Rashpal Singh Bhatti, BHP’s Vice President Maritime & Supply Chain Excellence, said that from a mindset point of view the majority of the industry were still waiting for “the silver bullet”.
Speaking at a DNV webinar “Future-proofing shipping” on Tuesday Bhatti noted that just 30% of the newbuilding orderbook was equipped to run on LNG.
“Now isn’t that quite telling. We know we have a fuel that delivers 30 – 40% abatement, we know that from a cost perspective we can match or beat VLFSO, yet VLFSO vessels are still be ordered,” he said.
While LNG as a fuel offers significant reductions on greenhouse gas emissions in has come in for criticism as it is still a carbon-based fuel, and there have been questions raised over methane slip. Shipowners such as AP Moller – Maersk have eschewed LNG in favour of methanol, which it believes will bring zero carbon shipping from day one.
BHP, which has invested in LNG via long term charters for five LNG-powered newcastlemax newbuildings with Eastern Pacific Shipping, takes a rather different point of view.
LNG is a good solution
“Our viewpoint is you don’t look past good to wait for perfection. LNG is the good solution that is here today and 30% to 40% is not a number you can look past,” Bhatti stated.
This is not to say that BHP is not looking at other solutions. “I see very clearly on our roadmap we will have LNG vessels, we will probably have some kind of biofuels, we will probably be looking at vessels where we try ammonia, we try hydrogen,” he said.
The company also sees innovations such as rotor sails, hull coatings and drop-in biofuels as helping to bridge the gap until a silver bullet solution is found.
The first of the five 209,000 dwt newcastlemax bulkers is set to arrive in Singapore on 7 February.
Slow pace of regulation
Bhatti also criticise the pace of change at IMO as being to slow and that as a result innovation would drive decarbonisation in shipping rather than regulation.
“We’re heading into a time where innovation will drive regulation, regulation will not drive the outcomes. While we have the utmost respect for the IMO we are far too far behind on our speed to market, CII and EEXI are good, but do not take us where we need to be,” he said.
BHP is one of the world’s largest charterers moving 350m tonnes of commodities annually, and with around 150 vessels on the water at any one time.
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