Throughout its long history, the shipping industry has never before experienced such an urgent requirement to put sustainability at the heart of what we do. Seemingly every day there is more pressure on us to demonstrate environmental change, and general awareness of the sector’s decarbonisation efforts has increased.
This pressure goes beyond just required regulatory targets. More and more – and driven by an urge to make their supply chains greener – we see charterers and shippers entering this debate. They, in turn, are being prompted to act by changing consumer preferences and growing urgency from investors, institutions, non-governmental organisations and politicians. Supporting this sentiment are global collaborative bodies and initiatives, such as the Sea Cargo Charter, the Getting to Zero Coalition, and our sister company GoodShipping.
There are still significant barriers for shipping as the industry approaches 2050. These include economic development, future energy policies, the pace of technological progress, pricing trends for existing and new technologies, and disruption of global supply chains.
All of this sets the stage for a transformative decade for our industry, unlike anything we have ever seen before. But heightened uncertainty makes decision-making difficult. While no two decarbonisation pathways will be the same, we must all understand that taking that pathway is a requirement, not an option.
Mapping the path towards shipping’s low carbon transition
Where are industry leaders supposed to begin? A fragmented global industry certainly doesn’t make the process any easier.
Given this context, a hybrid approach that jointly embraces currently available solutions alongside investing in future technology development seems the most logical way forward.
By embracing a range of solutions, owners and operators can minimise risk. But by immediately championing fuels or technologies that enable impact in the immediate term, they’ll demonstrate their commitment towards the low carbon transformation pathway amongst other first movers. These ‘statements of intent’ are being seen increasingly favourably by charterers and financiers.
Meanwhile, injecting ‘B-Corp’ thinking into commercial operations will also support the industry in advancing sustainability. This thinking incorporates meeting the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
On the subject of immediate impact solutions, shipping has a few options to choose from. Proven clean technologies at the retrofit or newbuild stage can make a difference, as can trialling operational changes that enable efficiency gains. Nearly every solution has a differently high ‘barrier to entry’; availability, disruption to operations, a requirement for time in drydock. That’s why we’re excited and are continuing to advance the potential of sustainable marine biofuel as an immediate and long-term decarbonisation solution. In practise, with no operational changes, they can be used to drive decarbonisation action today on any type of vessel. The biofuels we produce allow for an 80-90% reduction in CO2 emissions well-to-exhaust, and use truly sustainable waste and residue streams as feedstock.
Biofuels’ central role in the marine fuel mix
Biofuels today have gone beyond the trial phase and are now scaling up. In fact, we expect that marine biofuels will constitute 10-15% of the future marine fuel mix by 2030. But for this to happen in a sustainable way, it will require a combination of local demand and supply, and positive incentives or regulation that supports biofuels.
With the right methods and incentives, decarbonisation can be accelerated by sustainable biofuels. We’ve demonstrated this with many partners, including Ocean Network Express, Volkswagen Group, Stena Bulk, and Höegh Autoliners to name a few.
In calling for increasing the uptake of biofuel and scaling up on a global scale, we recently conducted the world’s first supply of biofuel in Singapore – a significant step in scaling up biofuel and driving structural demand in Singapore.
It’s a genuine triple-win for shipowners, as biofuels are the fossil-free equivalent and virtually sulphur free (therefore offering compliance for IMO 2020); they are competitively priced; and they eliminate carbon, thereby setting up shipowners and operators to meet the industry’s 2030 and 2050 targets.
Other future fuels, such as ammonia and hydrogen, are important and have zero-emissions potential if produced by green energy, but there’s a long way to go before the industry can use them due to limited infrastructure and the requirement for new engines to burn them. Advanced biofuels are a solution for today and tomorrow that allow for instant decarbonisation impact, and the long-term prospects are favourable.
We’re confident that with targeted growth, we can ensure that the maritime industry has all of the sustainable biofuels that it needs, as part of an alternative fuel mix towards decarbonisation.
Perhaps most importantly of all, biofuels allow us to prove on thing very clearly: that first moving organisations embracing future fuels are doing so to show that they are on the right side of history. This kind of ambition should be a rallying cry to all of us as we continue to improve the sustainability of all of our operations.
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