Lack of R&D investment “the greatest blocker to shipping’s decarbonisation”, ministerial COP26 conference to be told
5 November 2021
Friday 5th November 2021. Glasgow, UK. Industry leaders will sound a warning that lack of investment in developing green technologies is the biggest threat to achieving decarbonisation targets, at one of the largest ever meetings of shipping executives and maritime states at COP26.
Key players representing 80% of global shipping will be meeting with ministers at the ‘Shaping the future of Shipping’ conference on 6th November in Glasgow. Attendees will identify ways to increase investment in R&D, and hear about a number of projects already underway to reduce the emissions from international shipping, which is currently responsible for nearly 3% of global emissions.
Industry will highlight findings from the International Energy Agency, which show that under current policy framework scenarios, low and zero-carbon fuels will make up less than 3% of shipping’s total energy consumption by 2030 and roughly one third by 2050. This would fall significantly short of industry’s 2050 net-zero carbon target.
To inform the discussion the International Chamber of Shipping (ICS) has published “A zero emissions blueprint for shipping” identifying 265 example projects that could kickstart the acceleration of innovation to decarbonise the maritime sector. An option to fund such projects, that will also be discussed at the meeting, is the creation of a $5billion USD R&D fund – the ‘IMRF’ – paid for by shipowners to accelerate investment in these new zero emissions technologies.
Esben Poulsson, chairman of ICS, commented ahead of the conference: “The net zero carbon pathway that we have all committed to is not achievable without a rapid and unified increase in R&D spending. We know what needs to be done but we need a global solution for a global industry to ensure that developing economies are not left behind.
“This is why we are looking to representatives of government, at no financial cost to their taxpayers, to approve the proposed $5bn R&D fund as soon as possible. Right now, it is being held back due to political hesitancy. This is the time for leaders to step up.”
CEOs attending the event will showcase initiatives already underway to reduce reliance on carbon-heavy fuels, but will flag concerns about a lack of scalability given the piecemeal nature of the developments.
Soren Toft, CEO MSC Mediterranean Shipping Company said: “It is critical that a funding mechanism for global R&D is put in place to close the gap to net zero shipping. At MSC, we continue to collaborate with strategic partners to study net-zero solutions, from the zero-emission fuels of the future to the technologies that will enable them, with the ultimate goal of working towards a zero-carbon flexi-fuel concept vessel. MSC believes we need a range of solutions with energy efficiency remaining a key component of the future approach.”
Ulf Schawohl, Head of Regulatory Affairs & Sustainability at Hapag-Lloyd, said: “In line with our firm commitment to reducing our carbon footprint, we recently invested around USD 2 billion into a dozen extremely fuel-efficient vessels that can be operated with LNG and thereby lower their CO2 emissions by between 15 and 25 percent.”
“While we need tangible action now from both industry and government if we are to speed up the decarbonisation of shipping, it is also clear that R&D efforts related to zero-carbon technologies and fuels remain a crucial point and urgently need to be expanded. The COP26 summit is an excellent opportunity to spur lasting change towards a more sustainable future,”
Knut Ørbeck-Nilssen, CEO of DNV Maritime, said: “The urgency and scale of the climate challenge we are now confronted with must be matched by the political will, concrete actions and capital needed for us to achieve it.
“There is still a huge amount of work to in turning the ambition of zero carbon shipping into a reality. Big questions still loom over alternative fuel availability, infrastructure, technical and operational safety and pricing.
“To answer these questions, we need to intensify research and piloting projects across traditional industry boundaries. Collaboration and determination are key to successfully bringing decarbonization within our grasp.”
Svein Steimler, President & CEO, NYK Group Europe Limited said: “In Japan there has been unequivocal backing around the need for net-zero shipping by 2050. This said we need certainty on what future fuels will drive this transition. At NYK we have invested heavily into LNG propulsion as a bridge whilst making great strides in research, development and investment of alternate propulsion using methanol, hydrogen and ammonia as possible future renewable energy sources as they gradually need to become available and scalable.
“We need governments across the world to ‘start walking the talk’ and do what is necessary to match the ambition shown by the industry and make a statement to the world by accepting proposals at the IMO for a $5bn R&D fund.”
Vandita Pant, Chief Commercial Officer of BHP, said: “We recognise our responsibility to mitigate emissions and drive sustainability in the shipping arena. We are changing our chartered fleet’s fuel mix; we are improving our energy and cost efficiency though onboard technology and innovations; we are benchmarking our chartering choices against vessel owner sustainability and energy efficiency practice; and, we underpin all this through essential ecosystem partnerships and collaborations across the industry to drive emissions reduction through common goals and pathways. We will continue to take action to deliver on our target of net zero GHG emissions from all shipping of BHP’s products by 2050.”
Carl-Johan Hagman, CEO Stena Shipping & Ferries, said: “we are planning to launch zero carbon vessels before 2030 for crossings shorter than 3 hours. This will be fully electric vessels which are possible to construct thanks to the fast development of batteries. If the port can provide renewable electricity in the right quantities – we can sail carbon free already in 2030”
Industry will reinforce its belief that the IMO as global regulator must oversee the fund to ensure a fair and equitable transition to net zero. This means the money effectively cannot be used until the IMRF, which would use mandatory contributions from the world’s shipping companies, is approved by governments.
ABS Chairman, President and CEO, Christopher J. Wiernicki said: “Securing the required quantities of zero-carbon fuels to power our industry’s transition will require significant scaling up the global renewable energy sources. Green hydrogen will certainly have a critical role to play but we are starting from a very low base and increasing production is an urgent global priority. Meanwhile, carbon capture is a potential game changer and ABS is working to accelerate development of both the technology and the vessels required to make it viable,”
“Just as simulation is being used in automotive design to decarbonize vehicles, shipping must embrace new ways of seeing things to bring forward innovation for greener vessels. At ABS we can now use advanced simulation and modelling to assess new concepts in design, engineering and operations while a vessel is in its design stages, allowing ship owners and shipyards to make more informed decisions.”
The shipping industry recently committed to reducing carbon emissions to net zero by 2050, doubling the IMO’s existing target. ICS and others have also pushed for a global carbon price in the form of a market-based measure to be introduced as soon as possible.
Register to watch the Shaping the Future of Shipping conference, Saturday 6th November 2021