Peter Borup, the CEO of Quadrise, writes for Splash today.
The maritime industry has a fuel problem. Despite a clear change in rhetoric in recent years regarding the need for shipping to decarbonise, 100% of the industry continues to rely, in some form, on fossil-fuel powered ships, whilst coal, oil and gas represent at least 40% of all products transported by global shipping. At the same time, the development of zero-carbon alternative fuel technology continues to be hampered by a myriad of challenges.
Furthermore, recent studies have suggested that despite a renewed focus on decarbonisation, the industry is in fact regressing in terms of its absolute output, with carbon emissions reported to have returned to 2008 levels. The current outlook is bleak, and shipowners’ “wait-and-see” attitude is likely to cost more in the long run, as regulations tighten and current assets fall into obsolescence.
Following the outcome of the recent MEPC meeting in October, the maritime industry must continue to contend with regulatory uncertainty amidst market volatility. Although a prevailing lack of clarity may continue to dominate policy, it certainly doesn’t have to dominate strategy.
The IMO’s delay changes the pace of regulation, not the direction of travel. Decarbonisation remains inevitable, but those who act early will capture the benefits first.
Shipowners have more control than they think. Regulatory pressure at the regional and multinational level has sparked an acceleration in the development of clean technologies in recent years, producing a range of viable options that can secure meaningful GHG reductions, today. From fuel-saving technologies like rotor sails and advanced hull coatings, to hybrid and emulsion fuels, such as MSAR and bioMSAR, there are clear routes to reducing emissions and improving operational efficiency that must be grasped with both hands.
All of the leading alternative fuel technologies that hold the promise of unlocking a net zero future for shipping – whether methanol, ammonia, or even nuclear – are suffering from a shortage of supply, poor and uncertain scale of distribution, as well as ongoing regulatory challenges.
However, there is a wide range of transitional fuels and technologies which, on their own or in combination, offer an immediate means of reducing fuel costs, as well as reducing CO2 and NOx emissions, whilst eliminating harmful particulate matter.
Many of these solutions also drive operational performance. This means that owners and operators are no longer having to forfeit commercial advantage in order to achieve regulatory compliance – unlocking a future in which energy efficiency improvements make real-world business sense.
Let’s be clear: shipowners cannot afford to wait for alternative fuels like ammonia or methanol to be readily available at the scale they are used to. Instead, they must seek to engage with a combination of practical and readily available transition fuels and energy efficiency technologies to reduce operational costs and as well as their GHG footprints.
While frustrating for some, the delay in adopting the new IMO rules may ultimately prove worthwhile if the end result creates a level playing field. The benefits of a consolidated framework are twofold; firstly, it will avoid creating a race to the bottom, as some shipowners may opt to align their operations with the most lenient regulatory regime; and secondly, to address the current compliance complexity by creating a unified regulatory environment that is better suited to support an inherently global business.
Despite the need for the industry to show meaningful emissions reductions by 2030, readily available transition fuels continue to face market challenges. Many of these fuels and technologies are at a critical stage where well-documented trials are necessary for them to be adopted more broadly.
However, class societies, flag states, as well as engine manufacturers risk becoming bottlenecks in this process if all of the industry’s resources are focused exclusively on developing engines that are capable of running on ammonia or methanol. A more balanced approach is needed; one that supports the evaluation and adoption of available fuels or technologies capable of advancing decarbonisation now, rather than later.
