‘All of the [new] fuels that we have on the table have a lower energy density than those we have today, therefore energy efficiency is very important,’ emphasised Claire Wright, GM, Commercial & Strategy, Shell Shipping and Maritime, during a webinar hosted by WFW.
The webinar, held on 11 March, followed on from the recent publication of Watson Farley & Williams' report, The Sustainability Imperative: ESG – Reshaping the funding and governance of shipping. Based on interviews with, and a survey of, owners, charterers and financial institutions, the study found that that reducing shipping’s carbon footprint tops the list of the industry’s key challenges, but it also identified a ‘big divide’ in the importance that owners and financiers currently attach to sustainability.
Participants at today’s webinar, moderated by Simon Petch, Partner at WFW, picked up and developed some of the themes and findings in the report.
Bud Darr, Group Executive VP, Maritime Policy and Government Affairs at MSC concurred with Claire Wright’s comments on energy efficiency. ‘Until the market balances normally, we are looking at multiples of high fuel costs,’ he said.
Given the volume densities of the new bunker fuels now under consideration, ‘it is critical that we use these fuels as efficiently as possible’.
Looking at the role of regulation in shipping’s decarbonisation, the webinar participants were in broad agreement that the IMO should take the lead on this, but they also highlighted that there is an urgency on shipping’s energy transition.
Katharine Palmer, Environmental Manager at Lloyd’s Register, said that the shipping sector cannot afford to take a ‘wait and see’ approach to the issue.
‘We have to start the transition now – we will not achieve the end goal of 2050 if we keep pushing the start date down the line,’ she commented.
The participants also highlighted the importance of collaboration between shipping and the wider supply chain as well as cross-industry engagement on innovation in technology and fuels in order achieve GHG emission reduction targets.
Shipping’s energy transition has spurred the creation of a number of cross-sector sector coalitions and WFW’s Petch asked participants for feedback on the role these groupings can play in accelerating energy change. Should they perhaps be smaller and more agile, he asked.
Bud Darr said that these initiatives had ‘catalysed’ the discussion around key issues, but he said that it was important for the industry to ‘coalesce around common ideas’. In this way, industry would be in a stronger position to ‘better inform the decision-making of governments.’
Claire Wright also highlighted that shipping needs to ‘think up and out’ and engage with other industries to tap into their expertise on fuels and technologies and also alleviate some of the cost burden of the sector’s decarbonisation.
‘The shipping industry can’t fund the entire transition itself,’ she said. It needs to look at where it can ‘piggyback’ the work undertaken by other sectors and leverage other supply infrastructures, as well as the activities underway at industrial hubs located near ports,’ she noted.
She did, however, highlight the challenge that shipping faces in terms of adapting fuel and technology to achieve ‘the process of marinisation that has to happen in any of the choices ahead of us’.
The panellists were also asked about the ‘pioneers’ in shipping’s decarbonisation. Bud Darr acknowledged the important role of first movers in the industry but noted: ‘Don’t lock in on one solution but build a ship to make it as flexible as possible to accommodate the market conditions for fuel and technology in the years yet to come’.