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Op-Ed: Why Shipping's Clean Technology Revolution is Accelerating

silverstream
Shell has trialed eco-friendly air lubrication technology aboard the LNG carrier Methane Patricia Camila (Silverstream)

Published Dec 23, 2021 6:09 PM by Noah Silberschmidt

Just a few months ago, the sentiment at COP26 was arguably one of positivity and hope, with shipping’s key players showing an unprecedented willingness to step up decarbonisation efforts. However, the fragmentation displayed at MEPC 77 painted a slightly different picture. The meeting saw action on accelerating environmental regulation and decarbonization remain, for the most part, solely as discussions. The ICS subsequently issued a statement calling the meeting a “missed opportunity” to decarbonize shipping, and the IMO has agreed to initiate a revision of its strategy on the reduction of GHG emissions from ships to strengthen its ambition. 

As the CEO and founder of a leading maritime clean technology company, I would agree that the results from MEPC 77 were disappointing. However, I would argue that they do not reflect the renewed energy within the industry to tackle decarbonization directly and get ahead of regulation. 

Realizing our ambition 

When I founded Silverstream Technologies over a decade ago, shipping’s perception of clean technology and innovation was one of scepticism; the result of a traditional industry reticent to change. However, shift forward 10 years, and our air lubrication system (ALS) is now one of the market’s most viable clean technologies for reducing the maritime industry's emissions. Much of that success is down to our determination to conduct rigorous and transparent sea trials with the industry’s most respected owners, and to provide the market with verifiable proof of the results that we can deliver. 

Today, we have more than 70 orders – under contract, in-build or in-service – including deals with major players such as Maersk, MSC, Shell, Carnival, Grimaldi, Vale and more. In 2021, we secured the largest ever order of a maritime propulsion clean technology system with MSC, covering more than 30 cargo vessels. It will save the company a forecasted 1.6 million tonnes of emitted CO2 and over $280 million in estimated fuel costs. 

It is hugely encouraging to see tier one owners implementing decarbonization strategies that go beyond the requirements of current regulatory measures. These market leaders are proving that clean technologies have a central role to play in maritime decarbonization, and that trusted solutions are being prioritized amidst a range of decarbonization tactics. 

I believe that the increased uptake we have seen this year is only a fraction of what is to come. In 2022, we will see the scales tip very much in favor of proven clean technologies as they start to become an industry standard. 

Vessel efficiency: a commercial imperative 

The widespread adoption of clean technologies in shipping has been bolstered in recent months by consumer demand for more environmentally conscious supply chains. As a result, we are seeing increased pressure from the charterers and shippers, who expect transparent and sustainable partners. This year alone we have seen Amazon, Ikea and Unilever sign a pledge to only move goods on ships using zero carbon fuel by 2040. Ultimately, for financial institutions, charterers and cargo owners, vessel efficiency is becoming a commercial imperative. 

Despite the acceleration of longer-term environmental regulation still under discussion, the IMO’s Energy Efficiency Operational Index (EEXI) and Carbon Intensity Indicator (CII), will come into effect in 2023. While slow steaming is predicted to be the most popular avenue to achieve compliance, it must realistically be challenged as short-term thinking for several reasons. 

Firstly, slow steaming constrains operational flexibility. For some segments such as cruise, these constraints are not feasible when balanced against strict voyage timetable requirements. Secondly, slow steaming discourages the use of smart voyage routing, whereas clean technologies can be used in conjunction with digital optimization technologies to increase overall voyage and vessel performance.  Finally, it also ignores the reality that regulations will continue to tighten and that ultimately in failing to enhance design efficiency, owners and operators are taking on the risk of potentially unprofitable assets. As an illustration of this, CII requirements will become 11 percent more stringent by 2026 and will further tighten before 2030.

With or without stronger regulation today, failing to invest in proven, fuel-agnostic and future-proofed technologies will leave ship owners and operators in a commercially perilous position in years to come. Given that shipping’s future fuels are and will continue to be many times more expensive than the fossil-fuel default, the case for increasing fuel efficiency is inarguable. 

Inspiring confidence in the market

With this context in mind, it’s clear that a gold standard must be set for technologies in an increasingly complex market. As a clean technology leader, we see it as our responsibility to help set this high standard, build confidence in the market and support the accelerated decarbonization of the industry. We make no efficiency claims that we cannot conclusively verify with in-operation data. This gives owners and operators the assurance that the technology will perform to the highest standards and, crucially, is something that many other manufacturers do not do. 

Similarly, owners and operators must work with shipyards and push for the technologies that are proven and will deliver on promised results. They need to request more of the manufacturers and organizations involved in constructing or retrofitting their vessels. As we look to the future, the conventional thinking that standard, "off the shelf" technologies at the newbuild stage are the best way of increasing efficiency must be challenged as outdated.

New pressures, less conservatism and more ambition have led to a hunger amongst ship owners and operators to go above and beyond current regulatory measures. They see the commercial and ethical incentive to decarbonize, and so do we. As a clean technology provider, we will stand shoulder-to-shoulder with shipping’s forward-looking firms, and we will help them thrive in this invigorated climate of optimism for the sector.

Noah Silberschmidt is the CEO and founder of Silverstream Technologies, a leading developer of air lubrication systems for shipping.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.