‘I Love Rules’ – Companies Consider Paths to Net Zero at COP26 Future of Shipping Event

The most quotable quote, from an event where shipping’s heavyweights were on full display (many in person, and some virtually) came from Svein Steimler, the President and CEO of the NYK Group- Europe, who proclaimed that: “I love rules,” speaking about pending actions from the International Maritime Organization (IMO)  at its meetings later this month, adding that: “The industry needs rules; come out with the rules and will comply.”

The International Chamber of Shipping (ICS) “Shaping the Future of Shipping” conference, a one day event held in conjunction with the COP26 meetings in Glasgow, brought together top-guns from the industry, alongside governmental attendees. Shipping folks have been out in force (at the ICS and other sidebar events), hoping that the IMO regulators (appointed, in turn, by the governments participating in COP26) are listening. Effectively, the industry has thrown down the gauntlet to the IMO on creating a clearly defined trajectory towards “net zero” by 2050.  Mr. Steimler, not one to mince words, implored the governmental side present at COP26 (and in the audience at the ICS event): “You politicians need to get your act together and tell us what to do.”

Unlike well-traveled courses on nautical charts (these days, plotted on ECDIS), the pathways here are still being explored. In the session titled “SHIPPING’S 4TH PROPULSION REVOLUTION – THE COMMITMENT AND THE CHALLENGE” Mr. Steimler (representing the Japanese Shipowner Association within ICS) was joined by top executives from CMA-CGM and from Hapag-Lloyd, along with representatives from the cargo side (BHP, from Australia), Class (DNV), and the ranks of government (Cyprus Maritime Ministry).

Each had varying takes on the path from fossil fuels to alternatives with low and then zero carbon emissions. BHP’s Ms. Vandita Pant, pointed to “…many levers which need to applied…” and “being pragmatic about the here and now…” citing the mineral giant’s recent chartering of five LNG fueled “Kamsarmax” bulkers from Eastern Pacific (Idan Ofer) to haul Australian iron ore into China She also mentioned BHP’s charter of the 2020-built 81,290 dwt. dry bulk carrier Kira Oldendorff , which refuelled with biofuel (blended with conventional fossil fuels) during a call at Singapore earlier this year. 

Both CMA-CGM and Hapag Lloyd, like Mr. Steimler’s NYK, have also deployed LNG as part of their fueling mixes, all recognizing that LNG (representing the “here and now” mentioned by BHP’s Ms. Pant) is a pathway to zero carbon fuels not yet available at scale. Panelist Knut Ørbeck-Nilssen, CEO of DNV, said that “LNG, and LPG as fuel, is a really great step to take now…it might not be perfect…so maybe that is the best starting point today.”

Discussions of future fuel choices were infused throughout the “Propulsion” session, and in others during the day. Ms. Pant mentioned a BHP intention to engage in pilot projects on other fuels, specifically mentioning e-Methanol and e-Ammonia. Ms. Lasse Kristoffersen, CEO of Norway’s Torvald Klaveness, and the Vice Chair of the ICS, was emphatic that green ammonia was the fuel of the future, pointing to its relatively high energy density (ie volumetric storage requirements) among alternatives to carbon based fuels. 

The cargo side will have an increasingly important role in prodding carriers towards their fuel choices. During the day, preferences for sustainable fuels as a criteria for choosing carriers for the consumer-facing “Big box” giants (eg Walmart, Ikea, Costco and Home Depot), were mentioned multiple times. This applies on the bulk side, as well. Ms. Pant, said “Our choices, both operationally and strategically, can steer the system into right action. What that means is looking at the efficiency benchmarks for vessels…as well as sustainability practices of our counterparts.”  

But the backdrop for the multiple industry-driven sessions in Glasgow is about getting governments to listen to the industry. The Deputy Shipping Minister from Cyprus, Mr. Vassilios Demetriades, said, in his remarks, “My message is that we need to have a set of measures to make the sector change…We are open to meet with, and listen to the industry…to get some concrete intermediary steps until we meet the objectives of 2030 and 2050.”