Charting a Digital and Decarbonized Future

 

The business - and technique - of categorizing and notating ships by their characteristics and capacities has been taking place for 250 yeras - far longer than other innovations in shipping like containerization, which only started in 1956.

Whereas classification originally considered only a ship's age and tonnage, today it includes a multiplicity of factors including environmental impacts and levels of autonomous operations as well.

EDWARD LLOYD'S COFFEE HOUSE

Classification has its roots in marine insurance. Towards the end of the seventeenth century as global shipping was gaining pace, shipowners, sailors and merchants would gather at Edward Lloyd's coffee house in London to exchange news. England's capital was rapidly transforming into a hub for seaborne trade. English vessels linked the country's coal fields to the timber trade around the Baltic Sea, the sugar and tobacco and slave plantations of the New World, and the spice and tea producers of Asia.

To protect their ships during increasingly lengthy voyages, shipowners at the popular coffee house underwrote insurance policies in which they shared risk for a ship's hull or cargo.

A hundred years later at that same London coffee shop, a few Englishmen landed upon another idea that would revolutionize shipping and formally establish Lloyd's Register. In 1760, they decided to establish a society that would offer classification services for the growing British commercial fleet.

At the time, ships were a construction hodgepodge. Their lack of standardization challenged the ability of insurers to properly assess how much risk they were assuming. Lloyd's began classifying ships based on factors such as how old they were. Once a ship passed a certain age, for instance, it was downgraded from "A1" status, meaning it could only ply shorter routes like ferrying cargo and timber around the North and Baltic seas.

Classification made it easier to calculate risk, granting insurers greater confidence along with the ability to lower their premiums and popularize their products. Vessels, as "agents of globalization," which British researcher Nigel Watson calls them, soon began spreading standards around the world along with their cargo.

SPREADING THE WORD

A century later on the other side of the North Sea in Norway, men were drawing inspiration from developments in London. In 1864 in Oslo – then Christiania – mutual insurance clubs like the one that had started at Lloyd's coffee shop banded together to form Det Norske Veritas (DNV).

Norway was becoming a major maritime nation, trading not only in its bountiful timber and fish stocks but also dealing in maritime services. DNV's goal was to provide a reliable and straightforward system for classifying and taxing Norwegian ships. The registry would eventually become the world's largest by gross tonnage, accounting for some 21 percent of the global fleet in 2023.

Over the next century, more class societies sprang up as shipbuilding and shipping became truly globalized. In 1899 in Japan, Nippon Kaiji Kyokai, now ClassNK, was established to promote maritime activities in Imperial Japan. The society began issuing its own classifications for ships in the 1920s.

After World War II, more vessels – and more steel, too – were being manufactured in the shipyards of Japan and, increasingly, Korea. Another important classification society, the Korean Register of Shipping (KR), was formed in 1960.

While the number of class societies was growing worldwide, the International Maritime Organization (IMO) was formed in 1958 under the auspices of the U.N. As set out in its founding convention, one of the IMO's responsibilities is "to encourage and facilitate the general adoption of the highest practicable standards in matters concerning maritime safety, efficiency of navigation and prevention and control of marine pollution from ships."

At first, class societies were worried that the intergovernmental organization would take over their business. But within three years of the IMO's founding, class societies and other non-governmental organizations were allowed to join the body, which provided them a useful venue to discuss and implement international shipping standards.

LATEST INNOVATIONS

Throughout their over 250-year history, class societies have helped push the envelope for making shipping safer – and, nowadays, greener and more secure.

As Joonho Cho, General Manager & Senior Vice President of KR's Technical Business Development Team, explains, "In today's regulatory landscape, shipowners must go beyond mere compliance with IMO and E.U. environmental rules and adopt a comprehensive, data-driven strategy that considers fuel costs, energy-saving technologies and long-term operational planning."

Busan-based KR has spent over a year carefully tracking the development of IMO regulations and carrying out in-depth research. These efforts have culminated in a new strategic platform called PILOT (Platform for Insightful LOw-emission Transitions), designed to help shipping companies quickly adapt to new requirements. PILOT is in its final development stage with official release scheduled for June 11.

"PILOT is KR's data-driven digital platform that supports both ship-level and fleet-wide decarbonization strategies," Cho says. "It leverages KR's extensive technical expertise and operational data to provide practical, actionable insights."

PILOT analyzes dozens of technical and regulatory factors including fuel consumption, greenhouse gas emissions, CII ratings, alternative fuel adoption scenarios and the use of onboard carbon capture systems to help shipowners decide upon the most cost-effective decarbonization strategy at present and into the future.

Other classification societies such as DNV have also released products to support shipowners through the green transition. In 2023, DNV, based in Norway (whose greenhouse gas emissions actually peaked in 2007), launched Emissions Connect. The comprehensive platform allows shipowners to closely monitor, verify and report fuel emissions at the fleet, ship and voyage levels – and on daily timescales, too.

Until recent years, many ships calculated emissions annually. But as regulations tightened, compliance demanded more precise data. Thanks to DNV's Emissions Connect, shipowners can closely calculate their emissions in order to manage their E.U. Allowances within the organization's carbon cap-and-trade system.

Like KR's PILOT, the digital platform supports compliance with FuelEU Maritime, the E.U. regulation that entered into force on 1 January 2025 and sets a limit on the annual average greenhouse gas intensity of energy used by ships trading within the E.U. or European Economic Area, no matter where they're flagged.

FuelEU Maritime has the ambitious goal of reducing carbon dioxide, methane and nitrous oxide emissions of all ships calling at European ports by 80 percent by 2050.

DIGITALIZATION PUSH

DNV's focus on helping shipowners reduce emissions is inseparable from its digitalization push. Many ships are now connected to the Internet 24/7, and some are even moving toward autonomous piloting.

DNV was heavily involved in the development of Yara Birkeland, the world's first fully electric, zero-emissions container vessel. The revolutionary ship has a class notation from the Norwegian society of RP (1,40), indicating that it's capable of being remotely piloted. DNV also released its Autonomous and Remotely Operated Ships (AROS) notations in December 2024, which help to define various levels of what DNV is calling "autoremote," or autonomous and remotely controlled operation.

The rise of remote operations is benefiting class societies, too.

KR is developing a remote inspection based on digital twin ships. Digital twins are virtual representations of a physical object, like a vessel, which are continuously updated with data from sensors on board the real thing. Inspecting ships remotely via their digital twins would help both class societies and shipowners carry out continuous monitoring and management throughout a ship's lifecycle.

As shipping enters the digital era, new risks are emerging including GPS spoofing, hacking and supply chain disruptions. To combat this challenge, class societies are funneling resources into cybersecurity.

In Japan, ClassNK, now the world's third largest class society in gross tonnage after the Texas-based American Bureau of Shipping (ABS), issued its first software security certification in June 2024 to MACK, a ship management program produced by Chennai, India-based Solverminds. DNV has had a "Cyber Secure" class notation since 2018, which address how well a vessel is able to safeguard ten crucial onboard functions – such as propulsion, steering and navigation – from cyber risks.

Many class societies now offer notations for much more than just carriers.

Since 2010, ABS has been a leading provider of classification to the growing offshore wind industry, offering notations for everything from floating and bottom-based wind turbines to offshore support vessels. In October 2024, ABS released the maritime industry's first comprehensive rules for floating nuclear power plants. While the infrastructure sounds futuristic, one such plant is already in operation off Russia's Arctic coastline. Countries such as the U.S., U.K., China and South Korea are reportedly all considering the technology as well.

TOWARD A DIGITAL, DECARBONIZED FUTURE

In the years to come, decarbonization and digitalization will remain at the forefront of classification societies' work. They will continue partnering with both shipowners and regulatory bodies like the IMO and E.U. to ensure a greener and safer future at sea.

They will also continue competing with one another to recruit and train competent surveyors and promote their standards as the industry's most trustworthy – and most pioneering.

MIA BENNETT is Associate Professor of Geography at the University of Washington.