If there is anything that shipping has always needed but rarely had it’s a great degree of certainty over what the future may bring.
There are very few industries that work to similar asset life spans than shipping where most ships are expected to work for 20-25 years and some specialist vessels such as LNG carriers and passenger ferries for much longer. Shipping is probably subject more to the vagaries of geopolitics than are many other industries and shipowners have needed to be able to handle sudden peaks and troughs in activities, oil crises and more.
When Peter Livanos, Executive Chairman of Gaslog spoke recently of the problem of deciding when to order new ships soon to face many shipowners because of the drive to decarbonise shipping , he was probably articulating what many shipowners must be thinking.
We can meet the 2030 IMO targets as a shipping industry along all types, from container to bulk carrier to tanker, by shifting to LNG fuel and making some modest adjustments to the way we run these ships in terms of speed. There is no way that we will achieve the 2050 targets without a major change in propulsion systems.
When Livanos talks of the average asset life of a tanker, Capesize bulk carrier or containership being 15 to 18 years, he is probably referring to the time with the first one or two owners there are probably a thousand or so ships in those categories older than that in service which are still earning money for an owner, providing employment for crews and carrying the cargoes that newer vessel owners prefer to avoid.
Whether the majority of potential owners of newbuilds this year will opt for LNG over fuel oil – even VLSFO – remains to be seen, many would say it is unlikely. But as to what the fuel will be in 2030 if zero emissions are the target then only hydrogen meets the requirement. Ammonia might be considered if used in a fuel cell, but it produces NOx when used in a conventional engine. Biofuels may be carbon neutral, but they too can produce other pollutants beside.
Aside from casualties and war, the only occasion in recent times when whole swathes of ships were made obsolete was with the phase out of single hull crude oil tankers at the beginning of this century. What could have been an economic catastrophe for the owners concerned turned out to be less of a problem with some tankers being modified and others converted into different ship types. With hindsight it might be admitted that converting obsolete VLCCs into ore carriers was a mistake but other conversions into FPSOs and FSOs as well as semi-submersible heavy lift ships helped mitigate the effects of the phase out.
Right now, no owner can say that they are confident about ordering any new ship other than a small electric ferry because of the uncertainty of what power source to use and what fuel that power source could be consuming throughout its expected lifespan. That is not a good situation for shipping to be in and it is one that must be resolved before the IMO decides on any further mandatory requirements for fuel, emissions or anything related.
If the world is demanding more sustainability then it has to be clearly understood that building vast quantities of ships that will be declared obsolete long before they have reached the end of a useful working life is the very opposite of that aim. By all means encourage the development of new technology but do not impose half-baked solutions on an essential industry.