Decarbonisation in the aftermath of corona

Sofia Fürstenberg Stott

Sofia Fürstenberg Stott · 24 March 2020

Fürstenberg Maritime Advisory

In the middle of the summer of 2017, the world saw the worst pandemic virus so far, reaching our shared electronic world. NotPetya infiltrated and infected companies far beyond ever seen or even thinkable before. During these black months until the virus was beaten, Maersk returned to Post-Its and flip-charts, and communication was reduced to instant messages over WhatsApp. The damage cost of this malware worldwide, has been estimated at around USD 0.85 - 1.2 billion, for Maersk alone an official announcement suggested 250-300 million.

Another virus has now reached our shores, and this time around, it is a virus in its true sense. The coronavirus is already creating a massive economic chokehold, curfews are being imposed, most shops are closed, restaurants are only allowed to keep open to provide TakeAway. As I write this, Italy has lost 3000 people to the virus. We have retracted into our pods, removed everything unnecessary out of our lives. We listen to brave Ligurians singing arias from their balconies, to epidemiologists being brutally crucified by the public, and to kings and queens making rare appearance on state television, pleading for calm and solidarity.

In the maritime world, we hear about cruise ships being refused port access, about cargo- and passenger companies letting go of all but few staff, and not least about the decision to postpone the crew changes. For many merchant seafarers looking forward to getting home to their families after many months at sea, they are now stuck on duty, heroically staying on, to secure the continued resilience of our global supply chains. Meanwhile, uncharacteristically Russia and Saudi Arabia through very opaque motivations, appear to have destroyed oil value: Brent Crude just went down to USD 27 per barrel.

Last week, just before “all hell broke loose”, The Green Ship Technology Conference, (GST Europe 2020), was held in Copenhagen. The conference had its largest focus on digitalisation and decarbonisation, as expected, and much appreciated.

The IMO commitment to be half-way to carbon-neutrality by 2050, is not a small one. To prove technological enablers in time for the long-term investment horizons typical of shipping, carbon-zero ships need to have entered the market by 2030 at the latest. Only then, with strategic incentives in place, and supporting regulations enforced, the journey to 2050 will be possible.

A possible addendum to MARPOL, relating to the industry proposal to pay USD 2 per ton fuel into a carbon research fund, to facilitate the transformational journey, was to be concluded at MEPC75. This meeting has now been postponed due to the virus. This is concerning for IMO’s current decarbonisation roadmap, as the urgently required addendum, identified as essential in order to be able to reach the ambitions, needs to be approved this year in order to come into force by 2023. Another item to be discussed at MEPC75 is the Carbon Intensity Indicator, as proposed by the Danish Maritime Authority; a measure to push performance beyond the EEDI, including existing vessels, in order to enable a level playing field towards 2050.

The representative from the European Commission, Policy Officer and responsible for the commission’s coordination between the ETS and IMO’s decarbonisation agenda, Petra Doubkova, lamented that there is a lack of pioneers to develop zero-carbon solutions. She was immediately met with an opinion from the moderator, Niels Bjørn Mortensen, previous Head of Regulatory Affairs at Maersk, and now independent consultant, that a carbon levy, like the one mentioned above, will be necessary in order to have any decarbonisation pioneers at all!

Several conversations during the GST dwelled around the complicated chicken-and-egg situation of which zero-carbon fuel will be able to scale to global level, and thus what solution you as a ship-owner should place your bets on. One take on this was the conversation between Guy Platten, Secretary General of ICS, and Melwin Mathews, Maritime Director at Wärtsilä, which actually took place during the parallel Shipping Transformation Summit, in the adjacent hall. Mr. Mathews insisted that Wärtsilä will build whatever engines the industry is asking for, stressing however that while Wärtsilä have 50% market share of LNG-propelled ships, and therefore somehow positioned for alternatives, there is currently no infrastructure for any other new fuels.

Therefore, they are not really able to build engines specialised for new zero-carbon fuels, which not yet exist at scale. Mathews explained, they are building engines with high flexibility, engines which would be able to operate on several fuels. The moderator, Lars Jensen from SeaIntelligence, was fast to inquire whether this means that currently the owners need to accept engines which are the jack of all trades, master of none? Mathews’ response indicated that Wärtsilä have not thus far, identified a different strategy.

This insight rendered several interactions from the audience, not least from an innovation manager who proposed that the likes of Wärtsilä are not taking sufficient action on the matter, and where a reorganisation of responsibility for the decarbonisation agenda needs to happen.

LNG was the target for some green-bashing in a later panel session. The accusation was that LNG is not really worthy of the decarbonisation tag, knowing that it only offers a minor carbon reduction (or even worse, the opposite, knowing we still haven’t solved the methane slip problem). This opened up for perhaps the most thought-provoking discussion throughout the entire conference; that although LNG is not going to accomplish industry decarbonisation as such, it can serve as a pathway to future zero-carbon options, like Bio-LNG and synthetic LNG produced from renewable sources. It can happen incrementally, as existing LNG assets and infrastructure can be utilised for this transition.

Certainly, there were also important conversations regarding the progress of wind-efficiency and wind propulsion solutions. Significant progress has been seen in this sector over the last few years, and I was especially impressed by Airseas, an offshoot of Airbus, having developed a kite, the Seawing, which through the combination of aeronautical knowhow and maritime innovations, has developed a fully automated solution, digitally twinned, which folds and unfolds without any human intervention on deck, and which can be retrofitted without the need for docking. This might be the golden chance for wind-assisted propulsion to really take off!

Now, back to reality. To the lockdown of a century. The economy is increasingly constrained, and we have no way of knowing for how long. The damage from this viral organism looks like it will be gargantuan. When this lockdown is over, and when schools and universities open again, and when we are finally out of our isolation, for sure we must do all we can to get the economy going again. Our jobs are depending on it. So are our salaries, our pensions, our health and well-being. Whole countries are depending on it.

But let us not move away from the decarbonisation trajectory because we need to find fast cash; let us not focus on consumption for consumption’s sake when this is over. Let us put more dedication than ever before on the zero-carbon journey. Because when the world is broken, we need to fix it sustainably. This must always be our ethos.

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