Q. Shipping will not only be a transporter and enabler of green fuels for industries around the world but will also be vying for those same green fuels to cut its own emissions. What do you think shipping needs to do to ensure access to these future fuels?

We’ve had the luxury of scraping the bottom of the fuel barrel for many years. The truth is, we’re all going to have to move to a platform of more expensive fuels and probably somewhat more expensive propulsive and electricity generating technology. The level playing field that we all talk about is still some ways away, and today’s marine fuel prices are a taste of what is to come – but we have adapted to the current expensive fuel environment and we will learn to adapt again in the future.

We will be competing for mainstream products in fairly high quantities but land-based energy production is still going to be the biggest demand. Shipping is going to have to get its foot in the door and be a much more visible global industry. 

Shipping is going to have to get its foot in the door and be a much more visible industry. – Mark Cameron, Chief Operating Officer, Ardmore Shipping

Q. As part of your Energy Transition Plan Ardmore has invested in methanol to hydrogen technology with private equity firm Maritime Partners and Element 1 Corp. What drove this investment decision?

Any positive step in maritime’s energy transition is always going to be accompanied by some degree of risk. However, at this stage, it’s not so much a question of ‘What if I get it wrong?’ but rather ‘What if I do nothing?’.

Making this investment in Element 1 Corp took a lot of time and effort to understand the technology. To make such moves you need to have a clear strategy, together with ambition and support from the Board, as we have.  

This investment, however, is one part of the long-term plan. We see more and more acceptance that methanol has a rightful place within the context of the energy transition. It’s not going to be a panacea but it is going to play a significant part in the future fuel mix for many practical and financial reasons.

Technology investment is vital, but we have two other core pillars to our Energy Transition plan. We are also working on projects with customers to understand their future fuel needs, which may involve building new ‘super-eco’ ships for long term time charters. The other pillar is the transition to non-fossil fuel cargoes working with customers and our seafarers to gain a better understanding of the routes, trajectories, and carriage requirements. We currently have more than 20% of cargoes we transport that are non-fossil fuel and we are looking to grow that deliberately while not forsaking the commercial upside.

None of us have the proverbial single silver bullet. What we have right now is a piece on the chessboard in a much larger game that is playing out over the next few years.

Any positive step in maritime’s energy transition is always going to be accompanied by some degree of risk.- Mark Cameron, Chief Operating Officer, Ardmore Shipping

Q. When making investments into new fuels and technologies, what considerations are you giving to safety, upskilling of crews and recruitment?

I personally am not an advocate of ammonia as a shipboard solution, I think it’s just too dangerous. And I’ve said recently that you can’t engineer out the toxicity of ammonia no matter what we do.

Vitally, we need to bring seafarers into the conversation so that they understand what is going to be expected of them, what range of experience they’re going to need to have, how safety is going to be evaluated, and how new routines are going to be developed.

Shipping is going to see a shortage of skills off the back of COVID-19 and the Ukraine/Russia crisis. This, in addition to upskilling to meet new green fuel standards and technologies is going to make retention and recruitment challenging. Fuels like hydrogen require a different kind of chemical engineer and a process systems engineering approach. As an example of future proofing our business, we’ve recently employed a graduate from Newcastle University, who has a much more diverse energy background than any of us sitting in the office.

Q. There are rumblings of a potential global recession in 2023, with the head of the International Monetary Fund recently saying the outlook had “darkened significantly” since April. What are you hearing on the ground?

We all know the tanker sector operates in a cyclical market. Currently the fundamentals are strong and based on our analysis, we believe this will continue to have good upside through the winter market.

We certainly hear the loudest rumblings and see evidence of recession in Europe, less so currently in Asia, while the US has both negative and not so positive indicators, although this may be due to several different interrelated factors including the global energy demand outlook.

Within Europe we’ve got to be careful not to talk ourselves into a deeper recession. We certainly believe that the MR and chemical sector positive earnings environment can continue for some time yet. The best thing we can do right now is enjoy what we have while we have it, and build our balance sheet appropriately for the future.

Q. You highlighted the conflict in Ukraine and its impact upon the tanker sector. What measures has Ardmore taken as a result of the conflict and are you reshaping your markets as a result?

We’ve opted not to pursue any Russian business. However, we are looking at a strategic shift in markets not just prompted by cause and effect. For example, in 2021 we launched our Energy Transition Plan to pursue alternative cargoes in different routes and to become more knowledgeable about new customers and cargoes. We will be working across longer trade routes as a result, the ton/mile demand is certainly up.

As a global centre of innovation for sustainable shipping and decarbonisation, I am in the process of moving to Singapore as part of Ardmore’s wider strategy to focus on business development and opportunities in Singapore and with the Far East, further supporting our efforts to engage with stakeholders for our Energy Transition Plan.

Q. After navigating years of downturn in the oil and gas markets, the tanker sector is seeing a return to strong conditions driven by geopolitics and the global energy crisis. Ardmore itself reported record earnings for the second quarter of 2022. What is Ardmore’s current strategy for making the most of this upturn and how is it impacting your long-term growth plans?

It would be remiss if we did not frame this market upturn in the unfortunate context of the ongoing Ukraine and Russia war and this tragic conflict being the catalyst for the situation we currently find ourselves in.

The resulting rally in the market comes after a long period of poor earnings so as a sector, and as a company, we must work to harness this moment in time. Of course, the future is only as bright as the darkest day you’ve had in your past. For us, this means paying down as much expensive debt. We’ve just completed a significant refinance of our fleet, moving away from costly loans that we had in the past, and rebuilding our balance sheet ready for a cyclical downturn in the market again in the future.