Being a first mover in the shipping industry decarbonisation race could help companies manage their costs more effectively, while progressing net zero targets, delegates at the Motorship's 44th propulsion and future fuels conference in Hamburg heard this week.
Speakers at the conference urged the industry to accept the inevitable costs of decarbonisation, to adopt multiple solutions throughout the energy transition— and to reap the rewards of acting first.
Shipping organisation International Chamber of Shipping (ICS) set out a three-pronged approach to create a market for zero-emissions fuels that incentivises immediate, pre-emptive action: a global fuel standard, a fund-and-reward system and the adoption of clean energy marine hubs. ICS told Argus that the fund-and-reward mechanism would consist of a flat rate donation from all member states which would then be reinvested into first movers and developing supply chains.
Clean energy marine hubs could connect sustainable energy suppliers to their global markets, through shipping, which complies with international standards, with little national fragmentation.
In return, renewable energy suppliers could provide low-carbon fuels for shipping — as it may be contradictory to transport sustainable energy with high-carbon emissions technologies. Securing alliances first could be crucial for guaranteeing a sustainable fuel supply.
Similarly, green corridors optimise routes and spread costs of expensive new infrastructure across ports through early collaboration.
Annika Kroon, head of the Maritime Transport and Logistics Unit of the European Commission, encouraged long-term contracts to plan for the transition, as they ensure suppliers for customers and vice versa. Contracts could squeeze the spot market with their low-risk, cost-efficient planning, but participants may hold on to it for its flexibility.
But even as supply chains and infrastructure for zero or near-zero-emissions fuels may take time to develop, energy and ship optimisation represent low-cost — if also low-impact — solutions for a head start in decarbonising.
The existing fleet must reach the International Maritime Organisation's (IMO) ambitions of 20-30pc GHG emissions reductions by 2030, and 70-80pc in 2040. Building an entire new fleet would overwhelm shipyards' capacities and depend on committing to a single fuel solution — when "there are no silver bullets", said Oskar Levander, vice-president of technology enterprise Kongsberg Maritime.
Instead, shipowners could take the first step in decarbonising by continuously maintaining and upgrading their ships to extend their longevity and increase their flexibility. Adaptability will prove a return on investment during an energy transition which will comprise different phases and technologies to keep up with ever more-ambitious targets.
First movers including shipping giant Maersk have already kept older vessels on the water. Experience in maintaining and upgrading an older fleet can only be gained by starting as soon as possible.
Being the first to adopt these increased costs for decarbonisation also means being the first to pass costs down the supply chain to the end consumer and return on their investment.
But prohibitive costs have so far deterred investment and the uptake of alternatives fuels and technologies, limiting their supply — especially for zero or near-zero emissions fuels.
Currently, biofuel blends in conventional fuels remain the most cost-effective way to reduce emissions.
Technological solutions companies such as Wartsila, WinGD, ABS and MAN presented a portfolio of new technologies— from new propellor designs, to retrofitting packages, to carbon capture aboard ships and methanol or ammonia-fuelled engines — at the conference,allsplitting investments across various proven and unproven pathways.
But delays and waiting for the perfect solution may result in even higher expenses when global climate conditions deteriorate and deadlines for emissions reductions targets get closer.
