The maritime industry, a cornerstone of global trade, appears on course for a transformative but challenging journey toward decarbonisation. The question of how we get there is the theme of a new book titled ‘Maritime Decarbonization', which offers a comprehensive range of insights from 75 scholars and industry experts. Ahead of the launch of the new book, a number of its co-authors came together to share key findings, as well as spell out what stakeholders should take onboard to enable a successful transition to low-carbon shipping.
The book is spearheaded by Mikael Lind from Research Institutes of Sweden (RISE), as well as Independent Supply Chain and Technology Strategist Wolfgang Lehmacher, and Robert Ward, former Secretary-General of the IHO.
Due to be released online today, the book tackles decarbonisation from various angles, including scenarios, value chains, enablers, and partnerships.
In this article, we delve into the key insights shared by a number of experts during the Maritime Decarbonization book’s pre-launch event, including on issues concerning alternative fuels, data sharing, port management, political governance and more. The decarbonisation ecosystem: a complex web of systems During the discussion, Wolfgang Lehmacher set the stage by referring to decarbonisation as a complex system of interconnected systems.
“The decarbonisation ecosystem is a system of systems. What I mean by that is that we have the equipment system, which is ships and their engines. We also have the energy system, which has to produce alternative fuels. In addition to that, we have the steel system and more. And at the centre of these systems sit value chains too,” says Lehmacher.
Lehmacher emphasizes that to trigger change, we must understand the interplay of these systems and know which buttons to press. This entails producing alternative fuels, enhancing shipbuilding systems, and adopting innovative designs.
The future necessitates collaboration beyond the boundaries of individual companies. Importantly, Lehmacher highlights the impending wave of regulations that could compel companies to act.
Could decarbonisation committees be a catalyst for change? Lehmacher, though typically skeptical about committees, recognizes the enormity of the decarbonisation challenge. He suggests starting with a dedicated committee, tasked with integrating decarbonisation practices into the organisation.
However, as he explains, it could be more optimal for decarbonisation to be included within an organisation’s risk committee: “I think we should start with a decarbonisation or sustainability committee. For me the the priority number one is to consider how thinking around decarbonisation or sustainable practices can be embedded in the entire organisation. However, it is so broad, and therefore, I think we could either dissolve this committee and pass on its responsibilities to the risk committee, which a lot of companies have. Then decarbonisation could be run throughout the entire organisation as part of its DNA.”
How decarbonisation could transform the supply chain. Decarbonisation, as envisioned by Lehmacher, will fundamentally alter the supply chain.
Among the issues that will grow in prominence according to Lehmacher are the optimisation of transportation routes, the embracing of circular principles in equipment design, and the harnessing of alternative fuels, as well as wind technology.
“I think everything will change, the design will change as we will have to decarbonise. As I said, we need to go and steps. That could be optimising routes, or shortening transports. Equipment will change too; everything we use needs to be designed based on circular principles. I’m a big advocate of the circular economy – without the circular economy, there will be no net-zero economy,” says Lehmacher.
These changes will ripple through the value chains within the industry, encompassing marine fuel, shipbuilding, and maritime operations. He adds that collaboration is the linchpin to bring these transformations to life.
The significance of value chains Another important part of the shipping decarbonisation puzzle is the utilisation of value chains, which was emphasised by Katharina Renken from Hapag-Lloyd AG.
Renken underscores the importance of interconnected value chains to the decarbonisation process. “Decarbonisation is a grand challenge of our time. That means if we are all connected, no one entity can solve the problem themselves. When we think about the value chain and how everything is connected, we also need to think connectedly about decarbonisation, as one cannot do it,” stresses Renken.
Renken outlines three primary value chains: marine fuel, shipbuilding, and maritime operations, each spanning the ship’s entire lifespan.
To navigate this challenge, Renken stresses that collaboration is key, and a four-step process is outlined to develop a value chain approach.
Overcoming sluggish change Kirsi Tikka, Ph.D., Board Member of Ardmore Shipping, Pacific Basin Shipping, and Foreship, highlights the industry’s legacy frameworks, which have made change a rather sluggish endeavor.
“The industry has a legacy of contractual and regulatory framework that has developed for many, many centuries. It’s quite challenging to change these legacy systems,” notes Tikka.
However, necessity is now driving the industry to collaborate and explore new perspectives. Tikka also emphasises the importance of incremental changes and the need for regulations to ensure universal adoption.
Tikka points out that available enablers largely focus on reducing fuel consumption, with incremental changes gaining significance when applied across the global fleet.
These measures are pivotal in preparing the worldwide fleet for new, more sustainable fuels.
“Many of the improvements that can be made are very incremental. But these incremental changes add up; first on a single ship, then on the ship owners’ fleet, and then for the entire worldwide fleet. We really need these measures to be taken up by the entire world fleet. We need them not only to reduce fuel consumption today, but also to prepare the worldwide fleet for the new alternative fuels. These are going to be expensive and also have lower energy density. We need all of the world leaders to be engaged as well. This is where we need regulations that serve the parts of the industry that may be more reluctant to make these improvements and participate in this effort,” says Tikka.
How the transition to alternative Fuels will change route optimisation priorities According to Dr Sanjay C Kuttan from the Global Centre for Maritime Decarbonisation, the shift from fossil fuels to alternative fuels will unfold in three phases: early transition, accelerated adoption, and stabilised equilibrium.
He adds that ports and producers must adapt to accommodate multiple fuel types, ensuring a secure supply: “I think we are at the stage where ports and producers need to really think where they’re going to make these alternative fuels available. Most ports that are bunkering large volumes need to consider a multi-fuel scenario, because you can’t depend on just supplying one type of fuel.”
The shift toward alternative fuels will necessitate strategic decisions on where to bunker and deliver goods according to Kuttan. Additionally, he states that alternative fuels’ lower energy density will require innovative solutions.
“Shipping’s purpose is to deliver goods, not to bunker. So it’ll be necessary to look at the ports that are available for that bunker fuel. Also, alternative fuels have a lower volumetric energy density, which means that fuel may not last as long as the old journeys would take. That means new ports may have to come into play, and that strategic decisions on where to bunker and where to deliver goods will be the new optimisation challenge for fleet owners,” says Kuttan.
Why reducing the transportation of fuels is key to reducing emissions Alternative fuels, as Kuttan suggests, could diminish reliance on the import of fossil fuels from certain countries. However, one of the important factors highlighted by the maritime decarbonisation expert is the added emissions generated via the transport of the fuel in the first place. He thus argues that there is a need to use fuels sourced a locally as possible: “We need to be more clever about keeping fuels closer to production, or reducing the distance of travel. The availability of renewable energy to couple itself to provide green hydrogen, green ammonia, and green methanol is also going to be very critical in terms of the entire carbon footprint of the fuel before it even enters a vessel. This is all going to be an important driver for the vessel owner when they start calculating their carbon intensity index in the near future.”
What KPIs should exist for decarbonised shipping? Kuttan foresees the emergence of new Key Performance Indicators (KPIs) with a focus on carbon intensity reduction. These KPIs will come with consequences for non-compliance, making accountability paramount. Port and flag states may enforce these KPIs to ensure effective progress.
In particular, Kuttan thinks the Carbon Intensity Indicator will have a role here, even if he admits its formula is somewhat troubled.
“I think that’s going to be a main driver, because every year there’s a tightening on the on the percentage reduction. You have to maintain band C as your minimum, and I think the question really is about what kind of punitive damages they’ll be if you’re band D or Band E. If there’s no consequence of being in those bands that are held accountable by the port states or the flag states of the ship, then it’s an academic exercise,” says Kuttan.
Uncertainty over the speed of change Another expert who weighed in on the discussion was Jeremy (JB) Bentham of the World Energy Council and Boston Consulting Group. He highlights that the pace of decarbonisation is marked by uncertain timing. Explosive growth and policy changes will occur at different times and places. Stakeholders thus face the choice of being early movers or followers in this transformative journey.
“If you look at all the kinds of credible scenarios that are facing industry and the energy system more broadly, you could think of them in terms of the pace of decarbonisation being faster or slower. That’s the key uncertainty. But if you dig a bit deeper, you’ll find it’s not necessarily about the same things going faster or slower. It’s the timing of when the stars align, because when they happen, things go fast. When your stars align around a new engine technology, it will go fast. So there’s explosive growth that’s happening at different times, sometimes in different places,” notes Bentham.
As the maritime industry embarks on its decarbonisation voyage, the insights in the ‘Maritime Decarbonization’ book aim to accelerate what appears to be a long journey.
The industry is entering uncharted waters, and the need for collaboration, innovative thinking, and a willingness to adapt is evident.
