2020, a watershed year in many ways, has flagged the importance of clean transformation and also provided several proof points that the industry is capable of enforcing the change. It is great to start 2021 not by capturing numbers on balance or spec sheets, but by focusing on the Cinderella moment and further accelerating the shift of maritime to what it may become.
A can-do attitude instead of “no we can’t”
Despite all the worries and uncertainties that preceded IMO 2020, the fears of product availability did not become a reality, at least in Europe. Granted, complaints concerning consistency issues have increased as many bunker providers are still adjusting their processes to match the 0.5% sulphur cap. But then there are refinery grade providers such as Neste and many of its peers, who have bypassed the issue by controlling the entire production chain, thus being able to deliver consistency and quality. Providing a quality 0.5% product became a matter of craftsmanship - a virtue this industry has always possessed.
The message to societies and regulative bodies is that maritime and bunkering can handle the change on a global scale. Not everyone may welcome it, but provided a sufficient preparation period – bring it on.
Innovative and action-packed industry
The coronavirus pandemic has somewhat accelerated the phase-out of fossil solutions. This resulted in a so-called survival game within refineries, where refiners’ existing strategies need to be transformed to even better ones at an unprecedented speed. Due to this fact, we have witnessed, and will continue to see during 2021, certain refineries closing down, as well as existing facilities being converted into biorefineries. As the demand for renewable solutions increases for road transport and aviation – and eventually maritime – it is a question of “evolve or die” for the conventional refining business, as S&P Global Platts puts it.
Roadmaps for reaching carbon neutrality have been created during 2020. They are characterized by various scenarios and a multi-solution approach. Being a drop-in solution, renewable fuels are bound to become one of the instant solutions in enabling decarbonization, while other technologies are maturing. Neste aims to increase the share of renewable and circular feedstock as future raw materials so that a greater share of waste and recycled feeds may be converted into energy.
As a whole, the ongoing transformation invites innovators to the table, and encourages entire nations to explore new options. How about Japan’s roadmap, including a scenario, where we could witness an onboard CO2 capturing ship as early as 2028? Maritime hasn’t been this exciting since the age of explorers.
Industry in the spotlight
2021 and beyond will give maritime its Cinderella moment - that twist in the story where we realize who we could become. Nowadays sustainable investing is already guiding maritime industry change. For example, the Poseidon principles – “a framework for integrating climate considerations into lending decisions to promote international shipping’s decarbonization” – is signed by 20 banks that together represent approximately USD 150 billion in shipping finance. In short, being reluctant to change will put you out of business.
On the other hand, not everything is about the stick. Even in the absence of regulations and incentives similar to those in place in road transport, industry pioneers have created a niche market for cleaner solutions. Major brand owners such as IKEA, Unilever and DHL are committed to lowering the emissions. This means maritime is just one step away from truly being in the public eye. So yes, every e-commerce executive out there is currently obsessed with speed, and it is a great opportunity for shipping to claim its place as the environmentally friendliest option for international consumers to have their items shipped.
Towards 2030 IMO targets
Despite the challenges the coronavirus pandemic has inflicted upon people, trade and travel, it also provided key experiences that have been guiding us forward and speeding up the pace of change.
The journey towards 2030 is a time where maritime’s capability to change is a great opportunity for those ready to act, and where economic forces begin to throw their weight behind the transformation of shipping. The industry may still look the same, but its core is different.
The incentives, rather carrots than sticks, are needed to truly bridge the gap between intentions and action. Once challenged, the bunker industry and maritime will rise up to the task. Through the coming decade, the importance of ecosystems of capable partners and reliable products will be more important than ever, and they will be paired with innovation, pilot projects, and cross-value chain efforts to create a cleaner maritime future.