As COVID-19 pandemic has cast a huge shadow over the globe, more and more companies are starting to work remotely, and the market is figuring out how to do business from home.

There is little doubt that environmental awareness is rising in all banks and especially in the West.

The usual seasonality in tandem with the coronavirus shockwave have dealt a heavy blow to the dry bulk shipping market during the first quarter of the year.

On Thursday 13 February 2020 Lloyd’s Register organised the first post January 2020 event under the “IMO 2020: The transition is over... how did it go?” headline topic, gathering more than 80 delegates from the shipping sector. Industry experts from Tsakos Energy Navigation, Euronav Ship Management Hellas, MAN Energy Solutions Hellas and Lloyd’s Register in a very vivid panel discussion, shared valuable insights on fuel quality issues and future scenarios for sampling as well as an update of engine’s feedback and the cylinder lubrication. With the occasion, Lloyd’s Register South Europe Marine & Offshore Regional Manager Theodosis Stamatellos, shares views on the 2020 fuel shift and the journey towards zero-carbon shipping.

Having a closer look on the latest industry developments, we can see that sulphur switchover, compliant fuels, scrubbers and gas as fuel pathways are at the centre of the discussion, capturing current industry best practices. Could you please tell us a few words about it?

IMO 2020 was a regulatory change that required hard work and planning from all stakeholders across the industry as it presented cost, operational, safety and training challenges. So far, it seems the industry has navigated this transition well, and many have turned to Lloyd’s Register’s (LR) FOBAS to support them with the switchover.

At our recent post-Sulphur event, we polled attendees about the 2020 fuel switchover – the delegates collectively operate over 1130 vessels. 96% of them said that had either had no issues or some issues that have since been overcome, aligning with our view that the transition has so far been a smooth one. However, it has not been completely without its problems as 42% of respondents said they had experienced non-availability of 0.50% sulphur fuels. Among the key industry soundings was the quality of the VLSFO, where heavy sludge deposits, cylinder scuffing / ring damage and fuel pumps sticking were highlighted as the top-3 issues.

The carriage ban of high sulphur fuel coming into force from 1 March 2020, will be the next milestone, where further challenges may arise, mainly with regards to the fuel sampling process.

Ammonia is just one of the pathways towards zero-carbon emitting vessels. Do you believe that new zero-carbon fuel technologies, such as ammonia fuel, have to be brought on the table, in order to take action proactively on maritime GHG emissions in accordance with the IMO’s ambitious road map?

Lloyd’s Register (LR) research indicates that zero-emission vessels need to enter the fleet by 2030 at the latest if the maritime industry is to successfully meet the IMO ambitions of at least 50% reduction in greenhouse gases by 2050. Zero-emission vessels development needs full-scale prototypes and pilot studies now, exploiting any available opportunities that can enable early adoption. The next decade will require substantial and collaborative input from all maritime stakeholders as shipping considers its decarbonisation options.

LR has been assessing future fuels for some time. Our study last year with A.P. Moller - Maersk found that the best-positioned fuels for research and development into achieving zero net emissions for shipping are alcohol, biomethane, and ammonia.

Looking specifically at ammonia, LR recently agreed a JDP with MISC, MAN ES and Samsung Heavy Industries for an ammonia-fuelled tanker. However, ammonia is just one of the pathways towards zero-carbon emitting vessels. Using ammonia as a marine fuel has the potential in the future to be created from renewable, primary-energy sources such as wind, hydropower or solar.

How willing are shipping companies to help for a safe, cost effective, efficient and environmentally friendly industry and therefore to navigate the decarbonisation challenge in the decade ahead?

The IMO’s 2020 World Maritime theme is ‘Sustainable Shipping for a Sustainable Planet’, and the UN agency believes 2020 will mark the “beginning of a decade of collaboration, action and delivery” where we play our clear role for the planet and our future. The IMO has identified some key challenges, which include:

* cutting greenhouse gas emissions
* improving the efficiency of shipping through digitalization
* transitioning shipping to sustainable future

The two dominant trends of digitalisation and decarbonisation will affect all shipping stakeholders as they assess what is required to achieve the IMO’s 2050 greenhouse gas ambitions and the opportunities and challenges presented by the shift to a zero-carbon future.

The transition is a long-term one and it is accepted that a variety of operational and asset investment strategies will need to be considered. Complex choices lie ahead and navigating this change will involve industry collaboration as well as access to expert advice and insight.

It is more than obvious that shipowners must invest for fuel flexibility. Do you believe that shipowners must be confident around their future investments and their fuel supply chain?

Our study with A.P. Moller - Maersk found that to develop zero carbon ready ships, shipowners must invest for fuel flexibility and pointed to the need for policy interventions and fundamental changes to incentives scheme for shipping.

Achieving net zero will predominantly be an operating expense (OPEX) rather than a capital expenditure (CAPEX) challenge – ships will have to adapt, potentially requiring new fuel tanks, modified engines and fuel supply systems, but this will be a very small element of the total cost of operation.

The study also forecasts that future fuels are likely to be two to three times more expensive to produce compared with today’s fuels. In the future, we expect to see a diverse range of zero-carbon technologies / fuels deployed across the world’s fleet.

Decarbonising shipping is a game changer that requires close collaboration and joint action from researchers, regulators, technology developers, investors, customers and energy providers. How difficult is this to happen?

Joint industry projects and collaborations will help to build consensus across the board, not only with existing partners but with fuel and propulsion technology companies, equipment manufacturers and energy developers from different sectors, so we can develop, de-risk, scale and commercialise zero-carbon fuels and zero-emission vessels. If we work together, it is within the industry’s hands to help shape what our decarbonised future looks like. Many players in the global maritime industry now recognise we need to be more collaborative in defining our future together.

* Lloyd’s Register South Europe Marine & Offshore Regional Manager

Decarbonization of the global shipping industry is a complex issue, and ideally Liberia’s view is to support a goal-based approach that will allow our industry to innovate, use alternative fuels and technologies to achieve the ambitious targets of the initial IMO GHG Strategy.

Marasco Marine Ltd, has introduced since February 2018, in the world wide shipping community, a NEW EXCLUSIVE INSURANCE PRODUCT which is unique both in benefits and premium: