New Bunker Supply Chain Needed "in the Medium-Long Term"

by Ship & Bunker News Team
Friday October 5, 2018

A group of 34 maritime CEOs and industry stakeholders have signed a joint call to action to decarbonize the shipping industry and support the IMO 2050 goal to reduce the industry's total greenhouse gas emissions at least 50% by 2050 compared to 2008 levels.

It is unclear exactly how the ambitious goal will be achieved, but the group stressed that "the biggest technology challenge in 100 years" must be a global effort.

"Global seaborne trade's transition to a low-carbon future will propel both technological and business model innovation. The right incentives for accelerated investment into R&D can only come about if we get a global IMO based regulation. We invite stakeholders from the entire maritime spectrum to join us on this new journey," says Claus Hemmingsen, Vice CEO of A.P. Moller – Maersk, whose firm is one of the signatories.

Achieving the goal will have a natural impact in the marine fuel industry, with Tristan Smith, Reader in Energy and Shipping at University College London, saying the "decarbonization of shipping means a new fuel supply chain in the medium-long term."

Paddy Rodgers, CEO of Euronav, says there will need to be a "fundamental change in the way we fuel our ships."

The industry will also require zero emission vessels relatively soon, with Alastair Marsh, CEO of Lloyd's Register, saying such vessels will need to enter the world fleet in 2030 and form a significant proportion of newbuilds from then on.

As part of their call to action, the CEOs have recommend the following core principles as part of a "Roadmap" for transition:

  1. Ambitious: The Strategy should be consistently in line with the Paris agreement's temperature goals.
  2. Predictable: Regulations should provide long-term certainty for financiers, builders, owners and charterers to make the required investments in low-carbon technologies.
  3. Market-oriented: Emissions reduction objectives should be met at the lowest possible cost, and the industry should explore the use of carbon pricing and other mechanisms that can create economic value from GHG emission reductions.
  4. Technology-enabling: The Strategy should accelerate the use of low-carbon technologies and fuels by encouraging significant funding flows for research and development.
  5. Urgent: Certain mid- and long-term measures will require work to commence prior to 2023, including the development of zero-emission fuels to enable implementation of decarbonization solutions by 2030.
  6. Coherent: Solutions implemented should build on and reinforce existing technical, operational, and energy efficiency measures whilst maintaining or enhancing safety standards. In this context it is critical that all IMO environmental regulations be compatible with future 2050 regulations.
  7. Enforceable: Legally binding, enforceable actions set by the IMO and enforced by member countries are required to compel the industry to shift.

Initial signatories are CEOs from the following companies: A.P. Moller – Maersk, Amsterdam Trade Bank, Anglo Eastern, Caravel Group, Carbon Pricing Leadership Coalition, Cargill Ocean Tranportation, Danish Ship Finance, Dorian LPG, DS Norden, Environmental Defense Fund, Euronav, Fairmont Shipping Ltd., Gaslog, Hempel, IRISL - Islamic Republic of Iran Shipping Lines, KC Maritime HK Ltd., LADOL, Liberian Registry, Lloyd's Register, Marine Capital Limited, MISC, Maritime Strategies International Ltd.,Ocean Network Express Pte., Pacific Basin, Precious Shipping, Rocky Mountain Institute,Royal Arctic Lione A/S, SKULD, The North American Marine Environment Protection Association (NAMEPA), SEACOR Holdings Inc., The Ocean Council, Trafigura, University College London and V.Group.