'We need the new fuels,' Says ESL Shipping Boss

Matti-Mikael Koshinen, managing director of ESL Shipping. Image Credit / S&B

New fuels are key to shipping's energy transition and the price differential between the new and the old fuels is too wide, ESL Shipping's managing director, Matti-Mikael Koskinen, said in a lunctime presentation at MEPC82.

"We are heating up the planet a bit too much and shipping needs to move faster," Koskinen told Ship & Bunker on the sidelines after the presentation.

His company is committed to hitting net-zero on science-based targets by 2040. He knows that it is a "highly ambitious" target but nevertheless achieveable if shipping "uses all the means it has at its disposal".

That can be by greater efficiency, for example, using data to get ships in and out of port faster.

But on the question of putting a price of a tonne of carbon equivalent, he is more reticent.

"It's more complicated than just setting a price," he said.

If the price on pollution is too high, those trade-dependent states, including Finland, facing the greatest distances will suffer from the higher cost of trade.

One solution could lie with the fuel standard. "Over time the greenhouse gas intensity of the fuel would need to go down which would lead to a higher price because supply would be limited.”

But whatever the solution, he know that ESL needs new fuels.

"We have LNG, we have bio-gas and we have methanol. We will have a basket of different alternatives."

With different types of ships, his company will adopt different strategies. 

"Methanol is not yet available for smaller ship sizes but for a bulker it works well if you have fuel availability." Tramp operators complain of the difficulty of sourcing the new fuels. But, suggests Koskinen, "the clients are often the ones who have the supply chain for many of the chemicals and commodities so we could solve this problem".

But that still leaves the carbon price

Yes, the price may well be key, he says, only he is not the one with the number.

ESL was participating in a lunchtime presentation to MEPC82 by the Finnish delegation. The presentation, Decarbonising Shipping in Challenging Conditions, refers to seas off Finland being iced over for four to five months of the year. For ice-class ships, greater power is required to operate in such conditions.