How can we employ smart data to accelerate the maritime energy transition?
November 15, 2021
“Shipping is on the verge of a clean energy revolution. To set the global maritime industry on a climate-aligned course and meet the goals of the Paris Agreement, zero-emission vessels need to be the dominant and competitive choice by the end of this decade. ”
Those were the words of Johannah Christensen, CEO of the Global Maritime Forum, upon the launch of the Zero-Emission Shipping Mission, part of Mission Innovation, earlier this year. This mission works towards having 200 ships operating net-zero carbon fuels, constituting 5% of global shipping’s total fuel consumption, by 2030.
At the time of writing, COP26 in Glasgow is still ongoing. A First Movers Coalition has there been announced, among its 33 founding members are e.g., Maersk, Trafigura and Yara International. The coalition will drive decarbonization investment in hard-to-abate sectors, shipping among them. Only a week before COP26, two much-awaited industry transition reports were launched; A Strategy for the Transition to Zero-Emission Shipping by UMAS and the Global Maritime Forum and The Industry Transition Strategy from the Maersk McKinney Møller Centre for Zero Carbon Shipping. Some of their key takeaways are that while the transition has to accelerate, we are laying the pathway brick-by-brick and that all actors have to ensure its being well-built.
Cross-industry collaboration is needed to place the sufficient demand
Maritime transport is not alone in the energy transition. On the contrary, without upstream and cross-sectoral collaboration, it will not succeed. While we think we represent a large industry, it is perhaps sobering to realize that in regional or national contexts we are, in most cases, not able to provide sufficient demand for zero-carbon fuels, to sufficiently de-risk the next offshore wind project. Other sectors must also come on board, place sufficient demand, and share risk and reward.
LNG may not play the role we thought
Shipowners have currently very few options. In April this year, the World Bank loudly denounced LNG as a viable fuel to battle climate change, this while an expanding order book contains almost 30% LNG fuel-capable tonnage. It will take time before we can pick and choose among the low-carbon or zero-carbon fuel options. We are battling several chicken-and-egg situations at the same time, and to many this is exhausting. When will the engines be ready? When will the fuel be available? At what quantities? At what price? At what port? We are all looking for answers, and we are short of time.
A green premium will be necessary
The Energy Transition Commission identified in its First Wave report, A Blueprint for Commercial-Scale Zero-Emission Shipping Pilots, that a shift to green ammonia or methanol could more than treble the total costs of a Zero Emission Vessel (ZEV) pilot, while the cost impact to the end consumer would be minimal, of less than a percent. This report suggests that with targeted measures, the fuel cost could be almost halved and the utilization of existing infrastructure and public support for the building of the vessel could further bring the costs down. While this is promising, the report concludes that this will still not be enough to bridge the cost gaps.
For the successful scaling of ZEVs by 2030, ETC suggests a green premium will be necessary. For that to be successful, fuel and emission transparency and traceability across fuel types’ lifecycles will be essential to de-risk first-movers. Until fuel certificates are established and satisfactorily implemented, smart digital solutions will be essential to sufficiently boost this green transition.
Shipping efficiency has to be optimized – now!
During COP26, an open letter from industry players offering energy efficiency and emission reduction technologies, urge “shipping stakeholders and international authorities” to focus also on immediate carbon reduction, through innovative energy efficiency- and renewable propulsion technologies. The logic is, alternative fuels will take decades to scale, and we need to reduce carbon immediately.
To overcome complexity, we need access to smart data
We will have to manage a situation for the next several years, where we have innovation and development in parallel with testing and deployment. Where we still have many questions to be answered, but where we nevertheless need to make decisions to move forward. Smart digital solutions have many roles to play in helping to manage these uncertainties. Innovative solutions to managing information through these transitions can evidently play a very important role in unlocking barriers for first-movers.
Smart policymaking and data sharing
Governments have a very big role to play to enable the energy shift. However, in order for them to be able to put the right policy measures in place, they need help to navigate that very same complexity that also we are faced with. As representatives from across shipping value chains are now gathering around initiatives like the Global Call to Action for Shipping Decarbonization, there is an inherent opportunity for increased data sharing and collaboration to support fact-based policy-making.
Shipping can have a wider impact through value chain collaboration
When the likes of IKEA, Amazon, Inditex, and Unilever are increasingly engaging collaboratively with their service providers, to explore joint possible pathways for improved sustainability, rather than dictating requirements, we have an emerging environment where shipping can play a wider strategic role in the global energy transition; shipping can help unlock opportunities for wider sustainability impact through smart digital value chain collaboration.
Smart digital solutions can be an enabler for data-driven ESG
Shipping is an essential enabler for global trade. Through smart digital solutions and cross-sectoral collaboration, it can also be an essential enabler for data-driven ESG. Smart maritime networks can explore paths that can bring us through the energy transition faster, bringing our entire stakeholder ecosystem with us on the way. Such networks can help reduce risks for greener investments and prepare for more fact-based decision-making, through sharing and connecting data, in a time where we are aflush with information noise.
WISTA Tech & Futures Committee connects
We, at the global level, have unprecedented challenges to solve but we also have unprecedented ability to gather and employ data. Properly employed, our digitalized tools can be the predominant force toward a sustainable future.
We mustn’t waste time by focusing on the wrong problems, or developing solutions that cannot scale. Collaborative efforts, open sources, and a shared vision are necessary in order to fully reap the benefits of maritime digitalization.
As a membership organization spanning the globe, WISTA is dedicated to making the energy transition real; connecting knowledge and its members.
This is our second blog post. We look forward to hearing your thoughts!
Holding the pen:
Board Member WISTA ExCo