Capital Link’s Decarbonization in Shipping Forum took place with great success and participation on Wednesday & Thursday, April 14 - 15, 2021 as a digital conference, opening it to a global audience and making this approach highly relevant and effective, and featured a series of LIVE interactive panel discussions.

The event took place over the course of two days, with 14 virtual sessions, and 78 speakers with 70 companies participating on the discussion panels.

The theme of the Forum was “Decarbonization”, which is the next frontier for the industry to conquer adhering to specific objectives and timeframes. 

Top executives from major companies and organizations from the shipping industry, discussed how the industry will meet the regulations, the costs and risks involved and the solutions that are available. 

STEERING COMMITTEE

The agenda topics were carefully designed and selected by the Steering Committee comprised of leading experts in the Maritime Industry.

• Dr Grahaeme Henderson OBE, Senior Vice President, Shipping & Maritime - Shell International Trading and Shipping Company Limited
• Michael Parker, Chairman, Global Shipping Logistics & Offshore - Citi
• Esben Poulsson, Chairman - International Chamber of Shipping, Executive Chairman - Enesel PTE. Ltd
• Dr. Nikolas P. Tsakos, Founder and Chief Executive Officer - TEN LTD; Chairman – INTERTANKO (2014-2018)
• Charles (Bud) Darr, Executive Vice President, Maritime Policy and Government Affairs - MSC Group

KEYNOTE SPEAKER

Dr. Martin Stopford, Non-Executive President - Clarkson Research Services Limited 

FORUM HIGHLIGHTS

• Presentations/panel sessions were delivered in real time video format
• Exhibition halls with 25 digital booths

• Participants visited our Sponsor booths to obtain the latest industry and financial reports, white papers, company videos, latest presentations and more
• All materials can be saved into a briefcase and reviewed at a later stage 

AGENDA TOPICS 

DAY ONE – WEDNESDAY, APRIL 14, 2021

THE ROADMAP TO ZERO - MOVING FROM DISCUSSION TO DELIVERY
Steering Committee Members - 1x1 Discussion

The discussion focused on how the shipping industry delivers the change needed to achieve its decarbonization ambitions. Drawing on experience as financiers, charterers & fuel providers, Grahaeme and Michael examined  some of the barriers to decarbonization and discussed how the industry can progress to move into the ‘delivery’ phase on shipping’s road to zero.

• Dr Grahaeme Henderson OBE, Senior Vice President, Shipping & Maritime - Shell International Trading and Shipping Company Limited / CONFERENCE CHAIRMAN
• Mr. Michael Parker, Chairman, Global Shipping Logistics & Offshore - Citi 

WELCOME REMARKS & INTRODUCTION

Mr. Nicolas Bornozis, President - Capital Link, Inc.

Mr. Bornozis welcomed and thanked the steering committee, sponsors, participants and panelists highlighting the value added of this forum along three major factors. The compact agenda which covers all critical topics related to decarbonization; the aim of the forum to highlight practical solutions in the context of “Moving from Discussion to Delivery” and the fact that it includes on the panels major stakeholders across the industry with heavy focus on shipowner engagement, both in the panel discussions and the implementation of alternative solutions and strategies.  

Dr Grahaeme Henderson OBE, Senior Vice President, Shipping & Maritime - Shell International Trading and Shipping Company Limited / CONFERENCE CHAIRMAN, stated: “Grahaeme and Michael’s discussion focused on how the shipping industry can deliver the change needed to achieve its decarbonisation ambitions.

Grahaeme highlighted that amongst other factors, such as the business case and disruption, how lack of alignment on future fuels can act as a barrier. This was also shown in Shell’s Report “Shipping Decarbonisation: All Hands on Deck”, following interviews with 80 senior shipping leaders. He also discussed how collaboration and coordinated effort, would be needed in shipping and with other industry sectors. He made the case for hydrogen as the most likely fuel to succeed for deep-sea shipping on the basis of managing safety risks, lower long-term costs, and greater total emissions potential. Looking at what the most significant drivers of change are for shipping’s decarbonisation, Grahaeme noted the importance of making emissions reductions today with LNG, while developing and deploying fuel cell and energy efficiency technologies, which will enable zero emission fuels. In support of the development of fuel cells, Grahaeme noted that Shell would soon be joining a consortium of companies from across the value chain, who will collaborate to trial fuel cells onboard deep-sea ships. Grahaeme also set out the ways in which Shell was accelerating progress on decarbonisation by reducing emissions in its own operations, working with partners and customers to help them reduce emissions, and advocating for strong, global regulations to incentivise and support the industry’s decarbonisation. Despite the many challenges, Grahaeme said he believed that the shipping industry can achieve the decarbonisation ambitions and it is vital to start delivering now.” 

SETTING THE STAGE - THE SHIPOWNERS' PERSPECTIVE - WHERE WE ARE TODAY - HOW TO MOVE FORWARD

This panel set the stage providing the shipowner perspective on the progress of decarbonization. What has been done, where we are in the process and what remains to be done. It also addressed challenges shipowners face today related to commercial and investment decisions involving long term assets against the backdrop of uncertainty regarding developments in regulation and marine fuels.

Moderator: Mr. John McDonald, Senior Vice President, Global Business Development and Global Marine - ABS

Panelists:

• Mr. Mark O'Neil, President - Columbia Shipmanagement
• Ms. Ioanna Procopiou, Chief Executive Officer - Prominence Maritime
• Mr. Hamish Norton, President - Star Bulk Carriers Corp.
• Mr. Jacob Meldgaard, Chief Executive Officer / Director - TORM A/S
• Mr. William Fairclough, Managing Director - Wah Kwong Maritime Holdings 

Mr. John McDonald, Senior Vice President, Global Business Development and Global Marine – ABS, stated: “Decarbonization is one of the biggest challenges of our generation. Addressing it requires a mix of solutions from operational measures to the adoption of energy efficiency technologies, but the biggest contribution will come from alternative fuels. 

ABS research has identified a gap between IMO ambition and industry reality. Ultimately, Shipping will be able to meet the carbon intensity target but will not be able to meet the ambition for a 50 percent reduction in Green House Gas unless we accelerate our efforts to decarbonize. 

This means that by the end of this decade we will need to scale up alternative fuels and begin applying zero carbon and carbon neutral fuels in maritime applications. At the same time, the IMO is developing short term measures that have both a technical and operational element to accelerate compliance.

Adoption of the efficiency design index measure for existing ships, the EEXI, is the first of these, followed by an operational measure, the Carbon Intensity Indicator, which will track the actual carbon intensity of vessels, while applying a reduction trajectory.

By January 1, 2023, EEXI will be applied in the form of a technical filter that vessels will have to go through. If they do not meet the requirement, they will have to explore options that will render them compliant. In most cases the compliance will be achieved through the application of an Engine power limitation. Other options include retrofitting with Energy Efficiency technologies or change to Low Carbon fuel.

At the same time, those vessels that meet the EEXI requirement will have to start reducing their carbon intensity, following a downward decarbonization trajectory until we meet the 40 percent reduction target (against 2008 levels) in 2030. 

As decarbonization forms an integral part of a company’s strategy, we see links with financier and charterer initiatives. We see the carbon footprint of shipping assets being represented in the value of the asset and in the value chain of which it is a component. 

ABS is committed to helping the industry achieve its decarbonization goals and has scaled up its Global Sustainability capabilities accordingly.” 

Ms. Ioanna Procopiou, Chief Executive Officer - Prominence Maritime, highlighted that it is of utmost importance for any initiative to have a clear and proven environmental benefit. Considering the above, it is crucial for any new solution / regulation to be evaluated using a life cycle analysis namely from the extraction of raw material to the end of life.  Otherwise, we shift the focus from sea to land-based emissions. Although improving the energy efficiency and reducing greenhouse gases in the shipping industry has been the central objectives of the policy making during the last years, the way that ships are operating has a notable impact on the overall emissions. Therefore, we shouldn’t underestimate the role of the charterer in determining the operational profile of the vessel which has a significant effect on the energy efficiency and therefore emissions. Ioanna was skeptical of the actual environmental benefit of many of the proposed new regulations and of the

incentives behind those proposals. She also expressed her concerns about the development of the distribution network for any alternative fuels in the near future which should be sustainable alternatives with a proven environmental benefit considering all the life cycle stages, safe for the crew and the equipment, readily available all around the globe and economically competitive. The bunkering infrastructure which is dependent on the dominant fuel, in her view will require a decade to be developed or even more. Concluding, Ioanna explained that there are operational measures readily available with zero cost that could potentially improve the energy efficiency of the ships up to 30% reaching today the goal of the IMO of 2030. Voyage optimization like power limitation and weather routing, traveling fully loaded, just in time arrivals are a few proposals that have not yet been used in their full potential. 

Mr. Jacob Meldgaard, Chief Executive Officer / Director - TORM A/S, stated: “In TORM’s view, decarbonization would require that IMO and other regulators set minimum standards and targets. Despite criticism of being slow and always ending up with the lowest common denominator, IMO remains the only sectoral global regulatory body to have set clear targets for the industry. IMO is challenged by the impatience of regulators in certain parts of the world, but I truly believe that we as industry can make a huge difference when we join forces and actively bring solutions to the table.

TORM believes in an even playing field making sure reporting could not be “bended”, meaning that clear reporting and tax paying frameworks were in place. Jacob underlined the importance of the EU, the ETS, the US and China coordinating measures to increase transparency which will simplify business procedures and reduce transportation costs and more preferably the measures should be taken with the IMO.

TORM believes in a continued evolution of operational gains through applying all competencies accumulated in technical management. Digitalization is a supporting tool which combined with common sense and intelligent use of the available data in the value chain can reduce energy consumption.

Jacob believes in the importance of keeping focus on what really has brought value and energy reductions and it was of course an issue to ensure there was a financially sound case in retrofitting gadgets which may be expensive but has reduced energy consumption. Jacob expects that the future would bring a mix of 2-3 fuels, however, the biggest challenge was availability, and the infrastructure around supplying and producing truly carbon neutral fuels. Furthermore, new low flash point fuels would require competent staff on board and quality operators to ensure safety.

The challenge was to foresee the right technology to build the infrastructure around, and the incentive to be first movers. For shipowners, the consideration would be to future-proof the assets so that they would not suddenly become obsolete in the mid-2020’s.” 

POLICY MAKING & THE REGULATORY DECARBONIZATION ROADMAP FOR SHIPPING - REGULATOR, INDUSTRY & STAKEHOLDER INVOLVEMENT - GLOBAL & REGIONAL ISSUES

Shipping is one of the most international and fragmented industries. This panel discussed the complexities and difficulties of policy-making framework & the regulatory decarbonization roadmap. It debated the prioritization of global and regional issues and how to ensure the involvement of all stakeholders in the process.

Moderator: Mr. John Keough, Partner - Clyde & Co

Panelists:

• Ms. Sanne Henriksen, Senior Regulatory Affairs Manager - A.P. Moller - Maersk
• Ms. Magda Kopczynska, Director for Waterborne - Directorate General for Mobility and Transport - European Commission
• Mr. Dimitrios Fafalios, Chairman - INTERCARGO; President / Director - Fafalios Shipping
• Mr. Guy Platten, Secretary General - International Chamber of Shipping (ICS)
• Ms. Caroline Yang, Chief Executive Officer – Hong Lam Marine Pte; President - Singapore Shipping Association (SSA)
• Mr. Lasse Kristoffersen, Chief Executive Officer - Torvald Klaveness; President – Norwegian Shipowners Association, 2018-2020

Ms. Magda Kopczynska, Director for Waterborne - Directorate General for Mobility and Transport - European Commission, stated: “It is extremely encouraging to hear that decarbonisation is at the core of the shipping

agenda. International cooperation is key for a global sector such as shipping.   Our vision for Europe is to become the first climate neutral continent by 2050 and to reduce GHG emissions by at least 55% by 2030. This means every sector must play its part, including maritime transport. The European Green Deal makes it clear that this needs to be done in coordination with international regulatory framework. The regulation of the International Maritime Organization (IMO) is extremely important for the EU and that is why the European Commission continues to advocate for an ambitious and inclusive progress at global level. Past experience has shown that irrespective of whether such progress is first spearheaded at the global, regional or national level, what matters is that the final outcome brings all negotiating partners on board and that it is coherent and consistent. A combination of measures and efforts will be needed to decarbonise a complex sector such as shipping, both in the short and longer term. We need to regulate differently and provide the sector with a long-term perspective (up to 2050) – to allow for the new fuel eco-system, first movers and partnerships to arise, with measures ranging from carbon pricing to fuel demand, supply and innovation. In summer this year, the European Commission will propose just such a basket of measures for consideration at EU level, having carefully assessed their coherence with any potential future measures at global level and working in parallel on the development of such measures at the IMO.”

Mr. Dimitrios Fafalios, Chairman - INTERCARGO; President / Director - Fafalios Shipping, stated: “The complexity of the shipping industry and the need for informed decisions by regulators, who must be assisted to understand the different sectors and their distinct business.

Regulation must be effective and balanced. The burden of compliance should not automatically and by default fall on shipowners.

It was stressed that the easy solution is not always the correct one, especially when dealing with an industry as diverse and complex as shipping; regulators should seek to reconcile environmental imperatives with existing business models, especially when the latter are as highly efficient as they are in tramp/bulk/oil sector.

The reduction of GHGs illustrates this point.

Notwithstanding the industry’s strong preference for global regulation at IMO level, the EU has recently decided to roll out regional measures to curb GHG emissions from shipping. If regional regulation is indeed deemed a political necessity, then it should at the very least be scalable and compatible with future IMO measures. Importantly, it should also be tailored to the inherent characteristics of our industry.

However, the European Commission seems determined to include shipping in the EU ETS, a system that is unworkable and fundamentally incompatible with our industry.

Reference was made to the recent joint initiative of the Union of Greek Shipowners, the Swedish Shipowners’ Association and the environmental NGO Transport & Environment, who ask the European Commission to adopt an ambitious yet tailored approach for the international shipping industry in the context of the EU ETS review. This initiative is proof that it is possible to be ambitious without unnecessarily disrupting a well-functioning industry.

Alternative fuels were also discussed as was the availability of clean, safe shore power which has different applicability to each shipping sector. This fact should be reflected in any future regulation.

The importance of involving all actors of the maritime value chain was stressed. Fuel suppliers and ports must also be incentivized and regulated to supply low carbon or zero carbon fuels, which are safe and competitively priced.”

Ms. Caroline Yang, Chief Executive Officer – Hong Lam Marine Pte; President - Singapore Shipping Association (SSA), stated: “Singapore is an International Maritime Centre with a diverse ecosystem of shipowners comprising multinational corporations as well as small and medium enterprises. Because of such vibrancy, the views of the Singapore shipping community on decarbonisation are not country specific but international in nature.

The Singapore Shipping Association (SSA) is also part of the ASEAN Shipowners’ Association and Asian Shipowners’ Association, and together we account for about 50% of the world’s ship tonnage. Therefore it is important that the Asian perspective is taken into account when developing policies and regulations on decarbonisation. 

This is where we would like to see the IMO taking leadership and demonstrate that it is serious about decarbonisation - to help prevent individual States or groups of States from unilaterally passing regulation that would upset the level playing field that is crucial for global shipping. 

We recognise there are challenges. On the one hand, IMO must demonstrate that it is prepared to act. This is why MEPC 76 in June must show real progress in passing robust, evidence-based regulations for decarbonisation. On the other, IMO needs to balance this with the need to pass practical, implementable regulations.

We favour practical, goal-based measures that can result in a real reduction in CO2 emissions. These measures must be administered by the IMO, which is and should be the leading technical and regulatory body for international shipping. 

The SSA also supports the development of the International Maritime Research & Development Board (IMRB). The IMRB promises to draw directly from ships' contributions to support the development of technology that can be proven to reduce shipping's emissions.”

Mr. Lasse Kristoffersen, Chief Executive Officer - Torvald Klaveness; President – Norwegian Shipowners Association, 2018-2020, stated: “Decarbonization is the task of our generation and we have no time to lose. Shipping connects the world and is the bloodstream of global trade. For the world to decarbonize, shipping needs to decarbonize. Our society demands change and the window of opportunity for the industry to chart our own future is now. This future needs to be aligned with the Paris agreement and target net zero latest by 2050.

But we have a big problem. The shipping market will not solve it by itself, carbon-based fuels are simply too competitive. The good news is that it will hardly cost the society and the consumer anything to decarbonize. For instance, transport of wheat to Europe on a zero emission Combination Carrier by Klaveness will only increase the price of bread with half a cent. Hence, we need to create a bridge between the society’s ability and willingness to pay and the significant competitiveness gap on a vessel and voyage level. The only bridge that can close this gap is a real price on carbon.

The ideal solution is a global levy regulated by the IMO, structured into a fund returning the proceeds to the industry and those affected. We need to think of this as both a subsidy for zero emission fuels and vessels, and a means to price out fossil fuels. We need to get out of the chicken and the egg situation where fuels are not produced as there are no consumers, and vessels are not built because there is no fuel.

A  global solution is needed, but given the urgency, we must accept, welcome and even encourage national and regional regulations, such as those under design in EU, that that puts a meaningful price on ships’ emission and are compatible with future global regulations through the IMO.

To reach net zero in 2050, zero-emissions vessels must become the only competitive choice, at the latest by 2030. Over the next 30 years, the whole world fleet will be replaced. If we incentivize the market now and put in place the much-needed regulations latest by 2025, we will reach zero by 2050.”

MEETING THE IMO 2030 DECARBONIZATION GOALS - ACHIEVING EEXI & CII COMPLIANCE - OPTIONS & STRATEGIES FOR THE EXISTING FLEET - MANAGING SECTORAL NEEDS TOWARDS A COMMON OBJECTIVE (containers - dry bulk - tankers - gas - passenger)

The industry has to achieve specific emission reduction objectives within defined timeframes. This panel discussed  the options and strategies available to shipowners across sectors in realizing EEXI & CII Compliance for their existing fleet, as promulgated by the 2030 Decarbonization Goals.

Moderator: Mr. Andrew McKeran, LR Maritime Performance Services Director - Lloyd's Register

Panelists:

• Mr. Salvatore d’Amico, Fleet Director - d'Amico Società di Navigazione S.p.A.
• Mr. Dimitirs Vastarouchas, DCOO & Technical Director – Danaos Shipping Co.
• Mr. Lars Pedersen, Chief Technical Officer - Frontline Management
• Mr. Paolo Enoizi, Chief Operating Officer - GasLog Ltd.
• Mr. Scott Bergeron, Director of Business Development & Strategy - Oldendorff Carriers 

Mr. Andrew McKeran, LR Maritime Performance Services Director - Lloyd's Register, stated: “In just under two months, the International Maritime Organization is expected to adopt amendments to MARPOL Annex VI, introducing an Energy Efficiency Design Index for existing ships (EEXI) and an operational carbon intensity reduction requirement. The objective: technically efficient new and existing ships, operated efficiently to achieve the IMO's interim level of ambition for 2030.  

Compliance with EEXI is the ticket to the game. For some ships, that ticket could be needed as early as 1st November 2022. The game itself kicks off on 1st January 2023, and the challenge is operational carbon intensity reduction for EEDI/EEXI compliant ships of 5,000 GT and above. EEXI will have different impacts for the main shipping sectors of gas, product, tankers, containers and bulkers and this Capital Link session elicited leadership views of how key sectors might be affected. 

Generally, EEXI is seen as a welcome development to a greener and cleaner approach to shipping. This was the overriding view from Frontline Management chief technical officer Lars Pedersen,  who said most of Frontline's young and efficient fleet of tankers already meet EEXI targets. Similarly, Dmitris Vastarouchas of Danaos Shipping doesn't see any significant effect on their efficient boxships fleet but agreed EEXI is welcome and needs complying with. 

Whilst younger fleets will already meet EEXI targets, older ships will need to limit power, slow down or fit energy-saving devices.  Pedersen added that this " may mean that "more vessels will be required on the water to transport the same cargo, as each voyage will take a longer time."

Complying with EEXI is essential for ships to continue to trade; there are many reasons to think that consistently maintaining a carbon intensity rating of C or above could be a vital commercial and regulatory risk management strategy.   

As Oldendorff's Scott Bergeron, stated: "carbon intensity is the tool that will drive emissions down…this is not just a shipping issue, it is a global energy issue". 

Mr. Dimitirs Vastarouchas, DCOO & Technical Director – Danaos Shipping Co., stated: “The shipping industry will face soon new challenges in the way to achieve IMO’s interim level of ambition for 2030. Compliance with EEXI and a significant reduction of CII, will be the focus points of the industry players.

In containers sector, EEXI seems that can be easily achieved mainly by reducing engine loads at certain extend (using EPL), maintaining at same time speeds at min 21 kn at design conditions. Energy Efficiency Improvement Measures (EEIM) have been applied in container ships during the last decade, following  the 2008 crisis, so there is small space for improvement by further tuning.

The big challenge however, is the CII reduction; considering average speeds of 16-17 kn during the last years, corresponding AER values, and the available speed margin after EEXI enforcement (up to at least 21 kn), it results that CII could easily deteriorate with higher speeds and increased ship’s utilization. Thus, the agreement between tonnage providers and their clients for pre-defined speeds close to, or even lower to current levels, is of paramount importance. At same time, given that big scale retrofits are not practical and investments are difficult to be amortized, other solutions should be adopted such as draft increase,  investment on more effective sea routing and ship’s performance monitoring , combustion improvement through blending and ideally carbon capture onboard, if feasible.

Moreover, a decision factor will be the re-consideration of Biodiesels CF value. If zero CF factor, as used in EU MRV, is adopted by IMO then, CII can be decreased on annual basis with the partial use of biodiesels, where available.

There are different approaches on CII reduction requirements and ships’ rating and uncertainty on how the underperforming vessels will be penalized. Existing containers fleet complies at a considerable percentage with currently available initiatives and reference curves such as the Poseidon Principle. What will be the convergence of the CII reference lines to be adopted in terms of the aforementioned ones is not clear yet, but the decision will determine the level of measures to be taken.

Furthermore, there are external factors that will affect owners’ decision towards more effective and at same time expensive solutions.

There are many questions that need to be replied that will fill in the puzzle and determine the decarbonization scene. What will be the final form of decarbonization tax  (levy or ETS )  and who will finally assume it ,how will this affect the future charter party agreements, what will be the penalties imposed on low rating vessels, whether the CII rating will seriously drive the financial institutes’ decision making process and gain  increased weighting over the traditional criteria.”

Mr. Paolo Enoizi, Chief Operating Officer - GasLog Ltd., stated: “The coming IMO, EU and other Government regulations will bring the shipping industry in the race to zero emission: indeed a welcome step for our always evolving industry that has never stopped improving its efficiency. It is also important that rules are clear, applicable and do not create unintended consequences that might jeopardize the final result.

When looking at the LNG transportation, we believe that the unique properties of the LNG trade make a one-size fits all approach to EEXI/CII challenging for our sector. Unlike other shipping sectors, in LNG shipping the cargo is also used as fuel to propel the engines. Emissions are therefore linked to a combination of the vessel’s size, efficiency of its containment system and performance of its engine technology.

LNG is the cleanest and most suitable fuel to enable the transition of heavy consumers industries (i.e. power plants, shipping sector,…) from more pollutant sources to a full renewable usage.

Today, over one third of the LNG carrier fleet utilizes steam turbine engine technology and will struggle to adapt to the upcoming environmental regulations as they have been drafted, potentially slowing down beneficial LNG uptake and, for instance, coal-to-gas switching.

As we are all awaiting the development of future technologies and net zero fuels, current mitigation strategies range from slow steaming vessels, applying energy saving devices and eventually introducing new technology in the global fleet, which will require significant amounts of capital and might run the risk of tonnage availability.” 

Mr. Scott Bergeron, Director of Business Development & Strategy - Oldendorff Carriers, stated: “The IMO is about to finalize two regulations aimed at achieving reduction of carbon emissions. The Energy Efficiency Existing Ship Index (EEXI) will effectively set a benchmark that brings existing ships up to the theoretical efficiency standards of the most modern ships built to Phase II of the Energy Efficiency Design Index (EEDI).  The most probable means to achieve this standard will be the installation of an engine power limiter, resulting in slower speeds for some ships. Other physical technologies that improve the efficiency of the ship can also be used to help achieve the required EEXI.

In most cases, the emission standards imposed by EEXI will not be enough to achieve the IMO requirements to reduce carbon emissions by 40% by 2030.  Therefore, the IMO is also developing Carbon Intensity Indicators (CII), which will measure specific emissions on a per voyage basis. Once established, a reduction trajectory can be applied to these CIIs to ensure that each ship is achieving the necessary reductions to comply with the 2030 and 2050 requirements.

Unfortunately, there are a large number of possible CIIs in circulation and no clear consensus on which variables and formulas are best.  The different CIIs influence or motivate different behaviour and no one CII suits every type of ship due to different characteristics of their design and trade. As a result, we are in the “Fog of War” on Carbon with these CIIs: confusion, misunderstanding and misapplication reigns supreme. 

Rather than criticize or rely on the variety of CII formulas that are in circulation such as Annual Efficiency Ratio (AER) and Energy Efficiency Operational Indicator (EEOI), I believe we need to gain experience with their use and reporting and then develop appropriate mechanisms that will facilitate the use of market forces that will in turn reduce actual total emissions.”

ENERGY EFFICIENT TECHNOLOGIES - IMPROVING FLEET PERFORMANCE

This panel discussed real-time performance monitoring and technologies that reduce fuel usage enabling companies to achieve fleet performance improvements while also reducing carbon emissions.

Moderator: Mr. Christos Chryssakis, Business Development Manager - DNV

Panelists:

• Mr. Tom Strang, Senior Vice President, Maritime Affairs - Carnival Corporation
• Mr. Roberto Coustas, CEO & Co-Founder - DeepSea Technologies
• Mr. Tommy Thomassen, Chief Technical Officer - Maersk Tankers
• Mr. Richard Gilmore, Executive Vice President - Maran Gas Maritime
• Mr. Stelios Psillakis, Technical Director - Seanergy Maritime Holdings Corp.
• Mr. Steve Brown, Manager of Shipping Technology - Shell 

Mr. Christos Chryssakis, Business Development Manager – DNV, stated: “In November 2020, the IMO’s MEPC 75 agreed on the first short-term measures for reducing GHG emissions from shipping. In parallel, the European Union has clearly expressed its intention to include shipping in its Emissions Trading Scheme (ETS), while other industry stakeholders are increasing pressure on shipping to decarbonize. The most notable examples are the Poseidon Principles, showing the commitment of financiers to sustainable shipping, and the Sea Cargo Charter, a global framework supported by some of the major charterers. While low carbon fuels will be an important element towards achieving the industry’s decarbonization goals, energy efficiency technologies will be key to reducing the carbon intensity of the fleet in the short term and the fuel bill in the long term. This naturally raises the question of which technologies can contribute most to decarbonizing shipping moving forward, and how we can ensure maximum utilization of these solutions.

The Capital Link panellists addressed the benefits of technologies such as improved hydrodynamics, air lubrication, wind-assisted propulsion, hull coating and overall optimization of machinery systems. Performance monitoring and the role of advanced artificial intelligence tools were highlighted as one of the key enablers towards reducing fuel consumption and assessing the efficiency gains of other technologies. Finally, the enhanced collaboration between industry stakeholders, including ship owners, charterers and technology providers was emphasized as critical to increasing the uptake of energy efficiency technologies.”

Mr. Tom Strang, Senior Vice President, Maritime Affairs - Carnival Corporation, stated: “The challenge of decarbonisation is the defining one of our age.  Reducing our energy consumption in our operations is a critical element in addressing this challenge while we continue to work on long term net-zero fuels and energy conversions.  We continue to investigate new technologies and operational aspects that will help us reduce our energy consumption.  These range from changing to LED lights, installing variable frequency drives motors, use of advanced hull coatings and hull monitoring, HVAC improvements, through to air lubrication systems and propeller changes.  Harnessing these technologies with itinerary/route planning, weather and condition monitoring to name but a few has allowed us to reduce our carbon footprint by some 30% since 2005.  A key part of this has been developing data monitoring tools and here there is lot more that can be done and it was really good to hear about some of the opportunities that AI and other tools can bring to the table.  The challenge remains to keep improving and working together with like minded companies and equipment suppliers to learn what works and perhaps more importantly what doesn't is key to success.”

Mr. Roberto Coustas, CEO & Co-Founder - DeepSea Technologies, stated: “As a co-founder of a performance optimisation company, I have learnt that every vessel is unique, and therefore there isn’t a recipe that will work on all vessels. Energy efficient technology investments need to be considered on a case-by-case basis, because an inaccurate investment can even deteriorate the performance instead of improving it.

First you need to use data to really understand the current behaviour of a vessel. Only then you can choose the efficiency enhancement solutions that are right for each vessel. From our experience, in terms of return on investment, Optimisation Technologies are ranked first by a large margin, then hull coating, and ducted propellers third.

Artificial intelligence is a very powerful tool to capture the complexity of vessel behaviour under many different conditions. This means that we can predict a vessel’s fuel consumption under any weather conditions – even in bad weather. With this information, you will know exactly how much fuel you will need for a given voyage before embarking, and you can use that information to optimise the route and speed for a given vessel.

We’ve done this with Seanergy for example. We’ve proven a 10% decrease in fuel consumption just with a better route, speed and trim combination – no other investment needed. Any other technology that even claims these results requires dry-docking and makes economic sense primarily for newbuilding vessels.

We see the split incentives as a very real barrier to digitalisation – and decarbonisation. There is no clear value proposition for the owners to become more efficient at the moment. The Sea Cargo Charter, RightShip’s A-G Rating and Poseidon Principles are great steps in the right direction. But more work is needed, and we believe a grading system created by both owners and charterers to align incentives could hold the key. We cannot simply wait for the IMO to address this through regulation. We need a framework now that enables change to happen rapidly and organically.” 

Mr. Richard Gilmore, Executive Vice President - Maran Gas Maritime (MGM), stated that “MGM’s LNG fleet has seen a 50% reduction in the fuel consumption per ton mile in its LNG fleet from 2005 to the present. This corresponds to a similar reduction in carbon emissions. This has been achieved by changing the propulsion system from steam, to medium speed diesel, and now slow speed diesel on the ships MGM has built, as well as increasing the vessel cargo capacity from 145,000 cu.m. to 174,000 cu.m. While this has been a great achievement, it is not enough, and MGM is looking to apply additional technologies to make further improvements. MGM has installed air lubrication on one vessel that has been in operation for over one year and seen a 3%~5% improvement in efficiency with a similar reduction in CO2 emissions. Another vessel, delivering in 2022, will apply air lubrication along with a shaft generator which is expected to reach up to 6% improved efficiency. MGM is working with International Universities, Class and Shipyards to study and explore additional technologies, in existence or under development, that may further reduce CO2 emissions for its fleet.” While the main focus is on seeking new technologies to lower emissions, Mr. Gilmore also noted that it was also very important to seek and apply good underwater hull coatings in order to keep the vessel clean. “Hull fouling can reduce efficiency by 10 ~ 20 % which will overcome any savings achieved with new technologies. MGM uses digital technology to monitor vessel performance in real time and uses an onboard waterproof camera, which is lowered into the water while the vessel is idle/at anchor, to provide a visual check on the state of the coatings on a periodic basis confirming when the time is right to perform a hull cleaning.” 

Mr. Steve Brown, Manager of Shipping Technology – Shell, stated: “Operational efficiency and energy efficient technologies can help narrow the gap to zero and should be a priority for the industry!

Shell has for some years developed and deployed energy efficient technologies on Owned and Chartered vessels. Development of these technologies has been both internal and through collaboration with industry partners, technology providers and ship owners. In addition to immediate emissions reductions and savings, reducing the total power required narrows the technology gap for future fuels and new technologies. Energy efficient technologies are essential in enabling these for all decarbonisation pathways and can be deployed now.

All the front-running fuels and energy sources have shortcomings in terms of their practical application for shipping. For instance, hydrogen, ammonia and methanol all have a much lower energy density than HFO or LNG. These fuels require greater storage capacity for the same range. This could impact cargo carrying capability to an extent, with some ship types affected more than others. Energy efficiency therefore has a critical part to play in the shipping decarbonisation journey and is essential to all decarbonisation pathways.” 

IS LNG AN INTERMEDIATE OR A LONG-TERM OPTION? What about LPG?

LNG is the cleanest fossil fuel, allowing companies to lower their sulfur emissions and position themselves closer to their overall sustainability goals, while also helping make their fleet more attractive to charterers and achieve competitive time charters. What are the commercial benefits and challenges of choosing LNG as a fuel, and how can LNG help a company align more effectively with its commercial objectives and sustainability strategy? Is LNG an intermediate solution, or can it continue to be used in the future? This is an especially relevant topic for companies which place newbuilding orders for assets that have a long economic life. 

Moderator: Mr. Spyridon Zolotas, Marine Southern Europe & Africa Area, Senior Director - RINA

Panelists:

• Mr. Peter Liew, Global Director, Business Development & Joint Venture Management - AET
• Mr. Farid Trad, Vice President Bunkering & Energy Transition - CMA CGM
• Ms. Lois Zabrocky, Chief Executive Officer - International Seaways
• Mr. Svein Steimler, President & CEO - NYK Group Europe Ltd.
• Mr. Tahir Faruqui, Manager of Downstream LNG - Shell
• Mr. Mathias Jansson, Director, Fuel Gas Supply Systems - Wärtsilä

Mr. Spyridon Zolotas, Marine Southern Europe & Africa Area, Senior Director – RINA, stated: “The introduction was focused on the benefits of using LNG and other clean fuels to reduce emissions and contributing to a zero-carbon future in shipping. Then, Mr. Zolotas asked the panelists to tell about their projects involving vessels with LNG as fuel, and the key factors that led them to choose it.

As the discussion went further, the speakers outlined their plans and strategy as regards LNG as well as other fuels, such as LPG and bio LNG. The panel also addressed other topics of high interest to maritime stakeholders, including the role of technological innovation in facing the technical issues, the current regulatory framework and the crew training on LNG-powered ships.” 

Mr. Peter Liew, Global Director, Business Development & Joint Venture Management – AET, highlighted that AET, as a leading owner and operator of sustainable maritime transportation assets and specialized services, has been an early adopter of LNG dual-fuel solutions, recognising the environmental benefits that this cleaner fuelling solution could deliver across various vessel segments. The company has four LNG dual-fuel vessels (two DPSTs, two Aframaxes) in operations and another five VLCCs under construction to be delivered from 2022 onwards.

Partnerships and collaboration are more important than ever and we believe all players in the maritime industry have a responsibility to act now to reduce the carbon footprint, aligned with the IMO Greenhouse Gas (GHG) strategy. We see LNG as the most viable fuel solution available today, and possible with technology advances, it will be part of the fuel solutions longer-term well past 2030. AET’s investments in LNG dual-fuel underscores its commitment to reduce the carbon footprint of shipping using the best fuel solution immediately available in the market while reenforcing that the environmental agenda and commercial viability can co-exist in sustainable shipping today. For more information on AET, please visit: www.aet-tankers.com” 

Mr. Farid Trad, Vice President Bunkering & Energy Transition - CMA CGM, stated: “The CMA CGM Group is actively implementing measures to accelerate the industry’s energy transition and is significantly investing in research and development to design the clean vessels of the future. To this end, the Group, has put forward solutions that are immediately available and that contribute to achieving its objective of being carbon-neutral by 2050.

LNG, a visionary decision aimed at preserving air quality and driving the energy transition

In November 2017, Rodolphe Saadé made the visionary decision to order nine 23,000 TEU vessels with an LNG power supply, a first in the history of the shipping industry for vessels of this size. LNG is currently the state-of-the-art industry solution for preserving air quality. It delivers a reduction of 99% in sulfur dioxide, 91% in particulate matter emissions and 92% in nitrogen oxide emissions, far surpassing the requirements of current regulations. LNG is the most advanced solution when it comes to preserving air quality. An LNG-powered vessel emits up to 20% less CO₂ than fuel-powered systems. With LNG, the Group has made a ground-breaking choice that goes beyond current and future environmental regulations.

Biomethane, a non-fossil energy and a step closer to carbon-neutral shipping  

In April 2021, the Group has reached another milestone in its efforts to be carbon-neutral by 2050, by supporting the production of 12,000 tonnes of guarantee-of-origin (GO) biomethane, equivalent to 250,000 kms at sea. Biomethane is a renewable green gas produced in part by the methanation of European-sourced organic and plant waste.

By supporting biomethane production, CMA CGM is accelerating its commitment to leading the energy transition in the shipping sector. The Group cut its overall CO2 emissions by 4% in 2020, following a 6% reduction in 2019. Since 2008, the Group has lowered its CO2 emissions per container-kilometer by 49%. 

Guarantee-of-Origin Biomethane, coupled with CMA CGM’s dual-fuel gas-power technology, can reduce well-to-wake (entire value chain) greenhouse gas emissions (including CO2) by at least 67%. On a tank-to-wake basis (at ship level), the reduction in greenhouse gas emissions reaches 88% (including CO2). 

How is this gas produced? See this pedagogical video and learn everything there is to know in 2 minutes on this energy.”

Ms. Lois Zabrocky, Chief Executive Officer - International Seaways, stated: “LNG as a fuel on a VLCC reduces consumption by nearly 40% compared to a 10-year old VLCC. Even more critically, the total Green House Gas (GHG) emissions when burning LNG is up to 20% less than a conventional VLCC of a similar age. This includes lowering CO2, sulphur oxides (SOX) and nitrogen oxides (NOX). These ships will meet all existing regulations and, more importantly, as future regulation and market‐based measures are expected to focus on conventional fuels, we believe LNG is the practical bridging fuel to the future.” 

Mr. Tahir Faruqui, Manager of Downstream LNG – Shell, stated: 

“Is LNG an intermediate option?

• Today LNG is the only marine fuel that can deliver emissions reduction that is up to 21% lower than conventional marine fuel.
• However, at Shell we believe that there are clear pathways that would lead to the Shipping industry burning a NZE fuel. This pathway starts with LNG. This is due to the technology that will enable the transition and because as an Industry we simply must be immediately making investment choices that make environmental sense given the cumulative nature of the emissions challenge we are trying to address. 

Is LNG a long term option?

• LNG bunkering is already commercially available in main ports such that it can effectively meet the bunkering requirements of Aframax tankers, container vessels operating on the top three global trade routes (China-Europe, Transpacific, China-South America) and also Bulkers moving between Australia and China.
• Shell plans to double its existing fleet of bunker vessels over the next two years and alongside the expansion by other market participants, LNG is poised to become a mainstream marine fuel that offers an affordable solution in perpetuity until a NZE fuel is available at scale commercially.
• For this reason, instead of viewing LNG as an intermediate option, LNG should be viewed as an insurance against potential delay in the availability of a NZE fuel, particularly if Regulators decide to implement financial incentives that encourage the use of low emission fuels.
• Simultaneously, from an investment longevity perspective LNG is also a credible long term option given the production of bioLNG is expected to ramp up and the increasing adoption in the use of Nature based offsets to further improve the environmental profile.
• Whatever the future looks like for a decarbonised shipping sector, that journey must begin with LNG today!” 

Mr. Mathias Jansson, Director, Fuel Gas Supply Systems – Wärtsilä, explained how much methane slip have already been reduced on gas engines compared to the first generation engines which were original diesel engines redesigned to run on gas. The new platform engines are designed to run on gas from the start which gives new opportunities to reduce the methane slip and further reduction is targeted. Also possible aftertreatment is looked at.  He also points out that even if we get the methane slip down LNG is still fossil, but the elegance with LNG is that you can mix in any ratio of bio and renewable LNG already today.

As technology supplier Wärtsilä is also looking at what can be done already today on both engines and the fuels system to be prepared for a possible mid life upgrade into one of the possible future fuels such as ammonia, hydrogen or methanol. Here the DF engine with the correctly designed fuel gas storage and supply system can offer a platform for easy conversion in the future when new fuels are available.

He also highlights that when looking at these future fuels one cannot only look at the molecule and whether it is carbon free or not. One needs to look at how the fuel can be consumed onboard and whether the consumers can consume 100% of this fuel or if a mix of fuel is needed. The next level to examine is then the entire vessel layout and fuel systems onboard and what this means to the vessel design for ones vessel type. Further to this he highlights that also the bunkering and available infrastructure needs to be analysed and only when looking at all these aspects the entire technological, logistic and economic picture will be clear.

PARTNERSHIPS, ALLIANCES & INDUSTRY INITIATIVES - FOSTERING COLLABORATION AMONG STAKEHOLDERS

In the absence of a uniform solution, several industry participants have formed partnerships and alliances aimed to explore alternative ways to achieve the decarbonization objectives set by the regulators. This panel will showcase a few of the major initiatives and how these are able to foster collaboration among multiple stakeholders effectively overcoming collective-action problems.

Moderator: Mr. Nicholas Makar, Senior Vice President, Maritime Administration / Regulatory Affairs – International Registries, Inc.

Panelists:

• Mr. Knut Ola Skotvedt, Senior Vice President – DNB Bank ASA; Signatory - Poseidon Principles
• Mr. Jose Matheickal, Chief of the Department of Partnerships and Projects - Global Industry Alliance, IMO
• Mr. Charles Haskell, Program Manager - Lloyds Register Decarbonization Hub
• Mr. Sebastien Landerretche, Global Head of Freight - Louis Dreyfus Company; Founding Signatory - Sea Cargo Charter
• Mr. Mads Peter Zacho, Head of Industry Transition - Mærsk Mc-Kinney Møller Center
• Ms. Charis Plakantonaki, Chief Strategy Officer - Star Bulk Carriers Corp

Mr. Nicholas Makar, Senior Vice President, Maritime Administration / Regulatory Affairs – International Registries, Inc., stated: “I would like to thank Capital Link for the opportunity to moderate this distinguished panel, which focused on the various partnerships, alliances, and industry initiatives which have recently formed to support the industry in achieving its decarbonization goals for 2030 and beyond.

The decarbonization challenge has prompted equipment manufacturers to consider a wide range of technical solutions aimed at improving efficiency, and clear steps are being taken to develop different types of low-carbon and zero-carbon fuel systems.  This requires shipyards and owners to make decisions to invest in zero-carbon newbuilds and retrofits, alongside the significant investments being made shoreside in zero-carbon fuel production and supply chains. Financial institutions have committed to aligning their shipping portfolios with a carbon intensity improvement pathway under the Poseidon Principles and charterers have done the same in the Sea Cargo Charter.

Given these developments and the many facets to this complicated and highly uncertain situation, a dynamic group of panelists representing ship owners, charterers, R&D, financial institutions, and the International Maritime Organization provided a broad spectrum of perspectives to better understand the drivers behind these partnerships and initiatives.  The panelists also described how they expect these alliances to make a difference in bringing about real change and real solutions to meet the industry decarbonization challenge and reflected on what this means for the future of business and policy.

Clearly from the discussion, these partnerships are considered essential to foster the collaboration necessary across stakeholders for the shipping sector to succeed in this challenge.  Active participation was also identified as being critical to ensure effectiveness of such undertakings.” 

Mr. Jose Matheickal, Chief of the Department of Partnerships and Projects - Global Industry Alliance, IMO, stated: “Greetings from IMO. This is Jose Matheickal (https://www.linkedin.com/in/dr-jose-matheickal-24230b45/), Chief of the Department of Partnerships and Projects, which the IMO Secretary General, established an year ago (https://www.imo.org/en/OurWork/PartnershipsProjects/Pages/default.aspx). The Department has three functions - 1) developing new partnerships, 2) implementing a portfolio of long-term projects to assist the Member States in implementation of IMO conventions and 3) promoting/advocating maritime innovation.

When it comes to decarbonization, IMO's work, over the recent years, has been focused on developing and adopting its ambitious Initial GHG Strategy.   The discussions at IMO also include importance of technical cooperation, targeted support to developing countries and actions to identify specific challenges of small island developing states and least developed countries.  

IMO is currently implementing a number of decarbonization initiatives including the EU-MTCC Network, Norway-GreenVoyage2050, RoK-GHG SMART, The GEF-IMO-UNDP GloFouling, The IMO-EBRD-World Bank FINSMART Roundtable, the IMO-Singapore NextGEN initiative and the IMO-UNEP Maritime Innovation Forum. IMO is just starting the preparations for a new initiative, with support of Germany, that will aim at demonstrating low-carbon technology solutions focussing on shipping and ports in Asia.

It is with this background I would like to give some more details of a very successful private sector partnership model we had initiated a number of years back - titled the Global Industry Alliance for low-carbon shipping where IMO partners with a number of Industry champions under its GreenVoyage2050 Project. GIA comprises of likeminded maritime industry leaders and the objective of the GIA is to collectively identify / develop innovative solutions to address common barriers to the uptake / implementation of energy efficiency technologies, operational best practices and alternative low- and zero-carbon fuels. 

So, my main message today is that, while the maritime decarbonisation challenge is huge, it is not insurmountable - with effective and intelligent use of resources and smart partnerships we can win this battle.  But we need a lot more of these partnerships: partnerships and initiatives that talk to each other, collaborate more and share information. We wish to see more of those partnerships that do take into account the special challenges of developing countries and facilitate North-South and South-South cooperation, technology cooperation and creation of enabling environment for local innovations. It is also important that stakeholder from entire maritime supply and value chain are involved in developing such partnerships.” 

Mr. Charles Haskell, Program Manager - Lloyds Register Decarbonization Hub, stated: “This Energy Transition is unique. The industry understands that in order to meet a 50% reduction in CO2 by 2050 that it needs to move to zero-carbon fuels, however, the alternatives are neither abundant, easy to store, cheap or as safe as todays fuels. However, this is not just a Maritime challenge, other sectors are decarbonising, from aviation, agriculture, transportation, industrial and domestic heating. The same discussions we are having in shipping are being held in other industry sectors and governments. It is only by collaboration across all stakeholders both in the maritime industry and outside that the 2050 targets can be met. The Lloyd’s Register Maritime Decarbonisation Hub has been created to bridge the gaps between supply, infrastructure, vessel readiness and technology.”

Mr. Sebastien Landerretche, Global Head of Freight - Louis Dreyfus Company; Founding Signatory - Sea Cargo Charter, stated: “As a leading global charterer, LDC is committed to the safe, reliable and responsible shipment of agricultural goods and recognizes its influential role toward the decarbonization of the shipping industry. Collaboration is key across the value chain to realize the common goal to optimize vessel operations. To reach that objective, measuring a fleet’s performance is a necessary step in reducing carbon intensity.

LDC has been reporting fleet emissions since 2017, and leverages modern technologies, such as machine learning and near real-time data, to build accurate models of vessels’ behavior at sea. These models will then allow our Trading and Operations teams to select the most efficient way to transport LDC’s products from origin to destination, with the goal of reducing LDC’s global environmental footprint.

In continuity of that approach, the Sea Cargo Charter (SCC) provides a transparent, global and coherent framework for emissions reporting. Granular analysis of a ship’s full voyage activity through the EEOI carbon intensity methodology can potentially lead to more optimal decision-making, not only on vessel selection but also on commercial use of the fleet with optimal routes.

The SCC shares values of transparency, accountability, and enforcement with the Poseidon Principles, and both initiatives are complementary global approaches that ultimately promote efficiencies realized through collaborative action on vessels, either through technical retrofitting or operational efficiencies. A carbon-efficient fleet naturally spurs attractiveness both from financiers and charterers. Globally standardized reporting is also an essential step toward carbon levy mechanisms that will be necessary on the shipping decarbonization journey.

The SCC is growing rapidly with 20 members today, expecting to reach 35 by the end of 2021, and hopes to continue attracting a wide geographic and industry array of charterers. Join us, to move the needle together.”                                                                                                                                                                 

Mr. Mads Peter Zacho, Head of Industry Transition - Mærsk Mc-Kinney Møller Center, stated: “Most likely the majority of people underestimate the challenge of decarbonizing shipping. We must eliminate almost 1 billion tons of annual co2 emissions coming from the combustion of approximately 300 mio tons of fossil fuel oil. And over the next decades trade volumes will grow significantly, while price spreads between fossil and zero carbon fuels will remain wide.  No-one can solve this challenge alone. It will require partnering and collaboration at an unseen scale. It will require new business models to better distribute the risk as well as intense R&D investments. To do all that we must have more attention to the challenge, more resources deployed and more partnering. Each partnership alliance has unique capabilities and wide networks that can be activated and that will amplify the push for decarbonization. The Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping will work with its partners to develop zero carbon technologies; to engage with authorities so rules and regulation incentivize decarbonization; to activate the financial industry support for zero carbon vessels; to induce customer requirement for emissions free transportation and to build industry leadership within the shipping industry.” 

END OF DAY ONE

DAY TWO – April 15, 2021

HOW TO GET TO 2050 WITHOUT SINKING - KEYNOTE REMARKS

Dr. Martin Stopford, Non-Executive President - Clarkson Research Services Limited 

WELCOME REMARKS & INTRODUCTION

Mr. Nicolas Bornozis, President - Capital Link, Inc. 

DESIGNING SHIPS OF THE FUTURE - FUELS - ENGINES - HULL/SHIP DESIGN & TECHNOLOGY

What the ships of the future will be like remains a stifling overhang to all in the industry. This panel brought together the insight of various stakeholders who discussed the aspects of future ships such as the fuels that will be used, the engines that will burn them, their hull and overall design, the technologies that will be used to build and operate them, and the potentialities these may unlock.

Moderator: Mr. Hayato Suga, Corporate Officer - ClassNK

Panelists:

• Mr. Tatsuya Motoi, Executive Officer - Kawasaki Heavy Industries
• Mr. Shin Ueda, Deputy Director - Mitsubishi Shipbuilding
• Mr. Marco Fiori, Chief Executive Officer - Premuda SpA
• Mr. Lars Anderson, Director, Power Supply Product Management - Wärtsilä Marine Power
• Dr. Loukas Barmparis, President and Director - Safe Bulkers (NYSE:SB)

Mr. Hayato Suga, Corporate Officer – ClassNK, stated: “To achieve the ambitious goal set by IMO to halve the GHG emission by 2050 and achieve zero emission during this century, we need to precisely investigate and evaluate each element around decarbonization of the maritime industry, including and not limited to type of fuels and propulsion technology, hull design, operation measures, change of trading patterns, etc at this moment. We hope our session could have provided technical insights outlining the pathways to decarbonization successfully.

Furthermore, we are expecting more and more collaborative initiatives to launch to fulfill the needs of a rapid implementation of green technologies. ClassNK is committing to support these initiatives not only by providing conventional classification service including assessments from safety perspective, but by providing a swift certification service to emerging technologies where existing standards may not cover. ClassNK will also combine its expertise and new findings obtained by the initiatives with frontrunners to set an adequate criterion for upcoming innovations.” 

Mr. Shin Ueda, Deputy Director - Mitsubishi Shipbuilding, stated: “In parallel with the expansion of new energy transportation, it will be necessary to establish CO2 transportation in order to maintain economic efficiency. For example, in thermal power plants, hydrogen or ammonia in addition to conventional fuels will significantly reduce CO2 emissions, but it seems to be necessary for some partial conventional fuel to keep economic efficiency, then CO2 need to be captured at power the station. CO2 is not an energy source, however, on the back side of green energy transportation, CO2 for storage or recycling will be considered. Based on Mitsubishi Heavy Industry’s carbon capture technology for onshore power plant, Mitsubishi Shipbuilding modified it to marine use. Then, Mitsubishi, “K” Line and Class NK planned to test world’s first Marine based CO2 Capture System on 2021. The project is called as “CC-Ocean” supported by Japanese Government Initiative. On board Carbon Capture Equipment will be retrofitted to a bulk carrier, and about 7 months operational research will be carried out. Technically, on board CO2 capture is possible, but there are some challenges. First is the impact on ship’s design as big additional energy input needed and will lose cargo spaces. Second challenge is the final use of captured CO2, that may need to unload on port. If along with the IEA 2 deg C scenario, broader CO2 seaborne network will be established and help for CO2 utilization. Third challenge is that: unless carbon trading scheme between on-shore ’nations’ and off-shore ‘IMO’ are established, ships need to reduce GHG emissions on our own. CO2 capture technology can be used in the segments where carbon-free fuel is not suitable, for example LNG, LPG and methanol supply chain may use carbon as fuel for long future.”

Mr. Lars Anderson, Director, Power Supply Product Management - Wärtsilä Marine Power, stated: 

“What is preferable/reliable design concept to increase fuel efficiency?

A lot can be achieved if we paid more attention to operating profiles when vessel design and machinery is decided. Today, design speed, scantling draft are THE reference points, but ships operate extensively at much lower speeds. In the past 10yrs operating speeds are down more than 15% but design speeds are almost unchanged. Operating at 30% MCR results in very poor efficiency when machinery is optimized for 75% MCR.

Things will change with the Poseidon Principles and the Sea Cargo Charter that measure CO2 against dwt, or cargo carried, and voyage distance. The old school design point will be less relevant and machinery selection will become more data driven.

A newbuilding’s compliance runway with the decarbonization trajectories can be extended with decarbonization upgrades. There are many different ESDs and no one-size fits all, you need to do a value mapping and not traditional Payback which only captures static moment in time. You need to account for future cashflows from better charter utilization, NAV, monetization of Carbon Reduction via Poseidon Principles in terms access to banks preferred lending versus Mezzanine finance, not to mention Carbon Credit regimes.

What is expected change of fuels impact on ship design concept?
Including Engine / Propulsion improvement

The only available Green Bunker are Biodiesel or Biogas and that is the starting point for a newbuilding fuel strategy, liquid or gas? Engine technology is not a showstopper. The required Bunker volumes, or tank sizes, as well as number of tanks play a role. If you start with LSFO and plan to blend in Biodiesel, you may need a separate tank for the Biodiesel.

If you want to go with Methanol it requires x3 the bunker volume for the same operating range and requires a separate fuel supply system.

With LNG you have more freedom because you do not need a separate tank for BioLNG or SyntheticLNG and you could blend Ammonia or Hydrogen but if they become available to bunker is another matter. Of course separate tanks and safety systems would be required.

We start Ammonia testing this year and will be offering Ammonia engines but again, I am confident that the engine technology is going to be a problem. There is the concern with NO2 emissions, laughing gas, with Ammonia but that can be solved with a Catalysator.” 

Dr. Loukas Barmparis, President and Director - Safe Bulkers (NYSE:SB), stated: “We are happy to participate in the Capital Link’s Decarbonization in Shipping Forum, hoping that soon will be attending conferences with physical presence. The forum addressed many significant topics such as the roadmap to reducing emissions in shipping, environmental regulations and investment decisions, alternative fuels and ship design technology, geopolitics and alternative finance. The participants gained meaningful insights supported by the excellent coordination of the event and the quality of the panels. Safe Bulkers is a pure dry-bulk player, with exposure in the spot market, strong liquidity position which provides financial flexibility and ability to react in opportunities, an efficient fleet able to compete in the stringer environment of 2023 as GHG restrictions will be introduced and lean and efficient hands on operations providing for financial and operational advantages. Gradual deleveraging and renewal strategy by substituting older vessels with younger or newbuilds with improved environmental footprint are the cornerstones for creating value for our shareholders.” 

LOOKING AHEAD TO 2050 - ZERO EMISSION ALTERNATIVE ENERGY FUELS: Ammonia - Hydrogen - Methanol - Biofuels

Going green means effectively moving away from fossil fuels. There is significant research and experimentation under way to identify a range of zero emission fuels and what could potentially be the optimal ones. Besides environmental considerations, this involves a multitude of issues such as the adequate supply of the fuels and at reasonable cost, their safe use on board, the availability of proper engines.

Introductory Presentation: Mr. Jesse Fahnestock, Project Director - Getting To Zero Coalition - Global Maritime Forum 

Moderator: Mr. Sverre Bjørn Svenning, Senior Advisor - Fearnleys

Panelists:

• Ms. Berit Hinnemann, Senior Innovation Project Manager – Decarbonization - A.P. Møller Maersk
• Mr. Mark Cameron, Chief Operating Officer - Ardmore
• Mr. Jens Ismar, Executive Director - EXMAR
• Ms. Claire Wright, General Manager, Commercial & Shipping - Shell Shipping & Trading
• Mr. Per Brinchmann, Vice President, Special Projects - Wilh. Wilhelmsen Holding 

Mr. Jesse Fahnestock, Project Director - Getting To Zero Coalition - Global Maritime Forum, presented the findings from the second edition of the Getting to Zero Coalition’s Mapping of Zero Emission Pilots and Demonstrations. The Mapping covered 106 projects focusing on zero emission pathways for the maritime industry, including ship technologies, fuel production and bunkering / recharging. The presentation showed that significant work is underway on a range of fuels and technologies, with an increasing focus on hydrogen-based fuels overall. Ammonia and methanol have been the focus for large ship applications and hydrogen and batteries, often in combination, mostly closely associated with smaller vessels. The second edition included a larger number of projects in Asia, with vessel technologies and ammonia-powered shipping a big part of the picture in the region. The Mapping also suggested that earlier projects are being extended, scaled up and expanded in scope, indicated increasing confidence in the relevance of zero-emission shipping technologies. 

Ms. Berit Hinnemann, Senior Innovation Project Manager – Decarbonization - A.P. Møller Maersk, stated: “Our ambition is to lead the way in decarbonising global logistics and our customers expect us to help them decarbonise their global supply chains. Today, 90 of our top 200 customers have set or are in the process of setting ambitious science-based or zero carbon targets. Therefore, we are embracing the challenge, working on solving the practical, technical and safety challenges inherent in the carbon neutral fuels we need in the future.

Back in 2018, we announced our ambition to have a carbon-neutral fleet in 2050, at the time this was considered a moonshot. Today we see it as a challenging, yet achievable target to reach, fast tracked by advances in technology and increasing customer demand. We continue to explore several carbon neutral fuel pathways, with methanol (e-methanol and bio-methanol), alcohol-lignin blends and ammonia as the primary fuel candidates for the future, along with the use of biofuels. There is no single silver bullet solution and we expect multiple fuel solutions to exist alongside each other in the future. Recently, we announced our first carbon-neutral liner vessel, to be launched in 2023 – seven years ahead of our initial 2030 ambition. We also announced that all future Maersk owned new buildings will have dual fuel technology installed, enabling either carbon neutral operations or operation on standard very low sulphur fuel oil (VLSFO). For our 2000 TEU feeder vessel our plan is to operate the vessel on carbon neutral e-methanol or sustainable bio-methanol from day one. It will be a significant

challenge to source an adequate supply of carbon neutral methanol within our timeline to pioneer this technology. Our success relies on customers embracing this groundbreaking product and strengthened collaboration with fuel manufacturers, technology partners and developers to ramp up production fast enough. Collaboration across the value chain will be key to solve these challenges, and we look forward to developing existing and new collaborations.” 

Mr. Mark Cameron, Chief Operating Officer – Ardmore, commented: “We believe that the time of ‘Wait and See’ regarding technical ability to comply with IMO 2030 targets is now rapidly coming to an end. As a result, it is now the beginning of the ‘Time to Act’ era.  Technological advancements are available today which can significantly reduce a vessel’s emissions beyond the IMO’s target dates.

“Understandably, there are differences in the newbuild and retrofit markets and economics must make individual sense to an owner / operator, but regulations are calling for change. EEXI, together with the application of the Carbon Intensity Index, will ultimately mean that owners with existing vessels have no choice but to improve performance.  The future will clearly see more than one fuel type being deployed and it is likely that the big, predictable consumers (i.e. liner trades) will influence tramp trades by way of setting up bunker supply logistics chains.

“At Ardmore, we have conducted an in-depth review leading to the establishment of our Energy Transition Plan.  This led to our recent investment in Element 1 and the formation of ‘e1 Marine’ with the tag line ‘Getting Hydrogen to Work’. The emission reduction challenge must, rightfully, put the operational safety of crew high on the agenda. This is why we believe the technology that e1 Marine brings to the market is safe, cost effective and reliable as it produces low pressure, high purity hydrogen ‘on demand’ for use with a fuel cell from a methanol and water mix. 

“Methanol is already in use as a fuel source today and we believe that by investing in this technology, we are able to use our relationship and standing within the maritime community to demonstrate commitment to finding practical solutions that work.” 

PORT INFRASTRUCTURE, LOGISTICS & SUPPLY CHAIN PREPAREDNESS

Port infrastructure is a vital link in the quest to decarbonization. This panel discussed  what becoming a green port entails and how ports are gearing to accommodate changes in storage, refueling / bunkering, loading / offloading, and all Port Terminal related management issues. The panel also discussed  the role of technology in efficient port operations.

Moderator: Ms. Cristina Migliaro, Ports & Marine Facilities Senior Advisor - RINA

Panelists:

• Mr. Jens Meier, Chairman - Hamburg Port Authority
• Ms. Quah Ley Hoon, CEO - Maritime and Port Authority of Singapore (MPA)
• Mr. Allard Castelein, President & CEO (Port Authority) - Port of Rotterdam 

Ms. Cristina Migliaro, Ports & Marine Facilities Senior Advisor – RINA, stated: “Moderator Ms. Cristina Migliaro, Ports & Marine Facilities Senior Advisor - RINA – The panel focused on Close community outreach, port authority mutual dialogue, decarbonization and digitalization of ports. In the first round of questions, Ms. Migliaro asked the speakers to share the most successful project completed by their Port Authority and the main issues they faced in the path towards becoming a fully green port.        

As the discussion progressed, the panelists talked about the future challenges of port infrastructures and the benefits provided by innovative digital solutions. In particular, the debate centered on how the adoption of advanced sustainable technology can drive operational efficiency in port systems and keep them competitive in a value chain approach.” 

Mr. Jens Meier, Chairman - Hamburg Port Authority, stated: "Climate change is a global phenomenon. So, the answer will be, amongst others, the global application of a suite of technologies to reduce emissions.

Port Authorities are in a strong position to regulate the deployment and application of green technologies. This means that, besides a massive push towards digitalization and automation, the pursuit of decarbonization will be a key driver for innovation. We are talking about a new era in which sustainability is achieved not through trade

limitations but through the implementation of new technologies. Since this is a global development, we cooperate with ports on national and global basis, exchange experiences and knowledge and learn from each other to be able to achieve decarbonization in the shipping industry." 

Ms. Quah Ley Hoon, CEO - Maritime and Port Authority of Singapore (MPA), stated: “As a major transhipment hub, the Port of Singapore contributes to the global supply chain through our connectivity, efficiency of our port operations and sustainability measures. Our connectivity with more than 600 ports in the world allows goods to be moved from one country to another in a more efficient manner.  Our port operations adopts digital solutions such as the DigitalPORT@SGTM for a one-stop port clearance.  Our port also adopts green initiatives including LNG bunkering and test-bedding hydrogen fuelled autonomous guided vessels.  Sustainability is also integral in developing our Next-Generation Port at Tuas. It will consolidate all container terminals in a single location, cluster port-related industries nearby as well as deploy advanced and green technologies, such as electrified port handling equipment. Our Port will also adopt Just-in-time delivery of marine services.  MPA has launched the $40mil Maritime GreenFuture Fund to accelerate low-carbon R&D efforts as well as setting up the International Advisory Panel on Decarbonisation to define strategies and pathways to decarbonise. MPA is also developing a Maritime Singapore Decarbonisation Blueprint 2050, which will be launched in end 2021 and outline our overall strategy towards decarbonisation. MPA will also focus our efforts on joint collaborations with industry partners, stakeholders and other leading ports to conduct pilot trials on low-carbon fuels (e.g electrification, ammonia, biofuels) as well as to develop common bunkering standards.” 

Mr. Allard Castelein, President & CEO (Port Authority) - Port of Rotterdam, stated: “As Europe’s largest port, Rotterdam aims to be frontrunner in the energy transition. Therefore the Port of Rotterdam is supporting the shipping industry in its decarbonization efforts. We work for instance with the industry in setting up facilities for the bunkering of sustainable fuels. We have done so for LNG in the past and together with the industry we’re looking at other low-carbon and net zero-emission fuels now. We’re also realizing shore power facilities within the port in cooperation with the terminals as well as the shipping industry. Last but not least we’re making logistics more efficient with the use of digitization. The Port of Rotterdam has developed a number of digital tools to for the industry to make supply chains more efficient.” 

LOOKING AHEAD TO 2050 - ALTERNATIVE PROPULSION SYSTEMS - BEYOND THE INTERNAL COMBUSTION ENGINE – Wind - Batteries - Nuclear - Fuel Cells

In a parallel attempt to move away from fossil fuels, the industry is experimenting with other powerful propulsion technologies. This panel discussed alternative propulsion systems and how these can become viable solutions for the industry.

Moderator: Mr. Nick Brown, Brand and Communications Director, Marine & Offshore - Bureau Veritas

Panelists:

• Mr. Kim Diederichsen, CEO - Anemoi Marine
• Mr. Mikal Boe, CEO - Core Power
• Mr. Geir Bjørkeli, CEO - Corvus Energy
• Mr. Vasilis Gregoriou, CEO - Advent Technologies

Mr. Nick Brown, Brand and Communications Director, Marine & Offshore - Bureau Veritas, stated: “This panel was a demonstration of the innovation that is coming to shipping. We need to be prepared for novel propulsion systems.  

Bureau Veritas is helping support the development of new propulsion systems as we shape the future of shipping. Just last month we released our new rules for wind propulsion systems , we have exciting projects underway for wind,  for different types of fuel cells and we have many electrical hybrid / battery assisted ships that are now in the water to BV class and operating very nicely. We are also looking keenly at atomic power and the opportunity to apply our nuclear expertise to merchant ships.

So it was a particular pleasure to be moderating this panel looking at alternative propulsion systems. 

While many are hoping that new fuels of the future to power the internal combustion engine will save us, we also need to look at new propulsion systems. The panelists we heard from today represent a VERY good cross section of the new technology  coming our way. All are actively doing things………….and they are creating a

better future. Plus, this is not a zero sum game - we can expect cooperation and overlapping applications as well as the integration of new technologies in the ships and shipping industry of tomorrow.”

Mr. Kim Diederichsen, CEO - Anemoi Marine, stated: “As discussed during this session, the industry is moving to decarbonise and shipowners are left with decisions about which technologies and fuels to invest in to achieve compliance with regulations such as EEDI and EEXI. Anemoi believes wind propulsion will play a significant role in decarbonisation. Our research and testing on the performance of Rotor Sails has shown that it can reduce fuel consumption and harmful emissions by up to 30%, making the technology a key player in meeting the IMO’s 2030 and 2050 targets.

Vessel owners are seeking options for regulatory compliance and evaluating investing in technologies that will stand the test of time, even as and when more options come to market. Rotor Sails have a proven application on commercial vessels and can be combined with a variety of other energy saving technologies and alternative fuels, even helping to unlock the latter by reducing consumption and associated cost. Utilising a completely renewable resource as assisted propulsion, wind technology, and in particular Rotor Sails, could be the answer for most vessel segments as retrofit or newbuild installations. Anemoi Rotor Sails have a design life of 25-years and can be redeployed across fleets, making any investment decision easy for owners.

As the demand for this proven technology increases, supply of Anemoi Rotor Sails is made available today at scale via a global supply chain and through a partnership with leading marine technology and lifecycle provider, Wärtsilä.” 

Mr. Mikal Boe, CEO - Core Power, stated: “It’s a fact that Atomic is the only technology which delivers a magic combination of zero emissions and competitive economics.

All these years, what we’ve been told about atomic being dangerous, has proven not to be so true. Who was so keen to scare us? Maybe the clue is found in the facts.

Fossil fuels kills 8.5 million people every year, - whilst nuclear radiation has not killed a single person since 1986.

Zero at Three Mile Island and Zero at Fukushima.

In fact, we use radiation to diagnose and cure, not kill. Cancer treatment, x-rays, MRI. They are all nuclear. This is not about ‘old nuclear’, this power technology that people think is dangerous. This is new advanced atomic technology.

This is the marine molten salt reactor.

This is like SpaceEx. This is ultra-modern science, super computers, and the most sophisticated new power source conceived to date.

It’s actually even safer than the safest energy system we have, which is nuclear - completely clean and uses just 1 gram of fuel per Megawatt Day.

We as an industry need a silver bullet and this is probably it. 1 gram p/MW day with zero emissions to produce millions of tons of green synthetic fuels which existing ships can use to eliminate emissions. That’s decarbonisation, right there.

MSR powered Floating refineries making cheap green fuels with zero emissions, like an FPSO converting water and air into green hydrogen and green ammonia.

That’s a VLCC size instead of hundreds of square kilometres of offshore wind.

It is scalable, it is flexible, it is movable, it is exportable, and it is surrounded by all the raw material we need – water and air.

We can’t solve our climate crisis with the same thinking that got us here. Let’s think differently.” 

Mr. Vasilis Gregoriou, CEO - Advent Technologies, stated: “Advent Technologies Holdings, Inc. is an American corporation that develops, manufactures, and assembles critical components for fuel cells and advanced energy systems in the renewable energy sector. Advent is headquartered in Boston, Massachusetts, with offices in the San Francisco Bay Area and Europe. With 120-plus patents (issued and pending) for its fuel cell technology, Advent holds the IP for next-gen high-temperature proton exchange membranes (HT-PEM) that enable various fuels to function at high temperatures under extreme conditions – offering a flexible ‘Any Fuel. Anywhere’ option for the maritime, automotive, aviation and power generation sectors. Advent’s HT-PEM based membrane electrode assemblies (“MEA”), which are the critical components used in fuel cells, can be used across many different customers and markets without requiring major infrastructure development – making them a unique and resilient option for the maritime industry. Advent’s proprietary technology allows the maritime industry the Advent ‘Any Fuel. Anywhere’ option. Learn more at www.advent.energy or by contacting Advent directly at iThis email address is being protected from spambots. You need JavaScript enabled to view it..

THE TRANSITION TO DECARBONIZATION – HOW TO FOOT THE BILL & WHO WILL SHARE INTO THE COST?

Going green has a significant cost. This panel discussed alternative proposals on how to come up with funding for decarbonization, including the $5 billion IMO Maritime Research Fund (IMRF), the European Union Emissions Trading System (EU ETS) and more. Also, how the various stakeholders involved (governments, fuel producers, charterers and shipowners) should share into the cost.

Moderator: Mr. George Paleokrassas, Partner - Watson Farley & Williams

Panelists:

• Mr. Peter Lye, Global Head of Shipping - Anglo American
• Mr. Theodore Jadick, Jr., Managing Director, CEO and President - DNB Markets
• Mrs. Clara de la Torre, Deputy Director-General - Directorate General for Climate Action - European Commission
• Mr. Simon Bennett, Deputy Secretary General - International Chamber of Shipping
• Mr. Julian Proctor, CEO - Purus Marine
• Mr. Stamatis Tsantanis, Chairman and CEO - Seanergy Maritime Holdings Corp
• Mr. Rasmus Bach Nielsen, Global Head of Fuel Decarbonization - Trafigura 

Mr. George Paleokrassas, Partner - Watson Farley & Williams, stated: “We are very pleased to participate in this year’s Capital Link Decarbonization in Shipping Forum and to moderate a panel discussion between such a high-profile group of senior figures to examine the key issue affecting the maritime sector.

The importance which we at WFW attach to this topic is shown by the recent launch of our thought leadership report ‘The Sustainability Imperative’, which examined the shipping world’s views on sustainability and governance and what actions need to be taken as a result.

Sustainability concerns have rocketed up the shipping agenda over the past decade, with environmental, social and corporate governance (ESG) issues already influencing financing decisions, fleet renewal and regulatory change across the industry. Decarbonisation of shipping is by far the most complex and pressing area.

This challenge will involve a great deal of change in the industry and, as covered in the panel discussion, the need for greater and closer collaboration and cooperation, as well as a significant amount of new investment.

The panel discussed the challenges involved, the balance between waiting for clarity from a regulatory and technological perspective and the need to immediately implement efficiency improvements as from now in order to meet the ambitious target set by the IMO for 50% lower greenhouse gas emissions by 2050.

We also debated the industry’s ability to influence and shape regulations so that they are fit for purpose and the recurring question of how this transition will be funded and in particular how the risk and cost should be shared as between owner/operators, charterers, cargo interests, consumers and other stakeholders.” 

Mrs. Clara de la Torre, Deputy Director-General - Directorate General for Climate Action - European Commission, stated: “While we continue fighting Covid-19 and its consequences for our economy, the climate crisis remains the other defining challenge of our time. There is a need to take urgent actions to limit the impact

of climate change, in line with the commitment to implement the Paris Agreement. Climate Change is at the core of the European Green Deal and its implementation is a top political priority. In order to set the EU on a sustainable path to achieve climate neutrality, the EU aims to raise its 2030 climate ambition with an objective to reduce greenhouse gas emissions to at least 55% below 1990 levels by 2030 and committed to be carbon neutral by 2050.

To deliver on this increased level of climate ambition, all sectors need to contribute their fair share, including maritime transport, and all relevant policies must be updated. To this end, by June this year a set of new legislative proposals in line with the at least 55% reduction objective by 2030 will be put forward by the European Commission.

In the maritime transport sector, our plan is to propose a basket of EU measures, along with the measures agreed at global level within the International Maritime Organization. This basket of measures is necessary, as there is no silver bullet to reduce shipping emissions. The extension of the European emissions trading system to maritime transport is part of the basket and is currently being assessed. The European Commission is also preparing other legislative measures such as the FuelEU Maritime initiative to boost the demand for renewable and low-carbon fuels or the revision of existing directives dealing with energy taxation, alternative fuel infrastructure or renewable energy and support for more research and innovation actions in the sector.” 

Mr. Rasmus Bach Nielsen, Global Head of Fuel Decarbonization for international commodity trading and logistics company Trafigura, stated: “Reducing shipping emissions is a vital component of the fight against global climate change, yet greenhouse gas emissions from the maritime sector are increasing.  There is therefore an urgent need to adopt radical measures to close the competitiveness gap between carbon-intensive fuels and low- and zero-carbon fuels used by the maritime industry.

We have called on the IMO to introduce a global carbon levy to incentivise the use of low and zero-carbon fuels by making these cost neutral compared to the higher emitting fuels primarily used today. The ships in use, the fuels that power them and the related infrastructure all need to change. Trafigura believes the best way of promoting such change is through the adoption of a market-based measure that would charge a significant levy on carbon-intensive shipping fuels and subsidise low-and zero-carbon fuels. These measures were outlined in our proposal for an IMO-led global shipping industry decarbonisation programme.

There’s a huge risk for the shipping industry if it does not push this up the IMO agenda.  We need urgent action so that all industry players are able, sooner rather than later, to decarbonise their infrastructure on a global level playing field.”

LOOKING AHEAD - THE SHIPOWNER'S PERSPECTIVE - WHAT DOES IT TAKE TO REACH ZERO

This panel brought together the insight of major shipowners as they discussed steps needed to tackle to hardest challenge the industry has had to face: Reaching Zero, while at the same time continuing to fulfill its day-to-day role as the artery of global trade. As a capital-intensive industry involving commercial and investment decisions with long term implications it is necessary to set a realistic pathway ahead, a complicated task which involves the collaboration of all stakeholders - regulators, shipowners, charterers, fuel producers, equipment manufacturers, shipyards and more. The panel included CEOs of major international shipping companies from various segments discussing options and strategies related to their own segment and to the industry as a whole.

Moderator: Mr. Knut Ørbeck-Nilssen, CEO - DNV Maritime

Panelists:

• Mr. John Hadjipateras, Chairman, CEO & President - Dorian LPG
• Mr. Mikael Skov, Chief Executive Officer - Hafnia
• Mr. Esben Poulsson, Executive Chairman - Enesel PTE. Ltd; Chairman - International Chamber of Shipping
• Mr. Charles (Bud) Darr, Executive Vice President, Maritime Policy and Government Affairs - MSC Group
• Mr. Erik Hånell, President and Chief Executive Officer - Stena Bulk AB
• Mr. Kenneth Hvid, President and Chief Executive Officer - Teekay Corporation
• Dr. Nikolas P. Tsakos, Founder and Chief Executive Officer - TEN LTD / Chairman - INTERTANKO 2014-2018 

Mr. Knut Ørbeck-Nilssen, CEO - DNV Maritime, stated: “Uncertainty is the operating reality of today’s shipping industry. International, regional, and national regulators are slowly dialing up the pressure on shipowners who are now required to comply with a dizzying array of current and future environmental rules. Adding to this complexity of decision-making is that cargo owners and charterers are also under a growing compulsion from their value chain to demonstrate a commitment to greener operations.

“Furthermore, emergent fuels, new technologies, piracy and cyber-attacks are creating a new risk picture. And despite the development of several vaccines, the global pandemic is still having a suppressive effect on seaborne trade making long-term strategic planning an exasperating exercise. With all of this in mind, making the right decisions on fleet renewal and the existing fleet is at best not straightforward - at worst it is downright difficult.

“There is no time to waste if we are to meet the IMO’s carbon reduction goals and shipowners must not delay in making decisions today that will protect their assets tomorrow. I strongly believe that the industry’s transition to a carbon neutral future starts with gas. Nearly 30% of newbuild tonnage on order will be propelled with alternative fuel systems and LNG is leading the way.

“Gas offers the best possible bridge towards 2050, and I would encourage all shipowners to give it serious consideration in the context of their own individual needs. But whichever route one chooses to pursue on their journey to carbon neutrality – whether that’s alternative fuels or innovative technological solutions - safety cannot be sacrificed. Doing so threatens not only the pace of transformation but also its success.” 

Mr. Mikael Skov, Chief Executive Officer – Hafnia, stated: “While the IMO is the global regulator for our industry, it is clearly under pressure as many regions worldwide have a political appetite for speeding up the decarbonisation process. The strength of the IMO – global, flag neutral regulation – is challenged by regional initiatives such as the proposal to include shipping into the EU ETS scheme expected this summer. So where does that leave us shipowners? I think our industry agrees that global regulation makes more sense, so we need to use the regional initiatives to push the IMO agenda.

As much as we need to decarbonise, we see one primary and immediate safety concern: can the new fuels be adequately handled? The physical conditions of alternative fuels are different from those of traditional fuels. For instance, ammonia’s very high auto-ignition temperature and toxicity to humans and aquatic life will require considerable safety precautions. Given these physical differences, we need to be confident that the people at sea and ashore who will be handling these fuels can be sufficiently trained. Even if the technology is available to use, it does not mean the industry is actually ready to use it. Proper preparation is essential.

Our preference is to invest in a newbuild that can meet the upcoming IMO emissions requirements using currently available fuel. As our business model is centred upon trading vessels in the global spot market, wider availability of current alternative fuels like LNG or methanol is essential. We therefore prefer to have secured earnings for a number of years on these newbuilds, to eliminate the risk of not being able to efficiently source and use LNG and methanol as bunker fuels.” 

Mr. Charles (Bud) Darr, Executive Vice President, Maritime Policy and Government Affairs - MSC Group, stated: “MSC fully supports the IMO’s policy goals to decarbonise shipping and is actively exploring and trialling a range of alternative fuels and technologies on top of some significant energy efficiency improvements across its fleet.

As a multi-asset ship operator, MSC has managed to share best practices across its businesses, the largest of which is in container shipping. MSC continues to invest heavily in low-carbon technologies and extensive new-build and retrofit programmes to increase efficiency and minimise environmental impact. In addition, the company has pioneered the use of up to 45% responsibly-sourced biofuel blends at scale within the existing fleet, and joined the Hydrogen Council to help accelerate R&D related to clean hydrogen derived fuels and solutions.

The future of shipping and decarbonisation will rely on strong partnerships from both the perspective of technology collaboration and procurement. There must be a massive injection of energy and capital into R&D efforts to bring alternative fuels and alternative propulsion technologies to the marketplace to decarbonise all

industries in the longer term. In addition to exploring strategic partnerships with technology and energy providers, MSC contributes to the work of industry groups and associations, and other initiatives that are designed to facilitate cross-sector information sharing.

At MSC, we believe that in order to fully decarbonise, we need to look at a set of solutions. There’s no one single solution that gets everyone across the line; we need a range of alternative fuels at scale and we need them urgently. The main challenge now is in determining the right combination of new fuels and technologies and implementing viable industry-wide proposals to invest in R&D to achieve those goals, and, ultimately, the zero-carbon future we all aspire to.” 

Mr. Erik Hånell, President and Chief Executive Officer - Stena Bulk AB, stated: “The speed at which shipping and society must manage the energy transition leaves no time for us to wait and see what others do. While the energy transition will be hugely challenging for shipping, we believe that this momentous challenge also offers opportunities for those who are willing to take a pioneering and innovative position.

As an organisation that is constantly striving to reduce our environmental impact by all means available, and as a progressive voice in shipping, Stena Bulk is focused on pushing sustainability boundaries in order to innovate and champion multiple pathways. We understand that some of these pathways will not reach full market fruition. But to drive momentum and widespread innovation, it is vital for us to communicate to the market when we have taken tangible steps on the decarbonisation journey.

While others may see technological investment or future fuels trials as speculative and risky, we take the view, backed by strong financial credentials and a strong history of entrepreneurial spirit, that these steps are progressive and commercially sensible against the backdrop of a radically changing maritime sector – and that they will drive further commercial success in the future.

As part of this approach, we recently unveiled our tangible and measurable decarbonisation roadmap to become a net zero emissions business by 2050, which comes hand in hand with our recently unveiled vessel design InfinityMAX concept, which is our take on zero emissions, self-sufficient and flexible seaborne transportation.

We will require every new ship in our fleet from 2030 to come with a roadmap to be upgraded to carbon neutral status - either by retrofitting new technology or switching to carbon neutral fuels – and aim to have a ship with a similar design to the InfinityMAX concept operating on the water by 2035.

The application of advanced technologies – including hydrogen fuel and other efficiency measures – that is needed to achieve full decarbonisation proves that innovation is key to commercial success. We also think that this is not a journey we can travel individually. In order for all of us to achieve our goals, it is crucial that we work closely and collaboratively with our partners and friends in the shipping community to make change happen.”

Mr. Kenneth Hvid, President and Chief Executive Officer - Teekay Corporation, stated: “Transparency has always been important to building a marine shipping business. Our founder knew this almost 50 years ago. Torben Karlshoej built Teekay on a commitment to provide customers a higher level of service and quality in tanker operations, and then he delivered on that. It’s important for us to be trustworthy and credible so that when we make commitments, we know we can achieve them, and we know how to achieve them.

The importance of trust and transparency has never changed. But what is changing, is the range of stakeholders we are accountable to, and the types of issues we are accountable for. Delivering safe, reliable, and cost-effective marine transportation services remains essential. However, to remain relevant, the shipping industry must continue to serve growing transportation needs while also addressing a broader range of environmental, social, and governance expectations, and key among those is finding new cost-effective solutions to reduce greenhouse gas emissions and address climate change.

Since 2008, we have significantly reduced the emissions intensity of our fleets and are committed to achieving a 40% reduction in greenhouse gas emissions intensity by 2030. Almost 60% of our group-wide fuel consumption is LNG, and we believe that further use of LNG in the maritime industry will support decarbonization. We also recognize that alternative zero-carbon fuels will be needed in the future. Teekay is one of the largest shippers of ammonia through our Exmar joint-venture, and we will continue to explore options for dual-fuel vessels that can

burn LPG or ammonia. For example, last month, Exmar received an Approval in Principle from Lloyd’s Register for its ammonia-fueled Midsize Gas Carrier (MGC) design.

The pathway to decarbonization in the maritime industry is a transition that will take time and considerable effort. However, sustainability has long been a core value at Teekay, and I believe our culture, values, and policies create a strong foundation for the work that lies ahead.”

END OF FORUM 

FORUM OVERVIEW AND STRUCTURE

The event combined two main features true to the theme of “Moving from Discussion to Delivery”. 

• Aimed to provide a comprehensive blueprint of the Roadmap to Decarbonization addressing all relevant core topics and issues such as regulations, alternative fuels and propulsion systems, technology, infrastructure and more.

• Offered practical suggestions as to the next steps for all stakeholders to achieve the goal of net-zero emissions. It focused on options and strategies for the existing fleet as well as for newbuildings and the ships of the future. It also highlighted the role and context of the various initiatives by regulators, industry organizations, charterers and financiers.

The value added and difference of this forum was based on:

• Featuring discussion/debate among all major stakeholders – with heavy emphasis on shipowner engagement;

• Providing a realistic assessment of where the industry is now, what needs to be done and come up with practical suggestions as to the next steps for all stakeholders.

PARTICIPATING COMPANIES & ORGANIZATIONS 

INDUSTRY PARTICIPANTS

• Advent Technologies
• Anemoi Marine
• Anglo American
• Bureau Veritas
• Citi
• ClassNK
• Clyde & Co
• Core Power
• Corvus Energy
• DeepSea Technologies
• DNB
• DNV
• EnTrust
• European Commission - Directorate General for Mobility and Transport
• European Commission - Directorate General for Climate Action
• Global Industry Alliance, International Maritime Organization (IMO)
• INTERCARGO
• International Chamber of Shipping
• International Registries, Inc.
• Kawasaki Heavy Industries
• Lloyd’s Register
• Lloyds Register Decarbonization Hub
• Louis Dreyfus Company; Sea Cargo Charter
• Mærsk Mc-Kinney Møller Center
• Maritime & Port Authority of Singapore (MPA)
• Mitsubishi Shipbuilding
• Port of Rotterdam
• RINA
• Shell
• Singapore Shipping Association (SSA)
• Trafigura
• Wärtsilä
• Watson Farley & Williams

SHIPPING COMPANIES

• A.P. Møller Maersk
• AET
• Ardmore Shipping Corporation
• Carnival Corporation
• CMA CGM
• d’Amico Societa di Navigazione
• Danaos Shipping Co.
• Columbia Shipmanagement
• Dorian LPG
• Enesel PTE. Ltd
• EXMAR
• Fafalios Shipping
• Frontline Management
• GasLog Ltd.
• Hafnia
• Hong Lam Marine Pte.
• International Seaways
• Maersk Tankers
• Maran Gas Maritime
• MSC Group
• NYK Group Europe Ltd.
• Oldendorff Carriers
• Premuda SpA
• Prominence Maritime / Dynacom
• Safe Bulkers
• Seanergy Maritime Holdings Corp.
• Star Bulk Carriers Corp.
• Stena Bulk
• Teekay Corporation
• Tsakos Energy Navigation TEN LTD
• TORM A/S
• Torvald Klaveness
• Wah Kwong Maritime Holdings
• Wilh.Wilhelmsen Holding

SPONSORS

GLOBAL GOLD SPONSORS: Columbia Shipmanagement • DNV GL • Tsakos Energy Navigation

GLOBAL SPONSORS: Citi • ClassNK • DNB • Lloyd’s Register • RINA • Wartsila • Watson Farley & Williams

EVENT SPONSORS: ABS • Advent Technologies • Astrup Fearnley • Ardmore Shipping • Bureau Veritas • Clyde & Co • DeepSea Technologies • The Marshall Islands Registry • d’Amico Societa di Navigazione  • Danaos Corporation • Dorian LPG • EXMAR • International Seaways • Seanergy •  Safebulkers • Start Bulk Carriers Corp. •  TORM

SUPPORTING SPONSORS: WinGD

CHARITY PARTNER: The Mission To Seafarers 

SUPPORTING ORGANIZATIONS: Association of Banking And Financial Executives of Hellenic Shipping • BCA College • CASS Business School (International Centre for Shipping, Trade and Finance) • HELMEPA • Hellenic Bankers Association (HBUK) • Hellenic Committee of Lloyd’s Brokers’ Associates (HCLBA) • Hellenic Shipbrokers’ Association (HSA) •  Greek Shipping Co-Operation Committee • InterManager • New York Maritime Inc. (NYMAR) •  Piraeus Association For Maritime Arbitration • The International Propeller Club of the US • Singapore Shipping Association (SSA) 

MEDIA PARTNERS: All About Shipping UK • Actualidad Maritima • Baird Maritime • ELNAVI • Maritime Direct • Marine Circle • Nafsgreen • Naftika Chronika • Natural Gas World • Oikonomiki | Business File • Port News • Ship2Shore • Ship Management International • World Oils • Xinde Marine News

FOR MORE INFORMATION

Please visit: http://forums.capitallink.com/shipping/2021decarbonization/

Or, contact Nicolas Bornozis, Olga Bornozi or Anny Zhu at This email address is being protected from spambots. You need JavaScript enabled to view it. or + 1 212 661 7566

ORGANIZER – CAPITAL LINK, INC.

Founded in 1995, Capital Link is a New York based investor relations, financial communications and advisory firm with a strategic focus on the maritime, commodities and energy sectors, MLPs, as well as Closed-End Funds and ETFs. In addition, Capital Link organizes a series of investment conferences a year in key industry centers in the United States, Europe and Asia, all of which are known for combining rich educational and informational content with unique marketing and networking opportunities. Capital Link is a member of the Baltic Exchange. Based in New York City, Capital Link has presence in London, Athens & Oslo.