In our most recent webinar series, we asked whether reduction of CO2 emissions was still a hot topic amongst stakeholders. Here’s what we learnt.
Image: From the left: Johannah Christensen (CEO of the Global Maritime Forum), Engebret Dahm (CEO, Klaveness Combination Carriers), Ingrid Kylstad (Sustainability Lead, Torvald Klaveness), Julian Bray (Editor-in-Chief, TradeWinds) and Marthe Lamp Sandvik (VP Energy Transition Solutions, DNB).
As 2030 looms and shipping continues to contribute 3 % of the world’s total GHG emissions with an upwards trend, we gathered a group of panelists to discuss what it will take to increase urgency amongst stakeholders and explore how charterers and shipowners are working together today – and how they could work together going forward, paving the way towards zero emissions freight.
There is little doubt that shipping emissions are on the rise and the hard work is ahead of us. Although we find ourselves amidst uncertain times, and it is unclear how the green transition will play out for shipping, stakeholders remain engaged in the question.
Webinar part I
How can companies support the regulatory processes taking place in the IMO?
As the IMO discusses the updated climate strategy owners and charterers can take the opportunity to engage with flag states and communicate the importance of flag states supporting the energy transition. They can also constructively engage with their governments that are represented at the IMO to increase the sense of urgency on the matter.
Carbon pricing and data availability is key to succeed in the green transition
There has been progress in recent years, seen in the increasing number of cargo owners measuring and reporting their shipping emissions r and some large companies have set ambitious emission reduction goals, for the emissions from their ocean freight. Dahm, pointed out that few charterers, however, have developed strategies on how to deliver the necessary large cuts in CO2 emission or started acting. More is needed to accelerate the process to net zero, and carbon pricing is key in this respect. With surging newbuilding prices, and the cost of alternative fuels likely being tripled that of conventional fuels, regulatory delays pose a challenge for most shipping companies. New business models for collaboration between Charterers and Owners are necessary.
With more data becoming available stakeholders can make increasingly informed decisions.
Webinar part II
We must do with the cards we’ve been dealt today. It’s not perfect, but it’s good enough to get started
As one of the panelists pointed out, the upcoming Carbon Intensity Indicator regulation (CII) is “taking up all the oxygen in the room”, leaving less energy for the more profound discussions, which is how to incentivize for large, actual emission reductions. One approach is to pilot a carbon adjustment factor (CAF) equivalent to a bunker factor, an approach taken by Klaveness Combination Carriers. Dahm explained that the essence of the CAF is to link the freight earnings to the emissions performance, relative to a baseline.
A CAF-mechanism represents the kind of business model innovation needed to accelerate decarbonization in face of regulatory uncertainty. Claire Wright from Shell made the important point that before the Sea Cargo Charter, there was no transparency. The SCC has mainstreamed data collection and the data enables decision making that can support emission reductions from operational improvement. Wright argued that the combination of the Sea Cargo Charter and CII will encourage charterers and owners to work closer together on how vessels will be deployed.
All panelists were clear that collaboration to enable energy efficiency now is an important contributor to long-term decarbonization.
The panelists also discussed how the increased interest in Scope 3 emissions helps accelerate the energy transition in shipping, and whether decarbonization is available to companies operating in the spot market.
