Unlocking green shipping
Uniting the shipping value chain to propel new engine technology
Breakthrough technologies have the power to reshape industries and drastically reduce their environmental footprint. However, pioneering unproven technology comes with inherent risks, both in terms of implementation and economics. Adam Gustafsson and Hans Christoph-Hirt, explain how investors can serve as catalysts for innovation, accelerating decarbonization efforts across entire value chains.
The global shipping industry accounts for 3% of global emissions and plays a crucial role in global trade. Shipping by sea was the only long-distance transportation mode before fossil fuels and remains the most efficient means of transporting heavy goods. Research into engines running on alternative fuels, primarily methane and ammonia, is showing immense promise. These engines have the potential to nearly eliminate emissions within the shipping sector, making shipping an industry ripe for transformation.
Yet, as with any pioneering venture, significant challenges loom on the horizon. Ship owners are faced with daunting uncertainties when considering investments in these novel engines. Questions linger about securing fuel supply and bunkering, the willingness of charter companies to accept the associated green cost premium, and concerns regarding the toxicity of ammonia. To tackle these critical issues head-on, we brought together key stakeholders across the value chain, including fuel producers, ship owners, engine manufacturers, and chartering companies.
The objective of this collaboration – hosted in our London office – was simple yet (hopefully) pivotal for the industry: to hash out challenges, seek common ground, and work towards de-risking engine investments for ship owners. By fostering dialogue and aligning interests among these diverse industry players, we aim to remove the roadblocks currently hindering the adoption of alternative shipping engines.
Hear from our experts
Hear from our experts
Shipping Value Chain
Shipping Value Chain
A few of the main takeaways from the day:
- MAN Energy Solutions has successfully developed and tested ammonia engines
- Consensus on the perceived risks associated with ammonia being overstated
- OCI can already guarantee ammonia bunkering in many key ports
- Ship owners are actively supportive of this development
We firmly believe that methane and ammonia engines are destined to become the industry standard in shipping. The only question that remains is when. Given the urgency of addressing climate change, we see our role as supporting industry leaders in accelerating the early adoption of these transformative technologies. Together, we are charting a course toward a more sustainable future.
This collaborative effort also marks a step change in the future of stewardship. Corporate and sector-level engagement is commonplace and well-established. Systemic, or ‘macro’ stewardship – the practice of engaging with policymakers and changemakers to improve the playing field – is becoming more and more widespread. Value-chain engagement appears to be far less common, however. If we are to reach our collective sustainability targets, this needs to change.
We extend our heartfelt gratitude to all the participants who contributed to this vital dialogue and collaborative effort.
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