Shipping industry leaders debated the industry’s decarbonization challenge at a high-profile ABS panel at London International Shipping Week today.
CEO of JP Morgan Global Transport Andrian Dacy; Global Head of Wet Freight at Trafigura Rasmus Bach Nielsen and CTM CEO John Radziwill joined ABS Chairman, President and CEO Christopher J. Wiernicki for a discussion on the Journey to 2050: Beyond State-of-the-Art, moderated by TradeWinds Editor-in-Chief Julian Bray.
Welcoming guests to the exclusive event, UK Maritime Minister Nusrat Ghani said: “The UK maritime sector has a lot to be proud of in developing cleaner, smarter ways of working and investing in technology that will lead to greater efficiencies tomorrow. This includes the development of new maritime technologies that will help us meet our targets to drive emissions to zero. We need tangible action on clean technologies and fuels so we can thrive in a changing world, focusing on innovation, something which ABS has been at the forefront of.” said the Minister.
The panel offered on insights on how new technology can make shipping more efficient, new and existing alternative fuels, carbon emission reduction strategies, sources of finance in a decarbonizing economy and the impact of shipyard consolidation on new vessel designs.
“Today, the maritime industry is at the start of a daring voyage of disruptive change. Daring because its ultimate goals are both clearly stated and clearly unattainable, for now. We know where we want to go and have only the tools to begin the journey, but our own history tells us that, if we remain committed, we will eventually break the barriers that separate our vision from reality,” said Wiernicki.
Julian Bray opened the discussion saying, “How do you decarbonize an industry built on carbon and which carries so much carbon? That illustrates the scale of the challenge. We have to remember that the leading edge of efficient ships are a fraction of the fleet. There is a great deal of interest but so far action and investment have been limited to a few industry leaders. What needs to become clearer is where the opportunities for change will emerge and how the market will support them.”
Rasmus Bach Nielsen said: “The last 10 years have shown that shipping is a hard market in which to push the adoption of technology and take on the associated costs, because there has been so little money available. Shipyard consolidation could not have come at a better time; it will help to force through technology challenges; we need yards to be as strong as possible. Consolidation in shipbuilding is positive and needed for industry to be successful on the journey of the next 10 years.”
Andrian Dacy said: “There is not one institutional investor in the west that is not thinking about the ESG (Environmental Social Governance) Agenda and the ESG status of their investments. The reality is that the largest pools of capital have made sustainability a priority. These issues may not trickle into your business straight away but capital moves the market and CIOs or finance executives are all thinking that way. It’s part of the broader conversation in the industry.”
John Radziwill said: “Would I be willing to give away inefficiency in the market in the cause of decarbonisation? 100% yes. If port congestion is less going forward then so be it. Efficiency and profitability go together and digital technology can help in a major way, but ordering new ships that are a little more efficient is not the solution. We need to use the existing fleet better, to play the hand we are dealt. I think we can lower costs increase safety and make money.”
Wiernicki added: “2050 is obviously a long way off and it will be another generation of leaders making the practical decisions in that respect. But it would be a mistake to put the question in a box to be opened by the next generation. It must be on the radar today because, although current technologies cannot get us there, it falls to the present generation to make a commitment to develop and mature these solutions so that the next generation can implement them.”