaps, purchase of CAP options,
sale of FLOOR options, currency swaps and other derivative
instruments solely to manage its exposure to interest rates and
foreign currency exchange rates and to achieve an appropriate
mix of fixed and floating rate exposure as defined by the Group.
For a more detailed position of Euronav’s financial instruments,
we refer to note 19 of the Financial Statements.
Risk factors
Summary
In addition to important factors and matters discussed
elsewhere in this report, and in the documents incorporated
by reference herein, important factors that, in our view, could
cause our actual results and developments to differ materially
from those discussed in the forward-looking statements
include:
•
The strength of world economies and currencies;
• General market conditions, including the market for crude
oil and for our vessels, fluctuations in charter rates and
vessel values;
•
The availability of financing and refinancing, as well as the
Company’s ability to obtain such financing or refinancing
in the future at acceptable rates as well as to comply
with the restrictive and other covenants in our financing
arrangements;
• Our ability to secure available and future grants and
subsidies;
• Our business strategy and other plans and objectives for
growth and future operations, including planned and
unplanned capital expenditures;
• Possible acquisitions, business strategy and expected
including
capital spending or operating expenses,
drydockings, surveys, upgrades and insurance costs;
• Our ability to generate cash to meet our debt service
obligations;
• Our levels of operating and maintenance costs, including
bunker prices, drydocking and insurance costs;
• Potential liability from pending or future litigations;
•
•
•
•
•
Significant decrease in spot charter rates that could impact
our profitability;
Environmental, Social and Governance (ESG) expectations
of investors, banks and other stakeholders and related
costs related to compliance with ESG measures;
Availability of skilled workers and the related labor costs;
Increased fuel costs or bunker prices;
The failure to protect our information systems against
security breaches, or the failure or unavailability of these
systems for a significant period of time;
• Potential cyber-attacks which may disrupt our business
operations;
•
•
•
•
•
The state of the global financial markets may adversely
impact our ability to obtain additional financing;
The market value of our vessels are volatile and may
decline;
The length and severity of the ongoing coronavirus
(COVID-19) outbreak and governmental response thereto,
including its impacts across our business on demand for
our vessels, our global operations, counterparty risk as
well as its disruption to the global economy;
The rising threat of a Chinese financial crisis and trade
tensions between China and the United States;
The shift from oil towards other energy sources such as
electricity, natural gas, liquefied natural gas or hydrogen;
119
•
•
•
•
•
Technology risk associated with energy transition and
fleet/systems rejuvenation to alternative propulsion;
The imposition of sanctions by the United Nations, U.S.,
EU, UK and/or other relevant authorities;
International sanctions, embargoes, import and export
restrictions, nationalizations, piracy, terrorist attacks and
armed conflicts, including the recent conflict between
Russia and Ukraine;
Any non-compliance with the U.S. Foreign Corrupt
Practices Act of 1977 or FCPA, or other applicable
regulations relating to bribery;
Fluctuations in currencies, interest rates and foreign
exchange rates and the impact of the discontinuance of
the London Interbank Offered Rate, or LIBOR, after June
30, 2023 on any of our debt that reference LIBOR;
• General domestic and international political conditions,
including trade wars and disagreements between oil
producing countries, including illicit crude oil trades;
• Potential disruption of shipping routes due to accidents,
environmental factors, political events, public health
threats, international hostilities including the ongoing
developments in the Ukraine region, acts by terrorists or
acts of piracy on ocean-going vessels;
•
•
Vessel breakdowns and instances of off-hire;
The supply of and demand for vessels comparable to ours,
including against the background of possibly accelerated
climate change transition worldwide which would have an
accelerated negative effect on the demand for oil and thus
transportation;
• Reputational risks, including those related to climate
change;
• Compliance with governmental, tax (including carbon
related), environmental and safety regulations and related
costs;
• Potential liability from future litigations related to claims
raised by public-interest organisations or activism with
regard to failure to adapt to or mitigate climate impact;
•
•
Increased cost of capital or limiting access to funding
due to EU Taxonomy or relevant territorial taxonomy
regulations;
Any non-compliance with the amendments by the
International Maritime Organization, the United Nations
agency
for maritime safety and the prevention of
pollution by vessels, or IMO, (the amendments hereinafter
referred to as IMO 2020), to Annex VI to the International
Convention for the Prevention of Pollution from Ships,
1973, as modified by the Protocol of 1978 relating thereto,
•
•
•
collectively referred to as MARPOL 73/78 and herein as
MARPOL, which will reduce the maximum amount of
sulfur that vessels may emit into the air and applies to us
as of January 1, 2020;
Any non-compliance with the International Convention for
the Control and Management of Ships' Ballast Water and
Sediments or BWM which applies to us as of September
2019;
Any non-compliance with the upcoming EC Fit-for-55
regulation and specifically with EU Emission Trading
Schemes Maritime and Fuel EU Maritime;
Any non-compliance with the European Ship Recycling
regulation for large commercial seagoing vessels flying
the flag of an European Union or EU Member State which
forces shipowners to recycle their vessels only in safe and
sound vessel recycling facilities included in the European
List of ship recycling facilities which is applicable as of
January 1, 2019;
• New environmental regulations and restrictions, whether
at a global level stipulated by the International Maritime
Organization, and/or imposed by regional or national
authorities such as the European Union or individual
countries;
• Our incorporation under the laws of Belgium and the
different rights to relief that may be available compared to
other counties, including the United States;
•
Treatment of the Company as a “passive foreign investment
company” by U.S. tax authorities;
• Being required to pay taxes on U.S. source income;
•
•
The effects of new products and new technology in our
industry;
The failure of counterparties to fully perform their
contracts with us;
• Our dependence on key personnel;
•
Adequacy of insurance coverage;
• Our ability to obtain indemnities from customers;
• Changes in laws, treaties or regulations.;
•
•
•
The inability of our subsidiaries to declare or pay dividends;
The losses from derivative instruments; and
The interest rate risks under our debt facilities.
Risk factors
Investing in our shares involves risk. We expect to be exposed
to some or all of the risks described below in our future
operations. Risks to us include, but are not limited to, the
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Euronav Annual report 2021
risk factors described below. Any of the risk factors described
below could affect our business operations and have a material
adverse effect on our business activities, financial condition,
results of operations and prospects and cause the value of
our shares to decline. Moreover, if and to the extent that any
of the risks described below materialise, they may occur in
combination with other risks which would compound the
adverse effect of such risks on our business activities, financial
condition, results of operations and prospects. Investors in our
shares could lose all or part of their investment. It is advised
to carefully consider the following information in conjunction
with the other information contained or incorporated by
reference in this document. The sequence in which the risk
factors are presented below is not indicative of their likelihood
of occurrence or of the potential magnitude of their financial
consequence.
Risks Relating to our Business
The tanker industry is cyclical and volatile, which may
lead to reductions and volatility in charter rates , vessel
values, earnings and available cash flow.
The tanker industry is both cyclical and volatile in terms of
charter rates and profitability. We expect continued volatility
in market rates for our vessels in the foreseeable future with
a consequent effect on our short- and medium-term liquidity.
Fluctuations in charter rates and vessel values result from
changes in the supply and demand for tanker capacity caused
by changes in the supply and demand for oil and oil products.
The carrying values of our vessels or our floating storage and
offloading (FSO) vessels may not represent their fair market
values or the amount that could be obtained by selling the
vessels at any point in time since the market prices of second-
hand vessels tend to fluctuate with changes in charter rates
and the cost of newbuildings.
We evaluate the carrying amounts of our vessels to determine
if events have occurred that would require an impairment of
their carrying amounts. The recoverable amount of vessels
is reviewed based on events and changes in circumstances
that would indicate that the carrying amount of the assets
might not be recovered. The review for potential impairment
indicators and projection of future cash flows related to the
vessels is complex and requires us to make various estimates
relating to, among other things, vessel values, future freight
rates, earnings from the vessels, discount rates, residual
values and economic life of vessels. Many of these items have
historically experienced volatility and both charter rates and
vessel values tend to be cyclical. Declines in charter rates,
vessel values and other market deterioration could cause us to
incur impairment charges.
In general, the factors affecting the supply and demand for
tankers are outside of our control, and the nature, timing and
degree of changes in industry conditions are unpredictable.
The main factors that influence demand for tanker capacity
include:
•
Supply of and demand for oil and petroleum products;
• Changes in the consumption of oil and petroleum products
due to the availability of new, alternative energy sources
or changes in the price of oil and petroleum products
relative to other energy sources, or other factors making
consumption of oil and petroleum products less attractive;
• Regional availability of refining capacity and inventories
compared to geographies of oil production regions;
• National policies regarding strategic oil
inventories
(including if strategic reserves are set at a lower level in the
future as oil decreases in the energy mix);
• Global and regional economic and political conditions
and developments, armed conflicts including the recent
conflict between Russia and Ukraine, terrorist activities,
trade wars, public health threats, tariffs embargoes, illicit
trades of crude oil and strikes;Currency exchange rates,
most importantly versus USD;
• Changing trade patterns and the distance over which the
oil and the oil products are to be moved by sea;
• Changes in seaborne and other transportation patterns,
including shifts in transportation demand between crude
oil and refined oil products and the distance they are
transported by sea;
• Changes in governmental or maritime self-regulatory
organisations’ rules and regulations or actions taken by
regulatory authorities;
•
Environmental
developments;
and other
legal
and
regulatory
• Developments in international trade, including those
relating to the imposition of tariffs; and
•
International sanctions, embargoes, import and export
restrictions, nationalisations and wars.
The factors that influence the supply of tanker capacity
include:
•
•
The number of newbuilding orders and deliveries as may
be impacted by the availability of financing for shipping
activity;
The degree of recycling of older vessels, depending,
amongst other things, on recycling rates and international
recycling regulations;
121
•
The number of conversions of tankers to other uses;
• Business disruptions, including supply chain issues, due
to natural or other disasters, or otherwise;
•
•
The number of vessels that are out of service, laid up, dry-
docked or used as storage units or blocked in port or canal
congestions; and
Environmental concerns and uncertainty around new
regulations in relation to amongst others new technologies
which may delay the ordering of new vessels.
Declines in oil and natural gas prices or decreases in demand
for oil and natural gas for an extended period of time, or
market expectations of potential decreases in these prices
and demand, could negatively affect our future growth in the
tanker and offshore sector. Sustained periods of low oil and
natural gas prices typically result in reduced exploration and
extraction because oil and natural gas companies’ capital
expenditure budgets are subject to cash flow from such
activities. They are therefore sensitive to changes in energy
prices. Sustained periods of high oil prices on the other hand
may be destructive for demand. These changes in commodity
prices can have a material effect on the demand for our
services, and periods of low demand can cause excess vessel
supply and intensify the competition in the industry. This often
results in vessels, particularly older and less technologically-
advanced vessels, being idle for long periods of time. We
cannot predict the future level of demand for our services
or future conditions of the oil and natural gas industry.
Any decrease in exploration, development or production
expenditures by oil and natural gas companies or decrease in
the demand for oil and natural gas could reduce our revenues
and materially harm our business, results of operations and
cash available for distribution (see also “Peak oil” below).
A substantial portion of our revenue is derived from a
limited number of customers and the loss of any of these
customers could result in a significant loss of revenues
and cash flow.
We currently derive a substantial portion of our revenue from
a limited number of customers. For the year ended December
31, 2021, Valero Energy Corporation, or Valero, accounted for
11 % of our total revenues in our tankers segment. In addition,
our only FSO customer as of December 31, 2021 was North
Oil Company. All of our charter agreements have fixed terms,
but may be terminated early due to certain events, such as a
charterer’s failure to make charter payments to us because
of financial inability, disagreements with us or otherwise. In
addition, a charterer may exercise its right to terminate the
charter if, among other things: The vessel suffers a total loss or
is damaged beyond repair;
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Euronav • We default on our obligations under the charter, including
prolonged periods of vessel off-hire;
• War, sanctions, or hostilities significantly disrupt the free
trade of the vessel;
•
•
The vessel is requisitioned by any governmental authority;
or
A prolonged force majeure event occurs, such as war,
piracy, terrorism, global pandemic or political unrest,
which prevents the chartering of the vessel, in each
case in accordance with the terms and conditions of the
respective charter.
In addition, the charter payments we receive may be
reduced if the vessel does not perform according to certain
contractual specifications, such as if average vessel speed
falls below the speed we have guaranteed or if the amount of
fuel consumed to power the vessel exceeds the guaranteed
amount. Additionally, compensation under our FSO service
contracts is based on daily performance and/or availability of
each FSO in accordance with the requirements specified in the
applicable FSO service contracts. The charter payments we
receive under our FSO service contracts may be reduced or
suspended (as applicable) if the vessel is idle, but available for
operation, or if a force majeure event occurs, or we may not be
entitled to receive charter payments if the FSO is taken out of
service for maintenance for an extended period, or the charter
may be terminated if these events continue for an extended
period. In addition, our FSO service contracts have day rates
that are fixed over the contract term. In order to mitigate the
effects of inflation on revenues from these term contracts, our
FSO service contracts include yearly escalation provisions.
These provisions are designed to compensate us for certain
cost increases, including wages, insurance and maintenance
costs. However, actual cost increases may result from events
or conditions that do not cause correlative changes to the
applicable escalation provisions.
If any of our charters are terminated, we may be unable to
re-deploy the related vessel on terms as favourable to us as
our current charters, or at all. We are exposed to changes in
the spot market rates associated with the deployment of our
vessels. If we are unable to re-deploy a vessel for which the
charter has been terminated, we will not receive any revenues
from that vessel and we may be required to pay ongoing
expenses necessary to maintain the vessel in proper operating
condition. Any of these factors may decrease our revenue and
cash flows. Further, the loss of any of our charterers, charters
or vessels, or a decline in charter hire under any of our charters,
could have a material adverse effect on our business, results of
operations, financial condition and ability to pay dividends, if
any, to our shareholders.
Annual report 2021
Dependency on spot charters.
As of 31 March 2022 we employed 54 of our vessels in either the
spot market or in a spot market-oriented tanker pool, including
40 vessels in the Tankers International Pool (TI Pool) (see
Euronav Fleet p 40), a spot market-oriented pool in which we
were a founding member in 2000, exposing us to fluctuations
in spot market charter rates. We will also enter into spot
charters in the future. The spot charter market may fluctuate
significantly based upon tanker and oil supply and demand.
The successful operation of our vessels in the competitive spot
charter market depends on, among other things, obtaining
profitable spot charters and minimising, to the extent possible,
time spent waiting for charters and time spent travelling in
ballast to pick up cargo. The spot market is very volatile and
there have been and will be periods when spot charter rates
decline below the operating cost of vessels. If future spot
charter rates decline, we may be unable to operate our vessels
trading in the spot market profitably, meet our obligations,
including payments on indebtedness, or pay dividends in the
future. Furthermore, as charter rates for spot charters are fixed
for a single voyage which may last up to several weeks, during
periods in which spot charter rates are rising, we will generally
experience delays in realizing the benefits from such increases.
Increasing scrutiny and changing expectations from
investors, lenders and other market participants with
respect to our Environmental, Social and Governance
(ESG) policies may impose additional costs on us or
expose us to additional risks.
Companies across all industries are facing increasing scrutiny
relating to their ESG policies. Investor advocacy groups, certain
institutional investors, investment funds, lenders and other
market participants are increasingly focused on ESG practices,
especially as they relate to the environment health and safety,
diversity, labour conditions and human rights in recent years,
and have placed increasing importance on the implications
and social costs of their investments. The increased focus
and activism related to ESG and similar matters may hinder
access to capital, as investors and lenders may decide to
reallocate capital or to not commit capital as a result of their
assessment of a company’s ESG practices. Failure to adapt
to or comply with evolving investor, lender or other industry
shareholder expectations and standards, or the perception of
not responding appropriately to the growing concern for ESG
issues, regardless of whether there is a legal requirement to do
so, may damage such a company’s reputation or stock price,
resulting in direct or indirect material and adverse effects on
the company’s business and financial condition.
increase
The
in shareholder proposals submitted on
environmental matters and, in particular, climate-related
proposals
indicates that we may face
increasing pressures from investors, lenders and other market
in recent years
123
participants, who are increasingly focused on climate change,
to prioritise sustainable energy practices, to reduce our carbon
footprint and to promote sustainability. As a result, we may
be required to implement more stringent ESG procedures or
standards so that our existing and future investors and lenders
remain invested in us and make further investments in us,
especially given the highly focused and specific trade of crude
oil transportation in which we are engaged. If we do not meet
these standards, our business and/or our ability to access
capital could be harmed.
Additionally, certain investors and lenders may exclude
oil transport companies, such as us, from their investing
portfolios altogether due to environmental, social and
governance factors. These limitations in both the debt and
equity capital markets may affect our ability to grow as
our plans for growth may include accessing the equity and
debt capital markets. If those markets are unavailable, or if
we are unable to access alternative means of financing on
acceptable terms, or at all, we may be unable to implement
our business strategy. This would have a material adverse
effect on our financial condition and results of operations
and impair our ability to service our indebtedness. Further,
it is likely that we will incur additional costs and require
additional resources to implement, monitor, report and
comply with wide ranging ESG requirements. Members of
the investment community are also increasing their focus on
ESG disclosures, including disclosures related to greenhouse
gases and climate change in the energy industry in particular,
and diversity and
initiatives and governance
standards among companies more generally. As a result, we
may face increasing pressure regarding our ESG disclosures.
The occurrence of any of the foregoing could have a material
adverse effect on our business and financial condition.
inclusion
Moreover, from time to time,
in alignment with our
sustainability priorities, we aim to establish and publicly
announce goals and commitments in respect of certain
ESG items, such as shipping decarbonisation. While we may
create and publish voluntary disclosures regarding ESG
matters from time to time, many of the statements in those
voluntary disclosures are based on hypothetical expectations
and assumptions that may or may not be representative of
current or actual risks or events or forecasts of expected risks
or events, including the costs associated therewith. Such
expectations and assumptions are necessarily uncertain and
may be prone to error or subject to misinterpretation given
the long timelines involved and the lack of an established
standardised approach to identify, measure and report on
many ESG matters. If we fail to achieve or improperly report on
our progress toward achieving our environmental goals and
commitments, the resulting negative publicity could adversely
affect our reputation and/or our access to capital.
Finally, organisations that provide information to investors on
corporate governance and related matters have developed
ratings processes for evaluating companies on their approach
to ESG matters. Such ratings are used by some investors to
inform their investment and voting decisions. Unfavourable
ESG ratings and recent activism directed at shifting funding
away from companies with fossil fuel-related assets could lead
to increased negative investor sentiment toward us and our
industry and to the diversion of investment to other, non-fossil
fuel markets. This could have a negative impact on our access
to and costs of capital.
Servicing our current or future indebtedness limits funds
available for other purposes and if we cannot service our
debt, we may lose our vessels.
We had USD 1,807.9 million and USD 1,375.5 million of
indebtedness as of December 31, 2021 and December 31,
2020 respectively, and expect to incur additional indebtedness
as we further expand our fleet. Borrowing under our credit
facilities are secured by our vessels and certain of our and
our vessel owning subsidiaries’ bank accounts. If we cannot
service our debt, we may lose our vessels or certain of our
pledged accounts. Borrowings under our credit facilities and
other debt agreements require us to dedicate a part of our
cash flow from operations to paying interest and principal
on our indebtedness. These payments limit funds available
for working capital, capital expenditures and other purposes,
including further equity or debt financing in the future.
Amounts borrowed under our credit facilities bear interest
at variable rates. Increases in prevailing rates could increase
the amounts that we would have to pay to our lenders, even
though the outstanding principal amount remains the same
and our net income and cash flows would decrease. We expect
our earnings and cash flow to vary from year to year due to
the cyclical nature of the tanker industry. If we do not generate
or reserve enough cash flow from operations to enable us
to satisfy our short-term or medium- to long-term liquidity
requirements or to otherwise satisfy our debt obligations, we
may have to undertake alternative financing plans. This could
dilute shareholders or negatively impact our financial results.
However, these alternative financing plans, if necessary, may
not be sufficient to allow us to meet our debt obligations. If
we are unable to meet our debt obligations or if some other
default occurs under our credit facilities, our lenders could
elect to declare our debt, totally or partially, together with
accrued interest and fees, to be immediately due and payable
and proceed against the collateral vessels securing that debt
even though the majority of the proceeds used to purchase the
collateral vessels did not come from our credit facilities.
Our agreements governing our indebtedness also impose certain
operating and financial restrictions on us. These are mainly to
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Euronav Annual report 2021
ensure that the market value of the mortgaged vessel under the
applicable credit facility does not fall below a certain percentage
of the outstanding amount of the loan, which we refer to as the
asset coverage ratio. This means that the facility size of the vessel
loans can be reduced if the value of the collateralised vessels falls
under a certain percentage of the outstanding amount under
that loan as a result of which a repayment in the same amount
may be required. In addition, certain of our credit facilities will
require us to satisfy certain financial covenants, which require us
to maintain, among other things:
•
•
•
•
An amount of current assets, which may include undrawn
amount of any committed revolving credit facilities and
credit lines having a maturity of more than one year, that,
on a consolidated basis, exceeds our current liabilities;
An aggregate amount of cash, cash equivalents and
available aggregate undrawn amounts of any committed
loan of at least USD 50.0 million or 5% of our total
indebtedness (excluding guarantees), depending on the
applicable loan facility, whichever is greater;
An aggregate cash balance of at least USD 30.0 million; and
A ratio of stockholders’ equity to total assets of at least 30%.
In general, the operating restrictions that are contained in our
credit facilities may prohibit or otherwise limit our ability to,
among other things:
• Declare and pay dividends if there is or will be, as a result
of the dividend, an event of default or breach of a loan
covenant; and
•
Incur additional indebtedness.
A violation of any of our financial covenants or operating
restrictions contained in our credit facilities may constitute
an event of default under our credit facilities, which, unless
cured within the grace period set forth under the applicable
credit facility, if applicable, or waived or modified by our
lenders, provides our lenders with the right to, among other
things, require us to post additional collateral, enhance our
equity and liquidity, increase our interest payments, pay
down our indebtedness to a level where we are in compliance
with our loan covenants, sell vessels in our fleet, reclassify
our indebtedness as current liabilities and accelerate our
indebtedness and foreclose their liens on our vessels and
the other assets securing the credit facilities, which would
impair our ability to continue to conduct our business.
Furthermore, certain of our credit facilities contain a cross-
default provision that may be triggered by a default under
one of our other credit facilities, or those of our 50%-owned
joint ventures.
As of December 31, 2021 and as of the date of this annual
report, we were in compliance with the financial covenants
contained and other restrictions in our debt agreements.
•
•
Effect changes in management of our vessels;
Transfer or sell or otherwise dispose of all or a substantial
portion of our assets;
We depend on our executive officers and other
employees, and the loss of their services could, in
the short term, have a material adverse effect on our
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Euronav
126
business, results and financial condition.
We depend on the efforts, knowledge, skill, reputations and
business contacts of our executive officers and other key
employees. Accordingly, our success will depend on the
continued service of these individuals. We may experience
departures of senior executive officers and other key
employees, and we cannot predict the impact that any of their
departures would have on our ability to achieve our financial
objectives. The loss of the services of any of them could, in the
short term, have a material adverse effect on our business,
results of operations and financial condition.
Rising fuel prices may adversely affect our profits.
On the spot market, fuel is a significant factor in negotiating
charter rates. The price and supply of fuel is unpredictable
and fluctuates based on events outside our control, including
geopolitical developments (such as the recent conflicts
between Russia and Ukraine (see section ‘Events occurred
after the ending of the financial year ending 31 December
2021’ p 47), which remain ongoing as of the date of this
annual report), supply and demand for oil and gas, actions
by the Organization of the Petroleum Exporting Countries
(OPEC), and other oil and gas producers, war and unrest in oil
producing countries and regions, regional production patterns
and environmental concerns. Fuel may therefore become
much more expensive in the future and we might not be able
to fully recover this increased cost through our charter rates.
Fuel is also a significant, if not the largest, expense in our
shipping operations when vessels are operated on the spot
market under voyage charter. As a result, an increase in the
price of fuel beyond our expectations may adversely affect our
profitability at the time of charter negotiation. Furthermore,
fuel has become much more expensive as a result of
regulations mandating a reduction in sulfur emissions to
0.5% as of January 2020, which may reduce the profitability
and competitiveness of our business versus other forms of
transportation, such as truck or rail. Other future regulations
may have a similar impact.
With the exception of four VLCC vessels and four Suezmax
vessels, none of our vessels are equipped with scrubbers and
as of January 1, 2020 we have transitioned to burning IMO
compliant fuels. We continue to evaluate different options
in complying with IMO and other rules and regulations and
continue to work closely with suppliers and producers of both
scrubbers and alternative mechanisms. We currently procure
physical low sulfur fuel oil directly on the wholesale market
with a view to secure availability of qualitative compliant
fuel and to capture volatility in prices between high sulfur
and low sulfur fuel oil. The procurement of large quantities
of low sulfur fuel oil implies a commodity price risk because
of fluctuations in price between the time of purchase and
consumption. Whilst we may implement financial strategies
with a view to limiting this risk, we cannot give assurance
Annual report 2021
that such strategies will be successful in which case we could
sustain significant losses that could have a material impact
on our business, financial condition, results of operation and
cash flow. The storage of and onward consumption on our
vessels of the procured commodity may require us to blend,
co-mingle or otherwise combine, handle or manipulate such
commodities. This implies certain operational risks that may
result in loss of or damage to the procured commodities or the
vessels and their machinery.
We rely on our information systems to conduct our
business, and failure to protect these systems against
security breaches could adversely affect our business
and results of operations. Additionally, if these systems
fail or become unavailable for any significant period of
time, our business could be harmed.
The efficient operation of our business is dependent on
computer hardware and software systems.
Information
systems are vulnerable to security breaches by computer
hackers and cyber-terrorists. Like other global companies,
we do experience threats to our data and systems, including
malware and computer virus attacks, internet network scans,
systems failures and disruptions. A cyberattack that bypasses
our IT security systems, causing an IT security breach, could
lead to a material disruption of our IT systems and adversely
impact our daily operations and cause the loss of sensitive
information
including our own proprietary
information,
and that of our customers, suppliers and employees. Such
losses could harm our reputation and result in competitive
disadvantages, litigation, regulatory enforcement actions,
lost revenues, additional costs and liability. While we devote
substantial resources to maintaining adequate levels of
cybersecurity, our resources and technical sophistication may
not be adequate to prevent all types of cyberattacks.
We rely on industry accepted security & control frameworks and
technology to securely maintain confidential and proprietary
information and personal data maintained on our information
systems. However, these measures and technology may
not adequately prevent security breaches. In addition, the
unavailability of the information systems or the failure of these
systems to perform as anticipated for any reason could disrupt
our business and could result in decreased performance and
increased operating costs, causing our business and results of
operations to suffer. Any significant interruption or failure of
our information systems or any significant breach of security
could adversely affect our business, results of operations and
financial condition, as well as our cash flows.
Furthermore, as from May 25, 2018, data breaches on personal
data as defined in the General Data Protection Regulation
2016/679 (EU), could lead to administrative fines up to EUR 20
million or up to 4% of the total worldwide annual turnover of
the company, whichever is higher.
Moreover, cyberattacks against the Ukrainian government
and other countries in the region have been reported in
connection with the recent conflicts between Russia and
Ukraine. To the extent that such attacks have collateral effects
on global critical infrastructure or financial institutions, such
developments could adversely affect our business, operating
results and financial condition. It is difficult to assess the
likelihood of such threat and any potential impact at this time.
In the highly competitive international market, the
Company may not be able to compete effectively for
charters.
The Company’s vessels are employed in a highly competitive
market. Competition arises from other vessel owners, including
major oil companies, national oil companies or companies
linked to authorities of oil producing or importing countries,
as well as independent tanker companies which may all
have substantially greater resources than us. Competition
for the transportation of crude oil and other petroleum
products depends on price, location, size, age, condition and
the acceptability of the vessel operator to the charterer. The
Company believes that because ownership of the world tanker
fleet is highly fragmented , no single vessel owner is able to
influence charter rates.
We are subject to certain risks with respect to our
counterparties, and failure of our counterparties to meet
their obligations could cause us to suffer losses or negatively
impact our results of operations and cash flows.
We have entered into, and may enter in the future, various
contracts,
long-term
including shipbuilding contracts or
contracts such as the FSO vessels operating offshore Qatar,
credit facilities, insurance agreements, voyage and time
charter agreements and other agreements associated with
the operation of our vessels. Such agreements subject us to
counterparty risks.
Euronav has established a detailed counterparty risk policy to
set forth processes for avoiding, monitoring, mitigating and
effectively managing the risk of default:
127
Through a credit limit system that restricts the exposure
Euronav may have on any single counterparty, as well as
other mitigating measures. Counterparty limits are monitored
periodically and are calculated taking into account a range of
factors that govern the approval of all counterparties, including
an assessment of the counterparty’s financial soundness
and financial ratings (if any), reputation, compliance and
regulatory/legal risk based on current and prospective risk to
earnings or assets arising from violations by the counterparty
of, or nonconformance with, international sanction lists (such
as OFAC, UK Sanctions and Anti-Money Laundering Act, EU
Sanction List), laws, rules, regulations, prescribed practices,
internal policies and procedures, or ethical standards.
Notwithstanding these measures, the ability of each of our
counterparties to perform its payment and other obligations
under a contract with us will depend on a number of factors that
are beyond our control and may include, among other things,
general economic conditions, the condition of the maritime
and offshore industries, the overall financial condition of the
counterparty, charter rates received for specific types of vessels,
work stoppages or other labour disturbances, including as a result
of the outbreak of COVID-19 and various expenses. Charterers are
sensitive to the commodity markets and may be impacted by
market forces affecting commodities such as oil, such as, but not
limited to, access to financing for large cargo amounts.
In addition, in depressed market conditions, our charterers and
customers may no longer need a vessel that is currently under
charter or contract or may be able to obtain a comparable
vessel at lower rates. As a result, charterers and customers
may seek to renegotiate the terms of their existing charter
agreements or avoid their obligations under those contracts.
The current state of the global financial markets and
current economic conditions may adversely impact our
results of operation, financial condition, cash flows,
ability to obtain financing or refinance our existing and
future credit facilities on acceptable terms, which may
negatively impact our business.
Global financial markets and economic conditions have been,
and continue to be, volatile. Beginning in February 2020,
due in part to fears associated with the spread of COVID-19
(as more fully described below), global financial markets
experienced volatility and a steep and abrupt downturn
followed by a recovery. Such volatility may continue as
the COVID-19 pandemic continues. Credit markets and
the debt and equity capital markets have been distressed.
The uncertainty surrounding the future of the global credit
markets has resulted in reduced access to credit worldwide,
particularly for the shipping industry. These issues, along with
significant write-offs in the financial services sector, the re-
pricing of credit risk and the uncertain economic conditions,
128
have made, and may continue to make, it difficult to obtain
additional financing. The current state of global financial
markets and current economic conditions might adversely
impact our ability to issue additional equity at prices that
will not be dilutive to our existing shareholders, or preclude
us from issuing equity at all. Economic conditions may also
adversely affect the market price of our common shares.
Also, as a result of concerns about the stability of financial
markets generally, and the solvency of counterparties
specifically, the availability and cost of obtaining money
from the public and private equity and debt markets has
become more difficult. Many lenders have increased interest
rates, enacted tighter lending standards, refused to refinance
existing debt at all or on terms similar to current debt, and
reduced, and in some cases ceased, to provide funding to
borrowers and other market participants, including equity
and debt investors, and some have been unwilling to invest on
attractive terms or even at all. Due to these factors, we cannot
be certain that financing will be available if needed and to
the extent required, or that we will be able to refinance our
existing and future credit facilities, on acceptable terms or at
all. If financing or refinancing is not available when needed,
or is available only on unfavourable terms, we may be unable
to meet our obligations as they come due, or we may be
unable to enhance our existing business, complete additional
vessel acquisitions or otherwise take advantage of business
opportunities as they arise.
In 2019, a number of leading lenders to the shipping industry
and other industry participants announced the Poseidon
Principles, a global framework by which financial institutions
can assess the climate alignment of their ship finance
portfolios. Additional lenders have subsequently announced
their intention to adhere to such principles. If the ships in
Euronav Annual report 2021
our fleet are deemed not to satisfy the emissions and other
sustainability standards contemplated by the Poseidon
Principles, the availability and cost of bank financing for such
vessels may be adversely affected.
If economic conditions throughout the world decline,
this will impede our results of operations, financial
condition and cash flows.
There has historically been a strong link between the
development of the world economy and demand for energy,
including oil and gas. An extended period of deterioration in
the outlook for the world economy could reduce the overall
demand for oil and gas and for our services. Such changes
could adversely affect our results of operations and cash flows.
Cargo volumes remained below 2019 levels for most of 2021.
Although volumes improved during the third and fourth
calendar quarter of 2021, buoyed by the return of Asian crude
import demand, we saw this recovery came to a halt toward
the end of the fourth calendar quarter of the year. This was a
result of restrictions on economic activity and a consequent
reduction in both the demand for crude and the supply of export
cargoes attributable to the Omicron variant of COVID-19. We
cannot guarantee a recovery in freight rate and market activity
as a result of the highly unpredictable nature of the COVID-19
pandemic. Please also see risk “The continuing effects of the
COVID-19 pandemic and other outbreaks of epidemic and
pandemic diseases and governmental responses thereto
could materially and adversely affect our business, financial
condition, and results of operations.” We face risks attendant
to changes in economic environments, changes in margins
or interest rates, and instability in the banking and securities
markets around the world, among other factors. Major market
disruptions may adversely affect our business or impair our
ability to borrow amounts under our credit facilities or any
future financial arrangements. In the absence of available
financing, we also may be unable to take advantage of
business opportunities or respond to competitive pressures.
An economic slowdown or changes in the economic and
political environment in the Asia Pacific region could
have a material adverse effect on our business, financial
condition and results of operations.
We anticipate that a significant number of the port calls made
by our vessels will continue to involve loading or discharging
operations in ports in the Asia Pacific region. As a result, any
negative changes in economic conditions in any Asia Pacific
country, particularly in China, may have a material adverse
effect on our business, financial condition and results of
operations, as well as our future prospects.
We cannot assure that the Chinese economy will not
experience a significant contraction in the future. Furthermore,
there is a rising threat of a Chinese financial crisis resulting
from massive personal and corporate indebtedness and
“trade wars”. In recent years, China and the United States have
implemented certain increasingly protective trade measures
with continuing trade tensions, including significant tariff
increases, between these countries. Although the United
States and China successfully reached an interim trade deal in
January of 2020 that de-escalated the trade tensions with both
sides rolling back tariffs, the extent to which the trade deal will
be successfully implemented is unpredictable. A decrease in
the level of imports to and exports from China could adversely
affect our business, operating results and financial condition.
Also, several initiatives are underway in China with a view
to reduce their dependency on (foreign) oil, such as the Net
Zero 2060 initiative and development of shale oil on their own
territory, which could impact the need for oil transportation
129
services. The method by which China attempts to achieve
carbon neutrality by 2060, and any attendant reduction in the
demand for oil, petroleum and related products, could have a
material adverse effect on our business, cash flows and results
of operations.
The Chinese government may adopt policies that favour
domestic oil tanker companies and may hinder our ability
to compete with them effectively. For example, China
imposes a tax for non-resident international transportation
enterprises engaged in the provision of services of passengers
or cargo, among other items, in and out of China using
their own, chartered or leased vessels. The regulation may
subject international transportation companies to Chinese
enterprise income tax on profits generated from international
transportation services passing through Chinese ports.
This tax or similar regulations by China, such as the recently
promoted environmental taxes on coal, may result in an
increase in the cost of raw materials imported to China and
the risks associated with importing raw materials to China,
as well as a decrease in any raw materials shipped from our
charterers to China. This could have an adverse impact on our
charterers’ business, operating results and financial condition
and could thereby affect their ability to make timely charter
hire payments to us and to renew and increase the number of
their time charters with us.
A shift in consumer demand from oil towards other
energy sources may have a material adverse effect on
our business.
A significant portion of our earnings are related to the oil
industry and our lack of diversification will potentially affect
the demand for our vessels. We rely almost exclusively on the
cash flows generated from charters for our vessels that operate
in the tanker sector of the shipping industry. Due to our lack of
diversification, adverse developments in the tanker shipping
industry have a significantly greater impact on our financial
condition and results of operations than if we maintained more
diverse assets or lines of business. Adverse developments in
the tanker business could therefore reduce our ability to meet
our payment obligations and our profitability.
A shift in or disruption of the consumer demand from oil
towards other energy resources such as electricity, natural
gas, liquefied natural gas or hydrogen will potentially affect
the demand for our tankers. A shift from the use of internal
combustion engine vehicles to electric vehicles may also
reduce the demand for oil. These factors could have a material
adverse effect on our future performance, results of operations,
cash flows and financial position.
“Peak oil” is the year when the maximum rate of extraction of
oil is reached. Recent forecasts of “peak oil” range from 2019
to the 2040s, depending on economics and how governments
respond to global warming. Irrespective of “peak oil”, the
continuing shift in consumer demand from oil towards other
energy resources such as wind energy, solar energy, hydrogen
energy or nuclear energy, which appears to be accelerating as
a result of the COVID pandemic, as well shifts in government
commitments and support for energy transition programs,
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Euronav Annual report 2021
may have a material adverse effect on our future performance,
results of operations, cash flows and financial position.
Changes to trade patterns for oil and oil products may
have a material adverse effect on our business.
Seaborne trading and distribution patterns are primarily
influenced by the relative advantage of the various sources
of production, locations of consumption, pricing differentials
and seasonality. Changes to the trade patterns of oil and oil
products may have a significant negative or positive impact
on the ton-mile and therefore the demand for our tankers.
This could have a material adverse effect on our future
performance, results of operations, cash flows and financial
position.
Any decrease in shipments of crude oil may adversely
affect our financial performance.
In addition, conditions affecting the world economy generally
and the economics of the United States, China and India
specifically, may result in reduced consumption of oil products,
a decreased demand for our vessels and lower charter rates,
which could have a material adverse effect on our earnings
and our ability to pay dividends.
The outlook for global oil and tanker demand is highly
uncertain due to the continuing development of the COVID-19
outbreak and its impact on the global economy. Please
also see “The continuing effects of the COVID-19 pandemic
and other outbreaks of epidemic and pandemic diseases
and governmental responses thereto could materially and
adversely affect our business, financial condition, and results
of operations.”
Lack of technological innovation to meet quality and
efficiency requirements could reduce our charter hire
income and the value of our vessels.
Our customers, in particular those in the oil industry, have a
high and increasing focus on quality and compliance standards
with their suppliers across the entire supply chain, including
the shipping and transportation segment. Our continued
compliance with these standards and quality requirements is
vital for our operations. The charter hire rates and the value
and operational life of a vessel are determined by a number of
factors including the vessel’s efficiency, operational flexibility
and physical life. Efficiency includes speed, fuel economy
and the ability to load and discharge cargo quickly. Flexibility
includes the ability to enter harbours, utilise related docking
facilities and pass through canals and straits. The length
of a vessel’s physical life is related to its original design and
construction, its maintenance and the impact of the stress of
operations. We face competition from companies with more
modern vessels with more fuel efficient designs than our
vessels, and if new tankers carriers are built that are more
efficient or more flexible or have longer physical lives than
the current eco vessels, competition from the current eco-
vessels and any more technologically advanced vessels could
adversely affect the amount of charter hire payments we
receive for our vessels and the resale value of our vessels could
significantly decrease. Similarly, technologically advanced
vessels are needed to comply with environmental laws the
investment in which along with the foregoing could have a
material adverse effect on our results of operations, charter
hire payments and resale value of vessels. This could have an
adverse effect on our results of operations, cash flows financial
condition and ability to pay dividends.
factors,
Newbuilding projects are subject to risks that could cause
delays, cost overruns or cancellation of our newbuilding
contracts.
We currently have six vessels under construction. These
construction projects are subject to risks of delay or cost
overruns inherent in any large construction project from
numerous
including shortages of equipment,
materials or skilled labour, unscheduled delays in the delivery
of ordered materials and equipment or shipyard construction,
failure of equipment to meet quality and/or performance
standards, financial or operating difficulties experienced by
equipment vendors or the shipyard, unanticipated actual or
purported change orders, inability to obtain required permits
or approvals, unanticipated cost increases between order and
delivery, design or engineering changes and work stoppages
and other labour disputes, public health threats, adverse
weather conditions or any other potential events of force
majeure. Significant cost overruns or delays could adversely
affect our financial position, results of operations and cash
flows. Additionally, failure to complete a project on time may
result in the delay of revenue from that vessel.
If for any reason we default under any of our newbuilding
contracts, or otherwise fail to take delivery of our newbuilding
vessels, we would be prevented from realising potential
revenues from such vessels, we could also lose all or a portion
of our investment, including any instalment payments made,
and we could be liable for penalties and damages under such
contracts. as well as suffer reputational damage.
In addition, in the event a shipyard does not perform under
its contract, we may lose all or part of our investment,
which would have a material adverse effect on our results of
operations, financial condition and cash flows.
If our vessels call on ports located in countries or
territories that are the subject of sanctions or embargoes
imposed by the U.S. government, the European Union,
the United Nations, or other applicable governmental
authorities, it could lead to monetary fines or other
131
penalties and adversely affect our reputation and the
market for our ordinary shares.
Although no vessels owned or operated by us have called on
ports located in countries or territories that are the subject
of country-wide or territory-wide comprehensive sanctions
and/or embargoes imposed by the U.S. government, the
European Union, or other applicable governmental authorities
(Sanctioned Jurisdictions) in violation of sanctions or embargo
laws during 2021, and we endeavour to take precautions
reasonably designed to mitigate such risks, it is possible that,
in the future, our vessels may carry cargo from or call on ports
in Sanctioned Jurisdictions on charterers’ instructions and/
or without our consent. If such activities result in violation of
applicable sanctions or embargo laws, we could be subject to
monetary fines, penalties, suspension of our license to operate
or other sanctions, and our reputation and the market for our
ordinary shares could adversely affected.
The applicable sanctions and embargo laws and regulations
vary in their application, as they do not all apply to the
same covered persons or proscribe the same activities, and
such sanctions and embargo laws and regulations may be
amended or expanded over time as is the case with the war
in Ukraine. Current or future counterparties of ours may be or
become affiliated with persons or entities that are now or may
in the future be the subject of sanctions imposed by the U.S.
Government, the European Union, and/or other international
bodies. If we determine that such sanctions or embargoes
require us to terminate existing or future contracts to which
we, or our subsidiaries, are a party or if we are found to be in
violation of such applicable sanctions or embargoes, we could
face monetary fines, we may suffer reputational harm and our
results of operations may be adversely affected.
Although we believe that we have been in compliance with
all applicable sanctions and embargo laws and regulations
in 2021, and intend to maintain such compliance, there can
be no assurance that we will be in compliance in the future,
particularly as the scope of certain laws may be unclear and
may be subject to changing interpretations. Any such violation
could result in reputational damages, fines, penalties or other
sanctions that could severely impact our ability to access U.S.
capital markets and conduct our business, and could result
in some investors deciding, or being required, to divest their
interest, or not to invest, in us.
international hostilities and
Terrorist attacks and
instability can affect the tanker industry, which could
adversely affect our business.
Terrorist attacks, the outbreak of war, or the existence of
international hostilities could damage the world economy,
adversely affect the availability of and demand for crude oil and
petroleum products and adversely affect both the Company’s
ability to charter its vessels and the charter rates payable
under any such charters. In addition, Euronav operates in a
sector of the economy that is likely to be adversely impacted
by the effect of political instability, terrorist or other attacks,
war or international hostilities. In the past, political instability
has also resulted in attacks on vessels, mining of waterways
and other efforts
international shipping,
particularly in the Arabian Gulf region and most recently in
the Black Sea in connection with the conflict between Russia
and the Ukraine (see section ‘Events occurred after the ending
of the financial year ending 31 December 2021’ p 47).
to disrupt
Recent developments in the Ukraine and continuing conflicts
in the Middle East may lead to additional armed conflicts
around the world, which may contribute to further economic
instability in the global financial markets and international
commerce. Additionally, any escalations between the North
Atlantic Treaty Organisation countries and Russia could result
in retaliation from Russia that could potentially affect the
shipping industry.
Beginning in February of 2022, President Biden and several
European leaders announced various economic sanctions
against Russia in reaction to its invasion of Ukraine which may
adversely impact our business given Russia’s role as a major
global exporter of crude oil and natural gas. Our business could
also be adversely impacted by trade tariffs, trade embargoes
or other economic sanctions that limit trading activities by
the United States or other countries against countries in the
Middle East, Asia or elsewhere, as a result of terrorist attacks,
hostilities or diplomatic or political pressures.
On March 8, 2022, President Biden issued an executive order
prohibiting the import of certain Russian energy products into
the United States, including crude oil, petroleum, petroleum
fuels, oils, liquefied natural gas and coal. Additionally, the
executive order prohibits any investments in the Russian
energy sector by US persons, among other restrictions.
These uncertainties could also adversely affect our ability to
obtain additional financing or insurance on terms acceptable
to us or at all. Any of these occurrences could have a material
adverse impact on our operating results, revenues and costs.
These factors could also increase the costs to the Company
of conducting its business, particularly crew, insurance and
security costs, and prevent or restrict the Company from
obtaining insurance coverage, all of which have a material
adverse effect on our business, financial condition, results of
operations and cash flows.
The continuing effects of the COVID-19 pandemic and
other outbreaks of epidemic and pandemic diseases and
governmental responses thereto could materially and
adversely affect our business, financial condition, and
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Euronav results of operations.
Since the beginning of calendar year 2020, the outbreak of
COVID-19 that originated in China in late 2019 and that has
spread to most nations around the globe, has resulted in
numerous actions taken by governments and governmental
agencies in an attempt to mitigate the spread of the virus,
including travel bans, quarantines, and other emergency
public health measures, and a number of countries
implemented lockdown measures. These measures resulted
in a significant reduction in global economic activity and
extreme volatility in the global financial markets. While many
of these measures have since been relaxed, we cannot predict
whether and to what degree such measures will be reinstituted
in the event of any resurgence in the COVID-19 virus or any
variants thereof. If the COVID-19 pandemic continues on a
prolonged basis or becomes more severe, the adverse impact
on the global economy and the rate environment for tanker
vessels may deteriorate and our operations and cash flows
may be negatively impacted. Relatively weak global economic
conditions during periods of volatility have and may continue
to have a number of adverse consequences for tanker and
other shipping sectors, including, among other things:
•
Low charter rates, particularly for vessels employed on
short-term time charters or in the spot market;
• Decreases in the market value of tanker vessels and limited
second-hand market for the sale of vessels;
•
•
Limited financing for vessels;
Loan covenant defaults; and
• Declaration
vessel
operators, vessel owners, shipyards and charterers.
bankruptcy
certain
by
of
The COVID-19 pandemic and measures to contain its spread
have negatively impacted regional and global economies
and trade patterns in markets in which we operate, the way
we operate our business, and the businesses of our charterers
and suppliers. These negative impacts could continue or
worsen, even after the pandemic itself diminishes or ends.
Companies, including us, have also taken precautions, such
as requiring employees to work remotely and imposing travel
restrictions, while some other businesses have been required
to close entirely. Moreover, we face significant risks to our
personnel and operations due to the COVID-19 pandemic. Our
crews face risk of exposure to COVID-19 as a result of travel
to ports in which cases of COVID-19 have been reported. Our
shore-based personnel likewise face risk of such exposure, as
we maintain offices in areas that have been impacted by the
spread of COVID-19.
Measures against COVID-19 in a number of countries have
Annual report 2021
133
Euronav
restricted crew rotations on our vessels, which may continue
or become more severe. As a result, in 2021, we experienced
and may continue to experience disruptions to our normal
increased deviation time
vessel operations caused by
associated with positioning our vessels to countries in which
we can undertake a crew rotation in compliance with such
measures. Delays in crew rotations have led to issues with
crew fatigue and may continue to do so, which may result in
delays or other operational issues. We have had and expect
to continue to have increased expenses due to incremental
fuel consumption and days in which our vessels are unable to
earn revenue in order to deviate to certain ports on which we
would ordinarily not call during a typical voyage. We may also
incur additional expenses associated with testing, personal
protective equipment, quarantines, and travel expenses
such as airfare costs in order to perform crew rotations in
the current environment. In 2021, delays in crew rotations
have also caused us to incur additional costs related to crew
bonuses paid to retain the existing crew members on board
and may continue to do so.
The COVID-19 pandemic and measures in place against the
spread of the virus have led to a highly difficult environment
in which to dispose of vessels given difficulty to physically
inspect vessels. The impact of COVID-19 has also resulted in
reduced industrial activity globally, and more specifically in
China with temporary closures of factories and other facilities,
labour shortages and restrictions on travel. We believe these
disruptions along with other seasonal and market factors,
including lower demand for some of the cargoes we carry,
have contributed to lower tanker rates in 2021.
The ultimate extent to which the COVID-19 pandemic impacts
our business, financial condition, and results of operations will
depend on future development. These are highly uncertain,
difficult to predict, and subject to change, including, but
not limited to, the duration, scope, severity, proliferation of
variants and increase in the transmissibility of the virus, its
impact on the global economy, actions taken to contain or
limit the impact of COVID-19, such as the availability of an
effective vaccine or treatment, geographic variation in how
countries and states are handling the pandemic, how long
current restrictions over travel and economic activity in many
countries across the globe remain in place over the course of
the pandemic, and how quickly and to what extent normal
economic and operating conditions may potentially resume.
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Annual report 2021
to vessel-to-loan financial covenants; potential disruptions,
delays or cancellations in the construction of new vessels,
which could reduce our future growth opportunities; potential
non-performance by counterparties relying on force majeure
clauses and potential deterioration in the financial condition
and prospects of our customers, joint venture partners or other
business partners.
Our international operations expose us to additional costs
and legal and regulatory risks, which could have a material
adverse effect on our business, results of operations and
financial conditions.
We operate worldwide, where appropriate, through agents or
other intermediaries. Compliance with complex local, foreign
and U.S. laws and regulations that apply to our international
operations
increases our cost of doing business. These
numerous and sometimes conflicting laws and regulations
include, among others, data privacy requirements (in particular
the European General Data Protection Regulation, enforceable
as from May 25, 2018 and the EU-US Privacy Shield Framework,
as adopted by the European Commission on July 12, 2016),
labour relations laws, tax laws, anti-competition regulations,
import and trade restrictions, export requirements, U.S. laws
such as the FCPA and other U.S. federal laws and regulations
established by the office of Foreign Asset Control, local laws
such as the UK Bribery Act 2010, or other local laws which
prohibit corrupt payments to governmental officials or certain
payments or remunerations to customers.
Given the high level of complexity of these laws, there is a risk
that we, our agent or other intermediaries, may inadvertently
breach certain provisions thereunder. Violations of these laws
and regulations could result in fines, criminal sanctions against
us, our officers or our employees, requirements to obtain
export licenses, cessation of business activities in sanctioned
countries,
implementation of compliance programs, and
prohibitions on the conduct of our business. Violations of laws
and regulations also could result in prohibitions on our ability to
operate in one or more countries and could materially damage
our reputation, our ability to attract and retain employees, or
our business, results of operations and financial condition.
Furthermore, detecting, investigating and resolving actual or
alleged violations is expensive and can consume significant
time and attention of our senior management. Though we have
implemented monitoring procedures and required policies,
guidelines, contractual terms and audits, these measures may
not prevent or detect failures by our agents or intermediaries
regarding compliance.
The worldwide operation of an ocean-going vessel carries
inherent operational risks as well. Our vessels and their cargoes
are at risk of being damaged or lost because of events such
as marine disasters, bad weather, and acts of God, business
135
Effects of the current and any future pandemic may include,
among others: deterioration of economic conditions and
activity and of demand for oil and other petroleum products;
operational disruptions to us (such as but not limited to, crew
rotation and crew fatigue) or our customers due to worker
health risks and the effects of new regulations, directives or
practices implemented in response to the pandemic (such as
travel restrictions for individuals and vessels and quarantining
and physical distancing); potential delays in (a) the loading
and discharging of cargo on or from our vessels, (b) vessel
inspections and related certifications by class societies,
customers or government agencies and (c) maintenance
(including access to spare parts), modifications or repairs to,
or drydocking of, our existing vessels due to worker health or
other business disruptions; reduced cash flow and financial
condition, including potential liquidity constraints; potential
reduced access to capital as a result of any credit tightening
generally or due to continued declines in global financial
markets; potential reduced ability to opportunistically sell any
of our vessels on the second-hand market, either as a result
of a lack of buyers or a general decline in the value of second-
hand vessels; potential decreases in the market values of our
vessels and any related impairment charges or breaches relating
• Respond to changes
Company’s vessels;
in customer demands for the
• Obtain supplies and materials necessary for the operation
and maintenance of the Company’s vessels; and
• Mitigate the impact of labour shortages and/or disruptions
relating to crews on the Company’s vessels.
The failure of third-party service providers to meet such
commitments could lead to legal liability for or other damages
to the Company. The third-party service providers the
Company has selected may not provide a standard of service
comparable to that which the Company would provide for
such vessels if the Company directly provided such services.
The Company relies on its third-party service providers to
comply with applicable law, and a failure by such providers to
comply with such laws may subject the Company to liability
or damage its reputation even if the Company did not engage
in the conduct itself. Furthermore, damage to any such third
party’s reputation, relationships or business may reflect on
the Company directly or indirectly, and could have a material
adverse effect on the Company’s reputation and business.
The third-party managers have the right to terminate their
agreements. If the third-party manager exercises that right,
the Company will be required either to enter into substitute
agreements with other third parties or to assume those
management duties. The Company may not succeed in
negotiating and entering into such agreements with other
interruptions caused by mechanical failures, grounding, fire,
explosions and collisions, human error, war, terrorism, piracy,
disease, quarantine and other circumstances or events.
Furthermore, changing economic, regulatory and political
conditions in some countries, including political and military
conflicts, have from time to time resulted in attacks on vessels,
mining of waterways, piracy, terrorism, labour strikes and
boycotts. Compared to other types of vessels, tankers are
exposed to a higher risk of damage and loss by fire, whether
ignited by a terrorist attack, collision, or other cause, due to
the high flammability and high volume of the oil transported
in tankers.
In addition, international shipping is subject to various
security and customs inspections and related procedures in
countries of origin and destination and trans-shipment points.
Inspection procedures can result in the seizure of the cargo
and/or our vessels, delays in the loading, offloading or delivery
and the levying of customs duties, fines or other penalties
against us.
Dependence on third party service providers.
The Company currently outsources to third party service
providers certain management services of
its fleet,
including certain aspects of technical, commercial and crew
management. In particular, the Company has entered into
ship management agreements that assign technical and
crew management responsibilities to a third party technical
manager for 20% of the Company’s fleet and the Company has
transferred commercial management of part of its fleet to the
Tankers International (TI) Pool.
In such outsourcing arrangements, the Company has
transferred direct control over technical, crew and commercial
management of the relevant vessels, while maintaining
significant oversight and audit rights, and must rely on third
party service providers to, among other things:
• Comply with their respective contractual commitments
and obligations owed to the Company,
including
with respect to safety, security, quality, proper crew
management and environmental compliance of the
operations of the Company’s vessels;
• Comply with
requirements
imposed by
the U.S.
government, the UN and the EU (i) restricting certain
transactions and calls on ports located in countries that
are subject to sanctions and embargoes and (ii) prohibiting
bribery and other corrupt practices;
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Euronav Annual report 2021
third parties and, even if it does so, the terms and conditions
of such agreements may be less favourable to the Company.
Furthermore, if the Company is required to dedicate internal
resources to managing its fleet (including, but not limited
to, hiring additional qualified personnel or diverting existing
resources), that could result in increased costs and reduced
efficiency and profitability. Any such changes could result in
a temporary loss of customer approvals, could disrupt the
Company’s business and have a material adverse effect on
the Company’s business, results of operations and financial
condition.
Risks relating to Legal and Regulatory Matters
We are subject to complex laws and regulations,
including environmental laws and regulations that can
adversely affect our business, results of operations, cash
flows, financial condition, and our available cash.
Our operations are subject to numerous laws and regulations
in the form of international conventions and treaties, national,
state and local laws and national and international regulations
in force in the jurisdictions in which our vessels operate or are
registered, which can significantly affect the ownership and
operation of our vessels. Compliance with such laws and
regulations, where applicable, may require installation of
costly equipment or operational changes and may affect the
resale value or useful lives of our vessels. We may also incur
additional costs in order to comply with other existing and
future regulatory obligations, including, but not limited to,
costs relating to air emissions including greenhouse gases, the
management of ballast waters, maintenance and inspection,
development and implementation of emergency procedures
and insurance coverage or other financial assurance of our
ability to address pollution incidents. Oil spills that occur
from time to time may also result in additional legislative or
regulatory initiatives that may affect our operations or require
us to incur additional expenses to comply with such new laws
or regulations.
These costs could have a material adverse effect on our
business, results of operations, cash flows and financial
condition and our available cash. A failure to comply with
applicable laws and regulations may result in administrative
and civil penalties, criminal sanctions or the suspension or
termination of our operations.
Environmental requirements can also affect the resale value
or useful lives of our vessels, could require a reduction in
cargo capacity, ship modifications or operational changes or
restrictions, could lead to decreased availability of insurance
coverage for environmental matters, or could result in the
denial of access to certain jurisdictional waters or ports or
detention in certain ports. Under local, national and foreign
laws, as well as international treaties and conventions, we
could incur material liabilities, including clean-up obligations
and natural resource damages liability, in the event that
there is a release of hazardous materials from our vessels or
otherwise in connection with our operations. Environmental
laws often impose strict liability for remediation of spills and
releases of hazardous substances, which could subject us to
137
Euronav
138
liability without regard to whether we were negligent or at fault.
We could also become subject to personal injury or property
damage claims relating to the release of hazardous substances
associated with our existing or historic operations. Violations
of, or liabilities under, environmental requirements can result
in substantial penalties, fines and other sanctions, including, in
certain instances, seizure or detention of our vessels, and could
harm our reputation with current or potential charterers of
our tankers. We are required to satisfy insurance and financial
responsibility requirements for potential oil (including marine
fuel) spills and other pollution incidents. Although we have
arranged insurance to cover certain environmental risks, there
can be no assurance that such insurance will be sufficient to
cover all such risks or that any claims will not have a material
adverse effect on our business, results of operations, cash
flows, financial condition and available cash.
In addition, many environmental requirements are designed
to reduce the risk of pollution, such as from oil spills, and
our compliance with these requirements could be costly. To
comply with these and other regulations, including: (i) the
sulfur emission requirements of Annex VI of the International
Convention for the Prevention of Marine Pollution from Ships,
or "MARPOL", which instituted a global 0.5% (lowered from 3.5%
as of January 1, 2020) sulfur cap on marine fuel consumed by
a vessel, unless the vessel is equipped with a scrubber, and (ii)
the International Convention for the Control and Management
of Ships' Ballast Water and Sediments of the International
Maritime Organization, or "IMO", which requires vessels to
install expensive ballast water treatment systems, we may be
required to incur additional costs to meet new maintenance
and inspection requirements, develop contingency plans
for potential spills, and obtain insurance coverage. The
increased demand for low sulfur fuels may increase the costs
of fuel for our vessels that do not have scrubbers. Additional
conventions, laws and regulations may be adopted that could
limit our ability to do business or increase the cost of doing
business and which may materially and adversely affect our
operations.
We are subject to international safety regulation and if
we fail to comply with international safety regulations,
we may be subject to increased liability, which may
adversely affect our insurance coverage and may result
in a denial of access to, or detention in, certain ports.
The operation of our vessels is affected by government
regulations in the form of international conventions, national,
state and local laws and regulations in force in the jurisdictions
in which the vessels operate, as well as in the country or
countries of their registration. As such, we are subject to
the requirements set forth in the IMO’s International Safety
Management Code for the Safe Operation of Ships and for
Pollution Prevention, or the ISM Code, the International Ship
& Port Facility Security Code, or ISPS Code, promulgated by
Annual report 2021
the IMO under the International Convention for the Safety of
Life at Sea of 1974, or SOLAS, as well as to other conventions,
mainly MARPOL, the International Convention on Standards
of Training, Certification and Watchkeeping for Seafarers, or
STCW, etc. Failure to comply with these requirements may
subject us to increased liability, may decrease available
insurance coverage for the affected ships, and may result in
denial of access to, or detention in, certain ports. The U.S.
Coast Guard (USCG) and E.U. Authorities enforce compliance
with the ISM and ISPS Codes and prohibit non-compliant
vessels from trading in U.S. and E.U. ports. This could have
a material adverse effect on our future performance, results
of operations, cash flows and financial position. The IMO
continues to review and introduce new regulations. It is
impossible to predict what additional regulations, if any, may
be passed by the IMO and what effect, if any, such regulations
might have on our operations.
Because such conventions, laws, and regulations are often
revised, we cannot predict the ultimate cost of complying with
such conventions, laws and regulations or the impact thereof
on the resale prices or useful lives of our vessels. Additional
conventions, laws and regulations may be adopted which
could limit our ability to do business or increase the cost of
our doing business and which may materially adversely affect
our operations. We are required by various governmental
and quasi-governmental agencies to obtain certain permits,
licenses, certificates, and financial assurances with respect to
our operations.
Developments in safety and environmental requirements
relating to the recycling of vessels may result in escalated
and unexpected costs.
The 2009 Hong Kong International Convention for the Safe
and Environmentally Sound Recycling of Ships, or the Hong
Kong Convention, aims to ensure ships, being recycled once
they reach the end of their operational lives, do not pose any
unnecessary risks to the environment, human health and
safety. The Hong Kong Convention, which would enter into
force 24 months after the date on which 15 IMO Member States
have ratified or approved, has yet to be ratified by the required
number of countries to enter into force. Upon the Hong Kong
Convention's entry into force, each ship sent for recycling will
have to carry an inventory of its hazardous materials. The
hazardous materials, whose use or installation are prohibited
in certain circumstances, are listed in an appendix to the Hong
Kong Convention. Ships will be required to have surveys
to verify their inventory of hazardous materials initially,
throughout their lives and prior to the ship being recycled.
On November 20, 2013, the European Parliament and the
Council of the EU adopted the Ship Recycling Regulation,
which retains the requirements of the Hong Kong Convention
and requires that certain commercial seagoing vessels
flying the flag of an EU Member State may be recycled only
in facilities included on the European list of permitted ship
recycling facilities.
These regulatory requirements may lead to cost escalation
by shipyards, repair yards and recycling yards. This may then
result in a decrease in the residual recycling value of a vessel
which could potentially not cover the cost to comply with the
latest requirements, which may have an adverse effect on
our future performance, results of operations, cash flows and
financial position.
Regulations relating to ballast water discharge may
adversely affect our revenues and profitability.
The IMO has imposed updated guidelines for ballast water
management systems specifying the maximum amount of
viable organisms allowed to be discharged from a vessel’s
ballast water. Depending on the date of the International Oil
Pollution Prevention or IOPP renewal survey, existing vessels
constructed before September 8, 2017 are required to comply
with the updated D-2 standard on or after September 8, 2019.
For most vessels, compliance with the D-2 standard will
involve installing on-board systems to treat ballast water and
eliminate unwanted organisms. Vessels constructed (keel-laid)
on or after September 8, 2017 are required to comply with the
D-2 standards on or after September 8, 2017. We currently have
21 vessels that do not comply with the updated guideline and
costs of compliance may be substantial and adversely affect
our revenues and profitability.
Furthermore, United States regulations are currently changing.
Although the 2013 Vessel General Permit (VGP) program and
U.S. National Invasive Species Act (NISA) are currently in effect
to regulate ballast discharge, exchange and installation, the
Vessel Incidental Discharge Act or VIDA, which was signed
into law on December 4, 2018, requires that the EPA develop
national standards of performance for approximately 30
discharges, similar to those found in the VGP, within two
years. On October 26, 2020, the EPA published a Notice of
Proposed Rulemaking for Vessel Incident Discharge National
Standards of Performance under VIDA. Within two years after
the EPA publishes its final Vessel Incidental Discharge National
Standards of Performance, the U.S. Coast Guard must develop
corresponding implementation, compliance and enforcement
regulations regarding ballast water. The new regulations could
require the installation of new equipment, which may cause
us to incur substantial additional costs which may adversely
affect our profitability.
Climate change and greenhouse gas restrictions may
adversely impact our operations and markets.
Due to concern over the risk of climate change, a number
of countries, the European Commission and the IMO have
adopted, or are considering the adoption of, regulatory
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Euronav
(MEPC) announced
frameworks to reduce greenhouse gas emissions. These
regulatory measures may include, among others, adoption
of cap and trade regimes, carbon taxes, taxonomy of
‘green’ economic activities, increased efficiency standards
and incentives or mandates for renewable energy. More
specifically, on October 27, 2016, IMO's Marine Environment
Protection Committee
its decision
concerning the implementation of regulations mandating
a reduction in sulfur emissions from 3.5% currently to 0.5%
as of the beginning of January 1, 2020. Additionally, in April
2018, nations at the MEPC 72 adopted an initial strategy to
reduce greenhouse gas emissions from ships. The initial
strategy identifies levels of ambition to reducing greenhouse
gas emissions, including (1) decreasing the carbon intensity
from ships through implementation of further phases of
the Energy Efficiency Design Index (EEDI) for new ships; (2)
reducing carbon dioxide emissions per transport work, as
an average across international shipping, by at least 40% by
2030, pursuing efforts towards 70% by 2050, compared to 2008
emission levels; and (3) reducing the total annual greenhouse
emissions by at least 50% by 2050 compared to 2008 while
pursuing efforts towards phasing them out entirely.
The European Commission has proposed adding shipping to the
Emission Trading Scheme (ETS) as of 2023 with a phase-in period. It
is expected that shipowners will need to purchase and surrender a
number of emission allowances that represent their recorded
carbon emission exposure for a specific reporting period. The
person or organisation responsible for the compliance with the EU
ETS should be the shipping company, defined as the shipowner
or any other organisation or person, such as the manager or
the bareboat charterer, that has assumed the responsibility for
the operation of the ship from the shipowner. Compliance with
the Maritime EU ETS could result in additional compliance and
administration costs to properly incorporate the provisions of the
Directive into our business routines. Additional EU regulations
which are part of the EU’s Fit-for-55, could also affect our financial
position in terms of compliance and administration costs when
they take effect.
Territorial taxonomy regulations in geographies where we are
operating and that are legally liable, such as the EU Taxonomy,
might jeopardise the level of access to capital. For example,
the EU has already introduced a set of criteria for economic
activities which should be framed as ‘green’, called EU
Taxonomy. As long as we are an EU-based company meeting
the Non-Financial Reporting Directive (NFRD) prerequisites,
we will be eligible for reporting our Taxonomy eligibility and
alignment. Based on the current version of the Regulation,
companies that own assets tailored and dedicated to shipping
fossil fuels are considered as not aligned with EU Taxonomy.
The outcome of such provision might be either an increase
in the cost of capital and/or gradually reduced access to
financing.
140
Since January 1, 2020, ships must either remove sulfur from
emissions or buy fuel with low sulfur content, which may lead
to increased costs and supplementary investments for ship
owners. The interpretation of "fuel oil used on board" includes
use in main engine, auxiliary engines and boilers. Shipowners
may comply with this regulation by (i) using 0.5% sulfur fuels
on board, which are available around the world but at a
higher cost; (ii) installing scrubbers for cleaning of the exhaust
gas; or (iii) by retrofitting vessels to be powered by liquefied
natural gas or other alternative energy sources, which may
not be a viable option due to the lack of supply network and
high costs involved in this process. Costs of compliance with
these regulatory changes may be significant and may have a
material adverse effect on our future performance, results of
operations, cash flows and financial position.
In addition, although the emissions of greenhouse gases
from international shipping currently are not subject to the
Kyoto Protocol to the United Nations Framework Convention
on Climate Change, which required adopting countries to
implement national programs to reduce emissions of certain
gases, or the Paris Agreement (discussed further below), a new
treaty may be adopted in the future that includes restrictions
on shipping emissions. Compliance with changes in laws,
regulations and obligations relating to climate change could
increase our costs related to operating and maintaining
our vessels and require us to install new emission controls,
acquire allowances or pay taxes related to our greenhouse
gas emissions or administer and manage a greenhouse gas
emissions program. Revenue generation and strategic growth
opportunities may also be adversely affected.
Adverse effects upon the oil and gas industry relating to
climate change, including growing public concern about the
environmental impact of climate change, may also adversely
affect demand for our services. For example, increased
regulation of greenhouse gases or other concerns relating
to climate change may reduce the demand for oil and gas in
the future, or create greater incentives for use of alternative
energy sources. In addition to the peak oil risk from a demand
perspective, the physical effects of climate change, including
changes in weather patterns, extreme weather events, rising
sea levels, scarcity of water resources, may negatively impact
our operations. Any long-term material adverse effect on the
oil and gas industry could have a significant financial and
operational adverse impact on our business that we cannot
predict with certainty at this time.
Risks relating to Tax Matters
United States tax authorities could treat us as a “passive
foreign investment company,” which could have adverse
United States federal income tax consequences to United
Annual report 2021
States shareholders.
A foreign corporation will be treated as a “Passive Foreign
Investment Company,” or PFIC, for United States federal
income tax purposes if either (1) at least 75% of its gross
income for any taxable year consists of certain types of
“passive income” or (2) at least 50% of the average value of the
corporation’s assets produce or are held for the production of
those types of “passive income.” For purposes of these tests,
“passive income” includes dividends, interest, and gains from
the sale or exchange of investment property, and rents and
royalties other than rents and royalties which are received from
unrelated parties in connection with the active conduct of a
trade or business. For purposes of these tests, income derived
from the performance of services does not constitute “passive
income.” United States shareholders of a PFIC are subject to a
disadvantageous United States federal income tax regime with
respect to the income derived by the PFIC, the distributions
they receive from the PFIC and the gain, if any, they derive from
the sale or other disposition of their shares in the PFIC.
Based on our current and proposed method of operation,
we do not believe that we will be a PFIC with respect to any
taxable year. In this regard, we treat the gross income we derive
or are deemed to derive from our time chartering activities as
services income, rather than rental income. Accordingly, our
income from our time and voyage chartering activities should
not constitute “passive income,” and the assets that we own
and operate in connection with the production of that income
should not constitute assets that produce or are held for the
production of “passive income.”
is substantial
legal authority supporting
There
this
position, consisting of case law and United States Internal
Revenue Service, or IRS, pronouncements concerning the
characterisation of income derived from time charters and
voyage charters as services income for other tax purposes.
However, it should be noted that there is also authority that
characterizes time charter income as rental income rather
than services income for other tax purposes. Accordingly, no
assurance can be given that the IRS or a court of law will accept
this position, and there is a risk that the IRS or a court of law
could determine that we are a PFIC. Moreover, no assurance
can be given that we would not constitute a PFIC for any future
taxable year if the nature and extent of our operations change.
If the IRS were to find that we are or have been a PFIC for
any taxable year, our United States shareholders would face
adverse United States federal income tax consequences
and incur certain information reporting obligations. Under
the PFIC rules, unless those shareholders make an election
available under the United States Internal Revenue Code of
1986, as amended, or the Code (which election could itself
have adverse consequences for such shareholders),
141
such shareholders would be subject to United States federal
income tax at the then prevailing rates on ordinary income
plus interest, in respect of excess distributions and upon any
gain from the disposition of their ordinary shares, as if the
excess distribution or gain had been recognised ratably over
the shareholder’s holding period of the ordinary shares.
We may have to pay tax on United States source shipping
income, or taxes in other jurisdictions, which would
reduce our net earnings.
Under the Code, 50% of the gross shipping income of a
corporation that owns or charters vessels, as we and our
subsidiaries do, that is attributable to transportation that
begins or ends, but that does not both begin and end, in the
United States may be subject to a 4% United States federal
income tax without allowance for deductions. Unless that
corporation qualifies for exemption from tax under Section 883
of the Code and the regulations promulgated thereunder by
the United States Department of the Treasury or an applicable
U.S. income tax treaty.
We and our subsidiaries continue to take the position that we
qualify for either this statutory tax exemption or exemption
under an income tax treaty for United States federal income
tax return reporting purposes. However, there are factual
circumstances beyond our control that could cause us to
lose the benefit of this tax exemption and thereby become
subject to United States federal income tax on our United
States source shipping income. For example, we may no
longer qualify for exemption under Section 883 of the Code
for a particular taxable year if shareholders with a five percent
or greater interest in our ordinary shares (5% Shareholders)
owned, in the aggregate, 50% or more of our outstanding
ordinary shares for more than half the days during the taxable
year, and there does not exist sufficient 5% Shareholders that
are qualified shareholders for purposes of Section 883 of the
Code to preclude non-qualified 5% Shareholders from owning
50% or more of our ordinary shares for more than half the
number of days during such taxable year, or we are unable
to satisfy certain substantiation requirements with regard to
our 5% Shareholders. Due to the factual nature of the issues
involved, there can be no assurances on the tax-exempt status
of us or any of our subsidiaries.
We may also be subject to tax in other jurisdictions, which
could reduce our earnings.
Our shareholders residing in countries other than
Belgium may be subject to double withholding taxation
with respect to dividends or other distributions made by
us.
Any dividends or other distributions we make to shareholders
will, in principle, be subject to withholding tax in Belgium
at a rate of 30%, except for shareholders which qualify for
an exemption of withholding tax such as, amongst others,
qualifying pension funds or a company qualifying as a parent
company in the sense of the Council Directive (90/435/EEC) of
July 23, 1990, or the Parent-Subsidiary Directive or that qualify
for a lower withholding tax rate or an exemption by virtue of
a tax treaty. Various conditions may apply and shareholders
residing in countries other than Belgium are advised to
consult their advisers regarding the tax consequences of
dividends or other distributions made by us. Our shareholders
residing in countries other than Belgium may not be able to
credit the amount of such withholding tax to any tax due on
such dividends or other distributions in any other country
than Belgium. As a result, such shareholders may be subject
to double taxation in respect of such dividends or other
distributions.
Belgium and the United States have concluded a double tax
treaty concerning the avoidance of double taxation, or the
U.S.-Belgium Treaty. The U.S.-Belgium Treaty reduces the
applicability of Belgian withholding tax to 15%, 5% or 0%
for U.S. taxpayers, provided that the U.S. taxpayer meets the
limitation of benefits conditions imposed by the U.S.-Belgium
Treaty. The Belgian withholding tax is generally reduced to
15% under the U.S.-Belgium Treaty. The 5% withholding tax
applies in cases where the U.S. shareholder is a company
which holds at least 10% of the shares in the Company. A
0% Belgian withholding tax applies when the shareholder
is a company which has held at least 10% of the shares in
the Company for at least 12 months, or is, subject to certain
conditions, a U.S. pension fund. The U.S. shareholders are
encouraged to consult their own tax advisers to determine
whether they can invoke the benefits and meet the limitation
of benefits conditions as imposed by the U.S.-Belgium Treaty.
If we or our subsidiaries were not entitled to exemption
under Section 883 of the Code for any taxable year, we or
our subsidiaries could be subject for such year to an effective
2% United States federal income tax on the shipping income
we or they derive during such year which is attributable to
the transport of cargoes to or from the United States. The
imposition of this taxation would have a negative effect on
our business and would decrease our earnings available for
distribution to our shareholders.
Changes to the tonnage tax or the corporate tax regimes
applicable to us, or to the interpretation thereof, may
impact our future operating results.
Shortly after its incorporation in 2003, Euronav applied for
treatment under the Belgian tonnage tax regime. It was
declared eligible for this regime by the Federal Finance
Department on 23 October 2003 for a ten-year period. In line
with the tonnage tax regulations, which are part of the normal
corporate tax regime in Belgium, profits from the operation of
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Euronav Annual report 2021
seagoing vessels are determined on a lump sum basis based
on the net registered tonnage of the particular vessels. After
this first ten-year period had elapsed, the tonnage tax regime
has been automatically renewed for another ten-year period.
This tonnage tax replaces all factors that are normally taken
into account in traditional tax calculations, such as profit or
loss, operating costs, depreciation, gains and the offsetting of
past losses of the revenues taxable in Belgium.
Changes to the tax regimes applicable to us, or the
interpretation thereof, may impact our future operating results.
Euronav is also operating vessels under Belgian, French, Greek,
Marshall Island and Liberian Flag for which the Company is
paying the required tonnage tax in these particular jurisdictions.
There is, however, no guarantee that the tonnage tax regime
will not be reversed or that other forms of taxation will not
be imposed such as, but not limited to, a global minimum
tax, a carbon tax or emissions trading system in the context
of the discouragement of the use of fossil fuels. To the extent
such changes would be implemented on the EU level only,
the global level playing field may be distorted and put the
company in a weaker competitive position compared to its
non-EU peer companies.
Risks Relating to an Investment in Our Ordinary
Shares
The price of our common shares has fluctuated in the
past, has been volatile and may be volatile in the future,
and as a result, investors in our common shares could
incur substantial losses.
Our share price may be highly volatile and future sales of our
ordinary shares could cause the market price of our ordinary
shares to decline.
The market price of our ordinary shares has historically
fluctuated over a wide range and may continue to fluctuate
significantly in response to many factors, such as actual or
anticipated fluctuations in our operating results, changes
in financial estimates by securities analysts, economic,
regulatory and ESG trends, general market conditions,
rumours, fabricated news, business interruptions caused by
the outbreak of COVID-19 and other factors, many of which
are beyond our control. Since 2008, the stock market has
experienced extreme price and volume variability due to
various factors, including the prospect of increased interest
rates, notable market fluctuations in the first calendar quarter
of 2022 to date. If the volatility in the market continues or
worsens, it could have an adverse effect on the market price of
our ordinary shares and impact a potential sale price if holders
of our ordinary shares decide to sell their shares.
Our stock price has fluctuated in the past, has recently been
volatile and may be volatile in the future. The price of our
common shares has ranged from a price of between USD 7.75
and USD 11.11 between 1 January 2021 and 31 December
2021 without any discernible announcements or de
velopments by the company or third parties to substantiate
the movement of our stock price. Our stock prices may
experience rapid and substantial decreases or increases in
the foreseeable future that are unrelated to our operating
performance or prospects. In addition, the ongoing outbreak
of the novel COVID-19 virus has caused broad stock market
and industry fluctuations. The stock market in general,
and the market for shipping companies in particular, have
experienced extreme volatility that has often been unrelated
to the operating performance of particular companies. As a
result of this volatility, investors may experience substantial
losses on their investment in our common shares. The
market price for our common shares may be influenced by
many factors, including the following:
143
Euronav
•
•
Investor reaction to our business strategy;
Shareholder activism;
• Our continued compliance with the listing standards of
NYSE and/or Euronext;
• Regulatory or legal developments in the United States and
other countries, especially changes in laws or regulations
applicable to our industry, including those related to
climate change;
•
Variations in our financial results or those of companies
that are perceived to be similar to us;
• Our ability or inability to raise additional capital and the
terms on which we raise it;
• Declines in the market prices of stocks generally;
•
•
Trading volume of our common shares;
Shorting activity in relation to our share; Sales of our
common shares by us or our stockholders;
• General economic, industry and market conditions; and
• Other events or factors, including those resulting from
such events, or the prospect of such events, including
war, terrorism and other international conflicts, public
health issues including health epidemics or pandemics,
such as the ongoing COVID-19 pandemic, adverse
weather and climate conditions could disrupt our
operations or result in political or economic instability.
improvements in actual or expected operating performance,
financial condition or other indicators of value. Since the stock
price of our common shares has fluctuated in the past, has been
recently volatile and may be volatile in the future, investors
in our common shares could incur substantial losses. In the
past, following periods of volatility in the market, securities
class-action
instituted against
companies. Such litigation, if instituted against us, could result
in substantial costs and diversion of management’s attention
and resources, which could materially and adversely affect our
business, financial condition, results of operations and growth
prospects. There can be no guarantee that our stock price will
remain at current prices.
litigation has often been
In addition securities of certain companies have recently
experienced significant and extreme volatility in stock price
due short sellers of shares of common shares, known as a
“short squeeze”. These short squeezes have caused extreme
volatility in those companies and in the market and have led to
the price per share of those companies to trade at a significantly
inflated rate that is disconnected from the underlying value of
the company. Many investors who have purchased shares in
those companies at an inflated rate risk losing a significant
portion of their original investment when the price per share
declined steadily as interest in those stocks abated. While we
have no reason to believe our shares would be the target of
a short squeeze, there can be no assurance that we will not
be in the future, and you may lose a significant portion or all
of your investment if you purchase our shares at a rate that is
significantly disconnected from our underlying value.
These broad market and industry factors may seriously harm
the market price of our common shares, regardless of our
operating performance, and may be inconsistent with any
From time to time our Supervisory Board may authorize
a share buyback within the Belgian legal framework.
144
Annual report 2021
Although we have a dividend policy that includes a fixed
component, we cannot assure you that we will declare or
pay any dividends. The tanker industry is volatile and we
cannot predict with certainty the amount of cash, if any,
that will be available for distribution as dividends in any
period.
Our Supervisory Board may from time to time declare and pay
cash dividends in accordance with our Coordinated Articles of
Association and applicable Belgian law. The declaration and
payment of dividends or other distributions, if any, will always
be subject to the approval of either our Supervisory Board
(in the case of “interim dividends”) or of the shareholders (in
the case of “regular dividends”, "intermediary dividends" or
“repayment of capital”).
Our current dividend policy is as follows: we intend to pay a
minimum fixed dividend of at least $0.12 in total per share per
year provided the Company has in the view of the Supervisory
liquidity
Board, sufficient balance sheet strength and
combined with sufficient earnings visibility from fixed income
contracts. In addition, if the results per share are positive and
exceed the amount of the fixed dividend, the resulting excess
income will be considered for allocation to either additional
cash dividends, share buy-backs, accelerated amortization of
debt or the acquisition of vessels that the Supervisory Board
considers at that time to be accretive to shareholders’ value.
Additional guidance to the above stated policy as applied to
our final results for the year ended on December 31, 2019 and
to our quarterly results as from 2020 onwards, was provided by
our Supervisory Board by way of a press release dated January
9, 2020, as follows:
•
•
•
Each quarter the Company will target to return 80% of net
income (including the fixed element of $0.03 per quarter)
to shareholders.
This return to shareholders will primarily be in the form of
a cash dividend and the Company will always look at stock
repurchase as an alternative if it believes more value can
be created for shareholders.
The Company retains the right to return more than 80%
should the circumstances allow it.
As part of its distribution policy, the Company will continue to
include exceptional capital losses when assessing additional
dividends but also continue to exclude exceptional capital
gains when assessing additional dividend payments. As part
of its distribution policy the Company will not include non-
cash items affecting the results such as deferred tax assets or
deferred tax liabilities.
145
There is no guarantee that we will repurchase shares at
a level anticipated by stockholders or at all, which could
reduce returns to our stockholders. Once authorised,
decisions to repurchase our common stock will be at
the discretion of our Management Board, based upon a
review of relevant considerations.
In accordance with the authorization granted by a general
meeting of shareholders held on 23 June 2021, we have the
option but not the obligation until July 2027 of buying our
own shares back should we believe there is a substantial value
disconnect between the share price and the real value of the
Company. During 2021 we bought back shares from June 2021
until December 2021. During 2022 as of the date of this annual
report, we did not buy back shares.
As of 31 March, 2022 we owned 18,346,732 of our own shares
(8,34% of the total outstanding shares). We may continue to
buy back our shares opportunistically under the conditions
laid down by law and subject to a valid authorization. The
extent to which we do so and the timing of these purchases, will
depend upon a variety of factors, including market conditions,
regulatory requirements and other corporate considerations.
The Supervisory Board’s determination to repurchase shares
of our common stock will depend upon our profitability
and financial condition, contractual restrictions, restrictions
imposed by applicable law and other factors that the
Supervisory Board deems relevant. Based on an evaluation
of these factors, the Supervisory Board may determine not to
repurchase shares or to repurchase shares at reduced levels
compared to historical levels, any or all of which could reduce
returns to our stockholders. The Supervisory Board may
suspend or discontinue this authorization at any time.
Our Supervisory Board will continue to assess the declaration
and payment of dividends upon consideration of our financial
results and earnings, restrictions in our debt agreements,
market prospects, current capital expenditures, commitments,
investment opportunities, and the provisions of Belgian law
affecting the payment of dividends to shareholders and other
factors. We may stop paying dividends at any time and cannot
assure you that we will pay any dividends in the future or of the
amount of such dividends. For instance, we did not declare or
pay any dividends from 2010 until 2014.
In general, under the terms of our debt agreements, we are
not permitted to pay dividends if there is or will be a default
or a breach of a loan covenant as a result of the dividend. Our
credit facilities also contain restrictions and undertakings
which may limit our and our subsidiaries' ability to declare
and pay dividends (for instance, with respect to each of our
joint ventures, no dividend may be distributed before its loan
agreement, as applicable, is repaid in full).
Belgian law generally prohibits the payment of dividends
unless net assets on the closing date of the last financial year
do not fall beneath the amount of the registered capital and,
before the dividend is paid out, 5% of the net profit is allocated
to the legal reserve until this legal reserve amounts to 10% of
the share capital. No distributions may occur if, as a result of
such distribution, our net assets would fall below the sum of
(i) the amount of our registered capital, (ii) the amount of such
aforementioned legal reserves, and (iii) other reserves which
may be required by our Coordinated Articles of Association or
by law, such as the reserves not available for distribution in the
event we hold treasury shares.
We may not have sufficient surplus in the future to pay dividends
and our subsidiaries may not have sufficient funds or surplus
to make distributions to us. We can give no assurance that
dividends will be paid at a level anticipated by stockholders
or at all. In addition, the corporate law of jurisdictions in which
our subsidiaries are organized may impose restrictions on the
payment or source of dividends under certain circumstances.
Future issuances and sales of our ordinary shares could
cause the market price of our ordinary shares to decline.
As of December 31, 2021, our issued (and fully paid up) share
capital was USD 239,147,505.82 which was represented by
220,024,713 shares. As of December 31, 2021, we had:
•
•
201,677,981 ordinary shares outstanding, and
18,346,732 treasury shares.
By decision at our Shareholders’ Special Meeting held on
146
June 23, 2021, our Supervisory Board has been authorised
to acquire a maximum of 10% of the existing shares or profit
shares during a period of five years, at a price per share not
exceeding the maximum price allowed under applicable law
and not to be less than EUR 0.01. Shares bought back by us,
can be cancelled or can be held as treasury shares, at the
option of the Company.
Under Belgian corporate laws, the voting rights related to
treasury shares are suspended, and treasury shares give no
entitlement to dividend. We may at any time transfer all or
part of our treasury shares to a third party, at which time the
corresponding voting rights will cease to be suspended and
the shares will again give their holder entitlement to dividend.
Our shareholders may incur dilution from any such future
transfer.
Additionally, by decision of our shareholders’ meeting held on
February 20, 2020, our Supervisory Board has been authorised
to increase our share capital in one or several times by a total
maximum amount of USD 25,000,000 (with possibility for
our Supervisory Board to restrict or suspend the preferential
subscription rights of our existing shareholders) or USD
120,000,000 (without the possibility for our Supervisory Board
to restrict or suspend the preferential subscription rights of
our existing shareholders) during a period of five years as from
the date of publication of the decision, subject to the terms
and conditions to be determined by our Supervisory Board.
Issuances and sales of a substantial number of ordinary shares
in the public market, or the perception that these issuances
or sales could occur, may depress the market price for our
ordinary shares. These sales could also impair our ability
Euronav Annual report 2021
to raise additional capital through the sale of our equity
securities in the future. We intend to issue additional ordinary
shares in the future. Our shareholders may incur dilution from
any future equity offering.
We are incorporated in Belgium, which provides for
different and in some cases more limited shareholder
rights than the laws of jurisdictions in the United States.
We are a Belgian company and our corporate affairs are
governed by Belgian corporate law. Principles of law relating
to such matters as the validity of corporate procedures, the
fiduciary duties of management, the dividend payment dates
and the rights of shareholders may differ from those that
would apply if we were incorporated in a jurisdiction within
the United States.
For example, there are no statutory dissenters’ rights under
Belgian law with respect to share exchanges, mergers and
other similar transactions, and the rights of shareholders of a
Belgian company to sue derivatively, on the company’s behalf,
are more limited than in the United States.
Civil liabilities based upon the securities and other laws
of the United States may not be enforceable in original
actions instituted in Belgium or in actions instituted in
Belgium to enforce judgments of U.S. courts.
Civil liabilities based upon the securities and other laws of
the United States may not be enforceable in original actions
instituted in Belgium or in actions instituted in Belgium to
enforce judgments of U.S. courts. Actions for the enforcement
of judgments of U.S. courts might be successful only if the
Belgian court confirms the substantive correctness of the
judgment of the U.S. court and is satisfied that:
•
•
•
•
•
•
•
•
The effect of the enforcement judgment is not manifestly
incompatible with Belgian public policy;
The judgment did not violate the rights of the defendant;
The judgment was not rendered in a matter where the
parties transferred rights subject to transfer restrictions
with the sole purpose of avoiding the application of the
law applicable according to Belgian international private
law;
The judgment is not subject to further recourse under U.S.
law;
The judgment is not incompatible with a judgment
rendered in Belgium or with a subsequent judgment
rendered abroad that might be enforced in Belgium;
A claim was not filed outside Belgium after the same claim
was filed in Belgium, while the claim filed in Belgium is still
pending;
The Belgian courts did not have exclusive jurisdiction to
rule on the matter;
The U.S. court did not accept its jurisdiction solely on the
basis of either the nationality of the plaintiff or the location
of the disputed goods; and
•
The judgment submitted to the Belgian court is authentic.
147
Euronav
Corporate Governance
Statement
Introduction
Reference Code
During 2020 Euronav adopted the Belgian Code on Corporate
Governance of 2020 as its reference code within the meaning
of Article 3:6(2)(4) of the Belgian Companies and Associations
Code (the ‘BCAC’) and updated its Corporate Governance
Charter accordingly. The full text of the Corporate Governance
Charter can be consulted on the Company’s website www.
euronav.com under the Corporate Governance section.
New York Stock Exchange Listing
Following the dual listing of the Company’s shares on the
New York Stock Exchange on 23 January 2015, the New York
Stock Exchange Corporate Governance rules for Foreign
Private Issuers became applicable to the Company. The
Company therefore registered and began to be a reporting
company under the U.S. Securities and Exchange Act of 1934,
as amended. As a further result of this listing, the Company is
subject to the U.S. Sarbanes-Oxley Act of 2002 and to certain
U.S. Securities laws and regulations relating to corporate
governance applicable to reporting companies that are foreign
private issuers and are subject to SEC reporting obligations.
Capital, shares and shareholders
Capital and shares
On 31 December 2021 the registered share capital of Euronav
amounted to USD 239,147,505.82 and was represented by
220,024,713 shares without par value.
The shares are in registered or dematerialised form and
may be traded on the New York Stock Exchange or Euronext
Brussels, depending on which component of the share register
the shares are registered in. Shares may be transferred from
one component to the other after completion of a procedure
for repositioning.
Senior unsecured bonds
On 2 September 2021 the Company announced that Euronav
Luxembourg S.A. successfully placed USD 200 million senior
unsecured bonds, which are guaranteed by Euronav NV. The
bonds are listed on the Oslo Stock Exchange. In conjunction
with the bond issue, Euronav Luxembourg S.A. has bought
back USD 131.8 million of the outstanding bond EULU01 (ISIN:
NO0010793888) with maturity date in May 2022.
Treasury shares
Corporate Governance
As of 20 February 2020 Euronav adopted a two-tier governance
model including a Supervisory Board and a Management
Board as set out in article 7:104 and following of the CCA,
which entered into force on 1 May 2019.
On 31 December 2021 Euronav held 18,346,732 of its own
shares. Besides the stock option plans for the members of the
Management Board and potentially senior employees (please
refer to section 6.1 Remuneration policy for the Management
Board and the employees further on in this Corporate
148
Annual report 2021
Governance Statement), there are no other share plans, stock
options or other rights to acquire Euronav shares in place.
Shareholders and shareholders’ structure
As of 31 December 2021, and taking into account the
transparency declarations available on that date, the
shareholders’ structure is as shown in the table.
Figure 45: Shareholder structure on 31 December 2021
Shareholders
Number of shares
Percentage
Euronav (treasury shares)
18,346,732
8.338%
C.K. Limited
19,852,500
9.023%
Other
TOTAL
181,825,481
82.639%
220,024,713
100.0%
Figure 46: Editor’s note - Shareholders’ structure as of 31
March 2022, date of closing for publishing:
Shareholders
Saverco NV
C.K. Limited
Shares
Percentage
22,024,400
10.01%
19,852,500
9.02%
8.34%
Euronav (treasury shares)
18,346,732
Other
TOTAL
159,801,081
72.63%
220,024,713
100,0%
149
Supervisory Board
Name
Carl Steen
Chairman —
Independent Member
Anne-Hélène Monsellato
Independent Member
Grace Reksten Skaugen
Independent Member
Anita Odedra
Carl Trowell
Independent Member
Independent Member
Type of mandate
First appointed
End term of office
2015
AGM 2022
2015
2016
2019
2019
AGM 2022
AGM 2022
AGM 2023
AGM 2023
Hereunder follows a list of biographies of the members of the Supervisory Board in the
composition as of 31 December 2021.
Carl Steen - Independent Member - Chairman
Carl Steen was co-opted Director and appointed Chairman of the Supervisory Board with immediate effect
after the Board meeting on 3 December 2015. Mr Steen is also a member of the Audit and Risk Committee and
a member of the Corporate Governance and Nomination Committee. He graduated from Eidgenössische
Technische Hochschule in Zurich, Switzerland in 1975, with an M.Sc. in Industrial and Management
Engineering. After working as a consultant in a logistical research and consultancy company, he joined a
Norwegian shipping company in 1978 with primary focus on business development. Five years later, in
1983, he joined Christiania Bank and moved to Luxembourg, where he was responsible for Germany, and
later for the Corporate Division. In 1987, Mr Steen became Senior Vice President within the Shipping Division
in Oslo and in 1992, he took charge of the Shipping/Offshore and Transport Division. When Christiania Bank
merged with Nordea in 2001 he was made Executive Vice President within the newly formed organisation
while adding the International Division to his responsibilities. Mr Steen remained Head of Shipping, Offshore
and Oil Services and the International Division until 2011. Currently, Mr. Steen is a non-executive Director for
the following listed companies in the finance, shipping and logistics sectors: Golar LNG, where he also sits
on the Audit Committee, Wilh Wilhelmsen and Belships
Anne-Hélène Monsellato - Independent Member
Anne-Hélène Monsellato serves on the Supervisory Board since her appointment at the AGM of May 2015, and
is the Chairman of the Audit and Risk Committee. She can be considered as the Audit and Risk Committee
financial expert for purposes applicable to corporate governance regulations and Article 3:6 §1, 9° of the
Belgian Companies and Associations Code. Since June 2017, Mrs. Monsellato serves on the Board of Directors
of Genfit, a biopharmaceutical company listed on Euronext and on Nasdaq, and is the chairman of the Audit
Committee. Mrs. Monsellato is an active member of the French National Association of Directors since 2013.
In addition, she is serving as the Vice President and Treasurer of the American Center for Art and Culture,
a U.S. public foundation based in New York. From 2005 till 2013, Mrs. Monsellato served as a Partner with
Ernst & Young (now EY), Paris, after having served as Auditor/Senior, Manager and Senior Manager for the firm
starting in 1990. During her time at EY, she gained extensive experience in cross border listing transactions,
in particular with the U.S., she is also a member of the French institute of directors. She is a Certified Public
Accountant in France since 2008 and graduated from EM Lyon in 1990 with a degree in Business Management.
The Company’s Supervisory Board has determined that Ms. Monsellato is considered “independent” under
Rule 10A-3 promulgated under the Exchange Act and under the rules of the NYSE.
150
Euronav Annual report 2021
Grace Reksten Skaugen - Independent Member
Grace Reksten Skaugen serves as an Independent Member on the Supervisory Board since the AGM of 12
May 2016. She is the Chair of the Remuneration Committee and a member of the Corporate Governance
and Nomination Committee, as well as of the Sustainability Committee. Grace Reksten Skaugen is a Trustee
member of The International Institute of Strategic Studies in London. From 2002 until 2015, she was a
member of the Board of Directors of Statoil ASA. She is presently a Board member of Investor AB, Lundin
Petroleum AB, and PJT Partners, a US boutique investment bank. In 2009 she was one of the founders of the
Norwegian Institute of Directors, of which she continues to be a member of the Board. From 1994 till 2002
she was a Director in Corporate Finance in SEB Enskilda Securities in Oslo. She has previously worked in
the fields of venture capital and shipping in Oslo and London and carried out research in microelectronics
at Columbia University in New York. She has a doctorate in Laser Physics from Imperial College of Science
and Technology, University of London. In 1993 she obtained an MBA from the BI Norwegian School of
Management.
Anita Odedra - Independent Member
Anita Odedra serves on the Supervisory Board since her appointment at the AGM of May 2019, and is member
of the Audit and Risk Committee and the Sustainability Committee. Anita brings 25 years of experience in
the energy industry, and is currently Chief Commercial Officer at Tellurian Inc.. Prior roles include Executive
Vice President at the Angelicoussis Shipping Group Ltd. (ASGL), where she led the LNG and oil freight trading
businesses, and Vice President Shipping & Commercial Operations for Cheniere. Anita spent 19 years at BG
Group, where she worked across all aspects of BG’s business including exploration, production, trading,
marketing, business development, commercial operations and shipping; latterly holding the position of VP,
Global Shipping. She began her career with ExxonMobil in 1993 as a Geoscience analyst. Anita was on the
Board for the Society of International Gas Tanker and Terminal Operators (SIGGTO) from 2013 to 2016 and
was Chair of GIIGNL’s Commercial Study Group from 2010 to 2015. She completed her PhD in Rock Physics
from University College London and University of Tokyo, and has a BSc in Geology from Imperial College,
University of London.
Carl Trowell - Independent Member
Carl Trowell serves on the Supervisory Board since his appointment at the AGM of May 2019, and is
Chairman of the Corporate Governance and Nomination Committee and a member of the Remuneration
Committee. Since June 2020, Carl Trowell has been the Chief Executive Officer of Acteon Group Ltd., a
marine energy and infrastructure services company serving the renewables, near-shore construction and
oil and gas sectors. Prior to joining Acteon, Carl served as Chief Executive Officer of Ensco PLC, a NYSE listed
London-based offshore drilling company, since 2014, where he was also a member of the Board of Directors
and took up the position of Executive Chairman in April 2019 upon closing of the merger with Rowan PLC
(subsequently becoming Valaris PLC) until April 2020. Prior to this, Carl had an international executive
career with Schlumberger Ltd., holding the roles of President of the Integrated Project Management, the
Production Management and the WesternGeco Seismic divisions of the company. Prior to these roles,
he held a variety of international management positions within Schlumberger including corporate VP for
Marketing and Sales and Managing Director North-Sea/Europe region. Mr Trowell began his career as a
petroleum engineer with Royal Dutch Shell before joining Schlumberger. Carl has been a member of several
energy industry advisory boards, he was formally a Supervisory Board member for EV Private Equity and
served as a non-executive director on the board of Ophir Energy PLC from 2016 to 2019. Mr Trowell has a
PhD in Earth Sciences from the University of Cambridge, a Master of Business Administration form the Open
University (UK), and a Bachelor of Science degree in Geology from Imperial College London.
151
Composition
The Supervisory Board currently consists of five members.
All members are Independent Members under the Belgian
Corporate Governance rule, under Rule 10A-3 promulgated
under the U.S. Securities Exchange Act of 1934, and under the
rules of the NYSE. The articles of association provide that the
members of the Supervisory Board can be appointed for a
period not exceeding four years per mandate. The Supervisory
Board members are eligible for re-election. The articles of
association of the Company do not provide an age limit for the
members of the Supervisory Board.
Functioning of the Supervisory Board
In 2021 the Supervisory Board formally met ten times for
a Board meeting. Due to COVID-19 measures and related
travel restrictions, 9 out of 10 meetings took place via video
conferences. The attendance rate of the members was the
following:
Besides formal meetings, the Board members of Euronav are
regularly in contact with each other, by conference call or via
e-mail. Due to social distancing restrictions, the written
decision-making process was used regularly in 2021 when
urgent decisions were required.
Name
Carl Steen
Type of
mandate
Chairman —
Independent
Member
Meetings
attended
10 out of 10
Anne-Hélène
Monsellato
Independent
Member
10 out of 10
Ludovic
Saverys
Member
Grace Reksten
Skaugen
Independent
Member
Anita Odedra
Carl Trowell
Independent
Member
Independent
Member
3 out of 3
(end of mandate
in May 2021)
10 out of 10
9 out of 10
10 out of 10
152
Euronav Working procedures
On 20 February 2020 the extraordinary shareholders meeting
implemented the CCA and adopted new articles of association
including a two-tier governance model. The powers and
responsibilities of the Supervisory Board are those outlined
in article 7:109 of the CCA and section III.1 of the Corporate
Governance Charter. All decisions of the Supervisory Board
are taken in accordance with article 19 of the articles of
association. A copy of the articles of association and the new
Corporate Governance Charter can be consulted at https://
www. euronav.com/investors/corporate-governance.
The Supervisory Board is the ultimate supervisory body of the
Company. It is responsible for the general policy and strategy
of the Company and has the power to perform all acts that
are exclusively reserved to it by the Code of Companies and
Associations. The Supervisory Board drafts all reports and
proposals in accordance with books 12 and 14 of the Code of
Companies and Associations. It supervises the Management
Board.
The Supervisory Board pursues the success of the Company
in terms of shareholder value while giving consideration to the
Annual report 2021
corporate, social, economic and environmental responsibility,
gender diversity and diversity in general. In doing so, members
of the Supervisory Board shall act honestly and in good faith
with a view to the best interests of the Company.
Activity report 2021
In 2021 Euronav’s Supervisory Board deliberated on a
variety of topics, including but not limited to:
• The impact of the COVID-19 pandemic on the
Company’s operations and its financial results;
• Mid- and long-term strategic perspectives for the
Company;
• Fuel procurement and inventory strategy;
• Capital allocation strategy and implementation,
including quarterly return to shareholders by way
of dividend and/or share buybacks;
• Sustainability matters, including developments
regarding alternative fuels, propulsion methods
and ESG related regulatory developments;
• Fleet management strategy and implementation,
including sales and purchases of vessels;
• Overseeing the purchase of three VLCC and three
Suezmax purchase contracts;
•
(Re-)financing of existing as well as newly acquired
vessels;
• Guarantee of the Nordic Bonds issued by Euronav
Luxembourg S.A. and partial repurchase of EULU01
bond;
• Corporate governance matters;
• The company culture and its values;
• Risk management, including third party risk
management policy and processes;
• Health, Safety, Quality and Environment (HSQE)
matters, with particular focus on safety and
wellbeing of seafarers in spite of crew rotation
complexities due to the COVID-19 pandemic.
Procedure for conflicts of interest
The procedure for conflicts of interest within the Supervisory
Board is set out in the CCA and in the Company’s Corporate
Governance Charter. In the course of 2021, no decision taken by
the Supervisory Board required the application of the conflict of
interest procedure as set out in provision 7:115 of the CCA.
153
Supervisory Board Committees
Audit and Risk Committee
Composition
Committee held 8 out of 9 meetings via video conference or
conference calls. The attendance rate of the members was as
listed below:
In accordance with Article 7:119 of the CCA and provision 4.3 of
the Belgian Corporate Governance Code 2020, the Audit and
Risk Committee must count at least three Supervisory Board
Members, of which at least one is an Independent Member.
The Audit and Risk Committee of Euronav currently counts
three Supervisory Board members, which are all Independent
Members.
As of 31 December 2021, the composition of the Audit and Risk
Committee was as follows:
Name
Type of mandate
Anne-Hélène
Monsellato
(Chair)
Carl Steen
Anita Odedra
Independent
Member
Independent
Member
Independent
Member
Meetings
attended
9 out of 9
8 out of 9
9 out of 9
Name
Anne-Hélène
Monsellato1 (Chair)
Carl Steen
Anita Odedra
End term of
office
Independent
Member
2022
2022
2023
X
X
X
1 Independent Supervisory Board Member and expert in
accounting, internal control over financial reporting, and
audit related matters (see biography) in accordance with
Article 3:6 paragraph 1, °9 of the Belgian Companies and
Associations Code
Powers
The Audit and Risk Committee handles a wide range of financial
reporting, controlling and risk management matters and is
responsible for the appointment, the compensation and the
oversight of the independent auditor. Its main responsibilities
and functions are described in the Corporate Governance
Charter. The Audit and Risk Committee reviews its terms
of reference periodically and where changes are useful or
required, makes recommendations to the Supervisory Board
with the aim of ensuring the composition, responsibilities and
powers of the Committee comply with applicable laws and
regulations.
Activity report 2021
During these meetings, the key elements discussed within
the Audit and Risk Committee included financial statements,
impairment methodology, assumptions (including residual
values used for vessels) and depreciations, fuel inventory
valuation, external and internal audit reports, quality and
performance of the external audit process, external audit
approach and independence and external auditor renewal,
the internal audit function, old and new financing and
related covenants, LIBOR transition, ESEF implementation,
accounting policies, matters related to section 302 and 404 of
the Sarbanes-Oxley Act and the effectiveness of the internal
control over financial reporting, third party risk management
policy and procedures, the Belgian annual report, the annual
report on Form 20-F, certain company policies, significant
transactions or important claims, organisation and staffing
of the finance teams, GDPR implementation and monitoring,
cybersecurity, tax matters, risk management process and
framework and the risk register, and whistleblowing.
Remuneration Committee
Composition
As of 31 December 2021, the Remuneration Committee of
Euronav counted three Supervisory Board members, all of
which are Independent Members. In this respect, Euronav is in
compliance with Article 7:120 of the CCA and Article 4.3 of the
Belgian Corporate Governance Code 2020, pursuant to which
a Remuneration Committee should comprise at least three
members, a majority being Independent Members.
In 2021 the Audit and Risk Committee convened nine times.
Due to COVID-19 measures and related travel restrictions, the
As of 31 December 2021, the Remuneration Committee was
composed as follows:
154
Euronav Name
End term of office
Independent
Member
Grace Reksten
Skaugen (Chair)
Carl Steen
Carl Trowell
2022
2022
2023
X
X
X
Powers
The Remuneration Committee has various advisory
responsibilities related to the remuneration policy of members
of the Supervisory Board, members of the Management Board
and employees in general. The Corporate Governance Charter
contains a detailed list of the powers and responsibilities of
the Remuneration Committee.
The Remuneration Committee makes recommendations
to the Supervisory Board related to the remuneration of
the Supervisory Board members and Management Board
incentives,
members,
bonuses etc. in line with suitable industry benchmarks.
including variable
remuneration,
The Remuneration Committee reviews its terms of reference
periodically and where changes are useful or required, makes
recommendations to the Supervisory Board with the aim of
ensuring the composition, responsibilities and the powers of
the Committee comply with applicable laws and regulations.
Activity report 2021
In 2021 the Remuneration Committee met four times. The
attendance rate of the members was as listed hereafter:
Name
Ludovic
Saverys
Type of
mandate
Member
Grace Reksten
Skaugen (Chair)
Independent
Member
Carl Steen
Carl Trowell
Independent
Member
Independent
Member
Meetings
attended
1 out of 4
(end of mandate
in May 2021)
4 out of 4
2 out of 4
4 out of 4
Half Year Report
155
During these meetings the key elements discussed within the
Remuneration Committee included the remuneration report in
the annual report, the remuneration of the Supervisory Board
Members and members of the Management Board, the set-up
of a long-term incentive plan, the KPIs for the members of the
Management Board and the annual bonus for the members of
the Management Board and employees.
Corporate Governance and Nomination
Committee
Composition
On 31 December 2021, the Corporate Governance and
Nomination Committee of Euronav counted three Supervisory
Board members, all of which are Independent Members. In
this respect, Euronav is in compliance with provision 4.19 of
the Belgian Corporate Governance Code of 2020, pursuant to
which a Nomination Committee should comprise a majority
of Independent Members. The composition of the Committee
was further determined taking
into account members’
expertise in this area and their availability, given other
Committee memberships.
Powers
The Corporate Governance and Nomination Committee’s role
is to assist and advise the Supervisory Board on all matters
related to the composition of the Supervisory Board and its
Committees as well as the composition of the Company’s
Management Board, the methods and criteria for appointing
and recruiting members of the Supervisory Board or the
Management Board, evaluation of the performance of the
Supervisory Board, its Committees and the Management
in any other matters relating to corporate
Board, and
governance. The Corporate Governance Charter contains a
detailed list of the powers and responsibilities of the Corporate
Governance and Nomination Committee.
Activity report 2021
In 2021 the Corporate Governance and Nomination Committee
met six times. Due to COVID-19 measures and related travel
restrictions, the Committee held 5 out of 6 meetings via video
conference. The attendance rate of the members was as
follows:
As of 31 December 2021, the Corporate Governance and
Nomination Committee was composed as follows:
Name
Type of mandate
Name
End term of office
Independent
Member
Carl Trowell
(Chair)
Carl Steen
Grace Reksten
Skaugen
2023
2022
2022
X
X
X
Carl Trowell
(Chair)
Independent
Member
Grace Reksten
Skaugen
Independent
Member
Carl Steen
Independent
Member
Meetings
attended
6 out of 6
6 out of 6
2 out of 2
During these meetings the key elements discussed within the
Corporate Governance and Nomination Committee included
the composition of the Supervisory Board and its Committees,
including gender diversity considerations, U.S. and Belgian
law and Corporate Governance requirements, the assessment
of the Supervisory Board and its Committees, succession
planning, the Supervisory Board education and leadership
development, as well as governance structure.
156
Euronav Annual report 2021
Sustainability Committee
Activity report 2021
Composition
As of 31 December 2021, the Sustainability Committee
of Euronav counted 6 members: two Supervisory Board
members, both are Independent, and four members of the
Management Board, including the CEO as Chairman of the
Committee. The composition of the Committee is determined
taking into account members’ expertise given other Committee
memberships.
As of 31 December 2021, the Sustainability Committee is
composed as follows:
Name
Anita Odedra
Grace Reksten Skaugen
Hugo De Stoop
(Chairman)
Egied Verbeeck
Brian Gallagher
Stamatis Bourboulis
End term
of office
Independent
Member
2023
2022
n/a
n/a
n/a
n/a
X
X
n/a
n/a
n/a
n/a
Powers
The Committee is an advisory body to the Supervisory Board.
The main role of the Committee consists of assisting and
advising the Supervisory Board to monitor the performance,
as well as to determine the key risks and opportunities that
the Company faces in relation to environmental, social and
climate matters. In this respect, the Committee oversees
the Company’s conduct and performance on sustainability
matters as well as its reporting thereon. The Committee
informs the Supervisory Board and makes recommendations
to the Supervisory Board when it deems appropriate on any
area within its remit where action or improvement is needed.
Additionally, the Sustainability Committee monitors the
effectiveness of the organisation to meet stated goals and
targets in relation to sustainability matters.
In 2021, the Sustainability Committee met four times. Due to
COVID measures and related travel restrictions, the Committee
held one physical meeting and three meetings through video
conference. The attendance rate of the members was as follows:
Name
Type of mandate
Ludovic
Saverys
Supervisory
Board Member
Anita
Odedra
Supervisory
Board Member
Grace Reksten
Skaugen
Supervisory
Board Member
Hugo De Stoop
(Chair)
Management
Board Member
Egied Verbeeck Management
Board Member
Brian Gallagher Management
Board Member
Stamatis
Bourboulis
Management
Board Member
Meetings
attended
1 out of 4
(end of
mandate in
May2021
2 out of 2
4 out of 4
4 out of 4
4 out of 4
4 out of 4
4 out of 4
During the meetings, the Committee took stock of existing ESG
initiatives within Euronav and discussed the Sustainability
Chapter in the Annual report 2020 and the ESG focus for
2021, monitored ESG developments at the level of the IMO
and the European Union, oversaw the CDP scoring obtained
by Euronav during 2021 and discussed ESG and climate
change risks as well as technical developments with regard
to decarbonisation and alternative fuels and methods of
propulsion.
157
Evaluation of the Supervisory
Board and its Committees
The main features of the process for the evaluation of the
Supervisory Board, its Committees and the Individual Members
are described in Euronav’s Corporate Governance Charter.
In 2021 an external Supervisory Board assessment was
conducted by BoardPractice, an independent firm specialising
in governance, by way of an online questionnaire. The
members were asked to reflect on the performance of
individual Supervisory Board members, the fulfilment of
the Supervisory Board’s key responsibilities, quality of the
relationship between the Supervisory Board and Management
Board, the effectiveness of the Supervisory Board processes,
meetings and the Supervisory Board structure. The outcome
was discussed at a Board meeting and was overall satisfactory.
Management Board
Composition
During 2021, and in application of Article 7:104 of the
Belgian Companies and Associations Code (BCAC), the
operational management of the Company was entrusted to
the Management Board, chaired by the CEO. The members
of the Management Board are appointed by the Supervisory
Board upon recommendation of the Corporate Governance
and Nomination Committee and in consultation with the CEO,
taking into account the need for a balanced Management
Board.
As of 31 December 2021, the Management Board was
composed as follows:
Name
Title
Hugo De Stoop1
Chief Executive Officer
Lieve Logghe2
Chief Financial Officer
Alex Staring3
Chief Operating Officer
Egied Verbeeck4
General Counsel
Stamatis Bourboulis General Manager Euronav Ship
Brian Gallagher
Management (Hellas) Ltd.
Head of Investor Relations
Research & Communications
1. As permanent representative of Hecho BV.
2. As permanent representative of TINCC BV.
3. As permanent representative of AST Projects BV.
4. As permanent representative of Echinus BV.
158
Powers
The Management Board has the power to carry out all acts
necessary or useful to the realisation of the Company's
objectives, with the exception of those reserved by law to
the Supervisory Board or the general shareholders’ meeting.
Accordingly, the Management Board is exclusively empowered
for the operational functioning of the Company and has all
residual powers. The powers of the Management Board are
outlined in article 7:110 of the CCA.
Procedure for conflicts of interest
The procedure for conflicts of interest within the Management
Board is set out in article 7:117, §1 of the CCA and in the
Company’s Corporate Governance Charter. In the course of
2021, no decision taken by the Management Board required
the application of the conflict of interest procedure.
Remuneration report
The remuneration report describes the remuneration of the
Euronav Management Board members and how executive
compensation levels are set. The Remuneration Committee
(hereinafter “RemCo”) oversees the executive compensation
policies and plans.
Euronav remuneration policy
Objectives
The purpose of the Euronav remuneration policy (hereinafter
referred to as ‘the Policy’) is to define, implement and monitor
an overall group remuneration philosophy and framework,
in line with group and local regulatory requirements. More
specifically, the Policy is intended to:
• Reward fairly and competitively, ensuring the organisation’s
ability to attract, motivate and retain highly skilled talent
in an international marketplace by providing them with a
balanced and competitive remuneration package;
• Promote accountability
the achievement
of demanding performance
long-term
sustainable growth, coherent with Euronav’s values,
identity and culture;
targets and
through
• Differentiate reward by performance and recognise
sustained (over)achievement of performance against
pre-agreed, objective goals at the corporate, operating,
company and individual level;
Euronav Annual report 2021
• Pursue long-term value creation and alignment with the
strategy, purpose and core values of Euronav, taking into
consideration the interests of all stakeholders;
business conduct, fair treatment, and to avoid conflict
of interest in the relationships with internal and external
stakeholders.
•
•
Align remuneration practices while respecting
(country) market practice and regulation;
local
Follow sound principles of corporate governance, of
responsible business conduct and comply with all legal
requirements;
• Observe principles of balanced remuneration practice
that contribute to sound risk management and avoid risk-
taking that exceeds the risk tolerance limits of Euronav.
Legal framework
The Policy is drafted in compliance with the requirements for
listed companies such as:
•
•
•
The Directive (EU) 2017/828 of the European Parliament
and of the Council of 17 May 2017 amending Directive
2007/36/EC as regards the encouragement of long-term
shareholder engagement (so-called Shareholders’ Rights
Directive II, or Say on pay Directive);
The Belgian Companies and Associations Code (the
Act of 23 March 2019 introducing the Companies and
Associations Code);
The Belgian Corporate Governance Code of 2020 (within
the meaning of Article 3:6(2) of the Companies and
Associations Code by the Royal Decree of 12 May 2019).
Scope
This Policy is established, implemented, and maintained in
line with the Euronav business and risk management strategy,
with the company objectives and the long-term interests and
performance of Euronav. It aims to encourage responsible
This Policy consists of an overall framework applicable to all
staff members of Euronav NV (further referred to as Euronav)
and its subsidiaries. It contains specific arrangements for the
Members of the Supervisory Board and the Members of the
Management Board.
Governance
General
The general principles set out in this Policy are drawn up by the
Supervisory Board, which assumes the ultimate responsibility
for this Policy and shall ensure that it is applied properly.
The Supervisory Board submits this Policy to the General
Shareholders’ meeting to enable the Shareholders to vote on it
for approval. Euronav shall take the necessary steps to address
concerns in case of non-approval, and consider adapting it.
The remuneration policy shall be submitted to a vote by the
General Meeting at every material change, and in any case at
least every four years.
The Policy is reviewed annually to ensure that the internal
control systems and mechanisms and other arrangements are
effective and that its principles are appropriate and consistent
with the objectives defined in article 1 of this Policy.
This assessment will be carried out, under the supervision
of the Supervisory Board, upon recommendation of the
Remuneration Committee and Human Resources.
At the advice of the Remuneration Committee the Supervisory
Board may deviate from any items of this policy under
exceptional circumstances, to protect the long-term interests
159
Euronav
and sustainability of the company as a whole, or to guarantee
its viability, on the understanding that any such deviation shall
be temporary and shall only last until a new remuneration
policy has been established. Any deviation from this policy will
be reported in the remuneration report.
The RemCo makes recommendations to the Supervisory
Board on the annual objectives and subsequent evaluation
of the performance of the CEO and of the other Management
Board members (based on an evaluation of the performance
of each member submitted by the CEO).
Bodies and functions implied regarding the
remuneration
The following bodies or functions are involved in the definition,
implementation and monitoring:
implementation of this Policy
(c) The Management Board
The
is ensured by the
Management Board, with assistance of the Remuneration
Committee and Human Resources.
(a) The Supervisory Board
The Supervisory Board determines the general principles
of the remuneration policy and the specific principles, upon
recommendation of the Remuneration Committee and Human
Resources. It decides on the remuneration of the members of
the Management Board based on input and recommendations
provided by the Remuneration Committee.
(b) The Remuneration Committee (RemCo)
The RemCo advises the Supervisory Board on the development,
the implementation and the continuous assessment of the
remuneration policy to be in alignment with the objectives
defined in Article 1 of this Policy.
It advises in all matters relating to the remuneration of
the Supervisory Board members, the Management Board
members and other identified staff, ensuring that all legal
and regulatory disclosure requirements are fulfilled. To
safeguard coherence throughout the group, the RemCo
makes recommendations to the Supervisory Board on the
implementation of the group’s remuneration principles.
(d) Human Resources
The Chief People Officer
•
Ensures the monitoring of the implementation and review
of this Policy and induces action whenever appropriate;
• Monitors market practice and regulation and proposes
required changes to this Policy to the RemCo for approval
by the Supervisory Board accordingly;
• Consults with the local HR Manager to ensure and facilitate
the implementation of this Policy at the level of the local
entities.
The local HR Manager
•
Ensures the execution and implementation of this Policy;
•
Establishes a compliant local remuneration policy;
• Consults first with the Chief People Officer on any
fundamental change in the local remuneration policy due
to local regulations.
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Annual report 2021
General principles of the Euronav remuneration
policy
General Principles
This Policy will be applied fairly, ensuring that equal
opportunities are given to all employees regardless of age,
gender, race, beliefs, (dis)ability or any other difference.
Euronav has a Performance Management system which
provides for:
•
•
The setting of annual business targets;
The setting of annual individual targets agreed upon
between the individual and her/his line manager;
•
An annual appraisal of job fulfilment, targets and values.
Severance payments are based on contractual terms and
conditions and cannot reward failure.
Any substantive structural changes of the remuneration
structure shall be subject to a formal assessment by the Chief
People Officer, prior to being presented to the Management
Board, RemCo or Supervisory Board.
Euronav Remuneration Structure
Remuneration shall include an adequate fixed (base salary +
benefits) component and a Short-Term Incentive (STI).
The fixed component of the remuneration has to represent
a sufficiently high proportion of the total remuneration
to avoid the staff member being overly dependent on the
variable components and to allow the company to operate a
fully flexible STI policy, including the possibility of paying no
variable component.
a. Fixed remuneration
Fixed remuneration consists of a base compensation and
fringe benefits and is set on an individual basis with regards
to the market salary of the position, the relevant professional
experience and organisational responsibility, as set out in the
job description.
The determination and evolution of the base remuneration is
based on an objective categorising of the function according
to a validated framework of an external provider, defined at
country level in accordance with local market practice.
The target salary will be positioned on the median of the
chosen and predefined market benchmark. Exceptions to the
median positioning can be made for specific functions or in
specific market conditions (e.g. shortage of profiles, retention
of key members).
Fringe benefits include health insurance plans, death and
disability coverage and other benefits. These benefits are
developed according to local regulation and local market
practice.
b. Variable remuneration
Variable remuneration consists of a one-year variable
remuneration, or a Short-Term Incentive (STI).
The STI is based on the achievement of relevant, predefined
and clearly defined SMART Key Performance Indicators (KPI’s)
fixed on different business levels, observing the following
principles:
•
•
•
The choice of the KPI’s and the determination of the
targets has to be in line with the overall business strategy,
values and long-term interests of Euronav;
The calculated variable income is based on the individual
performance compared with up-front set objectives and
the business performance;
The assessment of the achievement of the business and
individual targets should be clear, transparent and fair,
and contribute to the overall achievement of the strategic
and sustainability ambitions of the company.
The grant of an STI, even during a certain period or multiple
periods, consecutive or not, does not create any acquired
rights to an equivalent amount of STI for the future.
Variable remuneration is based on the beneficiary’s actual
working hours. Hence, if the employee has been absent from
work or worked part-time during the relevant performance
year, the variable remuneration will be adapted accordingly
(pro-rata).
The variable remuneration can be partly deferred.
As a general principle, the variable remuneration is only due
and paid if the beneficiary is still actively in service of the
Company on the payment date and has not resigned or been
fired. In case of termination prior to the end of the performance
year, the variable remuneration is forfeited.
The remuneration of the Board members
Members of the Supervisory Board
The amount and structure of the remuneration of Supervisory
Board members is submitted to approval at the General
Meeting of Shareholders by the Supervisory Board, based on
recommendations of the RemCo and taking into account the
Members’ general and specific responsibilities and per general
market principle.
161
Fixed fee
Attendance fee
Chair
Member
Chair
Member
Cap
Supervisory Board
€ 160,000
€ 60,000
€ 10,000
€ 10,000
Audit and Risk Committee
€ 40,000
€ 5,000
€ 5,000
€ 5,000
Remuneration Committee
€ 7,500
€ 5,000
€ 5,000
€ 5,000
Corporate Governance and
Nomination Committee
€ 7,500
€ 5,000
€ 5,000
€ 5,000
Sustainability Committee
€ 7,500
€ 5,000
€ 5,000
€ 5,000
maximum of
€ 40,000 per year
maximum of
€ 20,000 per year
maximum of
€ 20,000 per year
maximum of
€ 20,000 per year
maximum of
€ 20,000 per year
Supervisory Board members receive a fixed fee and an attendance
fee per Board and Committee meeting attended. The table below
gives an overview of the fixed fees and attendance fees applicable
as per decision of the AGM of May 2021:
As a general principle, variable remuneration will only be due
and paid if the Management Board member is still actively
in service of the Company on the payment date and has not
resigned.
Supervisory Board members do not receive performance
related remuneration, such as bonuses or remuneration
related shares or share options, nor fringe benefits or pension
plan benefits.
Members of the Management Board
The remuneration of the Management Board members is
subject to the principles laid down in this Policy, following
the same framework as the wider employees population with
specific stipulations for the following parts:
Fixed remuneration
• Management Board members working under a
consultancy agreement do not participate in Euronav’s
collective pension scheme, nor are they entitled to
customary fringe benefits as this has been taken into
account and integrated in the fixed salary;
•
The size of the total remuneration is reviewed every three
years, based on an objective predefined market benchmark
done by an external provider. After reference to the detailed
benchmark data, the remuneration awarded
is then
based on the experience of the post holders, required
competencies and responsibilities of the position;
• No fixed annual remuneration or attendance fees of any
kind are due to Management Board members for attending
Board or Committee meetings.
Variable remuneration
Variable remuneration consists of a Short-Term Incentive Plan
(STIP) and a Long-Term Incentive Plan (LTIP).
In relation to variable remuneration for all members of the
Management Board, the Company has the right to claim the
variable remuneration back in case of incorrect financial
statements or fraud, as provided under civil and Company
law provisions.
The Short-Term Incentive Plan (STIP)
The objective of the STIP is to ensure that the members of the
Management Board prioritise defined short-term operational
objectives leading to long-term value creation. The short-
term incentive consists of a (potential) cash bonus payment
and is determined by the actual performance in relation to
pre-set targets.
The financial criteria for the STIP include financial targets for:
• Company profits, representing 40% of the STIP;
• Opex and Overhead performance, corresponding to 30%
of the STIP.
The performance between pre-defined thresholds will be
measured and awarded on the basis of a linear scale.
The non-financial criteria on which each Management Board
member is evaluated includes:
•
•
The achievement of the 6 predefined HSQE KPIs, worth
15% of the STIP;
The achievement of individual objectives, representing
15% of the STIP.
162
Euronav
Annual report 2021
The system of measurement depends on the KPI and is either
binary or on target deviation.
The shares vested will be finally acquired by the beneficiary as
of the third anniversary.
If the 4 targets are reached, this will potentially result in a
bonus payment ranging from 30% to 100% of the base salary.
The following companies were selected to constitute the peer
group:
•
•
Frontline US (NYSE: FRO);
Teekay Tankers (NYSE: TNK);
• DHT (NYSE: DHT);
•
International Seaways (NYSE: INSW);
• Nordic American Tankers (NYSE: NAT).
The combined use of absolute and relative TSR ensures a
solid contribution to the company’s long-term interests and
sustainability. The absolute TSR as criteria reinforces the
importance of earnings, which are expected to have a direct
relationship to the Company's share price. The relative TSR as
criteria encourages delivery of a total shareholder return in a
cyclical industry that is superior to the Company’s market peers.
At year-end all members of the Management Board need to
present a self-assessment of their performance. This self-
assessment will be reviewed by and discussed with the CEO.
The results of this self-assessment are submitted to the RemCo
for recommendations to the Supervisory Board, as part of the
bonus consideration.
The Supervisory Board retains discretion over and above the
set criteria to adjust upwards or downwards the STIP award, if
the calculated STIP does not adequately reflect the Company’s
results or the individual performance. The discretionary add-
on that may be exercised is capped to never exceed 100% of
the gross annual earnings of the Management Board member.
Consequently, the total STIP awarded can never exceed
200% of the gross annual earnings of the Management Board
member.
The Long-Term Incentive Plan (LTIP)
The LTIP is designed to drive long-term performance by
realising the Company's long-term operational objectives,
to support retention, to further strengthen the alignment
with shareholders’ interests and the focus on sustainability
and long-term value creation, in accordance with the overall
Euronav strategy.
Under the LTIP the Management Board members are eligible
to annual awards of performance shares to be awarded upon
meeting a certain performance threshold as described here-
below. The measurement is done over a three year period, the
vesting occurs at the end of the 3-year cycle.
The Supervisory Board will
implementation of a new LTIP.
confirm annually
the
The maximum value at grant is set at 100% of the fixed base
salary for the CEO and ranging from 75 to 30% of absolute
base salary for the other Management Board members.
The vesting is subject to:
•
•
(TSR)
75% to a relative Total Shareholder Return
performance measurement compared to a peer group
over a three year period. Each yearly measurement to be
worth 1/3rd of 75% of the award;
25% to an absolute TSR of the Company’s Shares
measured each year for 1/3rd of 25% of the award.
163
Holding and share ownership requirements
Members of the Management Board are subject to a
shareholding requirement of 2 years of gross base salary for
the CEO, and 1 year of gross base salary for the CFO. For other
members this requirement applies with a value of 6 months
annual base salary. The required shareholding may be build
up in five years’ time.
The valuation of the requirement will happen yearly on 31
December.
Contractual terms
The members of the Management Board have entered into
consultancy agreements with Euronav, and the terms and
conditions are aligned with the provisions of The Corporate
Governance Code of 2020. One exception applies for the
General Manager ESMH who remained under an employee
contract, taking into account his retirement in 2022.
Duration and notice period
The consultancy agreements are contracts with an open end
and can be terminated by both parties at a notice period of:
Change of control arrangements are based on a ‘double
-trigger’ structure. This means that both a specified change
of control event and a termination of the Management Board
member’s employment must take place for any change of
control based severance payment to materialise.
Compensatory Awards
The RemCo has the flexibility to make compensatory awards
to new Management Board members, to compensate the
Management Board member for benefits lost as a result of
joining Euronav. These awards will consider the value of the
forfeited awards at the time of resignation and will be in a
similar form as the awards which are being lost.
Executive Member
Notice period
Change of control
CEO
CFO
COO
General Counsel
Head of Investor Relations, Research and Communications
12 months
12 months
12 months
12 months
6 months
18 months
12 months
18 months
18 months
12 months
(All amounts in Euro)
Name
Carl Steen
Anne-Hélène Monsellato
Ludovic Saverys
Grace Reksten Skaugen
Anita Odedra
Carl Trowell
TOTAL
Fixed fee
Attendance fee
Board
Audit and Risk
Committee
Attendance fee
Audit and Risk
Committee
Remuneration
Committee
160,000
60,000
25,000
60,000
60,000
60,000
40,000
40,000
10,000
40,000
40,000
40,000
20,000
20,000
20,000
40,000
0
0
20,000
15,000
0
425,000
210,000
80,000
55,000
2,500
0
2,083
7,500
0
5,000
17,083
Attendance fee
Remuneration
Corporate
Attendance fee
Sustainability
Governance
Corporate Governance
Committee
Committee
and Nomination
and Nomination
Committee
Committee
Attendance fee
Sustainability
Committee
10,000
5,000
20,000
Total
277,500
160,000
49,167
177,500
160,000
152,500
0
0
0
2,083
5,000
5,000
5,000
20,000
20,000
20,000
60,000
12,083
45,000
976,667
5,000
20,000
20,000
55,000
0
0
0
7,500
17,500
5,000
20,000
164
Euronav Remuneration report
Introduction
The remuneration of the Management Board members is
subject to the principles laid down in the remuneration policy.
(see above)
The executive remuneration consists of a fixed and variable
(short-term incentive plan) remuneration as well as long-term
incentive plans.
The fixed and variable remuneration
Management Board members is reflected in the table below.
in 2021 of the
Total remuneration
The remuneration in 2021 of the members of the Supervisory
Board is reflected in the table below:
Fixed fee
Attendance fee
Audit and Risk
Attendance fee
Remuneration
Board
Committee
Audit and Risk
Committee
Attendance fee
Remuneration
Committee
Corporate
Governance
and Nomination
Committee
Attendance fee
Corporate Governance
and Nomination
Committee
Sustainability
Committee
Attendance fee
Sustainability
Committee
(All amounts in Euro)
Name
Carl Steen
Anne-Hélène Monsellato
Ludovic Saverys
Grace Reksten Skaugen
Anita Odedra
Carl Trowell
TOTAL
160,000
60,000
25,000
60,000
60,000
60,000
40,000
40,000
10,000
40,000
40,000
40,000
Committee
20,000
40,000
20,000
20,000
20,000
15,000
0
0
0
2,500
2,083
7,500
0
0
5,000
17,083
425,000
210,000
80,000
55,000
10,000
5,000
20,000
5,000
20,000
20,000
55,000
0
0
5,000
0
7,500
17,500
20,000
20,000
60,000
0
0
2,083
5,000
5,000
0
5,000
20,000
20,000
12,083
45,000
976,667
165
Annual report 2021
Total
277,500
160,000
49,167
177,500
160,000
152,500
The Supervisory Board, following a recommendation by the
Corporate Governance and Nomination Committee, decided
at this stage not to comply with Clause 7.6 of the Belgian
Corporate Governance Code 2020 with regard to share
remuneration for Supervisory Board members, taking
into account several factors including the cyclicality of the
company’s business and share price which does not match
well with the relevant holding requirements, the risk of debate
as to potential conflicts of interest, adversely impacting swift
decision making, logical consistencies with Euronav’s
Table 1: Remuneration of Directors for the reported financial year
Name of Director
Position
Fixed remuneration
One-year variable
remuneration (1)
Extra ordinary items
Pension
Total Remuneration
Proportion of fixed
Proportion of variable
remuneration
remuneration
Base
Remuneration
Director
Fees
Fringe
benefits
De Stoop Hugo, represented
by HECHO Management
Staring Alex, represented
by AST Projects
CEO
COO
Verbeeck Egied, represented
by ECHINUS BV
General
Counsel
€ 314,496
€ 292,000
€ 17,142
€ 334,875
€ 255,732
€ 295,000
€ 0
€ 172,951
€ 219,960
€ 180,000
€ 17,142
€ 174,135
Logghe Lieve, represented
by TINCC BV
Gallagher Brian, represented
by BG-IR Ltd till 31/07/2021.
Gallagher Brian, as
from 01/08/2021
CFO
€ 372,500
€ 90,000
IR Manager
£ 121,917
IR Manager
£ 79,165
£ 0
£ 0
€ 0
£ 0
£ 0
Bourboulis Stamatis
GM Hellas
€ 365,625
€ 0
€ 11,730
(1) only takes into account the STIP, for the LTIP please refer to table 3
€ 202,134
£ 84,265
€ 48,582
€ 958,513
€ 723,683
€ 591,237
€ 664,634
65.06%
76.10%
70.55%
69.59%
71.27%
89.06%
34.94%
23.90%
29.45%
30.41%
28.73%
10.94%
£ 7,917.00
£ 293,264
€ 18,281
€ 444,218
166
Euronav
Annual report 2021
development to strong independent board composition and
complicated tax ramifications and practicalities related to the
international composition of the Supervisory Board.
The fixed and variable remuneration
Management Board members is reflected in the table below.
in 2021 of the
Table 1: Remuneration of Directors for the reported financial year
Name of Director
Position
Fixed remuneration
Extra ordinary items
Pension
Total Remuneration
Proportion of fixed
remuneration
Proportion of variable
remuneration
Base
Remuneration
Director
Fees
Fringe
benefits
One-year variable
remuneration (1)
De Stoop Hugo, represented
CEO
€ 314,496
€ 292,000
€ 17,142
€ 334,875
Staring Alex, represented
COO
€ 255,732
€ 295,000
€ 0
€ 172,951
by HECHO Management
by AST Projects
Verbeeck Egied, represented
by ECHINUS BV
General
Counsel
€ 219,960
€ 180,000
€ 17,142
€ 174,135
Logghe Lieve, represented
CFO
€ 372,500
€ 90,000
€ 202,134
by TINCC BV
Gallagher Brian, represented
IR Manager
£ 121,917
by BG-IR Ltd till 31/07/2021.
Gallagher Brian, as
from 01/08/2021
IR Manager
£ 79,165
£ 0
£ 0
Bourboulis Stamatis
GM Hellas
€ 365,625
€ 0
€ 11,730
£ 84,265
€ 48,582
€ 0
£ 0
£ 0
(1) only takes into account the STIP, for the LTIP please refer to table 3
€ 958,513
€ 723,683
€ 591,237
€ 664,634
£ 7,917.00
£ 293,264
€ 18,281
€ 444,218
65.06%
76.10%
70.55%
69.59%
71.27%
89.06%
34.94%
23.90%
29.45%
30.41%
28.73%
10.94%
167
Euronav
Short-Term Incentive Plan
The short-term incentive plan contributes to long-term value creation of
the company, information on how the performance criteria are applied
are described hereafter.
Table 2: Performance of Directors in the reported financial year
Name of Director
Relative weighting of the performance criteria
Information on Performance targets
De Stoop Hugo, represented by HECHO Management
Staring Alex, represented by AST Projects
40%
30%
15%
Weighting modified to 7.5% due to 2 fatalities onboard a
ship managed by a 3rd party Mgr
15%
40%
30%
15%
Weighting modified to 7.5% due to 2 fatalities onboard a
ship managed by a 3rd party Mgr
15%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
168
a) Measured performance and
b) actual award/remuneration
outcome
a) Minimum target/treshold
a)Maximum target/treshold
performance and b) corresponding
performance and b)corresponding
award
a) US $ 50m
b) 10%
award
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
a) consolidated result (G/A and
Opex) is 4% better than restated
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) M$ -338.7
b) € 0
budget
b) € 140,000
a) 75%
b) € 28,125
a) 73.5%
b) € 55,125
a) M$ -338.7
b) € 0
budget
b) € 108.640
a) 75%
b) € 21.825
a) 73%
b) € 42.486
a) consolidated result (G/A and
Opex) is 4% better than restated
Annual report 2021
Name of Director
Relative weighting of the performance criteria
Information on Performance targets
a) Measured performance and
b) actual award/remuneration
outcome
De Stoop Hugo, represented by HECHO Management
Staring Alex, represented by AST Projects
a) Minimum target/treshold
performance and b) corresponding
award
a)Maximum target/treshold
performance and b)corresponding
award
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) M$ -338.7
b) € 0
a) 5% overspent on budget
a) 5% better than budget
a) consolidated result (G/A and
Opex) is 4% better than restated
budget
Weighting modified to 7.5% due to 2 fatalities onboard a
b) depending on achievement of KPI
b) 15%
ship managed by a 3rd party Mgr
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
Weighting modified to 7.5% due to 2 fatalities onboard a
b) depending on achievement of KPI
b) 15%
ship managed by a 3rd party Mgr
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
b) € 140,000
a) 75%
b) € 28,125
a) 73.5%
b) € 55,125
a) M$ -338.7
b) € 0
a) consolidated result (G/A and
Opex) is 4% better than restated
budget
b) € 108.640
a) 75%
b) € 21.825
a) 73%
b) € 42.486
169
40%
30%
15%
15%
40%
30%
15%
15%
Name of Director
Relative weighting of the performance criteria
Information on Performance targets
Verbeeck Egied, represented by ECHINUS BV
40%
30%
15%
Weighting modified to 7.5% due to 2 fatalities onboard a
ship managed by a 3rd party Mgr
Logghe Lieve, represented by TINCC BV
Gallagher Brian, represented by BGIR Ltd
15%
40%
30%
15%
Weighting modified to 7.5% due to 2 fatalities onboard a
ship managed by a 3rd party Mgr
15%
40%
30%
15%
Weighting modified to 7.5% due to 2 fatalities onboard a
ship managed by a 3rd party Mgr
15%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) Minimum target/treshold permance
a)Maximum target/treshold permance
and b) corresponding award
and b)corresponding award
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
b) depending on achievement of KPI
b) 15%
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) achievement of 1 KPI
a) achievement of all KPIs
a) 72%
a) Measured performance and
b) actual award/remuneration
outcome
a) consolidated result (G/A and Opex)
is 4% better than restated budget
a) consolidated result (G/A and Opex)
is 4% better than restated budget
a) M$ -338,7
b) € 0
b) € 91,000
a) 75%
b) € 18,281.25
a) 73,5%
b) € 35,831.25
a) M$ -338.7
b) € 0
b) € 98,000
a) 75%
b) € 19,687.50
b) € 37,800
a) M$ -338,7
b) € 0
b) £ 53,200
a) 75%
b) £ 10,687.5
a) 71,5%
b) £ 20,377.50
a) consolidated result (G/A and Opex)
is 4% better than restated budget
170
Euronav Name of Director
Relative weighting of the performance criteria
Information on Performance targets
Annual report 2021
a) Measured performance and
b) actual award/remuneration
outcome
Verbeeck Egied, represented by ECHINUS BV
Logghe Lieve, represented by TINCC BV
Gallagher Brian, represented by BGIR Ltd
a) Minimum target/treshold permance
and b) corresponding award
a)Maximum target/treshold permance
and b)corresponding award
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) M$ -338,7
b) € 0
Weighting modified to 7.5% due to 2 fatalities onboard a
b) depending on achievement of KPI
b) 15%
ship managed by a 3rd party Mgr
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
Weighting modified to 7.5% due to 2 fatalities onboard a
b) depending on achievement of KPI
b) 15%
ship managed by a 3rd party Mgr
a) consolidated result (G/A and Opex)
is 4% better than restated budget
b) € 91,000
a) 75%
b) € 18,281.25
a) 73,5%
b) € 35,831.25
a) M$ -338.7
b) € 0
a) consolidated result (G/A and Opex)
is 4% better than restated budget
b) € 98,000
a) 75%
b) € 19,687.50
a) achievement of 1 KPI
a) achievement of all KPIs
a) 72%
b) depending on achievement of KPI
b) 15%
a) US $ 50m
b) 10%
a) US $ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
Weighting modified to 7.5% due to 2 fatalities onboard a
b) depending on achievement of KPI
b) 15%
ship managed by a 3rd party Mgr
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
b) € 37,800
a) M$ -338,7
b) € 0
a) consolidated result (G/A and Opex)
is 4% better than restated budget
b) £ 53,200
a) 75%
b) £ 10,687.5
a) 71,5%
b) £ 20,377.50
40%
30%
15%
15%
40%
30%
15%
15%
40%
30%
15%
15%
171
Name of Director
Relative weighting of the performance criteria
Information on Performance targets
Bourboulis Stamatis
40%
30%
15%
Weighting modified to 7.5% due to 2 fatalities onboard a
ship managed by a 3rd party Mgr
15%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) Minimum target/treshold
a)Maximum target/treshold
performance and b) corresponding
performance and b)corresponding
award
a) US$50m
b) 10%
award
a) US$ 200m
b) 40%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) Measured performance and
b) actual award/remuneration
outcome
a) consolidated result (G/A and Opex)
is 4% better than restated budget
a) M$-338.7
b) € 0
b) € 30,828
a) 75%
b) € 6,193.13
a) 70%
b) € 11,560.50
172
Euronav Name of Director
Relative weighting of the performance criteria
Information on Performance targets
a) Minimum target/treshold
performance and b) corresponding
award
a)Maximum target/treshold
performance and b)corresponding
award
Annual report 2021
a) Measured performance and
b) actual award/remuneration
outcome
Bourboulis Stamatis
a) US$50m
b) 10%
a) US$ 200m
b) 40%
a) M$-338.7
b) € 0
Weighting modified to 7.5% due to 2 fatalities onboard a
b) depending on achievement of KPI
b) 15%
ship managed by a 3rd party Mgr
a) achievement of 1 KPI
a) achievement of all KPIs
b) depending on achievement of KPI
b) 15%
a) 5% overspent on budget
a) 5% better than budget
b) 7.5%
b) 30%
a) achievement of 1 KPI
a) achievement of all KPIs
a) consolidated result (G/A and Opex)
is 4% better than restated budget
b) € 30,828
a) 75%
b) € 6,193.13
a) 70%
b) € 11,560.50
40%
30%
15%
15%
173
Share based remuneration
The outstanding long-term incentive plans are summarized in table below.The main conditions of the above mentioned plans are
as follows:
Table 3: Share options awarded or due to the Directors for the reported financial year
Name of Director
The main conditions of share plans
Position
De Stoop
Hugo,
represented
by HECHO
Management
Staring Alex,
represented
by AST
Projects
Specification of
plan
Performance
period (1)
Award date
Vesting date
End of
retention
period
CEO
LTIP 2016
LTIP 2017
LTIP 2018
TBIP
LTIP 2019
LTIP 2020
LTIP 2021
COO
LTIP 2016
LTIP 2017
LTIP 2018
TBIP
LTIP 2019
LTIP 2020
LTIP 2021
02/02/2016-
03/02/2020
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
02/02/2016-
03/02/2020
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
02/02/2016
03/02/2020
N/A
09/02/2017
10/02/2021
N/A
16/02/2018
17/02/2022
N/A
12/01/2019
12/01/2024
N/A
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
01/04/2021
01/04/2024
N/A
02/02/2016
03/02/2020
N/A
09/02/2017
10/02/2021
N/A
16/02/2018
17/02/2022
N/A
12/01/2019
12/01/2024
N/A
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
01/04/2021
01/04/2024
N/A
174
Information regarding the reported financial year
Opening balance
During the year
Closing balance
Shares held at the
beginning of the
Shares awarded
a) total number
Shares vested
Shares subject
Shares awarded
Shares subject to a
a) total number
to a performance
and unvested
retention period
year
granted b) value @
vested b) value @
condition
grant date
vest date
a) 6,743
b) € 58,472
a) 12,540
b) € 115,356
a) 4,186
b) € 36,299
a) 12,160
b) € 111,860
0
6,743
25,080
264,000
67,069
48,856
0
4,186
24,320
132,000
39,034
28,434
a) 65,355
b) € 500,000
a) 38,037
b) € 291,000
0
0
0
0
12,540
264,000
264,000
67,069
67,069
48,856
48,856
65,355
65,355
12,160
132,000
132,000
39,034
39,034
28,434
28,434
38,037
38,037
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Euronav Annual report 2021
Name of Director
Position
The main conditions of share plans
Information regarding the reported financial year
De Stoop
Hugo,
represented
by HECHO
Management
Staring Alex,
represented
by AST
Projects
Specification of
Performance
Award date
Vesting date
plan
period (1)
End of
retention
period
CEO
LTIP 2016
02/02/2016
03/02/2020
N/A
COO
LTIP 2016
02/02/2016
03/02/2020
N/A
02/02/2016-
03/02/2020
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
02/02/2016-
03/02/2020
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
LTIP 2017
LTIP 2018
TBIP
LTIP 2019
LTIP 2020
LTIP 2021
09/02/2017
10/02/2021
N/A
16/02/2018
17/02/2022
N/A
12/01/2019
12/01/2024
N/A
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
01/04/2021
01/04/2024
N/A
LTIP 2017
09/02/2017
10/02/2021
N/A
LTIP 2018
16/02/2018
17/02/2022
N/A
TBIP
12/01/2019
12/01/2024
N/A
LTIP 2019
01/04/2019
01/04/2022
N/A
LTIP 2020
01/04/2020
01/04/2023
N/A
LTIP 2021
01/04/2021
01/04/2024
N/A
Opening balance
Shares held at the
beginning of the
year
During the year
Closing balance
Shares awarded
a) total number
granted b) value @
grant date
Shares vested
a) total number
vested b) value @
vest date
Shares subject
to a performance
condition
Shares awarded
and unvested
Shares subject to a
retention period
a) 6,743
b) € 58,472
a) 12,540
b) € 115,356
a) 4,186
b) € 36,299
a) 12,160
b) € 111,860
0
6,743
25,080
264,000
67,069
48,856
0
4,186
24,320
132,000
39,034
28,434
a) 65,355
b) € 500,000
a) 38,037
b) € 291,000
0
0
12,540
264,000
264,000
67,069
67,069
48,856
48,856
65,355
65,355
0
0
12,160
132,000
132,000
39,034
39,034
28,434
28,434
38,037
38,037
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
175
Name of Director
Position
The main conditions of share plans
Information regarding the reported financial year
Specification of
plan
Performance
period (1)
Award date
Vesting date
End of
retention
period
Shares held at the
Shares awarded a) total
Shares vested a) total
Shares
Shares
Shares subject to
beginning of the
number granted b) value
number vested b) value
subject to a
awarded and
a retention period
@ grant date
@ vest date
performance
unvested
Opening balance
During the year
Closing balance
General
Counsel
Verbeeck
Egied,
represented
by ECHINUS
BV
LTIP 2016
LTIP 2017
LTIP 2018
TBIP
LTIP 2019
LTIP 2020
LTIP 2021
Logghe Lieve,
represented
by TINCC BV
CFO
LTIP 2020
Gallagher
Brian,
represented
by BG-IR
Limited
Investor
Relations
Manager
LTIP 2021
LTIP 2017
LTIP 2018
TBIP
LTIP 2019
LTIP 2020
LTIP 2021
02/02/2016-
03/02/2020
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
02/02/2016
03/02/2020
N/A
09/02/2017
10/02/2021
N/A
16/02/2018
17/02/2022
N/A
12/01/2019
12/01/2024
N/A
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
01/04/2021
01/04/2024
N/A
01/04/2020
01/04/2023
N/A
01/04/2021
01/04/2024
N/A
09/02/2017
10/02/2021
N/A
16/02/2018
17/02/2022
N/A
12/01/2019
12/01/2024
N/A
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
01/04/2021
01/04/2024
N/A
176
year
0
3,269
18,240
149,600
21,797
15,878
34,199
2,012
4,213
70,400
9,677
6,267
a) 21,240
b) € 162,500
a) 45,749
b) € 350,000
a) 8,614
b) £ 57,000
a) 3,269
b) € 28,347
a) 9,120
b) € 83,895
a) 2,012
b) € 17,447
a) 2,106
b) € 19,376
condition
0
0
9,120
149,600
149,600
21,797
21,797
15,878
15,878
21,240
21,240
34,199
45,749
45,749
0
2,107
70,400
70,400
9,677
9,677
6,267
6,267
8,614
8,614
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Euronav Name of Director
Position
The main conditions of share plans
Information regarding the reported financial year
Specification of
Performance
Award date
Vesting date
plan
period (1)
End of
retention
period
Opening balance
During the year
Shares held at the
beginning of the
year
Shares awarded a) total
number granted b) value
@ grant date
Shares vested a) total
number vested b) value
@ vest date
Closing balance
Shares subject to
a retention period
Shares
subject to a
performance
condition
Shares
awarded and
unvested
Annual report 2021
General
Counsel
Verbeeck
Egied,
represented
by ECHINUS
BV
LTIP 2018
16/02/2018
17/02/2022
N/A
LTIP 2016
LTIP 2017
TBIP
LTIP 2019
LTIP 2020
02/02/2016
03/02/2020
N/A
09/02/2017
10/02/2021
N/A
12/01/2019
12/01/2024
N/A
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
LTIP 2021
01/04/2021
01/04/2024
N/A
CFO
LTIP 2020
01/04/2020
01/04/2023
N/A
Logghe Lieve,
represented
by TINCC BV
Gallagher
Brian,
represented
by BG-IR
Limited
Investor
Relations
Manager
LTIP 2021
01/04/2021
01/04/2024
N/A
LTIP 2017
09/02/2017
10/02/2021
N/A
LTIP 2018
16/02/2018
17/02/2022
N/A
TBIP
12/01/2019
12/01/2024
N/A
LTIP 2019
01/04/2019
01/04/2022
N/A
LTIP 2020
01/04/2020
01/04/2023
N/A
LTIP 2021
01/04/2021
01/04/2024
N/A
02/02/2016-
03/02/2020
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
09/02/2017-
10/02/2021
16/02/2018-
17/02/2022
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
0
3,269
18,240
149,600
21,797
15,878
34,199
2,012
4,213
70,400
9,677
6,267
a) 21,240
b) € 162,500
a) 45,749
b) € 350,000
a) 8,614
b) £ 57,000
a) 3,269
b) € 28,347
a) 9,120
b) € 83,895
a) 2,012
b) € 17,447
a) 2,106
b) € 19,376
0
0
9,120
149,600
149,600
21,797
21,797
15,878
15,878
21,240
21,240
34,199
45,749
45,749
0
2,107
70,400
70,400
9,677
9,677
6,267
6,267
8,614
8,614
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
177
year
44,000
14,769
10,758
a) 14,391
b) € 110,100
condition
unvested
44,000
44,000
14,769
14,769
10,758
10,758
14,391
14,391
N/A
N/A
N/A
N/A
Name of Director
Position
The main conditions of share plans
Information regarding the reported financial year
Specification
of plan
Performance
period (1)
Award date
Vesting date
End of
retention
period
Shares held at the
Shares awarded a) total
Shares vested a) total
Shares
Shares
Shares subject
beginning of the
number granted b)
value @ grant date
number vested b)
subject to a
awarded
to a retention
value @ vest date
performance
and
period
Opening balance
During the year
Closing balance
Bourboulis
Stamatis
General
Manager
Hellas
TBIP
12/01/2019-
12/01/2024
12/01/2019
12/01/2024
N/A
LTIP 2019
LTIP 2020
LTIP 2021
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
01/04/2021
01/04/2024
N/A
(1) validity of the plan
LTIP 2015
On 20 February 2015 within the framework of a management
incentive plan, the Board of Directors granted 65,433 Restricted
Stock Units (RSUs) and 236,590 stock options. The exercise
price of the options is EUR 10.0475.
LTIP 2016
On 2 February 2016 within the framework of a Phantom Stock
Plan, the Board of Directors granted 54,616 phantom stock
units. The phantom stock units will mature one-third each
year on the second, third and fourth anniversary of the award.
All of the beneficiaries have accepted the phantom stock units
granted to them. The number of phantom stocks granted was
calculated on the basis of a share price of EUR 10.6134 which
equals the weighted average of the share price of the three
days following the announcement of the preliminary full year
results of 2015.
LTIP 2017
Within the framework of a Phantom Stock Plan, 66,449
phantom stock units were granted to the Executive Committee
and the Investor Relations Manager on 9 February 2017. The
phantom stock units will mature one-third each year on the
second, third and fourth anniversary of the award. All of
the beneficiaries have accepted the phantom stock units
granted to them. The number of phantom stocks granted was
calculated on the basis of a share price of EUR 7.2677 which
equals the weighted average of the share price of the three
days following the announcement of the preliminary full year
results of 2016.
178
LTIP 2018
Within the framework of a Phantom Stock Plan 154,431
phantom stock units were granted to the Executive Committee
and the Investor Relations Manager on 16 February 2018.
The phantom stock units will mature one-third each year on
the second, third and fourth anniversary of the award. All of
the beneficiaries have accepted the phantom stock units
granted to them. The number of phantom stocks granted was
calculated on the basis of a share price of EUR 7.2368 which
equals the weighted average of the share price of the three
days following the announcement of the preliminary full year
results of 2017.
Transaction Based Incentive Plan (TBIP)
The members of the Executive Committee have been granted
a TBIP in the form of 1.2 million** phantom shares as per 12
January 2019.
The TBIP has a duration of five years. The phantom stock
awarded matures in four tranches as follows:
•
•
•
First tranche of 12% vesting when the average 30 days
share price reaches USD 12 (decreased with dividends
paid, if any, since date of grant);
Second tranche of 19% vesting when the average 30 days
share price reaches USD 14 (decreased with dividends
paid, if any, since date of grant) ;
Third tranche of 25% vesting when the average 30 days
share price reaches USD 16 (decreased with dividends
paid, if any, since date of grant) ;
Euronav Name of Director
Position
The main conditions of share plans
Information regarding the reported financial year
Opening balance
During the year
Shares held at the
beginning of the
year
Shares awarded a) total
number granted b)
value @ grant date
Shares vested a) total
number vested b)
value @ vest date
Bourboulis
Stamatis
General
Manager
Hellas
Specification
Performance
Award date
Vesting date
of plan
period (1)
End of
retention
period
TBIP
12/01/2019
12/01/2024
N/A
12/01/2019-
12/01/2024
01/04/2019 -
01/04/2022
01/04/2020 -
01/04/2023
01/04/2021 -
01/04/2024
LTIP 2019
LTIP 2020
01/04/2019
01/04/2022
N/A
01/04/2020
01/04/2023
N/A
LTIP 2021
01/04/2021
01/04/2024
N/A
Annual report 2021
Shares
subject to a
performance
condition
Shares
awarded
and
unvested
44,000
44,000
14,769
14,769
10,758
10,758
14,391
14,391
Closing balance
Shares subject
to a retention
period
N/A
N/A
N/A
N/A
LTIP 2020
The Supervisory Board, upon recommendation of the
Remuneration Committee, has determined a variable
compensation structured as a LTIP Grant composed out of
RSUs. Each RSU grants the RSU Holder a conditional right to
receive one (1) Share for free upon vesting of the RSU.
Maximum value at grant:
•
•
100% of absolute base salary for the CEO;
Ranging from 75 to 30% of absolute base salary for the
other Executive Officers.
The vesting is subject for 75% to a relative TSR (Total
Shareholder Return) compared to a peer group over a three
year period. Each yearly measurement to be worth 1/3rd of
75% of the award.
The vesting is subject for 25% to an absolute TSR of the
Company’s Shares measured each year for 1/3 of 25% of the
award.
The RSUs vested will be finally acquired by the beneficiary as
of the third anniversary.
LTIP 2021
On March, 2021 the Supervisory Board, upon recommendation
of the Remuneration Committee, has adopted a variable
179
44,000
14,769
10,758
a) 14,391
b) € 110,100
•
Fourth tranche of 44% vesting when the average 30 days
share price reaches USD 18 (decreased with dividends
paid, if any, since date of grant)
** Not all of the amount is still applicable since it includes 2
participants to the plan that have since left the company.
LTIP 2019
recommendation of
The Supervisory Board, upon
a
has determined
the Remuneration Committee,
variable compensation
structured as a LTIP Grant
composed out of Restricted Share Units (RSUs). Each
RSU grants
to
receive one (1) Share for free upon vesting of the RSU.
Maximum value at grant:
the RSU Holder a conditional
right
•
•
100% of absolute base salary for the CEO;
Ranging from 75 to 30% of absolute base salary for the
other Executive Officers;
The vesting is subject for 75% to a relative TSR (Total
Shareholder Return) compared to a peer group over a three
year period. Each yearly measurement to be worth 1/3rd of
75% of the award.
The vesting is subject for 25% to an absolute TSR of the
Company’s Shares measured each year for 1/3 of 25% of the
award.
The RSUs vested will be finally acquired by the beneficiary as
of the third anniversary.
compensation structured as a LTIP Grant composed out of
RSUs. Each RSU grants the RSU Holder a conditional right to
receive one (1) Share for free upon vesting of the RSU.
The maximum value at grant:
•
•
In the case of the CEO and CFO is 100% of absolute base
salary; and
In the case of the other Management Board members,
ranges from 30 to 75% of their respective absolute base
salary.
The vesting is subject for:
• 75% to a relative Total Shareholder Return performance
measurement compared to a peer group over a three year
period. Each yearly measurement to be worth 1/3rd of
75% of the award.
• 25% to an absolute Total Shareholder Return of the
Company’s Shares measured each year for 1/3 of 25% of
the award.
The RSUs vested will only be acquired by the RSU holder as of
the third anniversary.
Executive severance arrangements
No occurrence during the reported year.
Use of claw-back rights
No occurrence during the reported year.
Derogations from the remuneration policy
No derogations from the policy have been applied during the
reported year.
Evolution of the remuneration and of the
Company’s performance
As there was no reporting obligation for previous financial
years and taking into account the change of employment
status of the members of the Management Board to self-
employed, the information below is submitted in the following
format, showing the relevant evolution.
Table 2: Comparative table on change of remuneration and
company performance over the last 5 financial years
Annual change
RFY
2021
Aggregate
executive
compensation (1)
Company's
performance
Net profit
achievement
€ 2,635,847
€ 2,670,830
USD 472,771 K USD -338,7 M
Opex and Overhead
performance G&A
USD 52 M
USD 32.4 M
Opex
USD 189 M USD 199.1 M
€ 69,400
€ 65,960
3%
3%
Average
remuneration on a
full-time equivalent
basis of employees
(2)
Ratio between
highest
remunerated
Executive and
least remunerated
employee (3))
(1) Only takes into account the fixed remuneration.
(2) Situation as per December 2021, taken into account
annual salaries, not including fringe benefits, not including
variable remuneration.
(3) Situation as per December 2021, taken into account
annual salaries, not including fringe benefits, not including
STIP or LTIP.
Information on shareholders vote
Pursuant to art. 7:149, 3rd of the Code of Companies requiring
the Company to explain how the vote on the remuneration
report of the most recent financial year was taken into account,
we improved the transparency and the nature of
180
Euronav our remuneration policy to make it easier for shareholders to
understand how remuneration works at Euronav.
Euronav strives to provide insight in the award levels,
performance criteria and performance targets for the short-
term incentive plan, enabling shareholders to assess the
stringency of the plan and how pay-outs relate to performance.
The explanations about short-term and long-term variable
remuneration are more detailed than in the past. Clearly
disclosing the applicable performance metrics of the STI
and disclosing threshold, target and maximum award level.
Regarding the LTI plans, the level of achievement of the
different LTI plans as well as the companies selected to
constitute the TSR peer group have also been integrated in the
remuneration policy.
Remuneration of the auditor KPMG
Bedrijfsrevisoren-Réviseurs d’entreprises
(KPMG)
Permanent representative: Herwig Carmans
For 2021, the worldwide audit and other fees in respect of
services provided by the statutory auditor KPMG can be
summarised as follows:
In USD
2021
2020
2019
Audit services
for the annual
financial
statements
Audit related
services
965,078
1,004,738
965,016
60,209
56,839
0
Tax services
736
798
728
Other non-audit
services
20,104
19,634
20,151
TOTAL
1,046,127
1,082,008 985,895
The limits prescribed by Article 3:62 of the CCA were observed.
Annual report 2021
181
Information to be included in the annual report as per article 34 of the
royal decree of 14 November 2007
Capital structure
General shareholders’ meeting
At the time of preparing this report, the registered share capital
of Euronav amounts to USD 239,147,505.82 and is represented
by 220,024,713 shares without par value. The shares are in
registered or dematerialised form. Euronav currently holds
18,346,732 own shares. At the time of preparing this report, no
convertible bonds or perpetual preferred equity instruments
of the Company were outstanding. Besides the stock option
plans referred to section 6.4 of this Corporate Governance
Statement, there are no other share plans, stock options or
other rights to acquire shares of the Company in place.
Restrictions on the exercise of voting rights
or on the transfer of securities
Each share entitles the holder to one vote. There are no
securities issued by the Company which would entitle the
holder to special voting rights or control. The articles of
association contain no restrictions on the voting rights, and
each shareholder can exercise his voting rights provided he is
validly admitted to the Shareholders’ Meeting and his rights
are not suspended. Pursuant to Article 12 of the articles of
association, the Company is entitled to suspend the exercise
of rights attached to shares belonging to several owners. No
person can vote at the Shareholders’ Meeting using voting
rights attached to shares for which the formalities to be
admitted to the general meeting as laid down in Article 33 of
the articles of association or the law have not been fulfilled in
time or accurately. Likewise, there are no restrictions in the
articles of association or by law on the transfer of shares.
The ordinary General Shareholders’ Meeting is held in Antwerp
on the third Thursday of the month of May, at 10.30 a.m., at
the registered office or any other place mentioned in the
convening notices. If such date would be a bank holiday,
the Annual Shareholders’ Meeting would take place on the
preceding business day.
Shareholders’ meeting
As of the date of this report, the Supervisory Board is not
aware of any agreements among major shareholders or any
other shareholders that may result in restrictions on the
transfer of securities or the exercise of voting rights. The
major shareholders have not entered into a shareholders’
agreement or a voting agreement, nor do they act in
concert. There are no agreements between the Company
and its employees or the members of its Supervisory Board
providing for any compensation in case of resignation or
dismissal on account of a public acquisition offer. However,
if the agreement with a member of the Management Board
is terminated for reasons of a Change of Control, the
member of the Management Board shall be entitled to a
compensation.
Apart from the foregoing and from the customary change of
control provision in the financing agreements, the terms of the
bonds issued by Euronav Luxembourg S.A. which have been
guaranteed by the Company, the bareboat charter parties in
the framework of sale-and-lease-back transactions and the
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Euronav long-term incentive plans Euronav has entered into, there
are no other important agreements to which the Company
is a party and which enter into force, be amended or be
terminated, in case of a change of control of the Company
following a public offer.
Appointment and replacement of members
of the Supervisory Board
The articles of association (Article 15 and following) and
the Euronav Corporate Governance Charter contain specific
rules concerning the (re)appointment, the replacement and
the evaluation of members of the Supervisory Board. The
General Shareholders’ Meeting appoints the Supervisory
Board. The Supervisory Board submits the proposals for the
appointment or re-election of members of the Supervisory
Board, supported by a recommendation of the Corporate
Governance and Nomination Committee, to the General
Shareholders’ Meeting for approval. If a Supervisory Board
member's mandate becomes vacant in the course of the
term for which such member was appointed, the remaining
Supervisory Board members may provisionally fill the
vacancy until the following General Shareholders’ Meeting,
which will decide on the final replacement. A Supervisory
Board member nominated under such circumstances is only
appointed for the time required to terminate the mandate
of the member whose place he has taken. Appointments of
Supervisory Board members are made for a maximum of four
years. After the end of his/her term, each member is eligible
for re-appointment.
Annual report 2021
Amendments to articles of association
The articles of association can be amended by the
Extraordinary General Meeting in accordance with the Belgian
Companies and Associations Code. Each amendment to the
articles of association requires a qualified majority of votes.
Authorisation granted to the Supervisory
Board to increase share capital
The articles of association (Article 7) contain specific rules
concerning the authorisation to increase the share capital of
the Company. By decision of the Shareholders’ Meeting held on
20 February 2020, the Supervisory Board has been authorised
to increase the share capital of the Company in one or several
times by a total maximum amount of USD 25,000,000 (with
possibility for the Supervisory Board to restrict or suspend the
preferential subscription rights of the existing shareholders) or
USD 120,000,000 (without the possibility for the Supervisory
Board to restrict or suspend the preferential subscription
rights of the existing shareholders) during a period of five years
as from the date of publication of the decision, subject to the
terms and conditions to be determined by the Supervisory
Board.
Authorisation granted to the Supervisory
Board to acquire or sell the Company’s own
shares
Article 13 of the articles of association contains the principle
that the Company and its direct and indirect subsidiaries
may acquire and sell the Company’s own shares under the
conditions laid down by law. With respect to the acquisition
of the Company’s own shares, a prior resolution of the General
Meeting is required to authorise the Company to acquire its
own shares. Such an authorisation was granted by the Special
General Meeting of 23 June 2021 and remains valid for a period
of five years as from the publication in the Annexes to the
Belgian Official Gazette of the decision taken by such General
Meeting.
Pursuant to this authorisation, the Company may acquire a
maximum of ten percent (10%) of the existing shares of the
Company at a price per share not exceeding the maximum
price allowed under applicable law and not to be less than
EUR 0.01.
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Euronav
Appropriation of profits
The Supervisory Board may, from time to time, declare and pay
cash dividends in accordance with the Articles of Association
and applicable Belgian law. The declaration and payment
of dividends, if any, will always be subject to the approval of
either the Supervisory Board (in the case of ‘interim dividends’)
or of the shareholders (in the case of ‘regular dividends’ or
‘intermediary dividends’). The current dividend payment
policy as adopted by the Board is the following: the Company
intends to pay a minimum fixed dividend of at least USD 0.12
in total per share per year provided (a) the Company has in
the view of the board, sufficient balance sheet strength and
liquidity, combined (b) with sufficient earnings visibility from
fixed income contracts. In addition, if the results per share are
positive and exceed the amount of the fixed dividend, that
excess income will be allocated to either: additional cash
dividends, share buy-back, accelerated amortisation of debt
or the acquisition of vessels which the Board considers at that
time to be accretive to shareholders’ value.
Additional guidance was provided by the Company by way of a
press release dated 9 January 2020, as follows:
•
Each quarter Euronav will target to return 80% of net
income (including the fixed element of USD 3c per quarter)
to shareholders.
184
•
•
This return to shareholders will primarily be in the form of
a cash dividend and the Company will always look at stock
repurchase as an alternative if it believes more value can
be created for shareholders.
The Company retains the right to return more than 80%
should the circumstances allow it.
Excess income is adjusted for certain items such as capital
losses and capital gains. As part of its distribution policy
Euronav will continue to include exceptional capital losses
when assessing additional dividends but also continue to
exclude exceptional capital gains when assessing additional
dividend payments. Deferred Tax Assets (DTA) and Deferred
Tax Liabilities (DTL). As part of its distribution policy Euronav
will not include non-cash items affecting the results such as
DTA or DTL.
In general, under the terms of the debt agreements, Euronav
is not permitted to pay dividends if there is or will be as a
result of the dividend a default or a breach of a loan covenant.
Belgian law generally prohibits the payment of dividends
unless net assets on the closing date of the last financial year
do not fall beneath the amount of the registered capital and,
before the dividend is paid out, 5% of the net profit is allocated
to the legal reserve until this legal reserve amounts to 10% of
the share capital. No distributions may occur if, as a result of
such distribution, the net assets would fall below the sum of
(i) the amount of the registered capital, (ii) the amount of such
aforementioned legal reserves, and (iii) other reserves which
may be required by the Articles of Association or by law, such as
the reserves not available for distribution in the event Euronav
holds treasury shares. Euronav may not have sufficient surplus
in the future to pay dividends and the subsidiaries may not
have sufficient funds or surplus to make distributions to the
Company. Euronav can give no assurance that dividends will
be paid at all. In addition, the corporate law of jurisdictions in
which the subsidiaries are organised may impose restrictions
on the payment or source of dividends or additional taxation
for cash repatriation, under certain circumstances.
Code of Business Conduct and
Ethics
Euronav has adopted and applies a Code of Business Conduct
and Ethics. The purpose of the Code of Business Conduct and
Ethics is to assist all the Euronav employees to enhance and
protect the good reputation of Euronav. The Code of Business
Conduct and Ethics articulates the policies and guidelines
that highlight the values of Euronav,
Annual report 2021
more particularly in its relation to customers, suppliers,
shareholders and other stakeholders, as well as society in
general.
The full text of the Code of Business Conduct and Ethics can
be consulted on the Company’s website www.euronav.com,
under the section Corporate Governance.
Measures regarding insider
dealing and market manipulation
In view of Regulation (EU) No 596/2014 of the European
Parliament and of the Council of 16 April 2014 on market
abuse (market abuse regulation) and repealing Directive
2003/6/EC of the European Parliament and of the Council
and Commission Directives 2003/124/EC, 2003/125/EC
and 2004/72/EC (the ‘Market Abuse Regulation’ or ‘MAR’),
the Supervisory Board approved the current version of
the Company’s Dealing Code. The Dealing Code includes
restrictions on trading in Euronav shares during so called
‘closed periods’, which have been in application for the first
time in 2006, as well as other procedures and safeguards the
Company has implemented in compliance with the Market
Abuse Regulation.
The members of the Supervisory and Management Boards
and the employees of the Euronav Group who intend to
deal in Euronav shares must first request clearance from the
Compliance Officer. Transactions that are to be disclosed
in accordance with the Market Abuse Regulation are being
disclosed at the appropriate time.
GUBERNA
As Euronav strongly believes in the merits of corporate
governance principles and is keen on further developing its
corporate governance structure, Euronav joined GUBERNA
as institutional member at the end of 2006. GUBERNA (www.
guberna.be) is a knowledge centre promoting corporate
governance in all its forms and offers a platform for the
exchange of experiences, knowledge and best practices.
Gender diversity
In accordance with the Corporate Governance Code, the
Supervisory Board must be composed in a manner compliant
with the principles of gender diversity, as well as of diversity in
general. The Supervisory Board of Euronav currently consists of
two men and three women with varying yet complementary
expertise. The Supervisory Board has been made aware of the
law of 28 July 2011 on gender diversity and the recommendations
issued by the Corporate Governance and Nomination Committee
following the enacting of the law with regard to the representation
of women on Supervisory Boards of listed companies.
As of 31 March 2022, the Management Board consists of one
women and five men: four of the board are based in Belgium, one
in Greece and one in the U.K. They all hold academic degrees in
various disciplines such as law, finance, shipping, engineering
and science. Before they started working with Euronav, they were
employed in the academic, financial, legal and shipping sector.
Their ages vary between 47 and 63 years old, and include their
average experience of 7 years in their current executive position.
The Senior Management (Chief People Officer, Secretary General,
General Manager Nantes office, HSQE Manager, Sustainability
Manager) consists of four men and one woman (three in Belgium,
one in France and one in Greece). They all have an academic
degree in various disciplines (economics, law, history, and
shipping). They started their careers in the academic, financial,
legal and shipping sector and have been working in their current
Euronav role for an average of four years. Their ages vary between
37 and 52 years old.
Appropriation accounts
Proposal to approve the financial statements of the Company
for the year ended 31 December 2021, as prepared by the
Supervisory Board, including the appropriation of the profit
and the distribution of a gross dividend of USD 0.09, already
paid in the form of an interim dividend during the financial
year 2021, and a shareholder distribution for Q4 2021 of USD
0.03 out of the available share premium.
Sustainability Committee
Euronav strongly believes that climate change and ESG matters
are such important issues that we require a specialist and focused
committee to oversee our response to the dynamic set of challenges
it poses to all facets of our business. This committee, comprising
both Supervisory and Management Board members, has already
evolved considerably since it was established. Information about
the composition of the Sustainability Committee can be found in
our Corporate Governance Statement section.
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Euronav
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Annual report 2021
Special
Report
The merits and dangers of divestment in the
shipping and energy sectors 188
187
Euronav
Special Report
Every year since 2013 Euronav has taken the opportunity to write a special paper on a subject matter impacting on
the wider crude tanker sector. These papers offer not only a deeper understanding of our positioning in certain areas
but are also intended to stimulate further open discussion and debate. The views expressed in this paper are those of
Euronav at the date of publication and not given as part of any wider corporate strategic messaging.
The merits and dangers of divestment in the shipping and energy sectors
Solutions required to deliver “green champions” for the energy transition
Divestment as a process of selling stocks, bonds,
or investment funds that are unethical or morally
ambiguous has gained remarkable traction in recent
years. It has moved from being a fringe strategy to a
USD 20 trillion movement. Within government, capital
markets, and society at large, the divestment movement
has changed the conversation and forced a fundamental
re-think of the future of the global energy system.
In this paper, we assess where we stand regarding divestment in
the energy and shipping sector, and what is the best way forward.
Divestment sounds appealingly simple to both the corporate
sector and investors alike: Cut off the flow of investment and
funds to those not complying with the rules, thus depriving
them of capital. Its strongest critics regard this as a blunt
and counterproductive instrument. In our view, the complex
problems presented by climate change and the energy
transition cannot be reduced to a binary choice between
divestment and engagement.
As the world slowly pivots away from fossil fuels, investor and
corporate engagement can promote economic and energy
continuity by helping businesses effectively transition to a low-
carbon world. However, this is not a one-size-fits-all approach.
Engagement strategies that fail to contemplate transformative
change should be rightly condemned as greenwashing.
Divestment does have a role and those who remain unwilling
or unable to align with best practice should feel its pressure.
Investors and corporates can be valuable long-term partners
in the transition to a low-carbon economy. Capital can and
should be rationed but must be allocated to those developing
and deploying change. The ‘green champions’, regardless of
their activity, should be identified and rewarded.
In this report, we consider and define “divestment” as a
process of selling subsidiary assets, investments, or divisions
of a company to maximise the value of the parent company.
Both corporates and investors may look to a divestment
strategy to satisfy other strategic business, financial, social,
environmental, or political goals. Investors can refrain from
investing in companies still holding certain types of assets, or
avoid specific sectors altogether, or companies as part of their
investment mandate.
Divestment is not as simple as merely not investing in certain
sectors, industries, or companies. There are nuances within
the divestment universe that roughly fall into the following six
broad categories:
Exclusion - The act of barring a company's securities from
being purchased for a portfolio due to business activities that
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Annual report 2021
189
are deemed unethical, harmful to society, or in breach of laws
or regulations.
Thematic investing - An approach that focuses on predicted
long-term trends rather than specific companies or sectors,
enabling investors to access structural, one-off shifts that can
change an entire industry.
Regulation investing - Guided by third-party or investment
management rules that focus on specific regulations from
bodies such as the EU. The incoming EU taxonomy regulations
are a good example of how investments in certain sectors
will go against regulatory investment and therefore require a
strong justification for their place in a portfolio.
Impact investing - An impact investing strategy targets
companies or industries that produce social or environmental
benefits. For example, some impact investors seek to support
renewable energy, electric cars, microfinance, sustainable
agriculture, or other causes which they believe to be
worthwhile.
Activist investing - An investor buys a significant stake in a
public company in a bid to influence how the company is run,
such as by obtaining seats on its board of directors. Companies
that are poorly managed, have excessive costs, could be run
more profitably if taken private, or have other problems the
activist investor believes they can solve are often targets for
activist investors.
Positive screening - Positive screening is the process of
finding companies that score high on environmental, social
and governance (ESG) factors compared to their peers. For
most investors, positive screening means identifying the
highest-scoring part of a Sustainable Investment metric (SI),
usually the top 20%-50% stocks ranked on the ESG score.
Figure 1: Growth of ESG assets
Source: Morgan Stanley
Why divest? Setting the scene
ESG invested assets
There are several reasons for divestment. One of these can be
the sheer scale, growth, and expected expansion of sustainable
assets that are attractive to investors and corporates alike.
‘ESG’
Sustainable or
invested assets have undergone
exponential growth in recent years, attracting the corporate
sector because of the sheer scale of these capital flows.
As figure 1 illustrates, this does not look to be a static or
maturing trend. Morgan Stanley estimates that assets under
management (AUM) of sustainable and ESG-themed funds
will TRIPLE in the next five years. Tapping into this new source
of funding drives a virtuous circle whereby assets that are in
demand and have the appropriate green labelling are subject
to increasing capital flows, and those deemed unsuitable
candidates are often denied access to such funding.
Since 2016 the value of investments in financial products
that claim to abide by environmental, social and governance
(ESG) rules has grown from USD 23 trillion to USD 35 trillion.
Bloomberg Intelligence, a research firm, reckons it could
exceed USD 50 trillion by 2025 (source Economist 11 February
2022).
The regulatory landscape
Regulation will become an area of focus for the investment
sector itself and influence how asset managers invest their
assets. This is likely to become increasingly differentiated
between regions such as the EU, the US and the Far East. The
most obvious example of this is the EU taxonomy regulation
that sets out six clear environmental objectives, including
those around climate change, and selects economic activities
and sectors that are considered most impactful for these
objectives. The regulation also establishes clear parameters
through detailed, specific technical screening criteria
which will be reviewed and improved going forward. These
criteria will change every five years and will set an ever-
higher threshold for activities to qualify as environmentally
sustainable.
Asset managers will be evaluated based on the EU Sustainable
Financial Disclosure Regulation (SFDR).
Increased direct
regulation of this nature has contributed to the speed and
scale of divestment. The EU-wide classification framework
is intended to provide businesses and investors with a
common way of identifying and measuring the degree to
which economic activities can be considered environmentally
sustainable. The framework will be an important driver for
wider and more global regulation.
The ‘Easy’ Alternative
Divestment by a corporate often benefits the owner and is
frequently the path of least resistance. It can prove popular
amongst stakeholders (shareholders as well as employees)
and gives management the opportunity to be seen to be
‘doing something’.
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Euronav Annual report 2021
Above all, it is relatively easy to do. In the mining and oil
sectors, there are several examples of coal and oil production
assets that are either sold directly to third parties or demerged
into new publicly listed companies. This allows shareholders
to decide themselves if they wish to retain exposure to such
assets. For example, in June 2021, Anglo American owned
South African thermal coal mines that are expected to close
within a decade. Rather than running these projects down,
Anglo American transferred them into a new company which
was then listed in London.
There is often an incentive to divest too: A key feature of
capital markets in the past three to five years has been the
quite marked differential in pricing, stock market rating and
implied cost of capital/equity that the ‘bad boys’ now possess
compared to the rest of quoted stocks.
Figure 2 illustrates the sustained de-rating that the EU oil and
gas sector has earned. It is now trading at a price-to-earnings
ratio relative to a 45% discount to the wider stock market,
compared to a 10-year average of 14% discount. All this
occurs, while the oil price has more than doubled in the year
to December 2021 (source: JP Morgan).
Figure 2: Derating of oil companies in
European capital markets
Source: JP Morgan, Bloomberg
making. Moreover, recent shareholder activity has shown
signs of mounting pressure from
investors to enhance
performance and disclosure measures based on ESG criteria.
Shareholder activists seeking to gain additional traction at
the ballot box are integrating ESG themes into their campaign
narratives. An increasing faith in the link between corporate
attention to ESG and business resilience, competitive strength,
and financial performance, has seen sustainable equity funds
outperform traditional equity funds. Meanwhile, investors
are actively lobbying governments and regulators for greater
commitment to the regulation of ESG-oriented business
principles and market disclosures.
COVID has accelerated this trend
The global slowdown caused by the pandemic added further
pressure to offload assets. Companies facing a cash crunch
have been forced to cut dividends, dramatically reduce
capital spending, and raise debt since Q1 2020. With many
sector share prices under pressure, attention has diverted to
streamlining operations and trimming costs. These companies
want to keep hold of assets that are the most profitable and,
ideally, the least polluting, because their earnout cash flow is
greater than the market price achievable.
Figure 3: Change in investment universe
Source: Citigroup, Euronav
Activism is Attractive
Asset managers can position themselves as value drivers
against complacent or intransigent managements and boards.
Divestment can be a key marketing edge for an investment firm.
Activist investors who purchase a large enough shareholding
can hope to influence top-tier decision
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Euronav
In addition, the investment universe has changed markedly
during COVID-19, with more investable assets available for
investors wanting exposure to renewables, clean energy, and
direct beneficiaries of policies around decarbonisation. Figure
3 indicates how this subtle but important change of mindset
has occurred during the COVID period.
Divestment and its implications
Stranded assets
Stranded assets are defined as “… assets that have suffered
from unanticipated or premature write-downs, devaluations,
or conversion to liabilities” (Caldecott, Howarth and McSharry,
2013). This implies that key assets held by a company will no
longer have any economic value after a certain period.
Shareholder pressure is forcing markets and companies to
concentrate on those investments that may have a place
in a carbon-neutral world, and jettison assets that do not fit
that model. Divestment is often a simple means of dealing
with such an issue either via direct sale or demerger. Fossil
fuel companies and those engaged in such sectors at a
secondary level, such as Euronav, face many financial risks
linked to climate change. Changes in policy, the transition to
a low-carbon economy, increased litigation against fossil fuel
companies, and the physical impacts of climate change make
fossil fuel investments increasingly risky. These risks could
lead to a sudden loss of value in fossil fuel investments and
bring about the scenario of stranded assets. By excluding and
divesting of exposure to these companies, funds can protect
against such risks.
Higher cost of capital
Figure 4: Cost of capital has been rising for “old” energy
versus “new” energy
Source: Goldman Sachs
Capital costs have been proven to be higher for energy and
other capital-intensive industries due to divestment. Recent
analysis by Goldman Sachs (see figure 4) shows the differential
in cost of capital for various energy sources. It can therefore
be inferred from this chart that the wider ESG pressures from
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Annual report 2021
investors have driven a 10-15% premium in WACC (Weighted
Average Cost of Capital) for oil compared to a new ESG-friendly
energy source such as wind.
its cost of equity alongside the de-rating in stock market rating
over the past 12 months (source: Morgan).
The global economy still operates on hydrocarbons and is not
yet ready to switch entirely to other renewable fuel sources.
The production costs of the fossil fuels available today are
already higher than that which may (or may not) be available
tomorrow. Goldman Sachs estimates that this higher cost of
capital is therefore also raising the production costs with USD
40 per ton implied carbon price for LNG, but USD 80 per ton
for oil and gas development. This makes the energy transition
more costly than it would otherwise need to be, and arguably,
will increase the duration (and added potential disruption) of
the energy transition.
De-rating of capital markets
More detailed analysis by Morgan Stanley delves further into
what its so-called “excluded sectors” have endured. The oil
and gas sector is estimated to have suffered a 4.2% increase in
Figure 5: Capital market de-rating of Oil & Gas sectors 2018-2021
Source: Morgan Stanley
It is therefore not surprising that companies view divestment
in specific sectors of capital markets as an attractive proposal
and strategy.
Access to capital
Shipping itself knows how access to capital can change very
quickly. Analysis by Petrofin (see figure 6) illustrates clearly
the near 50% reduction in funding that has come from banks
in the past decade. However, shipping has not become less
capital intensive. Quite the contrary, it will require increasing
access to capital with advanced technological and regulatory
requirements. Funding from other sources, especially capital
markets, has consequently become more, not less, important.
Whilst there have been multiple reasons for this “divestment
trend” from banks to fund shipping (regulation, financial crisis
of 2008, lower corporate governance standards in shipping)
the impact is the same – namely more limited access to capital.
Implied cost of Equity Change
1st year Fwd PE re-rating
Divi yield change (pp)
1 year
3 years
5 years
1 year
3 years
5 years
1 year
3 years
5 years
Oil & Gas global
Oil & Gas — US
Thermal Coal
3.0
4.2
-3.9
1.3
1.7
-0.5
2.8
3.9
3.5
-11.7
-13.8
0.4
-0.8
-2.0
0.2
-5.1
-8.9
-4.5
-1.6
-1.4
0.8
-0.6
1.3
2.9
-0.1
0.8
2.9
193
Figure 6: Bank lending to shipping – a one way trend
Source: Petrofin
Cost, disruption, and duration of the energy
transition will be potentially higher
Our view, put simply, is that the energy transition will be
costly, long, and potentially disruptive. It will require capital
and
to simultaneously
deliver economic expansion and measured reductions in GHG
emissions.
resource-intensive undertakings
According to analysis by Morgan Stanley, the capital intensity
of the energy transition is likely to be unlike anything we've
seen before in human history. For instance, investment in the
transition should be about ten times higher than in 2020 and
remain stable for the next three decades. This is illustrated in
figure 7.
investment
Consequently, it is essential that a balance is struck between
into
new regulation and the withdrawal of
traditional fuel sources, and the supply of renewable and
greener alternatives. Bringing CO2 emissions into line with
new regulations will require the support of sustained and
sustainable economic growth globally. Disruption to supply
and volatile pricing may sap the socio-political will for change
if the process is not carefully managed.
In terms of disruption, the first tangible examples of what
some of the difficulties associated with the transition away
from hydrocarbons may prove to be, unfolded during the
second half of 2021. Energy prices of all classifications soared
by hundreds of percent, bringing blackouts to areas like China
and India, and a stark reminder to Europe of how much it
relies on Russian goodwill for a supply of its gas. The modern
economy requires abundant energy, and we can only divest of
today’s energy as the energy of tomorrow comes into place.
Energy can become unaffordable, and disruptions can quickly
be impactful. The panic has also exposed deeper issues as
the world shifts toward a cleaner energy system, including
inadequate investment opportunities in renewables and
some transition fossil fuels.
Figure 7: The energy transition is going to be very costly
Source: CNN and Birkinyl Associates, Rystad Energy, BloombergNEF and IRENA
194
Euronav The key issue for the energy transition is cost. Energy
investment is running at half the level needed to meet the
ambition to reach net-zero by 2050. Fossil fuels already satisfy
83% of primary energy demand in the world and this needs to
be reduced aggressively towards zero over time. But the rise of
spending on renewables and the wind-down of supply of fossil
fuels need to happen in tandem, without creating dangerous
mismatches.
Overall, this will require capital expenditure on energy to more
than double to USD 4 to USD 5 trillion per annum (source:
Goldman Sachs). However, from an investor perspective, policy
remains confusing. Many countries have net-zero pledges but
no direct plan on how to get to that destination.
Private investors could end up with a structural
advantage
The result of this divestment process in selling such assets,
usually to private equity, is to transfer those assets and their
environmental impacts further away from the public eye. This
is important as the private equity industry in total manages
over USD 7.4 trillion of assets globally. Alyssa Giachino of the
Private Equity Stakeholder Project says private equity has
been quietly picking up the “least desirable assets” since 2010.
During this period, the top private equity firms in the world
have seen their investments comprise around about 80%
from just three sectors: oil, gas and coal (source: Private Equity
Stakeholder Project - PESP).
This investment totals at least USD 1.1 trillion into the energy
sector (source: PESP), which for context, is double the
combined market value of the three largest energy companies
in the world: Exxon, Chevron, and Royal Dutch Shell. Private
equity has a far more limited requirement to disclose
information. Therefore it can be very difficult to obtain a
proper view of, not only the holdings but also the climate and
environmental practices and policies of these assets.
As the Economist newspaper highlighted (February 11,
2022)”Many are ending up in the hands of private-equity (pe)
firms. In the past two years alone, these bought USD 60 billion
worth of oil, gas and coal assets, through 500 transactions—a
third more than they invested in renewables” (see figure 8).
This movement has often been inadvertently backed by the
banks. In the face of mounting pressure to cut back on fossil
fuel investments, they frequently leave private equity as the
key investment force behind a lot of so-called “demonised
assets”. Private equity has also taken advantage of the oil
industry and other fossil-fuel-related industries facing pressure
from the courts and environmental groups. They are often
around when stakeholders start shifting away from fossil fuels.
Annual report 2021
Figure 8: Rise in PE activity in acquiring fossil fuel assets
Source: PitchBook, The Economist
Consequently, many companies have begun shedding their
‘dirtiest’ assets, only for them to end up in the hands of private
equity far from the public eye and with less information for
activists.
However, an alternative investor class is establishing itself
among state-owned firms and sovereign funds. In 2022 Saudi
Aramco, the Kingdom’s national oil company, acquired a
30% stake in a refinery in Poland and in 2020 the Singapore
sovereign wealth fund GIC paid USFD 10 billion for a stake in an
Emirati pipeline (source: Economist 11 February 2022).
The notion is that divestment must be good, but new owners
of divested assets may not be subject to the same pressure
from regulators and responsible investors. During last year,
UK hedge funds scooped up the shares of unloved oil and gas
companies discarded by institutional investors.
Crispin Odey, founder of London-based Odey Asset
Management, told the Financial Times
“It’s such a great and easy idea as
they [big institutional investors] are
all so keen to get rid of oil assets,
they’re leaving fantastic returns on
the table.”
195
Euronav
Figure 9: From July 2021 European oil sector outperformed wider European index by nearly 30%
Source: Bloomberg
These stocks consequently made big gains as energy prices
surge (see figure 9). Hedge fund managers in the US and UK
have been betting that the eagerness of many big institutions
to be seen to hold ESG standards means they are selling
wholesale out of fossil fuel stocks, even though demand for
some of these products remains high.
Careful consideration needs to be given on a case-by-case
basis to ensure that selling off polluting assets does not result
in greater long term environmental damage, at least until
coordinated global regulatory and policy changes provide a
safer framework.
Greenwashing risk
Assets in sustainable investment funds have doubled over
the past four years to about USD 3.6 trillion (IMF HY Global
Financial Sustainability Report). However, additional
investments of up to USD 20 trillion will be required by 2050
to achieve the goal of reducing worldwide carbon emissions
to net-zero by the same time.
Some 70% of this additional funding is expected to come
from private sources. The potential for ‘greenwashing’ by
asset managers in these conditions looms large and has
been drawn into focus by recent investigations into asset
management groups. Allegations of misleading claims over
the sustainability of ESG labelled assets has highlighted
the poor quality of data available for grading companies,
with differing results and subjective definitions of what ESG
means. There are claims that some data providers who
rate companies on ESG rely too much on a company’s own
disclosures on sustainability.
In addition, there are fears that some funds are being rebranded
into ESG funds to avoid having to start a new ESG fund from
scratch or, worse, to mask existing ailing portfolios by trying to
attract flows of investment based on ‘green’ credentials.
for
Companies considering alternative options
some
controversial but lucrative fossil fuel assets are forming joint
ventures and spinning off certain oil and gas projects into a
separate entity, so listing a parallel vehicle on the stock market.
“Why do you think these companies want to form these types
of separate companies?”, says one European oil executive. “Not
only do you take the debt off the balance sheet, you remove the
emissions from these projects too.”
Most big asset managers claim to integrate ESG into all their
investments. Again, however, this is poorly defined. For one
asset manager, integration could mean that portfolio managers
have to consider a company’s ESG score before buying a stock.
For another they might be excluded from buying certain shares.
Alternative approaches to divestment - An
integrated incentivised framework
Below we provide several principles which Euronav
is
following and which we believe should be followed by the
investor and corporate sectors. These, if applied together,
would push back on the trend of divestment and the often
negative consequences this process can bring.
196
Annual report 2021
Listed status is best
Capital markets quite correctly set exacting standards for
corporates to observe, with access to capital coming with a high
degree of scrutiny and disclosure. Euronav has always strived
to uphold the most rigorous standards of governance (Press
release: Euronav climbs to runner-up position in Webber
Research’s 2021 ESG scorecard) and is a strong believer in
the “contract” between capital markets and corporates. That
contract requires detailed and constant scrutiny in return for
access to capital at a reasonable cost. Observing and enacting
high governance standards in shipping has been proven to
work. Since 2016, Webber Research (initially under Wells Fargo)
have employed an ESG scorecard which rates the world’s top
shipping companies on their corporate governance, capital
stewardship and emissions proposals. Stronger corporate
governance has generally been associated with stronger
capital market performance.
Transparency
Transparency is a key factor for both corporates and investors.
Corporates have an obligation to provide all stakeholders with
adequate financial and sustainability data, especially when
listed in public markets. Investors, particularly those with ESG
criteria linked to their assets, should also be open about where
they invest, or choose not to, and why they make those choices.
Data providers that are rating companies on their ESG credentials
must be required by regulation to produce consistent,
lack of standardisation or
comparable, reliable data. A
consistency across existing measurement and targets muddies
the waters and increases the potential for greenwashing. A
move towards third-party verified Science Based Targets (SBTs)
provides a clearer framework for aligning targets with warming
thresholds established in the Paris Agreement.
Corporates have a great deal of opportunity to work with third
parties such as TFCD (Task Force on Climate-Related Financial
Disclosures), CDP (Carbon Disclosure Project) and assessment
bodies such as Sustainalytics. These parties provide a
significant role in providing independent accreditation on how
a corporate is fulfilling its obligations.
Euronav has been part of the CDP programme now for two
years and has received a B rating in both 2021 and 2020 making
it one of the higher rated shipping companies in that universe.
Sequential milestones to measure progress -
not long-term, long-distance goals
Our engagement with investors has often revealed a surprising
inconsistency between what are seen as acceptable emissions
targets for easy-to-abate or low emission sectors, and those for
hard-to-abate sectors. Long-range (not to say ‘long-grass’)
Figure 10: In shipping the best corporate governance has led to best share price
performance according to Webber Research ESG scorecard dating back to 2016.
Source: Webber Research
197
Figure 11: Shipping has sequential improvements in emissions in place already
Source: DNV GL
goals such as ‘Net Zero by 2050’ appear to be lauded when
set by easy-to-abate sectors who fail to publish a trackable
roadmap to zero, while at the same time the hard-to abate
sectors such as shipping draw criticism for setting their sights
on 2030 targets. Ambition should not be rewarded over
obligation, and we believe all emission reduction timescales
must be set to verifiable milestones. A good example is that
those adopting financing based on the Poseidon Principles
must commit to reduce GHG emissions intensity by 40% by
2030. The trajectory for a shipping company like Euronav is
shown in figure 11.
Inclusivity, Incentive & Engagement – a two-
way street
Divestment can seem to be the only route when there is no
acknowledged, viable alternative, and assets such as oil or
shipping are deemed non-investible on a blanket basis. In
our view, exclusion from investment should be a last resort,
with inclusion being incentive-based. A ‘third way’ is required
whereby asset managers, banks and investors adopt a flexible
approach and are afforded the means to recognise and label
true ‘green champions’, even in hard-to-abate sectors.
This provides transparency and is easy to measure in a
timeframe open to all. It will become clear whether a company
will meet its objectives for 2030 very quickly. Failure should
have consequences, including divestment and a plan with
long-dated forecasts, but limited or no milestones on that
trajectory should be tolerated by neither investors nor
corporates.
Engagement should be characterised by compliance with
specific rules and measures such as the Poseidon Principles
which,
in their case, provide a single emissions-based
mechanism for shipping corporates to adopt. Failure to
adhere to a specific code of conduct, or placing scant focus
on sustainability, should have consequences and penalties for
companies. However, those that do illustrate best practice
198
Short-term 2018-2023••••Tighter EEDI and SEEMPEnergy-efficiency indicatorsSpeed reductionNational action plansMid-term 2023-2030Long-term 2030 Peak ASAPEuronav Figure 12: Key factors of the Poseidon Principles
Annual report 2021
should be incentivised to retain access to such capital flows,
and not be on the wrong side of divestment. Such a framework
is needed to afford inclusivity, incentive, and engagement.
Regulation
There are areas across the capital investment spectrum
which can be difficult to manage. For example, the lack of
commercial incentive to be found in decommissioning old
nuclear or oil assets means these phase-outs tend to fall
to government (public) funding. Regulatory and governing
bodies should tactically adopt a framework that will counter
divestment in these circumstances. When oil assets fall into
operating models which do not compete on a similar footing
to those from a capital market listed background, it creates a
two-tier market and incentivises low compliance on areas such
as emissions reduction. Regulation, particularly in areas where
private equity has acquired assets divested (and/or rejected)
by public markets (e.g. coal) must be forced to comply with a
regulatory” safety net” to avoid two-tier markets.
Incorporate financing at core
Divestment is often an easy solution, especially where access
to financing can be either difficult or costly, or sometimes
both. As part of a co-ordinated, constructive framework as an
alternative to divestment, the key jigsaw piece is financing.
Shipping has developed a reputable and coordinated
approach which is already bearing positive results within
what is a hard-to-abate emission sector. In 2019 the Poseidon
Principles were launched.
Essentially, this is a set of standards (figure 12) focused on
emission reductions that banks lending to shipping must
ensure their customers align with (for more detail https://
www.poseidonprinciples.org).
Emission reductions must be delivered every year toward a
target of 40% reduction in CO2 emissions intensity by 2030.
This alignment of finance with a clear objective (in this case
emissions) is a good example of financing being central
to an industry. This covers both private and publicly listed
companies. Such an initiative pushes back on divestment, as
meeting this objective drives inclusion rather than exclusion.
Around 70% of ship financing is now covered by the Poseidon
Principles as shown in figure 13. It should be celebrated and
promoted, illustrating what a capital-intensive sector like
shipping can deliver in pushing back against the trend of
divestment.
199
Figure 13: Breakdown of Shipping & Poseidon Principles banks
Source: Poseidon Principles
illustrates how a co-
The Poseidon Principles strongly
ordinated approach on financing, based on the highest
governance standards but shaped for a specific goal (in this
case emissions reductions) can deliver a robust, clear and
transparent framework to push back against the trend of
divestment.
Conclusion
Euronav is a one-product company transporting crude oil
safely and securely around the planet. That product itself
is subject to frequent assertions that it is near or at “peak
demand” and divestment has been a core feature since 2015.
As a shipping company, our industry is capital-intensive (a new
VLCC super tanker costs USD 110 million) with high a degree
of regulation and historically, a relatively poor corporate
governance track record. We therefore believe we have a front-
row seat in assessing not only the risks of divestment but also
what the opportunities are.
Divestment has put questions of finance and climate change
on the agenda and played a part in changing discourse
around the legitimacy, reputation and viability of the fossil
fuel industry. This cultural impact has in turn contributed to
changes in the finance industry through new demands made
by shareholders and investors and to a shift in the political
debate, The notion of ‘fiduciary duty’ has been re-examined in
this new context along with a reorientation of how we assess
risk around climate change and social impact.
In our view, however, divestment can be a very blunt and
discriminatory tool to deliver what are often complex and inter-
related objectives. The focus must be on what divestment will
achieve in actual long-term CO2 reduction, not be employed
for its own sake. We agree with the recent joint study made
by Harvard and the University of Chicago under the auspices
of the National Bureau of Economic Research (NBER) in
September 2020, the study concluded:
‘‘...divestment is messy and
unpredictable...divesting or
boycotting can lead to too little or
too much exit from the perspective
of a benevolent planner. Its
disruptive, limitative [sic] nature is
goal oriented; hence the outcomes
cannot be measured, nor verified.
It is a goal in itself instead of a
process.”
200
Euronav Figure 14: Divestment an option only after multiple
stakeholder engagement for quoted companies
Annual report 2021
Euronav does not believe that all companies engaged to a
greater or lesser degree in fossil fuel industries should be given
a free pass in their application of sustainability measures.
Divestment is a relevant and appropriate tool in certain
circumstances to prevent specific behaviours, or to starve
serial offenders of the capital needed to develop their non-
compliant business models. However, the point of this paper
has been to try and show that the binary choice - invest or
divest - is too blunt, too simplistic.
There is a third way. A coordinated, incentive-based framework
that delivers best practice, sustainable economics, and high
standards of corporate governance within the public capital
market arena is by far the best means to efficiently deliver the
complex objectives of decarbonisation. As we have shown,
shipping has in parts developed key parameters for such a
framework.
The argument against divestment should not act as a delaying
tactic over the decommissioning of hard-to-abate sectors.
Rather, the taxonomy and regulation must change the value
system around them and those that do not adopt this system
should feel the pressure and threat of divestment.
Ultimately, we believe that the development of green
champions with access to competitively priced capital across
in those hard-to-abate
the market spectrum, especially
sectors such as shipping, is the best way for all stakeholders
(equity investors, lending institutions, and bond markets)
to satisfactorily support decarbonisation over a practical
timeframe. We value engagement with all stakeholders to
discuss these important topics.
“Finally, investors should question
the idea that the best way to
make polluters pollute less is to
dump their shares. Such dumping
is supposed to raise the cost of
capital for polluters, and thereby
impede new investment by them.
But this does not work if there
is an abundance of alternative
private cash willing to buy up those
shares—which there is. To be truly
green, investment strategies must
be less black and white”
Economist 11 February 2022
201
TRANSPARENCYFINANCINGREGULATIONMILESTONESLISTEDONCAPITALMARKETSINCLUSIVITY,INCENTIVE&ENGAGEMENTDIVESTMENT Euronav
Prospects for 2022
If you were to explain the drivers of the maritime industry
during 2021 in a single phrase, it would be "Covid-19", and this
appears to be the case going into 2022 as well. More than a year
on from the initial outbreak of the pandemic the world is still
feeling the effects of delayed economic growth and sluggish
oil consumption, and these in turn impact the demand for oil
tankers which remains, in relative terms, low.
There are, however, positives to look out for as we enter the
new year. Global oil demand is in recovery mode. We have
not reached pre-pandemic levels yet, but 2022 seems to be
the year that most reporting agencies highlight as the year
that oil demand will reach this milestone. Asian economies in
particular are powering ahead and places like China and India
are already at the point where demand has normalised. On
a global scale Platts forecast 2022 demand to average 103.3
million barrels per day. This compares to a 2019 average of
102.6 million barrels per day. A factor that could boost baseline
oil demand further is inventory re-stocking. Stockpiles in most
major OECD hubs are significantly below pre-Covid levels
and will likely need replenishing in the short to medium term.
Switching to oil from coal and gas where prices have soared
towards the end of 2021, due to supply shortages, could also
continue to boost demand in the early part of 2022.
The positive outlook for oil demand is putting pressure on the
OPEC and its allies to respond with increased supply targets.
Oil production from the group has already risen through 2021
and is set to continue a steady rise through 2022. Global oil
supply is rising strongly and is forecast to grow by 6.6 million
barrels per day in 2022 based on numbers from Platts.
On the vessel supply side we are entering a time that is posed
for limited fleet growth. Ordering activity has slowed down
markedly and we are unlikely to see many additions to the
crude tanker orderbooks for delivery in the next two to three
years. Crude tanker fleets are getting older and the potential
for a significant amount of phaseout over the coming twelve
months remains strong.
We have not yet seen the improvements in oil demand and
supply reflected in sustained higher activity in the tanker
space. An increased demand for tankers in the near term is
202
Annual report 2021
While the demand story looks promising, albeit with some
downside risk, the supply of oil could be a limiting factor. It
remains to be seen how OPEC+ will act through the year as
the demand picture may change. On the ship supply side the
phaseout of older tonnage is paramount for the market to
return to some level of equilibrium. It appears that everything
is lined up for a large outflow of tonnage with higher demolition
prices, incoming environmental regulations and a relatively
low freight markets. If this was to take effect, we could see real
shifts in the tanker markets over the year that is 2022.
supported by factors such as fundamental improvements
in oil consumption, incremental demand for oil as rising gas
prices push a fuel switch, and low global crude stocks that
need replenishing.
There are certain risks to this outlook. Fresh waves of
COVID-19 that spread globally could hamper current demand
projections. We could also see a scenario where OPEC+ decide
to reduce production targets and therefore negatively impact
tanker demand. Current high crude oil prices could weigh
on demand for fresh crude purchases, refining margins and
consumption in general.
Clearly the tragic events unfolding at the time of writing in
Ukraine may have an impact on crude tanker flows for 2022.
Russian crude could potentially be displaced by alternative
tanker flows and sanctions are put in place that would likely
slow global Gross Domestic Product (GDP) growth. The
precise impact on the crude tanker market will also be driven
by a higher oil price and its potential effect on demand. The
duration and scale of these largely geopolitical events is highly
uncertain at the time of writing.
203
Euronav
Fleet of the Euronav Group
as of 31 December 2021
Owned VLCCs and V-Plus
Owned
Built
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2016
2016
2016
2016
2012
2017
2016
2016
2015
2017
2016
2016
2017
2007
2007
2021
2016
2015
2021
2021
2015
2016
2021
2016
2002
2010
2010
2017
2017
2011
2013
2012
2012
Dwt
299,999
298,991
299,445
299,320
320,350
298,991
299,392
299,533
299,421
298,767
298,991
299,999
298,642
306,005
306,543
300,200
299,999
299,999
299,550
300,200
299,999
299,999
300,200
299,999
441,561
302,550
302,624
297,363
297,363
302,550
302,965
314,000
314,000
Draft
21.62
21.62
21.6
21.6
22.5
21.62
21.62
21.6
21.6
21.62
21.62
21.62
21.62
22.49
22.49
21.60
21.53
21.52
21.60
21.60
21.54
21.54
21.60
21.53
24.53
21.03
21.03
21.62
21.62
21.03
21.64
22.37
22.38
Flag
Length (m)
Belgian
Liberian
Belgian
Belgian
French
Liberian
Liberian
French
Greek
Belgian
Belgian
Belgian
Belgian
Liberian
Liberian
Belgian
Liberian
Liberian
Belgian
Belgian
Liberian
Liberian
Belgian
Liberian
French
French
Greek
Liberian
Liberian
Greek
Belgian
Belgian
Belgian
332.97
332.97
333
333
330
332.97
332.97
333
333
333
332.97
333
333
332
332
336
336
336
336
336
336
336
336
336
380
333
333
333
333
333
330
319.03
319.03
Shipyard
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Samsung H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Daewoo H.I.
Universal
Universal
Hanjin Subic
Hanjin Subic
Universal
Japan Marine United
Hyundai H.I.
Hyundai H.I.
Name
Aegean
Alboran
Alex
Alice
Alsace
Amundsen
Andaman
Anne
Antigone
Aquitaine
Arafura
Aral
Ardeche
Daishan
Dalma
Delos
Desirade
Dia
Dickens
Diodorus
Dominica
Donoussa
Doris
Drenec
Europe
Hakata
Hakone
Hatteras
Heron
Hirado
Hojo
Ilma
Ingrid
204
Annual report 2021
Name
Iris
Oceania
Sandra
Sara
Simone
Sonia
Owned
100%
100%
100%
100%
100%
100%
Built
2012
2003
2011
2011
2012
2012
Dwt
314,000
441,561
323,527
323,183
313,988
314,000
Newbuildings*
Name
HSHI 8132
Owned
100%
Built
2023
Dwt
299,158
Draft
22.37
24.53
21.32
22.62
22.1
22.1
Draft
21.70
HSHI 8133
100%
2023
299,158
21.70
HSHI 8134
100%
2023
299,158
21.70
*These vessels will be delivered to Euronav during the first and second quarter of 2023.
Flag
Length (m)
Shipyard
Belgian
Belgian
French
French
Belgian
French
333.14
380
319.57
319.57
319.57
319.57
Hyundai H.I.
DSME
STX O&S
STX O&S
STX O&S
STX O&S
Flag
Length (m)
Shipyard
TBD
TBD
TBD
328
328
328
Hyundai Samho Heavy
Industries Co., Ltd.
Hyundai Samho Heavy
Industries Co., Ltd.
Hyundai Samho Heavy
Industries Co., Ltd.
VLCCs Bareboat
Name
Nautica
Navarin
Nectar
Neptun
Noble
Nucleus
Newton
Owned
100%
100%
100%
100%
100%
100%
No
Built
2008
2007
2008
2007
2008
2007
2009
Dwt
Draft
Flag
Length (m)
307,284
307,284
307,284
307,284
307,284
307,284
307,284
22.723
Liberian
22.72
22.72
22.72
22.72
22.72
22.3
Marsh I
Liberian
Marsh I
Liberian
Marsh I
Liberian
321.7
321.65
321.6
321.7
321.7
321.64
321.7
Shipyard
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
205
Owned Suezmax vessels
Owned
Built
Dwt
Draft
Flag
Length (m)
Shipyard
Name
Bari
Cap Charles
Cap Corpus Christi
Cap Felix
Cap Guillaume
Cap Lara
Cap Leon
Cap Pembroke
Cap Philippe
Cap Pierre
Cap Port Arthur
Cap Quebec
Cap Theodora
Cap Victor
Capt. Michael
Fraternity
Maria
Sapphira
Selena
Sienna
Sofia
Statia
Stella
Newbuildings*
Name
Cedar
Cypress
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2005
2006
2018
2008
2006
2007
2003
2018
2006
2004
2018
2018
2008
2007
2012
2009
2012
2008
2007
2007
2010
2006
2011
Owned
100%
Built
2022
159,186
158,881
156,600
158,765
158,889
158,826
159,049
156,600
158,920
159,083
156,600
156,600
158,819
158,853
157,648
157,714
157,523
150,205
150,205
150,205
165,000
150,205
165,000
17.07
17
17.15
17.02
17
17
17.02
17.15
17
17.02
17.15
17.15
17
17
17
17.02
17
16.02
16.02
16.02
17.17
16.02
17.17
Marsh I
Greek
Greek
Belgian
Greek
Greek
274.47
Hyundai H.I.
274
277
274
274
274
Samsung H.I.
Hyundai H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Liberian
274.29
Samsung H.I.
Greek
Greek
277
274
Hyundai H.I.
Samsung H.I.
Liberian
274.29
Samsung H.I.
Greek
Greek
Greek
Greek
Greek
Belgian
Greek
Belgian
Belgian
Belgian
Greek
Belgian
Greek
277
277
274
274
274.82
274.2
274.82
274.20
274.20
274.20
274.19
274.20
274.19
Hyundai H.I.
Hyundai H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Universal
Universal
Universal
Hyundai H.I.
Universal
Hyundai H.I.
Dwt
Draft
Flag
Length (m)
Shipyard
157,310
17.2
Greek
100%
2022
157,310
17.2
Greek
HSHI 8135
100%
2023
156,851
17.65
TBD
HSHI 8136
100%
2024
156,851
17.65
TBD
HSHI 8137
100%
2024
156,851
17.65
TBD
274
274
270
270
270
Daehan Shipbuilding
Co. Ltd.
Daehan Shipbuilding
Co. Ltd.
Hyundai Samho
Heavy Industries Co.,
Ltd.
Hyundai Samho
Heavy Industries Co.,
Ltd.
Hyundai Samho
Heavy Industries Co.,
Ltd.
*These vessels will be deliverd to Euronav during the second and fourth quarter of 2023 and the first quarter of 2024.
206
Euronav Annual report 2021
Owned FSO’s (Floating, Storage and Offloading)
Name
FSO Africa
FSO Asia
Owned
50 %
50%
Built
2002
2002
Dwt
442,000
442,000
Draft
24.53
24.53
Flag
Length (m)
Marsh I
Marsh I
380
380
Shipyard
Daewoo H.I.
Daewoo H.I.
207
Euronav
Glossary
Aframax - A medium-sized crude oil tanker of approximately
80,000 to 120,000 deadweight tons. Aframaxes can generally
transport from 500,000 to 800,000 barrels of crude oil and
are also used in lightering. A coated Aframax operating in the
refined petroleum products trades may be referred to as an
LR2.
AER - Abbreviation of ‘Annual Efficiency Ratio’. This is the
ratio of a ship’s carbon emissions per actual capacity
distance (e.g. dwt x nm sailed). The AER uses the
parameters of fuel consumption, distance travelled, and
design deadweight tonnage. It reflects an index based on
the tonnage supply.
Backwardation - When the future or forward price of oil is
lower than the current or ‘spot’ price.
Ballast - Seawater taken into a vessel’s tanks to increase draft,
to change trim or to improve stability. Ballast can be taken in
segregated ballast tanks (SBT), located externally to the ship's
cargo tanks (double hull arrangement), and in fore and aft
peak tanks.
Bareboat Charter - A Charter under which a customer pays a
fixed daily or monthly rate for a fixed period of time for use of
the vessel. The customer pays all costs of operating the vessel,
including voyage and vessel expenses. Bareboat charters are
usually long-term.
Barrel - A volumetric unit of measurement equal to 42 U.S.
gallons or 158.99 litre. There are 6.2898 barrels in one cubic
metre. Note that while oil tankers do not carry oil in barrels
(although vessels once did in the 19th century), the term is still
used to define the volume.
BIMCO - Baltic and International Maritime Council Organisation
for shipowners, charterers, ship brokers and agents. In total,
around 60% of the world’s merchant fleet is a BIMCO member,
measured by tonnage (weight of the unloaded ships).
BITR - Baltic Index Tanker Routes. The Baltic Exchange is
a source of independent, freight market data. Information
collected from a number of major ship brokers around the
world is collated and published daily. The Exchange publishes
the following daily indices: the Baltic Panamax Index, the Baltic
Capesize Index, the Baltic Handymax Index and the Baltic
International Tanker Routes. The Exchange also publishes a
daily fixture list.
BPD - Barrels Per Day. This is a measure of oil output,
represented by the number of barrels of oil produced in a
single day.
Bulk cargo - Bulk cargo is commodity cargo that is transported
unpackaged in large quantities. The containment for this type
of cargo is the tanks of the ship.
Bunkers – Bunkers includes all dutiable petroleum products
loaded aboard a vessel for consumption by that vessel.
International maritime bunkers describe the quantities of
fuel oil delivered to ships of all flags that are engaged in
international navigation. It is the fuel used to power these
ships.
CBA - Collective Bargain Agreement is a written contract
negotiated through collective bargaining for employees by one
or more trade unions with the management of a company (or
with an employers' association) that regulates the terms and
conditions of employees at work. This includes regulating the
wages, benefits, and duties of the employees and the duties
and responsibilities of the employer or employers and often
includes rules for a dispute resolution process.
CDP - The Carbon Disclosure Project is a not-for-profit charity
that runs the global disclosure system for investors, companies,
cities, states and regions to manage their environmental
impacts. The world’s economy looks to CDP as the gold
standard of environmental reporting with the richest and most
comprehensive dataset on corporate and city action.
Charter - Contract entered into with a customer for the use
of the vessel for a specific voyage at a specific rate per unit
of cargo (Voyage Charter), or for a specific period of time at a
specific rate per unit (day or month) of time (Time Charter).
Charterer - The company or person to whom the use of the
vessel is granted for the transportation of cargo or passengers
for a specified time.
208
Annual report 2021
CII - The Carbon Intensity Indicator is a response to the
company's need to move towards a business model
compatible with the Paris Agreement, achieving net zero
emissions by 2050. This indicator is used to monitor progress
and apply the most suitable and timely efficient levers.
Commercial Management or Commercially Managed -
The management of the employment, or chartering, of a vessel
and associated functions, including seeking and negotiating
employment for vessels, billing and collecting revenues,
issuing voyage instructions, purchasing fuel and appointing
port agents.
Contango - A term used in the futures market to describe an
upward sloping forward curve. Such a forward curve is said
to be ‘in contango’. Formally, it is the situation where and the
amount by which the price of a commodity for future delivery
is higher than the spot price, or a far future delivery price higher
than a nearer future delivery. The opposite market condition
to contango is known as backwardation.
COA - A Contract of Affreightment is an agreement providing
for the transportation between specified points for a specific
quantity of cargo over a specific time period but without
designating specific vessels or voyage schedules. This allows
flexibility in scheduling since no vessel designation is required.
COAs can either have a fixed rate or a market-related rate.
Crude oil - Oil in its natural state that has not been refined or
altered.
DTA - A deferred tax asset is an item on the balance sheet that
results from overpayment or advance payment of taxes.
DTL - A deferred tax liability is a tax that is assessed or is due
for the current period but has not yet been paid -- meaning
that it will eventually come due. The deferral comes from the
difference in timing between when the tax is accrued and
when the tax is paid.
dwt - Deadweight Tonnage is the lifting or carrying capacity of a
ship when fully loaded. This measure is expressed in metric tons
when the ship is in salt water and loaded to her marks. It includes
cargo, bunkers, water, lubricants, stores, passengers and crew.
Demurrage - Additional revenue paid to the ship owner on
its Voyage Charters for delays experienced in loading and/or
unloading cargo that are not deemed to be the responsibility
of the ship owner. The revenue is calculated in accordance
with specific Charter terms.
Double hull - A design of tanker with double sides and a
double bottom. The spaces created between the double sides
and bottom are used for ballast and provide a protective
distance between the cargo tanks and the outside world.
Draft - The vertical distance measured from the lowest point of
a ship’s hull to the water surface. Draft marks are welded onto
the surface of a ship’s plating. They are placed forward and
aft on both sides of the hull, and also amidships. The Plimsoll
lines which designate maximum drafts allowed for vessels
under various conditions are also found amidships.
Dry dock - An out-of-service period during which planned
repairs and maintenance are carried out,
including all
underwater maintenance such as external hull painting. During
the dry docking, certain mandatory Classification Society
inspections are carried out and relevant certifications issued.
Modern vessels are designed to operate for five years between
dry dockings. Normally, as the age of a vessel increases, the
cost and frequency of dry docking increase. After the third
Special Survey, dry-docks will be conducted every 2.5 years.
EBITDA - Stands
Interest, Taxes,
Depreciation, and Amortisation and is a metric used to
evaluate a company's operating performance. It can be seen
as a proxy for cash flow. In finance, the term is used to describe
the amount of cash (currency) that is generated or consumed
in a given time period
EEDI - Energy Efficiency Design Index. The EEDI for new ships is
the most important technical measure and aims at promoting
the use of more energy efficient (less polluting) equipment and
engines. The EEDI requires a minimum energy efficiency level
per capacity mile (e.g. tonne mile) for different ship type and
size segments. Since 1 January 2013 new ship design needs to
meet the reference level for their ship type.
for Earnings Before
209
EEOI - The Energy Efficiency Operational Index is the amount of
CO2 emitted by the ship per ton-mile of work. It is the ratio of the
CO2 emitted to the ton-mile (amount of cargo x nm sailed). The
total operational emissions to satisfy transport work demanded
is usually quantified over a period of time which encompasses
multiple voyages. It measures the ratio of a ship’s carbon
emissions per unit of transport work.
EEXI - Energy Efficiency Existing Ship Index describes, in principle,
the CO2 emissions per cargo ton and mile. It determines the
standardised CO2 emissions related to installed engine power,
transport capacity and ship speed. The EEXI is a design index,
not an operational index. The EEXI is applied to almost all ocean-
going cargo and passenger vessels above 400 gross tonnage.
EIA - The US Energy Information Administration is the statistical
agency of the Department of Energy. It provides policy-independent
data, forecasts, and analyses to promote sound policy making,
efficient markets, and public understanding regarding energy,
and its interaction with the economy and the environment.
FPSO - Stands for Floating Production, Storage and Offloading.
FPSOs are designed to receive all of the hydrocarbon fluids
pumped by nearby offshore platforms (oil and gas), to process it
and to store it. FPSOs are typically moored offshore ship-shaped
vessels, with processing equipment, or topsides, aboard the
vessel’s deck and hydrocarbon storage below, in the hull of the
vessel.
FSO - A Floating Storage and Offloading vessel is commonly used
in oil fields where it is not possible or efficient to lay a pipeline to
the shore. The production platform will transfer the oil to the FSO
where it will be stored until a tanker arrives and connects to the
FSO to offload it.
GHG - Green House Gas. Greenhouse gases are compound gases
that trap heat or longwave radiation in the atmosphere. Their
presence in the atmosphere makes the Earth's surface warmer.
The principal GHGs, also known as heat trapping gases, are carbon
dioxide, methane, nitrous oxide, and the fluorinated gases.
GEI - The Bloomberg Gender-Equality
Index tracks the
performance of public companies committed to disclosing their
efforts to support gender equality through policy development,
representation and transparency.
Green Passport - The Green Passport contains details of all
materials, especially which are harmful to human health, used in
the construction of a vessel. The green passport will be delivered
by the shipyard during the construction and it will be later updated
with all the changes made to the ship during its lifetime.
HELMEPA - The Hellenic Marine Environment Protection
Association; the pioneering voluntary commitment of Greek
seafarers and ship owners to safeguard the seas from ship-
generated pollution, undertaken in Piraeus, on June 4, 1982.
Under the motto “To Save the Seas”, they have consistently
supported their initiative to date.
Hull - The watertight body of a ship or boat. The hull may
open at the top (such as a dinghy), or it may be fully or partially
covered with a deck.
IFRS - IFRS standards are International Financial Reporting
Standards that consist of a set of accounting rules that
determine how transactions and other accounting events are
required to be reported in financial statements.
IGO - An intergovernmental organisation or international
organisation
is an organisation composed primarily of
sovereign states (referred to as member states), or of other
intergovernmental organisations.
IHM - The Inventory of Hazardous Materials is a list that
provides ship-specific information on the actual hazardous
materials present on board, their location and approximate
quantities
IMO - The International Maritime Organisation’s main task is to
develop and maintain a comprehensive regulatory framework
for shipping including safety, environmental concerns, legal
matters, technical co-operation, maritime security and the
efficiency of shipping. It was established by means of a
Convention adopted under the auspices of the United Nations
in 1948. https://www.imo.org/en
IoT - The Internet of Things describes the network of physical
objects—“things”—that are embedded with sensors, software,
and other technologies for the purpose of connecting and
exchanging data with other devices and systems over the
internet. These devices range from ordinary household objects
to sophisticated industrial tools.
Intertanko - The International Association of Independent
Tanker Owners is a trade association. It has served as the
voice for independent tanker owners since 1970 on regional,
national, and international levels. The association actively
works on a range of technical, legal, commercial, and
operational issues that have an influence on tanker owners
and operators around the world.
ISM Code - International Safety Management Code is a set of
IMO regulations that ship operators and ships must comply
with. The purpose of the ISM Code is to provide an international
standard for the safe management and operation of ships and
for pollution prevention.
ITF - The International Transport Workers’ Federation is a
democratic, affiliate-led federation recognised as the world’s
leading transport authority. The ITF has been helping seafarers
since 1896 and today represents the interests of seafarers
worldwide, of whom over 600,000 are members of ITF affiliated
unions. The ITF is working to improve conditions for seafarers
of all nationalities and to ensure adequate regulation of the
shipping industry to protect the interests and rights of the
workers. The ITF helps crews regardless of their nationality or
the flag of their ship.
ITOPF - The International Tanker Owner Pollution Federation
is a not-for-profit organisation established on behalf of the
world's shipowners to promote an effective response to
marine spills of oil, chemicals and other hazardous substances
Knot - A unit of speed equal to one nautical mile (1.852 km)
per hour, approximately 1.151 mph.
210
Euronav Annual report 2021
KPI - KA performance indicator or key performance indicator
is a type of performance measurement. An organisation may
use KPIs to evaluate its success, or to evaluate the success of a
particular activity in which it is engaged.
LNG - Liquefied Natural Gas has been made over millions of years
of transformation of organic materials, such as plankton and
algae. Natural gas is 95% methane, which is actually the cleanest
fossil fuel. The combustion of natural gas primarily emits water
vapour and small amounts of carbon dioxide (CO2). This property
means that associated CO2 emissions are 30 to 50% lower than
those produced by other combustible fuels.
LR1/LR2 - Abbreviations for Long Range oil tankers. Tankers with
approx. 50-80,000 dwt (LR1) and approx. 80-120,000 dwt. (LR2).
MACN - The Maritime Anti-Corruption Network is a global
business network working towards its vision of a maritime
industry free of corruption that enables fair trade to the benefit
of society at large.
mbpd - Million Barrels Per Day
MLC - The Maritime Labour Convention, 2006 sets minimum
requirements for nearly every aspect of working and living
conditions for seafarers including recruitment and placement
practices, conditions of employment, hours of work and rest,
repatriation, annual leave, payment of wages, accommodation,
recreational facilities, food and catering, health protection,
occupational safety and health, medical care, onshore welfare
services and social protection.
Mt - Metric Ton (or Tonne) of fuel – quantity in litres depends
on fuel type
MOPU - A Mobile Offshore Production Unit is any type of
portable structure that can be reused when procuring oil and
gas from the seabed. These are typically used when the depth
of drilling is over 500m. If the water is any shallower, then fixed
platforms are constructed
NAMEPA
- The North American Marine Environment
Protection Association is a marine industry-led organisation of
environmental stewards preserving the marine environment
by promoting sustainable marine industry best practices and
educating seafarers, students and the public about the need
and strategies for protecting global ocean, lake and river
resources.
NGO – a non-governmental organisation is a non-profit group
that functions independently of any government. NGOs,
sometimes called civil societies, are organised on community,
national and international levels to serve a social or political
goal such as humanitarian causes or the environment.
NOx - In atmospheric chemistry, NOx is a generic term for the
nitrogen oxides that are most relevant for air pollution, namely
nitric oxide (NO) and nitrogen dioxide (NO2). These gases
contribute to the formation of smog and acid rain, as well as
affecting tropospheric ozone.
OCIMF - The Oil Companies International Marine Forum is a
voluntary association of oil companies with an interest in the
shipment and terminalling of crude oil, oil products,
petrochemicals and gas. OCIMF focuses exclusively on preventing
harm to people and the environment by promoting best
practice in the design, construction and operation of tankers,
barges and offshore vessels and their interfaces with terminals.
OECD - The Organisation for Economic Co-operation and
Development is an international organisation that works to build
better policies for better lives. The goal is to shape policies that
foster prosperity, equality, opportunity and well-being for all.
OPEC - The Organisation of Petroleum Exporting Countries
is an organisation of 13 oil-producing countries. The mission
of the organisation is to "coordinate and unify the petroleum
policies of its member countries and ensure the stabilisation
of oil markets, in order to secure an efficient, economic and
regular supply of petroleum to consumers, a steady income to
producers, and a fair return on capital for those investing in the
petroleum industry.
OPEC+ - The Organisation of the Petroleum Exporting Countries
Plus is a loosely affiliated entity consisting of the 13 OPEC
members and 10 of the world's major non-OPEC oil-exporting
nations.
P&I Insurance - Protection and indemnity insurance, commonly
known as P&I insurance, is a form of marine insurance provided
by a P&I club. A P&I club is a mutual (i.e. a co-operative) insurance
association that provides cover for its members, who will typically
be ship owners, ship operators or charterers.
Plimsoll line - A reference mark located on a ship's hull that
indicates the maximum depth to which the vessel may be safely
immersed when loaded with cargo. This depth varies with a ship's
dimensions, type of cargo, time of year, and the water densities
encountered in port and at sea.
Pool - A pool is a group of similar size and quality vessels with
different ship owners that are placed under one administrator
or manager. Pools allow for scheduling and other operating
efficiencies such as multi-legged charters and Contracts of
Affreightment.
Pool points - A system of pool points creates a model for a
vessel with a performance equating to the average of those being
pooled. This ship is awarded 100 pool points. All other ships in
the pool are then given more or less pool points adjusted for the
characteristics of each vessel. Pool points, by their nature, can
only be used to address the differences between the vessels as
described, and not the vessel as performed.
Profit share - A mechanism where, depending on the
outcome of the negotiations and under certain Time Charter
contracts it is being agreed that the owner of the vessel is
entitled to an increase of the agreed base hire rate (minimum
or floor) amounting to a certain percentage of the difference
between that base rate and the average of rates applicable for
a certain period on certain routes.
SBT - Segregated ballast tanks are dedicated tanks constructed
for the sole purpose of carrying ballast water on oil tanker
ships. They are completely separated from the cargo, and fuel
tanks and only ballast pumps are used in the SBT.
211
Scrubbers - Shortened term for Exhaust Gas Cleaning
Systems (EGCS), or SOx (sulfur dioxide) scrubbers. These
are used to remove harmful elements (mainly Sulfur oxides)
from exhaust gases from vessels by using wash water from
the sea to neutralise the exhaust product. There are two key
categories - open loop scrubbers which discharge wash water
used into the ocean and closed loop which retain the waste
product until it can be delivered to an appropriate location.
SEEMP - The Ship Energy Efficiency Management Plan is an
operational measure that establishes a mechanism to improve
the energy efficiency of a ship in a cost-effective manner. The
SEEMP also provides an approach for shipping companies to
manage ship and fleet efficiency performance over time using,
for example, the Energy Efficiency Operational Indicator (EEOI)
as a monitoring tool.
Shale oil - Crude oil that is extracted from oil shale (fine
grained sedimentary rock containing kerogen) by using
techniques other than the conventional (oil well) method, for
example heating and distillation.
SOx - The two main pollutants from the ship’s emission are
Nitrogen oxides (NOx) and Sulphur oxides (SOx). These gases
have adverse effects on the ozone layer in the troposphere
area of the earth’s atmosphere which results in the green
house effect and global warming.
Spar - A Single Point Mooring and Reservoir is a type of floating
oil platform typically used in very deep waters and is named
for logs used as buoys in shipping that are moored in place
vertically. Spar production platforms have been developed as
an alternative to conventional platforms.
Special Survey - The survey required by the Classification
Society that usually takes place every five years and usually
in a dry-dock. During the Special Survey all vital pieces of
equipment and compartments and steel structures are
opened up and inspected by the classification surveyor.
Spill - Oil getting into the sea, in any amount, for any reason.
Spot (Voyage) Charter - A charter for a particular vessel
to transport a single cargo between specified
loading
port(s) and discharge port(s) in the immediate future. The
contract rate (spot rate) covers total operating expenses
such as port charges, bunkering, crew expenses, insurance,
repairs and canal tolls. The charterer will generally pay
all cargo-related costs and
if
incurred. The rate is usually quoted in terms of Worldscale.
Spot Market - The market for the immediate charter of a
vessel.
Spot Price - Current market price for an asset or commodity
Suezmax - The maximum size vessel that can sail loaded
through the Suez Canal. This is generally considered to be
between 120,000 and 199,999 dwt and mostly about 150,000
dwt, depending on a ship’s dimensions and draft. These
tankers can transport up to one million barrels of crude oil.
liable for Demurrage,
is
(Super) slow steaming - Reducing operating speeds in order
to save fuel. Operating laden speeds are reduced from 15
knots to about 13 knots and operating ballast speeds from 15
knots to about 10 to 8 knots.
Sustainability-linked Loan - Sustainability-linked Loans
or ESG Linked Loans are general corporate purpose loans
used to incentivise borrowers' commitment to sustainability
and to support environmentally and socially sustainable
economic activity and growth. Under this lending model,
borrowers pay higher interest rates when they fail to meet
certain environmental, social and governance-linked goals. By
the same token, they pay less when they exceed ESG targets.
SDG - The Sustainable Development Goals , also known as
the Global Goals, were adopted by all United Nations Member
States in 2015 as a universal call to action to end poverty,
protect the planet and ensure that all people enjoy peace and
prosperity by 2030.
T&Cs - Terms and Conditions
Technical Management - The management of the operation
of a vessel, including physically maintaining and repairing the
vessel, maintaining necessary certifications and supplying
necessary stores, spares and lubricating oils. Responsibilities
also generally include selecting, engaging and training crew and
could also include arranging necessary insurance coverage.
Time Charter (T/C) - A charter for a fixed period of time,
usually between one and ten years, under which the owner
hires out the vessel to the charterer fully manned, provisioned
and insured. The charterer is usually responsible for bunkers,
port charges, canal tolls and any extra cost related to the cargo.
The charter rate (hire) is quoted in terms of a total cost per day.
Subject to any restrictions in the charter, the customer decides
the type and quantity of cargo to be carried and the ports of
loading and unloading.
TCE - Time Charter Equivalent rate is a standard shipping
industry performance measure used primarily to compare
period-to-period changes in a shipping company's performance
despite changes in the mix of charter types (i.e. spot charters,
time charters and bareboat charters) under which the vessels
may be employed between the periods.
A standard method to compute TCE is to divide voyage revenues
(net of expenses) by available days for the relevant time period.
Expenses primarily consist of port, canal and fuel costs.
TLP - A tension-leg platform or extended tension leg platform
(ETLP) is a vertically moored floating structure normally used
for the offshore production of oil or gas and is particularly
suited for water depths greater than 300 meters (about 1,000
ft.) and less than 1,500 meters (about 4,900 ft). Use of tension-
leg platforms has also been proposed for wind turbines.
Tonnage Tax Regime - An alternative way of calculating
taxable income of operating qualifying ships. Taxable profits
are calculated by reference to the net tonnage of the qualifying
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Euronav vessels a company operates, independent of the actual
earnings (profit or loss).
Ton-mile - A unit for freight transportation equivalent to a ton
of freight moved one mile.
Ton-mile demand - A calculation that multiplies the average
distance of each route a tanker travels by the volume of cargo
moved. The greater the increase in long-haul movement
compared with shorter haul movements, the higher the
increase in ton-mile demand.
Tramp - As opposed to freight liners, tramp vessels trade on
the spot market with no fixed schedule, itinerary or ports-of-
call. Trampers go wherever the cargo is and carry it to wherever
it wants to go, within reason, like taxi cabs.
Treasury shares - Treasury stock, also known as treasury
shares or reacquired stock refers to previously outstanding
stock that is bought back from stockholders by the issuing
company.
ULCC - Ultra Large Crude Carriers are the largest shipping
vessels in the world with a size ranging between 320,000 to
500,000 dwt. Due to their mammoth size, they need custom
built terminals. As a result they serve a limited number of
ports with adequate facilities to accommodate them. They are
primarily used for very long distance crude oil transportation
from the Persian Gulf to Europe, Asia and North America. ULCC
are the largest shipping vessels being built in the world with
standard dimensions of 415 meters length, 63 meters width
and 35 meters draught.
Ultra Deep Water (UDW) - Water depth of more than 1500
meters.
Vessel Expenses - Includes crew costs, vessel stores and
supplies, lubricating oils, maintenance and repairs, insurance
and communication costs associated with the operation of
vessels.
Vetting - Ship Vetting is a risk assessment process carried
out by charterers and terminal operators in order to avoid
making use of deficient ships or barges when goods are being
transported by sea or by inland waterways.
VLCC - The abbreviation for Very Large Crude Carrier. Tankers
with a capacity between 200,000 and 320,000 dwt. These
tankers can transport up to two million barrels of crude oil.
VLCC Equivalent - The capacity of 1 VLCC or 2 Suezmax vessels.
Voyage Expenses - Includes fuel, port charges, canal tolls,
cargo handling operations and brokerage commissions paid
by the ship owner under Voyage Charters. These expenses are
subtracted from shipping revenues to calculate Time Charter
Equivalent revenues for Voyage Charters.
V-Plus - A crude oil tanker (ULCC or Ultra Large Crude Carrier)
of more than 350,000 dwt which makes it one of the biggest oil
tankers in the world. These tankers can transport up to three
million barrels or more of crude oil and are mainly used on the
same long-haul routes as VLCCs. To differentiate them from
Annual report 2021
smaller ULCCs, these ships are sometimes given the V-Plus size
designation.
Worldscale - The New Worldwide Tanker Nominal Freight
Scale is a catalogue of theoretical freight rates expressed as
USD per ton for most of the conceivable spot voyages in the
tanker trade. The final rate agreed will be determined as a
percentage of the ‘Worldscale’ rate, based upon a guaranteed
minimum quantity of cargo. That allows for charter parties
to cover a wide range of possible voyage options without the
need to calculate and negotiate each one separately.
WTI oil price - (US Oil) West Texas Intermediate, one of three
main benchmarks for oil pricing.
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