How Small Steps Can Unlock Shipping's Future
The world is changing for shipping. Cargo markets are evolving as global trading patterns are shifting. The crew change crisis is ongoing - although the Neptune Declaration, which Bureau Veritas has proudly signed, indicates a serious resolve to address the issue. Technological innovation is disrupting established working practices, both onboard and ashore but presenting massive opportunities. Shipping keeps doing its important job but the energy transition looms over everything.
So, change is coming. Today may be just the start of the most interesting times for any of us in shipping. The challenge is there, yet the opportunity is great: the shipping industry of today may bear little resemblance to that of 2040, or even 2030, let alone 2050.
How do we shift from the old to the new when we can’t be sure what the ‘new’ will be?
The road to net-zero
Net-zero declarations have tripled since the beginning of 2020. ESG and green financing now play major roles – at a pace that has taken many by surprise. The Poseidon Principles and the Sea Cargo Charter show how broad ESG concerns are being incorporated into decision making. Scope 3 emissions targets focus on shipping’s GHG impact - brands reliant on global shipping will be addressing these requirements.
We must focus on the fuels, energy, and propulsion systems needed to supply the dense energy required by the global fleet.
We cannot simply leap to a green zero-carbon future now but a transition is underway. Retrofitting ships now can deliver very significant fuel and carbon savings, particularly when coupled with operational measures. And ships will need to meet the incoming EEXI and CII requirements. We are very active in supporting owners in developing effective operational responses to reduce fuel consumption and meet, or exceed, compliance requirements.
Meanwhile for new ships LNG represents the starting point as the only viable alternative fuel right now. Wind is evolving fast – if not for main propulsion, the immediate conversion of wind energy to propulsive power is a powerful force and we know it works. BV has just issued new, modern rules for wind propulsion systems
But, of course, the industry is looking for future ‘green’ fuels – none are currently available at any scale. And all fuels, to some extent, are going to be transition fuels. But there is a very high likelihood that LNG will need to have a sustained and significant role to play in shipping’s decarbonization plans, beyond 2030. The full spectrum of LNG fuel products (spanning fossil LNG, bio-LNG and synthetic LNG), along with LNG expertise, knowledge and infrastructure, is likely to continue to play a key role in shipping’s energy transition.
The development of new technology such as ammonia fuelled engines and containment systems is happening. The key question will become that of availability and the pricing of fuels like ammonia when compared with alternatives. Ammonia is plentiful today mainly for use as an agricultural commodity or in refrigeration but its production needs to transition to production from renewable energy.
Future fuels will become more expensive and they will require far more space at the expense of cargo. The higher cost of cleaner fuel products will put ever more focus on the need for efficiency and performance – so we need to start focusing on performance now. The dollar value of any increase in fuel efficiency is going to be far higher for more expensive low-carbon or zero-carbon fuels. So design will be vital – as will operational measures.
But it is shipping’s digital revolution that could be just as profound a change and will be necessary to enable, measure and manage the complexity of our energy transition performance.
A digital future
Digitalization and data analytics will have to support smarter decisions - from ship design to operations. We have witnessed, supported and helped to drive innovation in shipping’s use of digital tools, particularly where it can overcome safety challenges for surveyors and seafarers, improve vessel seaworthiness and drive up performance standards. Autonomous shipping is less likely to go mainstream but much higher levels of autonomy and remote control are likely to find their way into a greater role shipboard operations.
Legacy systems, which are a burden on seafarers’ time, can be overhauled and replaced with digital solutions that can cut costs, save time, boost productivity and - most importantly - support safety while providing satisfying careers.
Class has a vital role to play. The growth of remote surveys highlights the clear impact of digital acceleration (somewhat induced by the pandemic). At a time when surveyors have been restricted from boarding vessels, the speed and success of expanding remote surveys is testament to how this “solution of the future” is at our disposal now to ensure business continuity. The development of AI and augmented reality and the introductions of new management platforms will provide management dashboards to drive change and performance.
Working across the supply chain
As well as important efforts being made by the shipping industry and research to achieve net-zero ship designs, collaboration across the supply chain has to be emphasized. One of the big changes coming in shipping is that regulators and society, through cargo interests, will need to look at the big picture. Decarbonizing shipping means decarbonizing supply chains and decarbonized cargoes. The recent announcement that Bureau Veritas has joined a broad group of players across supply chains in the Coalition for the Energies of the Future is an indication of the direction we need to take. We can expect that, in many ways, it is cargo interests that will decide what the ships of the future look like – and what fuels and technology they will use.
This is where we stand today. The stark challenge of decarbonization has coincided with the exciting opportunities of digitalization. In embracing these two D’s, not only do we have the desire, the skills, and the experience to chart a path to becoming a fully digital and decarbonized sector, we also have the opportunity to set an example for other hard-to-abate sectors while we also work with them and across our supply chains to provide the solutions and services society and our stakeholders will be looking for.
Matthieu de Tugny is Executive Vice President of the Marine and Offshore Division at Bureau Veritas (BV).
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.