Shipping sector prioritises five solutions for decarbonisation

Shell, together with Deloitte Netherlands and Deloitte UK, has published a joint research outlining industry perspectives on decarbonising the shipping sector. The “Decarbonising Shipping: All Hands on Deck” report sets out the views of senior shipping executives from across the sector and presents a roadmap of solutions to help the industry meet the International Maritime Organization’s (IMO) ambition to reduce carbon emissions.

“We know that shipping is one of the harder sectors to decarbonise, which is why we are working with our customers and the wider industry to identify possible solutions,’’ said Huibert Vigeveno, Downstream director of Shell. “This report shows the urgent effort required by industry to reduce carbon emissions. It stems from Shell’s own ambition to be a net-zero emissions energy business by 2050 or sooner. To achieve that, we need to work with our customers.”

An overwhelming 95% of shipping executives interviewed view decarbonisation as important or a top-three priority and nearly 80% noted that its importance had increased significantly over the past 18 months.

• 85% of interviewees saw market and customer demand as a major factor driving change towards decarbonisation
• 80% of interviewees saw technology alignment as a major factor in making decarbonisation feasible
• 65% of interviewees saw ease of replacing infrastructure as a major factor in being able to make change happen at speed and scale

“While shipping leaders are rightly focused on the current challenges of the COVID-19 pandemic, our research shows that they still have their sights on the horizon and identify decarbonising shipping as a top priority. In conducting this unique study involving detailed interviews with more than 80 of shipping’s top executives, we have been able to better understand the views of our customers and the broader shipping sector,” said Grahaeme Henderson, vice president ,Shell Shipping & Maritime.

“The research identified the barriers the industry faces, solutions that will drive progress, and how we can work to help accelerate change. We want to catalyse progress towards a net-zero emissions shipping industry and working together will be crucial to implementing these solutions.”

Based on in-depth interviews with senior shipping executives across Europe, Asia and North America, the report presents a consolidated roadmap of how to accelerate decarbonisation of the shipping sector. It prioritises five solutions to be implemented over the next two to three years that could speed up progress:

Scale up customer demand: create scale in demand for zero-emission shipping through charterer’s commitments such as long-term contracts and green procurement criteria.

Global regulatory alignment: create a level playing field by aligning decarbonisation targets and timelines between the IMO and major local regulatory bodies.

Cross-sector R&D: accelerate company partnering to develop a zero or low-emission fuel through joint research and development (R&D) across shipping, onshore sectors in which change is hard to achieve and the energy industry.

Scale up controlled pilot projects: accelerate R&D by running end-to-end green pilot projects involving charterers, operators, owners and ports on specific routes and vessel types.

Coordinated industry commitment: increase the reach of existing initiatives and implement independent coordination mechanisms to choreograph action and areas of responsibility.

In addition, operational efficiency is identified as the foundation for the transition process, enabling reduced emissions from the current fleet through the accelerated implementation of operational measures. This includes fuel and lubricant quality, digitalisation, and the use of data and smart navigation strategies.

Other solutions identified in the report would follow to increase the scale of the change.

To download the “Decarbonising Shipping: All Hands on Deck” report, go to www.shell.com/DecarbonisingShipping.

In related news, the EU Commission’s Environment Committee voted on Tuesday to include CO2 emissions from the maritime sector in the EU Emissions Trading System (ETS). The EU Commission has put forward a proposal to revise the EU system for monitoring, reporting and verifying CO2 emissions from maritime transport (the “EU MRV Regulation”) and bring it in line with new obligations under the International Maritime Organisation (IMO) to monitor emissions from 2019 and report in 2020.