AMICIE debates balancing fuel and environmental regulations

Guaranteeing environmental compliance for the shipping industry is an increasingly important issue in a sector that runs the global trade but thrives on balancing the emission while being environmentally and commercially viable. The face paced industry requires innovation to move forwards. Addressing this debatable explosive mix of balancing the two-sided sword, Association of Maritime International Commercial Interest and Expertise (AMICIE) webinar held on 1st May addressed the challenges and the probable solutions to combat the concern.

Registered 3 years ago with the vision to bridge the knowledge gap that exists across various arms of the marine industry, AMICIE has been acting as a think tank to the sector.

The webinar was attended by over 100 delegates from across the world, AMICIE aimed to shed light on drawing the balance between the fuel and environmental regulations.

Gracing the webinar as its Chief Guest was Dr Malini Shankar, Chairperson, National Shipping Board and Vice Chancellor of Indian Maritime University.

“A latest study reported shipping emissions to increase by upto 120% by 2050 if other sectors decarbonise successfully,” she shared.

“The IMO’s target for 50 percent reduction in GHG emissions is overly ambitious and will require shipping industry to implement substantial changes in fuels, technologies, and operations. Agreeing to the IMO’s targets the main challenge for the shipping industry will be to combat the barriers such as the traditional resistance from the sector towards the change but also investment opportunities and risks, uncertainty on future regulatory steps, information and time constrains, technological limits, market issues and other political obstacles. The real challenge for the future is to succeed in effectively integrating environmental sustainability with economic sustainability and shipping needs,” she added.

Mr Jyotisman Dasgupta cited the key 5 sectors on which change needs to be applied. He also briefed about the 10 available measures including speed reduction, and waste management while speaking on measures such as remodelling of ship’s bow, using low loss hybrid system and fuel oil emulsion by blended fuel solutions to assure full combustion and less fuel, low emissions, and cooler engines. He articulated on the various types of fuel including methanol, LNG, hydrogen, hybrid fuel and their challenges addressing the emission related challenges in a stepwise manner.

Briefing on the MEPC Roadmap for decarbonizing international shipping, Mr IN Bose, Advisor, The Great Eastern Shipping Co Ltd said, “IMO GHG strategy includes specific short term (2018-2023), mid-term (2023-2030) and long term (2030 and beyond) measures to reduce GHG emissions from ships and the timeline to finalise such measures.”

“There is pressure in the commercial world to reduce CO2 emissions and investors are interested in future proofing their investments in ships,” he alarmed.

Anil Kumar, Principal Surveyor and Business Development Manager- South Asia, Lloyds Register shed light on Lloyd’s new initiative Maritime Decarbonisation Hub to create a safe sustainable pathway to a zero-carbon maritime industry. He explained getting to zero carbon model by looking beyond technology readiness, investment readiness, community readiness and marine solution readiness.

“Zero carbon fuels now are expensive, but the price will drop over the time particularly for the electro fuel when you have the renewable electricity available for producing the fuel. Generally renewable electro fuel prices will drop while the prices of biofuel are expected to rise despite being more competitive in the short term today because of abundant use of biofuel, particularly in the maritime industry. But going forward through 2030 and 2040 there will be a cross over.”

He further said, “The short-term vision is to bring about immediate action to reduce emissions. The 2030s will be a critical window for change and scaling up the zero carbon fuels. Post 2050s will witness a revolutionizing switching of fuels.”

Dr Sairam Krishnamurthy opined, “Synergy accepts the broader need for decarbonization, but the proposed solution should be commercially viable and technically feasible. The greatest challenges today are environmental compatibility, availability of sufficient fuel and fuel costs in the fluctuating markets.”

He pointed out that as for now what’s best for the planet may not be so for the global shipping industry. Current regulations are more focussed on changing the engine technologies especially with combustion to reduce the industry’s carbon footprint, but the question is are we ready?

“Much emphasis needs to be laid on R&D which requires time and money. Hasty validation may lead to faulty results. Also, the availability of fuel and the clarity on the type of fuel and what’s good to go whether its LNG or green ammonia, reliability and scalability of technologies is more important, and technology needs to be proven and validated,” he believed.

He also discussed another barrier which is a big concern is upstream emissions when new fuel is burnt. While upstream emissions may not be directly under the ownership of shipping industry it is crucially important to consider their impact at this stage to prevent investment in technologies that may ultimately not be anymore greener than those of conventional ships.

Also, Mr Suboth Kumar, Technical Head, Seven Islands Shipping Limited shed light from shipowner’s perspective. He said, “The transition will pose huge challenge for owners especially those operating older tonnage as there is a lack of cost-effective upgrade to improve the fuel efficiency of older vessels. The challenge is having to scrap a significant fleet size due to non-compliance with non availability for purchase of fuel-efficient ships in 2nd hand market and insufficient availability of low carbon fuel and bunkering options in trading areas with charters lack of flexibility on accepting lower voyage speed.”

According to him the need is to have a sustainable business model accepting changes to the way maritime businesses are conducted presently, in how the future vessels will be designed, built, operated and traded in the coming decade for reducing the carbon footprint.

Capt Sanjeev Verma, presented ship manager’s view of crew training with respect to the transition of fuel changes. He stressed on the need to prepare the crew to combat, face and address these challenges which will remain the major aspect faced by ship managers in this journey.

Highlighting the commercial aspects Mr Punit Oza, Director, Klaveness Asia shared, “Responsibility to comply with fuel regulations mostly lies with the owners. However, for the first time the risk of fuel an vessel performance in regards to decarbonization will also be shared by the charters. Wide availability of future fuels remains a key challenge. There are clearly untested waters and current commercial terms, and charter party clauses are not covering these aspects.”

Lastly Capt Rajesh Tandon, Global Director Industrial Relations, V Group spoke on the crew concerns – dealing with numerous regulatory requirements. He posed a question to the august panel that these newer changes with regards to fuel compliance will put additional burden on the already overburdened crew and if things go wrong then we have the crew to be blamed. The compliance over fuel needs to be smooth and hassle free rather than jeopardising the crew’s mental health and safety and also should involve beyond adding up the requirements of add-on checklists.

Various other AMICIE veterans Capt Venkat Iyer, Secretary; Capt Sury Pullat, Founder President; Mr Suresh Amirapu, Vice President; Sanjeev Vakil and Capt Kamal Chadha, Founder Member too shared their insights, among others. While Ramakrishnan Olumam, Treasurer, AMICIE delivered the vote of thanks.

The webinar concluded that challenging targets from IMO are pushing the industry to find new solutions around fuel and operations that are not only environmentally responsible but also commercially viable and technically feasible and safe for it to be sustainable. Over the coming years, a great deal of R&D innovation and industry collaboration will be needed to improve energy and emissions efficiency in maritime supply chains.


(Courtesy: Marex Media)

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