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Wartsila on meeting the challenges ahead for shipping

 

Visit Marintec China 2019
 
Ahead of Marintec China we talk to Östen Lindell, Director, Marine Unit East Asia & China, Wärtsilä Corporation, about what he sees as the top issues facing the industry in 2020 and beyond, and how Wärtsilä is positioning to help its customers with these challenges.

The Wärtsilä team will be at Marintec China 2019, which takes place in Shanghai from 3-6 December and celebrates its 40th anniversary, and Östen shares the company's plans for the event which it has been an exhibitor at for over 20 years

 

Heading into 2020, what are the major challenges for the shipping industry?

Cutting Sulphur Oxide emissions to 0.5% m/m will be mandatory from 1st January 2020. There are essentially three different investment options shipping companies can take to achieve compliance depending on the needs of the shipowner and operator.

Switching from HFO to low Sulphur content fuel is, technologically speaking, the easiest option to take. Today’s engines can run on VLSFO, meaning no modifications are needed to implement this strategy. However, cost and availability of this fuel remain in question.

Retrofitting a vessel with installations capable of running on ultra-low Sulphur fuel, such as LNG, is an option that’s gaining traction owing to rapid infrastructure development for access to LNG bunkering.

Or business can be conducted as usual with the addition of a retrofittable exhaust gas cleaning system (Scrubber) that removes harmful emissions before they enter the atmosphere. Given the fast-approaching deadline, the pace of implementation would need to be stepped up. 

But looking at the latest environmental regulations hailing from the IMO, the 2020 Sulphur cap is one small step towards meeting the more ambitious 2030 and 2050 decarbonisation targets. To hit the 2030 target, we need to see a minimum emission reduction of 40% at vessel level, based on 2008 records. By 2050 these levels will need to have been reduced by 70%.

A combination of energy-saving applications, smart propulsion technologies and broader collaboration can see us reaching the 2030 targets. But the single biggest contributor to lowering emissions is fuel choice. It’s clear that the industry needs to adopt greener fuels – these may include bio-LNG and synthetic LNG, ammonia and hydrogen. But there are considerable obstacles to overcome such as lack of regulation and supply chain and poor economic feasibility.

 

How will Wärtsilä help the industry to overcome/understand these challenges?

At Wärtsilä, we understand that meeting the IMO targets entails significant changes in the type and quality of fuels and power sources used in the industry today. We’re committed to testing the compatibility of alternative fuels with our existing and emerging combustion engine technology. We’re also working with other industry stakeholders to bring about the infrastructure needed to supply cleaner fuels to ships.

We’d like the market to understand that there’s nothing that the internal combustion engine does with Heavy Fuel Oil that cannot be done with LNG and future fuels. We introduced dual-fuel engines to the market some 30 years ago, so this is a well-established and future-proof technology that’s capable of using almost all liquid and gaseous fuels, including green ammonia, hydrogen and methanol.

We are also bringing to life a Smart Marine Ecosystem that uses connectivity, real-time communication and data analytics in operation and energy management. By connecting the dots, and leveraging our broad portfolio of products, solutions and services, we can help our customers to plan their fleet expansion, secure a substantial decrease in fuel bill while meeting future GHG emission targets.

 

What opportunities are there in 2020 and ahead?

As the well-used saying goes… 90% of world trade, worth approx. $24 trillion in goods and services, travels by sea. This gives us enormous leverage. However, the slow adoption of new technologies has meant that unnecessary inefficiencies in day-to-day marine operations have gone unaddressed – for example, congestion in ports.

Global population growth continues. We’re seeing mass migration to urban areas. This presents us with the opportunity to enable sustainable societies with clean, smart marine technologies. For example, Wärtsilä has a strong position in offering solutions where a continuous dialogue between the port and ship can eliminate congestion and secure a Just-in-Time (JIT) arrival to the port, hereby eliminating unnecessary fuel consumption and emissions both during the voyage and at anchor.

 

What are Wärtsilä’s objectives for 2020 – for the domestic China region and rest of world?

Wärtsilä will continue to support customers to meet the IMO 2020 challenges because there is still some uncertainty about the price difference between high Sulphur and low Sulphur fuel and many customers are considering installing scrubbers to meet the challenge.

Beyond the IMO 2020 Sulphur regulation Wärtsilä is promoting and aiming for more partnership business with the customer to help with life cycle solution together through use of digital solutions such as fleet optimization solutions, dynamic maintenance planning etc.

As China continues to move more towards the high value and more complex ships such as cruise and LNG carriers where Chinese shipyards need technology partners like Wärtsilä to help them develop their competence and mitigate risks.

 

Looking back at 2019, how do you feel the industry evolved – especially with such significant 2020 deadlines in mind (Sulphur Cap etc)?

Once it became clear that the IMO 2020 Sulphur regulation deadlines won’t be postponed from originally agreed 1st January 2020 date, many of the ship owners started to decide to install scrubbers which has been a boom to the scrubber suppliers in last couple of years. But due to the last-minute decisions to secure scrubbers and the complexity involved in installation at shipyards, there was significant delay in originally estimated retrofit time.

As per Clarkson there will be approximate 4000 scrubbers ready vessel which is still a fraction of the global fleet.

The good news is that IMO 2020 Sulphur regulation has brought the LNG as Fuel option to the forefront especially for the newbuilds with some owners proactively choosing the LNG fuel option even for non-LNG carrier such as containerships and tankers. We foresee this trend to get stronger in near future even in other traditional HFO-fueled segments such as bulk carriers which are already considering LNG as the fuel for their new orders. For example, very recently there has been news that BHP from Australia will choose LNG as Fuel for their new order of bulkers.

 

Has the industry done enough to prepare?

It’s easy to look back and analyze what could have been done better but the shipping industry has done as much as it could considering the challenging market dynamics it’s facing since the beginning of this year.

In our opinion it’s time to look beyond 2020 Sulphur regulation and start preparing strongly for the next game-changing phase of 2030 and beyond when IMO is set to come up with the regulation for reducing CO2 and GHG emissions in line with the IMO Strategy for GHG. We are living in an important era of shipping where it starts to not only focus on cleaner oceans but also contribute proactively towards tackling the global warming threat faced by our planet. IMO 2020 regulation is just the beginning in that direction….

As we enter an era of unprecedented change, it’s clear that we need to drive the fuel agenda and gain broad consensus across the industry on how to move forward. To achieve a green future, this requires concerted effort.

Certainly, no individual technology provider, maritime authority, or shipping company could achieve environmental sustainability on their own. We need to see large-scale deployment of low-carbon fuel infrastructure

Last year, Wärtsilä launched 'An Oceanic Awakening' an initiative through which we started talking about cities and citizens too because they are also an integral part of the maritime ecosystem. Transforming our industry will transform society and this needs to happen through mutual ascent. For this reason, we enabled SEA20, which is a global league of cities dedicated to rethinking their roles in marine and energy ecosystems. SEA20 is run by Helsinki-headquartered think tank, Nordic West Office.

In September, we joined the Getting to Zero 2030 Coalition, which is committed to getting commercially viable deep sea zero emission vessels powered by zero emission fuels into operation by 2030.

The Zero Emission Energy Distribution at Sea was launched earlier this year - a Wärtsilä-led initiative from six forward-leaning companies which share one common goal: To explore the fastest routes towards zero emissions shipping. The group includes Aker Solutions, Equinor, DFDS, Grieg Star and Kvaerner. Together, we are working on a proposal for a network of clean energy hubs placed near the world's busiest shipping lanes, capable of supplying and distributing clean fuels to the world's fleet.

The will is there, we just need to see that such bold ideas are brought to fruition in a timely manner and in accordance with IMO regulation and deadlines.

 

This is the 40th anniversary of Marintec China.  As a loyal supporter of this iconic event, please share with us why this is such an important platform for business in this region?

Marintec China has always been an important exhibition for the international shipping community – in large part because roughly two-thirds of global maritime trade passes through Asia and the South China Sea. China is also a key player when it comes to newbuild and operations, so the event presents us with a great opportunity to meet up with our regional customers and stakeholders to discuss business opportunities and the latest technological trends shaping the future of maritime.  

 

Can you share with us how many of the Marintec China events you have participated with?

It’s fair to say that Wärtsilä has participated in Marintec for more than 20 years. We have launched many new products here to great reception. I’ve participated in Marintec China for Wärtsilä for many times and I’m honored to witness it has developed itself over the years and become one of the most must-attend exhibitions within the shipping community.

 

In December 2019, you will be with us again.  Can you tell us a little about your plans for this edition? What can we expect for see from Wärtsilä – either on the stand or from the conference programme?

At Wärtsilä, we have a vision of a Smart Marine Ecosystem. This is a shipping ecosystem where asset, energy and voyage management solutions are interconnected to optimise everything that happens from the moment a vessel undocks from port A, all the way to docking at port B – throughout the ship’s lifecycle. We’ll be bringing our latest solutions that deliver on this vision to Marintec.

The solutions we’ll have on display improve safety for crew, provide predictive analytics for increased productivity and return on investment and route optimisation for fuel savings and reduced environmental impact.

For example, we’ll be showcasing our Navi-Planner voyage planning and optimisation product and Fleet Operation Solution. We’ll also be unveiling the Wärtsilä31SG pure gas engine - which sets a new standard in gas engine-based power generation - and presenting our performance monitoring and energy management solutions such as Operim. The full agenda can be seen here: https://www.Wärtsilä.com/marintec

 

 

 

 

 

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