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Future-proofing shipping: The decarbonization game-changer

28 Jan 2022

The global maritime industry might efficiently move 90% of goods around the world, but it’s also responsible for around 3% of global emissions of greenhouse gases.

Committed to decarbonization, the industry is still not moving fast enough, according to industry panelists who took part in a “Live from Singapore” webinar on 25 January. Organized by classification society DNV, the panel discussion caught the interest of more than 1,100 registrants mainly from the South East Asia, Pacific and India region.

While the maritime industry is under increasing pressure to decarbonize, panellists drew attention to what’s being done, and what more can be done, to speed up the process.

Moderator Yvonne Chan, presenter and former CNA News Anchor, asked panellists as to how far shipping has progressed on the decarbonization journey.

Rashpal Singh Bhatti, Vice President of Maritime & Supply Chain Excellence, BHP, one of the largest bulk charterers in the world, was quick to say: “We’re only at the start!”

He admitted that momentum is very good, as is global awareness, “but we’ve only just started on the journey to decarbonization”.

Mr Bhatti also strongly feels that “innovation will drive regulation”, and that it will not only be regulation that solely drives change. The International Maritime Organisation (IMO) is doing what it can, but 2023 is too late for a material change in carbon regulation, he said, pointing out that BHP has 150 vessels in the water at any one time.

It is an imperative that the industry sets the pace, he argued, as BHP has done with the commissioning of five LNG fuelled Newcastlemax bulk carriers this year.

He gave examples of how ship operators can improve performance and cut emissions through innovations, like adding wind rotors on vessels, painting hulls of vessels to reduce friction, as well as using biofuels, like used cooking oil, which has been adopted as a bunkering fuel in Singapore.

It was also noted that BHP, for one, is supporting the Global Maritime Forum’s Call to Action to fully decarbonize shipping by 2050 and is a founding member of the Global Centre for Maritime Decarbonisation (GCMD) in Singapore, too.

Johan Munir, Global Director, Corporate Strategy & Planning for leading tanker owner and operator AET, was optimistic about progress towards decarbonization.

Mr Munir told the webinar audience, “The shipping industry has made some progress to create awareness on the decarbonization issue as compared to when AET first pioneered dual-fuel solutions in 2017.”

He thinks the industry has already progressed 25% of the way towards the goal of decarbonization. However, we need to build on the momentum as much more has to be done.

AET is one industry player which has set new standards of eco-efficient shipping to meet IMO 2030 aspirations. As an early adopter, AET has invested over the past five years a total of around USD 2bn in new, more eco-efficient assets, including around 50% in dual-fuel vessels.

“We own nine dual-fuel vessels including five of the world’s first VLCCs to be delivered in 2022 and 2023 and we are not stopping there.” Mr Munir added, “Having a progressive Board is important to address the sustainability and decarbonization challenges.”

Cristina Saenz de Santa Maria, Regional Manager responsible for DNV’s Maritime operations in South East Asia, Pacific & India, sees that some industry members are ahead of the game and making very good progress, while others are trying to figure out how they fit in the decarbonization puzzle.

“But I like to see it this way: We are 100% committed to decarbonization. We have a clear goal to reach carbon zero. But we need to share, and we need to collaborate. It’s a team sport and not a race.”

Ms Saenz de Santa Maria also insists that there is no time to waste. “We only have this decade to get on track if we want to reach net zero by 2050. We have to not only reward first movers, but to incentivize investors to commit funds to the decarbonization process. Regulatory certainty is as well a must to reach the IMO goals.”

“We like to think of ourselves as trailblazers, as we see that DNV as a classification society has an important role to play to help the maritime industry navigate complex challenges,” she added.

The panellists were asked to elaborate on strategies to future-proofing shipping fleets.

With increasing regulatory uncertain ties, changing transportation needs, technological progress and alternative fuels, moderator Yvonne Chan asked how can ships of the future remain competitive and choose the best way forward?

Mr Bhatti said BHP was already working with industry partners to future proof its fleet. He gave the example of how some vessels designed and built for LNG can be easily retrofitted to consume new alternative fuels, like ammonia and hydrogen.

“We must also take waste out of the supply chain”, he said, indicating that it’s possible to achieve 15 to 20% savings by optimizing energy and other resources through more efficient operations in port and at sea.

Ms Saenz de Santa Maria reinforced the importance of energy efficiency. “We can also reduce energy emissions through ship design, as well as by better managing ship operations.”

She drew attention to steps being taken now to design ships that have built in “fuel flexibility” capabilities with “fuel ready” class notations,

Mr Munir made it clear that ships are designed for a lifetime of 20 to 25 years, hence they must also be future-proofed. In October 2021, AET invested in a climate tech start-up in methane abatement technologies to support the development and deployment of technology to transition the maritime sector to net-zero.

“Longer-term solution for decarbonization sees multiple pathways and we will select the most effective long-term solution for zero carbon vessels. Our company’s sustainability strategy incorporates profit but also takes account of people and the planet,” he said.

Shifting the focus to safety and recognizing that shipping has seen an improvement in this area over the last ten years, panellists were asked how new fuel technologies, for example, posed new challenges and risks.

Mr Bhatti was the first to insist that decarbonization and safety go hand in hand.

He pointed to the importance of maintaining “seafarer safety” in general. He credited hundreds of thousands of seafarers around the world who have shown that they are “essential workers” during these pandemic years, maintaining supplies of essential goods and services.

The other panellists agreed that safety must continue to be a prime consideration with the introduction of decarbonization, particularly when it comes to bringing new alternative fuels on board.

That’s why extensive fuel trials and pilots are necessary, and Ms Saenz de Santa Maria felt that Singapore is one of the best places for this, noting that safety is a prime consideration in assessing the suitability of new fuels, like ammonia and hydrogen.

In conclusion, panellists agreed that it was important for “business to come first” to drive the maritime industry towards decarbonization, but they would be wise to work together as so much more can be achieved through collaboration.

Access to the full recording of the hour-long webinar is provided by DNV Maritime from this link:  https://www.dnv.sg/maritime/webinars-and-videos/on-demand-webinars/future-proofing-shipping-jan-2022.html

 

Photo credit: DNV
Published: 28 January, 2022

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