The dry bulk sector's decarbonisation journey is a complex and evolving narrative, with a recent panel discussion at the Geneva Dry conference shedding light on the practical challenges and opportunities ahead. This article delves into the key insights and opinions shared by industry experts, highlighting the importance of fuel choices, efficiency upgrades, carbon pricing, and collaboration in the transition to cleaner shipping.
The panel, moderated by Mette Asmussen, World Economic Forum's lead on industry and climate, emphasized the need for constant care and agility in the face of uncertainty. This sentiment was echoed by Eman Abdalla, founder and CEO of Seathrew Marine, who noted a significant shift in the industry's mindset over the past two years. The focus has moved from debating the feasibility of decarbonisation to discussing the 'how' and 'when' of its implementation.
Despite geopolitical challenges and regulatory uncertainty, the industry has made progress through pilot projects, operational efficiency improvements, and the adoption of energy-saving devices and dual-fuel vessels. Abdalla stressed the importance of scalability, urging the industry to focus on making investable decisions for the future.
The economic reality of dry bulk shipping, characterized by thin margins, was a recurring theme. Alastair Stevenson, head of digital analysis at SSY, pointed out that carbon costs have a proportionally larger impact on bulk shipping economics compared to other sectors. He highlighted the complexity beyond fuel and emissions costs, including legal, compliance, and contractual challenges.
Vale's global head of chartering, Michelle Gonzalez, shared the company's extensive efforts in shipping efficiency measures. Vale has invested in scope 3 emissions initiatives and aims to reduce shipping emissions by 15% by 2035. Their journey involves testing various technologies, including advanced hull coatings, propeller upgrades, and wind propulsion systems, with a focus on long-term innovation.
Wind-assisted propulsion emerged as a promising short-term solution for bulk shipping. Engebret Dahm, CEO of Klaveness Combination Carriers, praised wind-assist systems for their cost-effectiveness and performance gains. He also advocated for operational measures like AI-based weather routing and digital optimisation systems as immediate ways to reduce emissions.
Collaboration between owners and charterers was highlighted as crucial by Louis Dreyfus Company's shipping decarbonisation lead, Fabian Kowatsch. The company's success in decarbonisation initiatives, growing from one project in 2022 to 14 collaborative projects last year, underscores the benefits of mutual listening and cooperation.
The panel discussed the importance of fuel flexibility and optionality in an uncertain regulatory environment. Vale's ethanol-fuel plans and Louis Dreyfus' methanol dual-fuel vessels exemplify practical early-stage solutions. However, owners remain cautious about costly fuel transitions without regulatory clarity and customer support.
The question of funding decarbonisation also arose, with Abdalla emphasizing the industry's reliance on other industrial players' willingness to pay for cleaner shipping. Dahm countered that the cost impact on end consumers is minimal, but the industry must navigate the complexities of fuel availability and competition.
In conclusion, the panel agreed that faster implementation is crucial, despite ongoing debates. The industry must start with small investments and gradually progress towards decarbonisation, recognizing that the transition is irreversible. As the session concluded, the emphasis on collaboration, innovation, and practical solutions remained a guiding principle for the industry's decarbonisation journey.
