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Singapore Maritime Week 2022

Decarbonising shipping and the ‘need for speed’

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The “need for speed” with action now and over the next few years was emphasised by leading shipowners on Wednesday.

With the UN IPCC report warning that Greenhouse Gas emissions must start to reduce by 2025 Lloyd’s Register (LR) CEO Nicholas Brown sought to focus a panel discussion at Singapore Maritime Week on accelerating decarbonisation on action in the next three to five years, and even the next 12 months.

MISC President and Group CEO Datuk Yee Yang Chien said that rapid growth in activities had been seen over the last 12 months, but the question was though was the action enough, and was it quick enough? Yee quoted actor Tom Cruise from the movie Top Gun, that “We have a need for speed”.

Coming back to the IPCC report he said, “Three years is not a lot of time. So, there's need for speed.”

Pacific International Lines (PIL), Co-President and Executive Director Lars Kastrup commented: “Ordering a ship today is actually ordering a ship for the next 25 years. And 25 years means that we will get into 2050, meaning that we will reach a very important date.”

However, while much significance has been attached to the 2050 date, it could be looking too far into the future and action was needed much sooner. Kastrup shared how he sat on a panel on previous day of young students presenting projects and that “2050 for them is too far away”.

Kastrup emphasised the need for global carbon pricing. “One of the key things that I think the industry has been repeating for a while is that we need to get the carbon pricing in place, that will provoke and initiate a lot of momentum.”

“We have to appeal to IMO to ensure that we get there,” he said, warning that otherwise shipping would be subject to a lot of differentiated pricing which would be extremely difficult for a global industry to deal with.

A portion of any carbon tax needs to go into research and development on new fuels.

Speaking on a following panel Jacob Sterling, Senior Director, Head of Decarbonisation Innovation & Business Development, AP Moller – Maersk agreed on the need for carbon pricing. “At some point we will need a regulatory level playing field, it will need a sizeable carbon tax to create a level playing field between green fuels and the fossil fuels,” he said.

Looking at newbuildings, PIL has recently ordered dual-fuel vessels that are e-methane and ammonia ready, but other owners will make different choices. Maersk has opted for methanol newbuildings where the challenge is sourcing the supply of green methanol. MISC meanwhile is committed this week to ammonia-fuelled VLCCs by 2025/26 as part of the Castor Initiative.

CMA CGM was the first mover for LNG-fuelled ultra large containerships and on Francois-Xavier Accard, Managing Director, CMA CGM (Singapore), said, “We need to act now. We need solutions now.

“LNG might not be the end solution, but at least it’s a solution right now. We have to start to bend the curve,” he stated.

Kastrup pointed out was not just what will fuel the future fleet of vessels, but also the tens of thousands of vessels on the water today that will continue to use conventional marine fuels.

“So, we should not underestimate the need to find solutions for conversion, for carbon capture,” he said

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