Why doing nothing about decarbonization is now the most expensive option

Lloyd's List: The Shipping Podcast

IN a market where free trade is under threat and geopolitical tensions are escalating, decisions get deferred, investment gets scaled back and doing nothing starts being passed off as pragmatic stewardship. There’s no value in making long-term decisions right now. Or is there? For this week’s podcast we want you to put your cynicism on hold and let our editor-in-chief Richard Meade pitch you the optimist’s view. While other industries’ green zeal has withered, shipping has found itself in the unexpected, and slightly uncomfortable position of being a climate leader, rather than a laggard. Even with some of the key details (reward factors, green classifications) still far off, there is an optimist case to assert that shipping actually now has a clear direction of travel when it comes to decarbonisation investment. If the IMO’s target of a 65% cut in fuel GHG intensity by 2040 is to be achieved, a fuel revolution is the only option. The rules don’t yet tell us how to do that. But cutting carbon intensity by that much is only really possible with a few ways, which brings us to synthetic, green e-fuels. A longer, slower transition leaves time to solve practical problems, and to explore technologies like nuclear. Shipowners have time to work out with some degree of confidence how far they can move ahead with what they have now. They know LNG-fuelled vessels look good in the early years, but ammonia-fuelled orders look better beyond 2028. They know they’ll have to wait longer for that fuel, since MEPC83 did a poor job of incentivising its production. But that’s where the optimism and faith in a long horizon comes in. The necessary greenwashing backlash injected some realism into shipping’s sustainability debate and MEPC83 offered the beginnings of some tangible certainties, with the promise of more to come. There is much yet to be clarified, but the case for optimism is worth listening to – and that’s what we are offering this week with the resolutely rosey thinkers at the Global Maritime Forum. On this week’s edition of the Lloyd’s List Podcast you will hear: • Johannah Christensen, CEO, Global Maritime Forum • Jesse Fahnestock, Director of Decarbonisation, Global Maritime Forum • Stephen Fewster, Treasurer, Poseidon Principles and Global Lead Shipping Finance at ING Bank