In a DNV webinar on the pathway to net zero on Tuesday the company said emissions overshoots means that the need for carbon capture and storage (CCS), while a newly released DSF report focussed on levelling the costs between green and carbon-based fuels.
To be fair the differences between DNV and DSF were mainly a matter of emphasis, highlighting the respective company’s specialisations, rather than specific differences in direction. And while DNV was looking at the global picture, DSF is considering the path to net zero for the maritime sector.
That said, their conclusions were strikingly similar, in that they both saw the need for governments to use all their levers to speed up decarbonisation, while DNV also highlighted the need to ban new fossil fuel projects and develop abatement plans, such as reforestation, as well as the development of technology to store excess carbon.
DNV President and CEO Remi Eriksen told the webinar: “Net zero is feasible and can be achieved with existing technology,” adding that there must be a tripling in green energy production and that CCS must be developed to deal with the excess carbon, because “we will overshoot the 1.5 degree target”.
However, excess carbon can be sequestrated from the atmosphere using CCS and direct air capture (DAC) technologies which, should bring the Earth back to within the 1.5 degree limit by the end of the century.
Meanwhile, DSF in its latest Market Review, also published on Tuesday, argues that; “Shipping markets are struggling to access the full potential of the energy efficiency encapsulated in the existing fleet.”
Lower costs of existing technologies are built into the system while the environmental options cannot gain traction as a result.
“In the shipping industry, this means port call planning that fails to minimise Scope3 emissions for cargo owners. This situation will persist until it is no longer the cheapest alternative for cargo owners.
“The combined costs of excessive fuel consumption, carbon pricing (i.e. the EUETS), and demurrage must exceed the alternative costs elsewhere in the supply chain before industry dynamics are likely to change,” said DSF.
Moreover, the DSF report has aimed another salvo at the much-maligned Carbon Intensity Indicator (CII): “The IMO has introduced a framework that aims to deliver transparency and benchmarking, but the CII fails to produce environmental benchmarks that allow vessel operations to be compared on an apples-to-apples basis.”
According to DSF terminal operations are key to shipping’s decarbonisation, not just to prevent idling ships, but to reduce vessel speeds with just-in-time arrivals.
CII compares the impact of terminal operations across regions, rather than benchmarking that environmental performance with other terminals.
In contrast DSF believes a voyage index would enable transparent benchmarking of environmental performance on an apples-to-apples basis.
“To allow competition to drive change, it is essential to create a voyage index that displays carbon intensity per voyage (grams of CO2e emitted per unit-NM) and split the voyage emission into variables that allow performance to be evaluated and optimised.”
In addition, the voyage index should be accompanied by a global terminal heat map that displays efficiency. “The voyage index could constitute a critical addition to commercial contracts”.
As a result of the introduction of targeted and specific voyage emissions data cargo owners will be willing to pay for a higher performance.
“A voyage index could cap ocean costs while guiding cargo owners towards their climate targets. This would encourage long-term vessel contracts, making such vessels prime candidates for increased energy efficiency and, eventually, sustainable fuel adoption.”
While the DNV’s broader outlook revealed that the technology to meet the Paris climate target was available and the possibility to achieve that goal was still within reach of the technological boundaries.
DSF’s more targeted report concentrated on the regulatory mechanisms that are necessary for shipping achieve its industry specific targets. DSF’s voyage index is seen as a critical benchmarking tool that will allow shippers to measure their scope 3 emissions and that, in the long-term, will drive emissions downwards.
In the final analysis, both DNV and DSF argue that governments need to make regulatory changes that make a difference and that will see the shift from carbon intense operations, to net zero alternatives.
These alternatives are more capital intensive, but will be far cheaper than the climate damage that will ensue if the changes are not made.