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Collaboration and fleet conversion carbon-critical needs for 2021

LNG extension and greater crew care called for at Lloyd’s List 2021 Shipping Outlook forum

THE Lloyd’s List 2021 Shipping Outlook forum reached consensus that liquefied natural gas remains the best bridge to shipping’s journey to a zero-carbon 2050, and 2021 should deliver a ramping up of the fleet for new fuels in general.

What also emerged from the forum was agreement there is a newfound understanding of crew needs, stemming from the crisis that engulfed crew health and transportation during the 2020 pandemic.

However, one speaker, Columbia Shipmanagement chief executive Mark O’Neil, said a lot had been done to turn back the crisis, and morale on his ships “has never been higher”.

“I don’t buy into the story of 400,000 crew members out there desperate to get ashore,” he told the forum. “A great deal of effort has been put in to getting them home.

“There has been too much attention on digitalisation. Before the crisis, the tail was wagging the dog. Now, the focus is back on our people.”

That sentiment was echoed by Grahaeme Henderson, vice-president of shipping and maritime at Shell International. However, neither speaker thought the crew-change crisis greatly elevated the profile of shipping among the general public.

The pandemic also obligated parties to work closer together to ensure safety. Nick Brown, marine and offshore director at Lloyd’s Register, said he was pleased with the way shipping has collaborated in finding solutions to keep assets safe “even when we haven’t been able to get on board and do physical inspections”.

Looking towards investment opportunities for 2021, Global Maritime Forum chief executive Johanna Christensen focused on decarbonisation, the main topic of the recent high-level GMF gathering.

She said she was hoping for a “quantum leap in decarbonisation in shipping” in 2021, with the industry at the forefront of the push for emissions-free transportation at the United Nations Climate Change Conference (COP26) in Glasgow in November 2021.

The GMF has done much to foster an environment in which shipping can no longer afford to do nothing, and must become more collaborative in its approach to decarbonisation and resolving other industry-wide issues.

“The transition speed for the vessel fleet to green fuels will be essential for the success of reaching the 2050 targets”, said Roger Holm, president marine power and executive vice-president of Wärtsilä Corporation. “LNG offers a great stepping-stone in the right direction supporting the transition already now, and on top of that it offers an opportunity to adapt the dual-fuel engine technology later on to run on the green fuels, like green ammonia as one example.

“Learning from the past LNG transition, the speed we need to see now transitioning into green fuels must be on a totally different scale than before, to reach the 2050 targets. Therefore, co-operation across the industry and with fuel suppliers is critical. Upgrading the engines later on when the green fuels are available will enhance the speed of transition significantly,” said Mr Holm.

Listen on demand

Michael Parker, head of shipping and logistics at Citigroup, said one of the biggest challenges will be collaboration. “Glasgow (COP26) must not only focus on decarbonisation but also on the importance of shipping in globalisation.” Shipping must take its place in the forthcoming investment revolution, “not standing on one side, complaining”, he said.

On the question of the biggest threat to shipping in 2021, Mr O’Neil from Columbia offered volatility, short-termism, and shipmanagers’ inability to speak with one voice; Shell’s Mr Henderson feared doing nothing about lowering emissions; and Ms Christensen suggested failure to collaborate on decarbonisation and other industry-wide issues.

The forum ended with an assessment of the coming year in the container, dry bulk, and tanker markets from Angelica Kemene, chief executive of innovation hub and accelerator Optima-X. She was optimistic about prospects for the container lines. but said the dry and tanker sectors “will have to wait a little longer.”

The forum is available on demand here.

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