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Working together to decarbonise shipping

Shipping has a crucial role to play in the current COP26 summit in Glasgow, Scotland

WORLD leaders, ministers, and negotiators are gathered this month with business, civil society and international organizations to discuss the most pressing issue of our time — how to jointly address climate change.

The shipping industry has a crucial role to play in this. The disruption of Covid-19 has underlined the critical importance of shipping in keeping global trade flowing and connecting suppliers and consumers around the world as the most energy efficient form of large-scale cargo transportation. Yet even during these volatile and difficult market conditions, MSC has never wavered from investing in its goal to reach net decarbonisation by 2050.

There is still a long way still to go for the shipping industry to reach this target. It will require significant R&D investment to achieve zero-emission ships, with a massive injection of energy and capital to bring alternative fuels and alternative propulsion technologies to the marketplace. This must be supported by a political environment that allows for businesses to de-risk these investments and a commitment to infrastructure development throughout the world.

“There’s never been a policy or regulatory challenge of this size before, and there never will be again. Carbon in shipping is a complex issue, and that means there is no one, single solution which will enable the industry to decarbonise,” says Bud Darr, Executive Vice President, Maritime Executive & Government Affairs at MSC Group.

Continuously improving efficiency

MSC operates one of the most efficient fleets in the shipping industry and is continuously working to further improve vessel efficiency beyond the 44.3% relative CO2 emissions reduction the company achieved from 2008-2020. Efficiency will continue to play a key role but there is a limit to how much emissions can be abated with the existing fuels available from energy suppliers. Substantial investment is needed in vessels which can adapt to use different fuels as technology advances and ship operators need to know from their suppliers what type of fuels will become available.

“We need a range of alternative fuels at scale and we need them urgently,” Mr Darr says. “Shipping companies are not in the business of developing fuels, and we need creative solutions emerging through cooperation to advance these technologies. One example is MSC’s agreement to work closely with Shell, a supplier which also operates its own vessels and is familiar with the issues. Together, we are pooling our expertise to develop a range of safe, sustainable and competitive technologies that can reduce emissions from both new and existing assets.”

Beyond this type of industry collaboration and partnership, a form of global market-based measure, incorporating carbon pricing, could help to reduce the price gap between fossil fuels and zero-carbon fuels as they become available. MSC also supports the proposed creation of a global multi-billion dollar decarbonisation fund, overseen by the UN’s International Maritime Organization, to provide financial capital for R&D.

Synthetic and bio natural gases

For years, MSC has been studying and exploring a range of alternative fuel combinations in search of a potential pathway toward net decarbonisation.

Among these, the company has noted the significant potential benefits of progressing from fossil-based liquefied natural gas to bio-LNG and synthetic LNG, which are produced from waste biomass or synthesised using renewable energy. Both options can be used as drop-in fuels and transported, stored and bunkered using existing infrastructure, in contrast to many other alternative fuels which will require new supply chains and significant investments to bunkering infrastructure.

“There is no doubt that low or net zero forms of natural gases must be in the basket of future fuels, which will power the global shipping fleet in the coming decades,” Mr Darr says. “The main challenge now is in determining the right combination of new fuels and technologies and implementing viable industry-wide proposals to invest in R&D to achieve those goals, and, ultimately, the zero-carbon future we all aspire to.”

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