Clarkson Research Services Limited. - Experts & Thought Leaders

Reducing the cost of electrolysers and rapid adoption of onboard carbon capture technology is going to be critical if shipping is to reach its net zero carbon emissions target. That was the message for the industry from an inspirational discussion at London International Shipping Week between renowned maritime industry economist - Dr. Martin Stopford and Christopher J. Wiernicki, ABS Chairman and CEO. The pair held a wide-ranging discussion at the Capital Link Forum, exploring key hurdles and drivers for shipping’s green energy transition, including fuel availability, carbon capture, and the impact of the escalating costs of green fuels.  Reducing the cost of electrolyser “The entire conversation is about what's going on in the internal combustion engine, but as you move from methanol to ammonia and LNG to green methanol, green ammonia, and synthetic LNG, the pace is going to be driven by the cost of the electrolyser,” said Christopher J. Wiernicki. He adds, “So, the two big things that I look at are how quickly you can reduce the cost of the electrolyser and the cost of carbon capture. If you can’t reduce the cost of the electrolyser fast enough, then you're into carbon capture and you have to go from grey to blue to green.” Green fuels Green fuels are probably a step backward for an industry going from heavy fuel oil" Dr. Martin Stopford said, “Green fuels are probably a step backward for an industry going from heavy fuel oil and the next bit of bad news is they're going to cost you $2,000 to $3,000 a ton. This changes the whole economics of the business." He adds, "And the final bit of bad news is that you won’t be able to get any of these fuels anyway because there are so many heavyweights already in the queue." Need for innovation Dr. Martin Stopford continues, "For example, we feed the world with ammonia, which increases the yields 4, 5, or 6 times and there is nothing else if you take that away. Innovation is about making things work that don't work and we will find the only way you could bridge that enormous gap between running down the carbon the way the IMO wants us to is that you build or retrofit a lot of ships with carbon capture.” Energy efficiency, carbon capture Christopher J. Wiernicki replied, “Size, a strong balance sheet, great charter relationships, and an understanding of the impact of technology on your commercial business is going to make all the difference in the world going forward." He adds, "You're going to have to take an eagle-eye look at energy efficiency and onboard carbon capture because you can't build enough ships to magically change the global fleet. So, retrofits are going to be important."  Layering of technologies Christopher J. Wiernicki continues, "Owners will need to take advantage of the layering of technologies. They are going to have to figure out what makes sense relative to the risk profile of the business." He concludes, "Commercial decisions in our industry are going to be more than just the historical reading of supply and demand. It's going to be reading the technology to take a calculated risk with partners and charterers to move this forward.”

The 175 member states of the International Maritime Organization (IMO) have unanimously agreed on an ambition to reach net-zero GHG (greenhouse gas) emissions from international shipping close to 2050. The previous strategy aimed for a 50% reduction in emissions by 2050. However, the new one is far more ambitious. The IMO is now targeting at least a 20% reduction by 2030 and 70% by 2040, compared to 2008 emission levels. The new strategy also includes striving for even higher reductions than this by 2030 and 2040. Carbon pricing The new IMO strategy also introduces emission pricing mechanisms with different approaches Shipping of cargo and passengers within, into and from the EU/EEA will be subject to carbon pricing through the EU emission trading system (ETS) from 1 January 2024. It is expected to cost the industry some EUR 8-10 billion per year once fully implemented in 2026. The new IMO strategy also introduces emission pricing mechanisms with different approaches to be assessed. A fragmented fuel landscape Clarksons estimate that 44% of the global order book was alternative fuelled in the first half of 2023. Front runners have been using alternative fuels for years and have gained experience and built supply chains. In the more fragmented fuel landscape, availability could be a risk and it is vital that the global bunkering infrastructure keeps pace with the developments in the industry. Green shipping corridors and the ambitions in the Clydesbank Declaration will be imperative in the transition. Implications for risks There will be an alteration of risk. If a vessel grounds, the environmental implications of a possible bunker oil spill pose considerable concerns. Alternative fuels are generally less harmful to the immediate environment but present us with potential safety consequences. New technology could also alter the risk picture for machinery failures Ammonia is highly toxic; hydrogen is explosive, and batteries can catch fire. New technology could also alter the risk picture for machinery failures, and the correct operations and handling of new fuels will be vital.  At the same time, it is worth bearing in mind that the transition from sail to coal to heavy fuel oil also caused considerable skepticism and concerns.  Gard is responding For Gard it is imperative to support their members and clients through the green transition and to ensure that the safety of seafarers is maintained. Experts across the company have been addressing risks associated with the new technologies and handling of alternative fuels, and Gard has established working groups focusing on the fuel transition and follows closely the developments. Additionally, Gard maps climate-related risks and opportunities, and is adjusting the strategy accordingly. To track decarbonisation developments, Gard co-founded the Poseidon Principles for Marine Insurance and monitors emissions from parts of their insurance portfolio.

Launched in 2017, Marintec Innovation is dedicated to covering important topics in the global maritime industry, and to let the ‘sparks of inspiration’ fly to create new ideas. Following ‘Cruise Shipbuilding’ in 2017, ‘International Marine Intelligent Energy Efficiency Technology’ in 2018, and ‘Marintec Interiors’ in 2019, this year’s theme is ‘The Fourth Industrial Revolution at Sea.’ A one-day conference which will be taking place at the Shanghai Renaissance Zhongshan Park Hotel on 3 December 2020. Advanced digital technologies I4 is powerful and experienced in automobile and aviation and can show how much can be achieved. Creating meaningful connections If the same technologies are applied in the maritime industry, it will transform sea transportation and lead to the fourth industrial revolution at sea since the 19th century. And against the backdrop of the global pandemic, social distancing and the postponement of many of the maritime events, they think connecting quality buyers and exhibitors to create meaningful connections has not changed, but rather adaptation is called for. If the same technologies are applied in the maritime industry, it will transform sea transportation Marintec Innovation Webinar Series spun out in June 2020, is based on Dr. Martin Stopford’s, President of Clarkson’s white paper on ‘Coronavirus, Climate Change & Smart Shipping’, the series covering ‘Autonomous Ships Overview’, ‘Zero Carbon Emission’ and ‘Advance Digital Systems’ in June, August and September 2020, the three chapters together attracted over 1,000 delegates from across the globe. Experiencing new opportunity The finale in December Marintec Innovation Conference will put the spotlight on the importance of the I4 demand and with the shared mandate, drive the maritime industry to the environmental agenda. Meanwhile, maritime professionals will experience a new opportunity as the team dedicates full resources to the first-ever hybrid event, Marintec Innovation Virtual Expo which will take place online from 30 November to 4 December. Marintec Innovation Virtual Expo is spearheading the new model and showcase an event format of the future, a platform to share unique and exceptional content to the global audience without any geographical barriers. Industry accelerate growth The Marintec Team is committed to helping the industry accelerate growth into next year A brand-new AI business matching platform with an online product showroom, instant video conferencing, live chat, meeting scheduler, 1:1 virtual meeting, will be enabling all attendees to enjoy a hassle-free online networking experience. Mr. Michael Duck - Moderator of the first Marintec Innovation Series and Director of Marintec China invite everyone to join them to connect with the industry and engage with some of the industry’s most prominent personalities. He goes on to say that “Innovation is often found where insight is obtained. Many times this is through forums such as these which make them always special.” The Marintec Team is committed to helping the industry accelerate growth into next year, echoing the theme, so now more than ever, they must harness the power of technology to come together and get business back on track.