Shipping Cannot Wait For Consumers Or Regulators To Get On With Decarbonisation

Insights at a decarbonisation panel discussion at the Inmarsat Connected Future Conference held during London International Shipping Week focused on the drivers, incentives and enablement of sustainable shipping.

Participants included Mette Asmussen, Maritime Sector Initiatives Lead, World Economic Forum; Anne Katrine Bjerregaard, Head of Strategy, Sustainability & ESG at Maersk Mc-Kinney Møller Center for Zero Carbon Shipping; and Gert-Jan Panken, Vice President Direct Sales, Inmarsat Maritime.

The session was moderated by Risto-Juhani Kariranta, CEO Ahti Climate.

WEF’s Mette Asmussen described the IMO agreement on decarbonisation strategy this summer as first and foremost a huge step forward but also as including some shortcomings

Work on a global fuel standard and an economic mechanism to incentivise greener fuels now need to be progressed, she said, and made to function.
Asmussen said the deal “gave some much needed certainty and provides room for even more action for the first movers in the maritime supply chain already taking these steps.” They can with better certainty be “even more brave in what they are doing,” she added.

But the human element remained a potential bottleneck. The workforce must be prepared and trained to use potentially much more dangerous alternative fuels.

Anne Katrine Bjerregaard, for the Maersk Mc-Kinney Møller Center, said the industry cannot sit back and wait for regulation, but needs to rethink its business case. “We have to move toward thinking about climate efficiency rather than just financial efficiency.”

“It is not easy, it is complex, but we have to change our thinking.”

The supply chain for alternative fuels was another major bottleneck. “To reach the IMO’s 5% target we are going to be building ammonia production plants from hereon now, and well into the 2030s,” she said.

Ahti’s Kariranta cited a recent report from DNV which warned about shortages of green fuel supplies for shipping.

Bjerregaard said the Centre, which is an independent not for profit organisation, has 120 people with varied expertise working with 100 companies and strategic partners to develop pathways to decarbonisation. Its proposals are open to the whole industry.

Asmussen said decarbonisation would raise questions about the true cost to shipping and who pays it when it no longer could burn a cheap waste product as fuel.

Bjerregaard said the shipping industry could no longer think about itself in isolation as fuel costs would also be determined by other industrial uses – such as for aviation or fertilisers.

Whether biofuels will be part of the answer for shipping will depend on what the aviation industry is prepared to pay for it, she added.

Inmarsat’s Gert-Jan Panken said a study carried out by Inmarsat with Thetius showed three main areas needed consideration for sustainability – the vessel where work needs to be done, the operation of ships and the human factor.

“We need to ensure that not only the crew members onboard the vessel have the right mindsets but also the decision makers onshore, the politicians and the buyers, so that sustainability is not a gimmick but a must.”

Economics not regulation should be the main driver of shipping decarbonisation, he added, in order to gain momentum.
Higher costs might be easier for end-consumer-facing businesses to address as end-consumers actively seek greener products to a greater extent than bulk or tanker supply chain stakeholders, Asmussen said.

“We have done a lot of analysis on whether it is good business – and it is. There are companies out there willing to pay for better environmental and social; performance,” Bjerregaard added.

But hopes that the cruise sector might be an early mover due to consumer pressure had not so far materialised.

“There is no demand for green cruises from the consumers, so we have to balance our belief in the consumer and be very realistic” Bjerregaard said. “We have to get the consumers on board,” she said, but the industry cannot always wait for them before it acts.

However, she said consumer demand is showing signs of responsiveness to the container lines that prioritise sustainability, while bulk carriers are showing positive signals in looking to take up green corridors.

However, 2050 is too far away and this is the decade of change where actions need to be taken before 2030, Asmussen said. “First movers will pave the way, but none of this will happen unless you have fast followers. Both are needed for this transition.”

Energy efficiency and digital solutions for cutting fuel use and emissions were also important factors, she added.

Kariranta raised the interest now coming for wind propulsion due to the greater cost savings that can be made when burning more expensive fuels.
Panken also raised the interesting issue of sustainability in space, citing 25,000 anti-collision manoeuvres required by one satellite operator due to the need to avoid the number of objects in orbit.
Source: Inmarsat Maritime

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