A movement is building within the global maritime industry to adopt the IMO’s strategy to cut shipping’s emissions in half by 2050 (compared to a 2008 baseline)—and at the same time, pursue efforts towards phasing them out entirely. Significant changes must be made as soon as possible.
A trillion-dollar force of transformation
A transformation of this scale is new for the marine sector, and on the one hand this challenge brings about undeniable uncertainty. Many questions are begging to be answered: What are the solutions? What types of investments are required? When and where should these be made? What sort of partnerships should be developed? What is the cost of transformation and who will pay for it?
On the other hand, realizing this ambitious target also creates tremendous opportunity and brings about a new connection between the maritime industries and societies at large. According to the World Economic Forum, the decarbonization of shipping is a trillion-dollar market opportunity, and has the scale to act as a catalyst for a wider energy transition.
The key pieces to the puzzle exist
The truth is that there is no one silver bullet. No solution alone will suffice, and pitting them against each other rather than treating them as complementary pieces in a much bigger puzzle is something we as an industry should avoid.
Considering a long-term outlook for emission reduction, biofuels is one of the enablers for kickstarting these reductions and will play a role in the overall energy mix of the future. Being a drop-in solution, biofuels could achieve immediate emission reductions on a very flexible basis, essentially providing sustainability and lower emissions as a service.
There are three main biofuel alternatives in the market today. These are hydrotreated vegetable oil (HVO) mainly produced from waste and residues, fatty acid methyl esters (FAME), and crude biofuel made from soya, rapeseed, palm oils, fish fat, used cooking oil (UCO) and similar feedstocks. These solutions today are mainly used as a blend mixed with conventional bunker fuels. In terms of technical maturity there are also differences: HVO is a drop in, ready to use biofuel, while other alternatives may require some fuel system modifications. What is still missing are scalable and technically mature ISO 8217 compliant solutions needed to satisfy biofuels demand in shipping.
A sense of urgency
Neste’s purpose is to create a healthier planet for our children. We have already created leading renewable commercial scale solutions for road transport, aviation, and plastics and polymers. These solutions are based on renewable raw materials including various wastes and residues from traceable and sustainable sources. Our reliance on strong R&D, technology, engineering, business development and partnerships has enabled us to build such a track record and become the third most sustainable company in the world on the Corporate Knights’ Global 100 list.
As such, we are no strangers to the arguments and obstacles that prevent companies from lowering emissions in a commercially viable way, and this also applies to shipping.
More and more people and organizations are not just determined to win the fight, but also see opportunities in it. And that is where humankind truly flourishes—seizing opportunities. We can do this because we find value in it. So when we talk about low-carbon shipping, it is not a question of if, but when. And the answer is probably ”sooner than you think.”
This is an abridged version of an article that was originally published in Bunkerspot Magazine April/May 2020.