The shipping industry must and can play a significant role in addressing global warming by reducing its GHG emissions.
That’s the finding of a 4-year research effort ‘Shipping in Changing Climates’, supported by over 30 partners from industry and academia including Lloyds Register, Rolls Royce, BMT, Shell and MSI.
The research concludes international shipping must cut GHG emissions at least 50% by 2050. Rising trade and demand means this will require substantial efficiency improvements in the average ship, which will have to reduce in carbon intensity some 60-90% by mid century.
Under a more ambitious 1.5C warming limit supported by over 50 climate vulnerable nations it must achieve carbon neutrality by 2050 at the latest.
Switching to LNG or improving energy efficiency of ships alone is not sufficient, greater reductions in GHG will only be enabled through a shift away from fossil fuels to renewable energy and low carbon fuels/energy. Zero emission ships, already becoming part of the global fleet on certain niche routes, will increasingly become the mainstream technology with significant penetration into the market from approximately 2030.
Katharine Palmer, Environmental Manager, Lloyds Register
“Following our low carbon pathways 2050, we have seen a transition in the mindset, with broad industry buy-in, to do something. But the question we are asked now is, ‘how are we going to do this in practice?’. The next step we are taking is to look at what threshold levels are needed to make zero emission technologies viable and what our responsibility is in handling this inevitable change.”
Adam Kent, Director, Maritime Strategies International
“…Shipping is clearly in a changing climate: clients are already regularly asking us about how the global shift away from fossil fuels for energy production towards renewables, and increasing electrification reduces demand for fossil fuels, and is changing demand for wet/dry bulk shipping. And important shifts are also happening outside of energy commodities such as the iron ore and coal trades as steel production moves to electric arc production…“
Tristan Smith, Reader in Energy and Transport UCL-Energy
“The risk for shipping companies is that, distracted by nearer-term regulations on SOx and other air pollutants, they fail to spot the growing political pressure behind the sector’s decarbonisation and the development of enabling technologies in the wider economy. The opportunity exists in spotting this change, and its synergies with compliance with other air pollution regulation. Companies need to identify which of biofuels, electrification and/or the use of synthetic fuels such as hydrogen, are best suited to their company’s decarbonisation pathway. These are not trivial changes and so need to be prepared for now.”
SCC recommendations include:
- Operational CO2 intensity for all containerships, tankers and dry-bulk must be cut 60-90% on 2012 levels by 2050 just to reach a two degree pathway. The current IMO efficiency regime just leads to a 3% reduction in emissions by 2050.
- Major companies should consider undertaking climate risk analysis, and implementing internal carbon pricing to prepare their business for forthcoming regulation under tougher climate policies
- The use of hydrogen or battery technology is viable but may require a fundamental change in operational philosophy and voyage planning, and care will need to be taken of upstream emissions
- Technology can make some difference, but it will take a lot of technologies and must include wind assistance. Speed reduction will be important even with future technology. Lowering carbon factor of fuels will be needed for major reductions.
- Zero operational emission ships will need to increasingly penetrate fleets especially from 2030.
- To meet climate targets ships will need to slow unless they can run on cleaner fuels such as hydrogen, biofuels or battery packs.
More on SCC:
For interviews with any of the report authors contact Nishatabbas Rehmatulla firstname.lastname@example.org / 07540 051942
HFW to provide legal, practical and financial support to the Mission to Seafarers in three-year deal.
International law firm HFW today announced that its Shipping Group has chosen The Mission to Seafarers as its first ever global charity partner. Over three years HFW will offer legal, practical and financial support to The Mission to Seafarers to support its essential welfare work with seafarers around the globe.
The partnership between HFW and the Mission will involve direct practical and legal support as well as an annual financial donation to the charity. HFW has pledged to offer pro bono legal counsel to support the effective governance of the charity and compliance with local regulations in the regions in which it works. The Mission will also be involved in HFW’s annual global Communities Week later this year.
HFW’s partnership with the Mission will help them to continue their ongoing support of thousands of seafarers around the world every day. This ranges from helping seafarers keep in contact with their friends and families back home up to care and support in crisis situations. In 2016, the Mission visited almost half a million seafarers aboard ships and supported over 1,000 justice and medical cases.
Craig Neame, Global Head of Shipping, Offshore and Logistics, HFW commented: “HFW has strong ties to the maritime community with 200 lawyers and 13 Master Mariners specialising in maritime law within Shipping. The Mission to Seafarers was the clear choice to become HFW’s first ever global charity partner, given the connection HFW felt with the direct welfare and emergency support it delivers to seafarers. We are keen to help the Mission continue its vital outreach work, and to support any relevant legal governance requirements that arise during our three-year partnership.”
The Reverend Canon Andrew Wright, Secretary General, The Mission to Seafarers commented: “We are deeply grateful to HFW for naming us as their charity partner. Seafarers continue to face challenging, dangerous and often lonely working conditions, but actions like this commitment by HFW show that the industry does see and value them, and enables us to deliver direct support to them when they need it most. The practical support being offered by HFW will help us to ensure we have stable and effective governance to continue to offer that direct helping hand. We look forward to partnering with HFW on this in the coming years.”
For more details, please contact:
T: +44 1865 514 214
The International Chamber of Shipping (ICS) has used London International Shipping Week to launch a new brand identity, to better serve its important role as the global trade association for shipowners, representing national shipowners’ associations from 37 countries and over 80% of the world merchant fleet.
Speaking from the British Library in London at the brand launch today, ICS Chairman, Esben Poulsson explained:
“Over the next 30 years, new technologies and environmental challenges will completely transform shipping: a vital industry that moves the essentials of life and around 90% of global trade.
“Together with our member national associations, we are wlly sustainable. Our contemporary new brand seeks to reflect what we do with a refreshed and vibrant colour palette, appropriate to a modern global trade association that represents one of the world’s most dynamic industries.”
He added “As the voice of the global shipping industry, ICS will continue to influence all maritime policy developments which affect the interests of shipowners. And we will continue to do what we always do best, helping governments and maritime policy makers understand the implications of their decisions, as we strive to shape the future of shipping.”
To promote the new brand, ICS has produced a short film which can be seen at https://youtu.be/n5_RbPIkBNA
Based on an update to the historic ICS logo, the refreshed brand pays homage to the iconic silhouette of a sailing ship that has been part of the ICS brand for nearly 100 years. Taking this heritage as a starting point, the symbol has been redrawn to be more contemporary in its style, combining the hull of a modern cargo vessel with the iconic sails of a traditional merchant ship.
The refreshed logo aims to speak of the larger shipping community with which ICS works on behalf of shipowners worldwide. The orientation has been rotated from profile to portrait making it stronger, prouder and more contemporary.
When combined with a refreshed vibrant colour palette that breaks from the commonly used blues of the industry, and a bold graphic style inspired by the language of shipping, the refreshed visual identity is one set to continue to shape the future of shipping for many years to come.
The new ICS logo and brand has been developed with the assistance of the international consultancy, Brand Union.
Experts from Braemar LNG Group gave a full audience a truncated overview relating the technical, commercial and market trends of the often very complex world of LNG shipping.
Andy Bright, Director, (Braemar Engineering) concentrated on the advanced technology and very precise engineering requirements around containment systems and propulsion options. Bright also said that the group was in advanced stages of approval for a new containment system designed by Braemar, particularly suited to small scale LNG including bunkering although not size limited.
Andrew Selby Bennett, (Commercial LNG Shipping, Braemar ACM London) focused on the relevance of the technical specifications to the commercial decisions, demonstrating the importance to the value of the speed and consumption on the differing types of 125-175,000 cubic metre vessels.
Jordan Neil (Senior LNG shipping Broker, London) gave an insightful market overview of tonnage supply and demand, with LNG trading with Japan being the highest importer in 2016 with 32% of the overall market.
The commercial team started in the UK 15 years ago and has expanded into the Americas and Far East servicing the increasing spot markets as well as maintain relationships with the project markets.
Denis Petropoulos, Director of Braemar Shipping Services plc summed up his colleagues’ presentations by saying:
“Our involvement in the design of a new type of containment system may be ground breaking, potentially useful in small scale LNG, such as distribution of smaller parcels as well as bunkering. There is no reason the system cannot be larger competing with those we are already familiar with.
“The group has extensive experience in the major LNG construction yards in Korea, Japan, as well as China and our technical expertise has been called into the conversions and construction of FSU’s and FSRU’s in Singapore. Being located in the major shipping centres serving the Atlantic, Europe, Africa and the Middle East, where many of our major customers are based, we are also involved with onshore projects.”
Global law firm Reed Smith played host to a panel of shipping industry experts on 12 September to discuss ‘Tomorrow’s Maritime World, Today’. Representatives from a cross-section of the industry each brought their unique experience to the discussion, making for a lively debate on three pressing topics in the industry: cyber risk and technical advancements; current trends in finance; and environmental impact of the industry. While each topic might present a different challenge, the overwhelming advice from our panellists was to focus on risk management.
On the second day of London International Shipping Week, attendees from across the industry convened at Reed Smith’s offices to hear the opinions of Frank Coles, CEO of Transas Marine; Mark O’Neil, president of Columbia Marlow Shipmanagement Ltd; Albert Stein, managing director of AlixPartners; Laura Bugden, company secretary and risk manager; and Reed Smith global head of shipping, Nick Shaw.
Panel moderator and Reed Smith partner Andrew Taylor introduced the first topic of discussion: cyber risk and technical advancements. In light of the recent cyber-attack on Maersk, cyber security has risen up the agenda for the industry as a whole. However, what is the scale of the risk and is the industry responding appropriately?
The panellists were in agreement that it’s about risk control. According to Mark O’Neil, president of Columbia Marlow Shipmanagement Ltd, “it’s all about education – of the crew, operators, owners and management companies”. Frank Coles, CEO of Transas Marine added that “common sense needs to prevail” although he warned, “we don’t know what we don’t know” therefore the onus must be on risk control.
The discussion then turned to vessel automation and what the role of crew might look like in the future. Mark began by informing the audience that a degree of automation is expected in the near to mid-term as the technology is “tapping at our door”. Yet, he believes there will still be a requirement for a human element. According to Frank, however, the technology for automation is here already and a number of shipowners are already controlling decisions from a shore base on information they can receive from vessels. Laura Bugden, company secretary and risk manager, said this could see the beginning of a “very different type of seafarer”.
What are the legal implications of technological changes to vessels? According to Nick Shaw, global head of shipping at Reed Smith, “lawmakers react to the marketplace, but it can be a very slow process to effect legal change in the international sphere”. Therefore, lawmakers are more likely to be asking themselves ‘what is the minimum they can do to fit the current rules to the new reality of autonomous vessels?’
The second topic of discussion centred on current trends in finance. As the traditional banks have exited, new players have filled the void. Despite the opportunities for funds and Chinese leasing agencies, according to Albert Stein, managing director of AlixPartners and a specialist in debt restructuring, the cost of capital is different for big players than it is for the smaller players. Therefore, more consolidation is expected according to all our panellists. Mark confirmed “it will be the bigger players who can ride out the market as returns become smaller than before”. Laura added that with these changes to the market players, greater emphasis must be placed on governance.
The third and final topic of the day looked at the environmental impact of the shipping industry and how the industry is responding to new regulations and the upcoming IMO 2020 global sulphur cap deadline. While environmental concern is now a reality for all market participants, unfortunately the costs associated with installing scrubbers, using new fuels or switching to LNG, are an impediment. To that end, our panellists believe that nothing will change until it has to, and that this could mean a last minute rush to compliance. As Laura summarised, “no one has the money to throw at it…therefore they’ll wait till the end”, again though, the reality of meeting the 2020 global sulphur cap set by the IMO will largely rely on risk management and training.
With all the changes required to make vessels environmentally compliant and to cater for automation, the lifespan of a vessel could look very different. With the time it takes to construct a ship, the industry needs to start considering now how to construct ships that cater for some or all of these changes. The next question will be how to ensure investments are still tenable. As Albert commented, “spreadsheet models are going to be very different”.
Reed Smith’s Shipping Group would like to thank Frank, Mark, Albert and Laura for joining the panel for an enlightening discussion on the future of the shipping industry.
Reed Smith’s next shipping event will be a webinar on 28 September: ‘Cyber Attacks – the New Pirates’. For further information, please contact email@example.com.
About Reed Smith
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Its long-standing relationships, international outlook and collaborative structure make it a go-to partner for speedy resolution of complex disputes, transactions, and regulatory matters.
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