There was an upbeat outlook on shipping and world trade from speakers at yesterday’s London International Shipping Week symposium Supporting the Entire Vessel Lifecycle.
Design, sale and purchase, finance and education industry experts backed continued growth in globalisation, despite the negative impact of trade wars and temporary economic declines.
However, the panel of speakers, including Andi Case of Clarksons, Michael Parker of Citi Bank, John Denholm of Denholm Group and Bud Darr of MSC, urged the leaders of shipping organisations to embrace new technology and to heed the input of its ‘millennial’ employees.
Meanwhile, on the sidelines of the bi-annual event, the hot topic was the transition of the shipping industry to a cleaner and more sustainable future.
The equivalent of around four million barrels of bunker fuel are consumed by shipping every day, currently with a maximum sulphur content of 3.5%, but from 1 January, IMO regulations require this to be at a maximum of 0.5%.
The IMO aims to force a reduction in emissions of greenhouse gases (GHGs) by international shipping of at least 50% on 2008 figures by 2050.
To comply with IMO 2020, shipowners and operators can either burn distillate LSFO (low-sulphur fuel oil) with a maximum sulphur content of 0.5%, fit vessels with exhaust gas cleaning systems known as scrubbers, or convert ships to run on LNG.
The final option is by far the most expensive, even for ships that are supposedly “LNG-ready”, reportedly costing up to $25m for an ULCV.
But, depending on the ‘spread’ between the cost of HFO and LSFO, vessel size and the trade it operates on, the circa $5m investment in a scrubber unit could potentially be recovered in less than 18 months.
One carrier source at LISW told The Loadstar his company was “very pleased with the outlook” for its scrubber strategy, but added that the largest percentage of its fleet would need to consume LSFO after 1 January.
“We only view scrubbers as temporary,” he said, “until such time as prices stabilise or a cheaper alternative compliant fuel is available. But in the interim we think we will easily recover the money spent on scrubbers,” he added.
Meanwhile, Norway-headquartered classification society DNV GL today at LISW released the third edition of its Maritime Forecast report, which focuses on the challenge of reducing shipping’s carbon intensity.
It claims “existing technology can deliver the future we desire”, including meeting the 1.5% global warming target set out in the Paris climate change agreement.
“One of the key components to meet the decarbonisation challenge is fuel flexibility, as the fuels of today may not be the fuels of tomorrow,” said chief executive Knut Orbeck-Nilssen.
The report suggests a variety of fuels with carbon-neutral options could come to the fore, including ammonia, biodiesel, liquid biogas and electrofuels for the deepsea sector, and battery, hybrid and hydrogen solutions as options for shortsea.