SERVICES

Towards a fossil free future? /ANALYSIS

Among tragedies and heavy slumps, shipping continues to ride an increasingly restless market.

Among tragedies and heavy slumps, shipping continues to ride an increasingly restless market. It now happens that the 0.5% reduction in the sulphur content of bunker, which will come into force in 2020, is perceived by many as a genuine revolution, destined to profoundly change positions of power and consolidated equilibrium. In reality this measure will be only the first step of a process destined to radically innovate shipping’s way of working, one of the most traditional and refractory industries to change. The reduction in consumption and therefore in emissions is measured on the basis of the Energy Efficiency Design Index (EEDI).

Between 2012 and 2014 the introduction of the so-called “eco-ships” already made it possible to significantly reduce emissions, thanks to the adoption of new and more efficient propulsion systems suitable for slow steaming. With the EEDI standards, a ship built in 2025 will have an energy efficiency of 30% higher than a similar ship built before 2013. An important starting point for even more substantial innovations capable of achieving the goals set by the IMO for a 40% reduction in emissions by 2030 and between 50% and 70% by 2050. An ambitious but possible milestone is substantial renewal of the global fleet. To comply with the standards required in 2020, many owners are investing in scrubbers.

Despite the sharp acceleration of orders recorded in recent months, however, less than 5% of the world’s fleet will be equipped within two years. A critical point will therefore be the availability for the majority of clean bunker in ports, with further need for more advanced terminal facilities to be equipped with adequate services. In future, our attention will increasingly be focused on ships that can operate with alternative fuels such as LNG/LPG, which emit zero SOx and 90% less NOx. To achieve these goals, however, it will be necessary to redefine the way in which ships are designed and managed. A huge job for shipping companies, shipyards and builders of propulsion systems that will probably lead to further concentration among shipowning societies.

In the last two years the container transport sector has anticipated the trend, with a series of mergers and acquisitions that have slimmed down the market list in a very drastic way. Compared to the twenty allied companies in nine consortia of ten years ago, today 80% of container traffic is managed by nine companies brought together in three alliances, and other important operations are under way. It is likely then, that in 2020 almost the whole market will be controlled by five or six mega companies. The lack of profits in the container sector but also in the other segments of maritime transport, from solid bulk to liquid bulk, not to mention ferries, is the major obstacle to sharing the objectives set by the IMO.

As the first deadlines approach, the most prudent companies have become convinced of the need for environmental full compliance without hesitations. A turning point destined to change in a short time an industry used for 200 years to use fossil energy, first with coal then with oil. In ten years’ time everything will change. Perhaps even with the return to profit of the wisest shipowning companies, already the first architects and protagonists of change.

Pressed for time?

Get the best news of the week in your inbox

Subscribe ››