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Container ships to drive alternative fuel adoption

Seatrade Maritime Coverage Cloud team talks to Panos Koutsourakis, Director of Global Sustainability at ABS about IMO andregional regulations, regulatory compliance and how ABS is supporting the industry to navigate decarbonisation.

What are the Impending IMO and/or regional regulations which will impact deep sea shipping?

Actually, I as part of the IMO strategy, there are two regulations that will enter into force in 2023. It's EEXI and CII. The EEXI side has more a structured, technical technical form. And is going to be a onetime certification for ships, while CII has a dynamic approach, and it depends on the operating profile of the vessels. So, both of these regulations, they are going to have an impact on shipping. And we have seen that almost 75% of them are going to have an impact on the global fleet. So, of course, beside the IMO regulations, there are other regional, let's say, requirements or regulations, that are going to have an impact on the shipping. For instance, the European Commission recently decided to include the shipping on the ETS scheme, the emissions trading scheme, and also decided to introduce the Fuel EU regulation for shipping. Of course, the European Union and European Commission is just one region, we're expecting similar regulation from other regions like China, UK and the US.

What are the options to comply with these regulations and improve the energy efficiency of ships?

I would say that the approach is different for each case. With regards to EEXI compliance, we have seen that most ships can comply with EEXI by adjusting EPL, which stands for any engine power limitation. For CII it's a more complicated multiparametric problem. What I can say is that for the older ship designs, which are rated with a D or E then they probably have to invest in energy efficiency technologies. For modern ship designs, rated with at least C or a higher grade, it will be easier and they may achieve you know, a good rating with just operational measures for a few years ahead. CII will start by 2023 and will go on until 2030, and the CII index is dynamic and will change year by year.

Is there any particular shipping sector which is driving alternative fuel developments?

Thinking about alternative fuels, one of the main challenges is how to develop the infrastructure and how to increase the demand and supply of course of fuels. I think that they for container ships it will be much easier to use or to adopt the alternative fuels because they have standard trading routes. Therefore, I would say that the container ship sector, it might be the sector that will be the early adopters and will drive the demand of the alternative fuels.

What are the advantages of methanol as a marine fuel and should we consider ammonia and alternative fuel to achieve the target of decarbonisation?

Methanol is known in our industry. Methanol can reduce carbon emissions. I believe that methanol's lower investment cost and lower production costs makes very attractive for shipowners and for the future designs. Also, there is availability of methanol and we have identified many existing and new projects for e-methanol and bio-methanol production. Thinking about the potential switch to a lifecycle approach in the market, that will increase the demand even more. Now about ammonia - definitely ammonia is going to be a strong candidate among the alternative fuels. Ammonia doesn't have the carbon element in its chemical composition as a fuel. So, looking forward to zero carbon fuel, ammonia is definitely a strong candidate.

How is ABS supporting the industry in navigating the emerging landscape of decarbonisation?

As ABS, we have done something unique. I think that we are the only organization that has a global dedicated sustainability and decarbonisation team. So, through this team and of course with the support of all of the organization, we're working on many different joint development projects with other industry partners, people, owners, shipyards, vendors and new technology providers in the market. And of course we have our advisory services and our advisory guidelines, we're feeding the market and supporting the whole market in the industry, you know, with this amazing landscape.