There is a lot of discussion around "green shipping" lately in light of recent regulatory measures by the International Maritime Organization's Marine Environment Protection Committee to monitor fuel consumption, reduce sulphur emissions and better manage ballast water. To get to the bottom of where the industry is at now we spoke to several Global maritime and shipping experts to ask them: Just how "green" is shipping and what potential do the shipping and maritime industries have to be leaders in green technology.
Bjørn Haugland, Chief Sustainability Officer, DNV GL
There is little doubt that financial, regulatory, and societal pressures will continue to be exerted to encourage shipping to lower its environmental impact further.
This will result in growing numbers of vessels being designed to offer superior energy efficiency through measures such as improved hydrodynamics, use of lightweight materials, and advanced electric and hybrid power generation systems. New, increasingly effective solutions to reduce water and air pollution will become available.
Diversification of the fuel mix should also be expected, with an increasing share of distillate fuels as well as scrubbers for compliance with upcoming low-sulphur requirements. Alternative fuels such as LNG, LPG, Methanol and hydrogen have the potential to play a more important role in deep sea shipping and grid electricity is becoming standard for cold ironing in ports.
Eleni Antoniadou, Policy and Regulatory Affairs Advisor, International Marine Contractors Association
Throughout the last century the maritime industry has displayed a laudable ability to introduce clean technology and embrace green policies. The industry has become a leader in green technology, which justifies why it’s the most carbon-efficient means of moving most products to market in a global economy.
In the age of climate change and Paris Agreement, marine industry players raise the bar of innovation even higher, by implementing regional and international regulations on ship energy efficiency, such as the EU MRV Regulation, the Energy Efficiency Design Index (EEDI), the Ship Energy Efficiency Management Plan (SEEMP) and the emerging global MRV instrument of IMO. In addition, fuel accounts for 25 to 50% of total costs in shipping, the single largest cost to the sector. There are, therefore, clear regulatory and economic incentives to improve energy efficiency in shipping and invest in green technology.
Katharine Palmer, Environmental Manager, Lloyd's Register
Technology is an enabler to a cleaner and more sustainable shipping industry, both as a change trend itself and as a solution to other challenges. Shipping has tended to adopt technology proven in other industries but there is no reason why the industry, if it took a proactive and coordinated approach to innovation, could not set a position of leadership. The key uncertainty with technology is the uptake and not necessarily the viability or performance of the technology itself. The barriers to industry-wide adoption, including market conditions, availability of information, cost, access to finance etc…could be overcome through regulation or by industry leaders setting a precedent in implementation.
Geert Schouten, Commercial Director, Shipbuilder Software
I'm convinced that the shipping industry is a leader in green technology. The current trends are using total energy systems, LNG, carrying no ballast water, new hull protection technologies, scrubbers, auxiliary power by solar cells, sail support, regulations for specific areas and more. Most of these technologies are specific for the industry, some can be applied in other industries. However, a capital-intensive product like a ship has to have a life cycle of 30 years minimum. Change will come step-by-step. The disruptive green technologies therefore are in new ship types and in smarter logistics. Big data is used to increase the load efficiency. Local 3D printing of products will dramatically impact logistics and indirect contribute to green shipping. We elaborate on the impact of 3D printing in the shipbuilding sector here.
On a side note: Often a comparison is made between the environmental impact of one single ship and a x million cars or x main cities. These comparisons cannot be made. The function for shipping products and materials around the globe is completely different from the function of the cities and cars, they cannot replace each other. Shipping is actively contributing to a green world, as are maritime software applications like Shipbuilder. Our recently launched Shipbuilder sustainability knowledge base for example brings all maritime sustainability requirements together making sustainable design, construction, maintenance and ultimate scrapping of a ship easy and within reach.
Diane Gilpin, CEO, Smart Green Shipping Alliance
Shipping’s arriving late to the green tech party. Last year global investment in renewable energy was $280bn, and none of that came shipping’s way – it’s a missed opportunity.
Renewable energy fundamentally alters the economics of long-life assets. Energy is free and the more of it you harness the more cost predictable and future-fit the asset will be. Better for shippers, better for consumers, but the biggest winners are the owners of the technology.
The accelerating global transition to clean tech means a ship built today must operate in zero emission world. As the ‘servant of global trade’ industry leaders in shipping can work with developers of market-ready maritime renewable technologies to provide the sorely needed green global supply chain.
Jad Mouawad, Owner, Mouawad Consulting
Shipping is arguably the most environmentally friendly means of transport given the volume of cargo transported vs. the energy use. However, to go from here to claim that the shipping industry is a leader in green technology is farfetched.
Throughout the last four decades, shipping has been forced to become more environmentally friendly by regulation. Starting from MARPOL and ending in the Air Emission discussions we have at the IMO at the moment. Very high fuel prices triggered hull optimisation, when fuel now is that low, the drive for that optimisation and innovation within that field has halted. Spread of invasive species by ship's ballast water has been brought up 28 years ago, still, ships are built today with ballast water tanks and no plans on how to meet the requirements of the Ballast Water Management Convention.
The challenge of the shipping industry in my opinion is that it´s a beast with multiple heads. Various organisations claiming to organise ship owners are just bureaucrats sitting in their offices with no real contact with their membership. This has led the industry to become so regulated like it is now, i.e. instead of this industry taking their own initiatives to curb their environmental footprints, they force regulators to come up with regulations to force them achieve that goal.
Next one up: hull biofouling. Here, shipping industry can show its leadership in green technology by curbing the pollution (yes, it is a pollution) by organisms hitch-hiking on the hull, voluntarily. My personal view is that they won´t, and that we will see a new Convention against that in a decade time.
Faig Abbasov, Aviation and Shipping Officer, Transport & Environment
Compared to other transport modes, shipping is by far the laggard in green technology uptake. Firstly, It burns the dirtiest of all fuels (residual fuel oil); even with a new global standard for 2020, the sulphur content of shipping fuel will be 500 times more than road diesel. Current standard up to 2020 is 3500 times worse than road diesel and the shipping industry wanted to keep it for another 5 years after 2020. We, together with the European Union, had to put up a big fight at MEPC70 of IMO four weeks ago in order to get this standard in place.
Secondly, shipping is the only sector in the world that is not subject to GHG emissions reduction. It managed to escape the INDCs within the scope of Paris Agreement. The shipping industry had long argued that there should be no regulation; this has changed a bit following the Paris pressure, but industry still argues against any target until IMO data collection system is up and running - which means after 2023. This message was also hidden in the IMO GHG work plan adopted by MEPC70 4 weeks ago - which envisages to have and IMO GHG strategy by 2018 but not to agree on a target or a measure until 2023. And if the global measure for shipping is agreed in 2023 (unlike with American presidential election results), the actual implementation date would be further away. For sulphur standard (mentioned above) the lead time between the adoption of regulation (2008) and its implementation (2020) will be 12 years and shipping industry wanted to delay it further 5 years (to 2025). New sulphur standard will cost them around 30B Euros, while the costs of decarbonisation will be measured in trillions of euros - so it is a no brainer to imagine how many years of lead time the industry will demand in 2023.
Max Tingyao Lin, Markets Editor, Lloyd's List
Shipping’s attitude towards renewable energy tends to be reactionary at times, so I wouldn’t exactly call it a leader in this field. But there is hope there—there will always be industry participants for and against major environmental regulations, but generally the eco side will win out, even though the process could take years.
The main challenge still lies in the bottom line. If shipping firms can find a way to profit from being early adopters of green technology, they will be.
Shun Chen, Associate Professor, Shanghai Maritime University
There seem to be no economic incentives for the shipping industry to become a leader in green technology. Usually, the building costs of a green ship will be significantly higher than a conventional one, and the abatement equipment of air pollution or some devices aiming at reducing fuel consumption, all require substantial capital expenses, a huge pressure for companies especially during the economic downturn. On the other hand, the ‘so-called’ economic superiority of green ships has yet to be proven and needs the support of more empirical analyses.
During the past decades, increasingly stricter standards of ships made by IMO in the context of environmental protection and sustainable development, has triggered the massive research and development of green technology in shipping industry. The revolution in green shipping is largely dependent on the close collaboration of main nations aiming at improving global environment, efficient oversight systems, government support and companies’ environmental awareness and social responsibility.
Kathy Metcalf, President and CEO, Chamber of Shipping of America
The shipping industry, like any industry, has a broad range of owners and operators relative to environmental and sustainability programs. The one fundamental that must be kept in mind is the primary focus on compliance with all applicable laws and regulations. For the shipping industry, this means compliance with IMO requirements as well as national and sub-national requirements that apply to vessels while in another nation’s waters.
Given the landslide of new requirements over the past 20 years that are now imposed on the global shipping industry, meeting that primary compliance goal is a day to day challenge and new requirements are continuously being created and must obviously be implemented by shipping companies. Larger shipping companies (with larger shoreside staffs) are more inclined to have “compliance plus” programs in place relative to environmental performance and sustainability programs. Leaders in this category include Crowley, Foss, Tote and Maersk to name a few.
So to answer your question, I would say the shipping industry is a leader in green technology primarily due to the new technology requirements that are being placed on the industry in a variety of regulatory areas e.g. ballast water treatment systems, new clean engine and clean fuels technology, etc. We can always do better, and I believe continuous improvement is a basic operating tenet of most ship owners and operators.
Zheng Wan, Research Scientist, Shanghai Martime University
I believe the shipping industry is one of the slowest on green technology. While global cooperation is preferred in solving global issues such as maritime pollution, it is a daunting task to reach global consensus between many different actors with differing interests. Global action has been slow. The legal, political and practical challenges associated with the implementation of a global policy for a global industry are enormous. Historically, maritime regulatory responses largely have been driven by events such as high-profile accidents, whereas comprehensive efforts to address environmental challenges and preserve biodiversity have been lacking.
Funding is also a major concern. Green technology is expensive, and the initial purchase will be followed by many adaptation and maintenance costs. Early adapters will be inevitably less economically competitive because the costs will be passed on to price-sensitive cargo owners. Naturally, the maritime industry prefers assuming a wait-and-see approach because there is no economic incentive to do otherwise—the best performer is not rewarded. While today’s IMO conventions establish largely technology-oriented agreements, we believe a mix of technical regulations and market instruments is necessary to provide sufficient incentives to comprise a coherent policy model for guiding industrial transformation. These incentives can include reduced port usage fees, priority access to port facilities and tax rebates for early adapters. Under the principle of common but differentiated responsibilities, technical and funding aid should be provided by developed countries to developing countries that lack response capacity.
Galen Hon, Manager Shipping Efficiency, Carbon War Room
Vessels equipped with innovative technologies like wind-assisted propulsion and hull air lubrication demonstrate leadership within the industry, but there is greater potential.
For the industry to truly lead, clean technology must graduate from novel to norm. This certainly begins with demonstrating the viability of clean technologies, but while simple fuel-saving retrofits or “eco-ship” orders remain headline news there is need for greater ambition.
To enable that, the market must reward shipowners who invest in green technologies and free them to operate more efficiently. Carbon War Room’s operational efficiency data portal, BetterFleet, provides data that demonstrate how operational constraints placed on shipowners lead to inefficiency and will inspire conversations about how to overcome them.