Sustainability as a new operational and commercial priority for shipping

Sustainability as a new operational and commercial priority for shipping

2020 will be remembered as a year of momentous change in the shipping industry. Notwithstanding the economic shockwaves caused by COVID-19, the pandemic has showcased shipping’s ability to adapt at a remarkable pace, writes Noah Silberschmidt, CEO of Silverstream Technologies. 

The speed of reconfiguration of our operations that we have seen across 2020 – and particularly in an industry that has been historically slow to change – now makes the task of shipping’s decarbonisation pathway appear as less of a concept and more of a reality.

With climate change being acknowledged as a priority by governments around the world as they set economic policy in the aftermath of the pandemic, the shipping industry must also place sustainability at the forefront of business decisions. Indeed, it must be increasingly viewed as a critical element in ensuring the longevity of operations.

The combination of new regulation on the horizon, including efforts by the IMO to improve the efficiency of existing vessels, gives us some ‘tools in the toolkit’ to deploy as we make sustainability an operational and commercial priority for the future.

Future fuels will play an important and central role, as will changes to operations such as slow steaming. But the industry must ultimately remain focused on efficiencies that can be delivered regardless of fuel or operational patterns, heightening the case for proven clean technologies.

The viability of clean tech now

Clean technologies will play a pivotal role in facilitating shipping’s green transition and ensuring the sector meets the IMO’s target of at least a 50 per cent reduction in total GHG emissions by 2050, compared to 2008 levels. Likewise, with tightening sustainability requirements on an existing global fleet, the industry needs clean technologies now to kickstart the decarbonisation pathway.

Noah Silberschmidt, CEO of Silverstream Technologies

In fact, during the November 2020’s Marine Environment Protection Committee (MEPC) meeting, the IMO approved amendments to MARPOL Annex VI to introduce an Energy Efficiency Design Index for all existing ships (EEXI). Although subject to adoption at MEPC 76 later in 2021, the requirements aim to address the technical aspects and operational measures of a vessel in relation to carbon intensity and, if approved, will come into force in 2023.

It is clear that this ambition will not be achieved with alternative fuels alone. With zero-carbon future fuels yet to be implementable on a global scale for many years – due to their higher costs, lack of infrastructure and supply issues  the requirement for shipping to have a thriving ecosystem of fuel agnostic, proven clean technologies – alongside alternative fuels – is vital. This will be instrumental not only to ensure sufficient progress on the decarbonisation pathway, but also in keeping ship owners and operators’ vessels compliant in the likely case that the EEXI is implemented.

As a final reflection of the important role that clean technology will have in the decarbonisation of the shipping industry, the UK Government’s Green Industrial Revolution plan has set aside £20 million for investment to develop clean maritime technology. This is a step in the right direction, but further investments are needed to support both existing clean technologies as well as help to deliver the new solutions that the sector will need to drive up its efficiency.

Prominence for air lubrication

We believe that air lubrication has a central role to play within the thriving ecosystem of clean technologies now emerging within shipping. Air lubrication is increasingly being acknowledged by regulatory bodies and influential industry players as a credible, effective, and easily implementable clean technology solution.

The industry’s perception of this technology to enable decarbonisation is growing, as highlighted by reports including Shell’s recent ‘Decarbonising Shipping: All Hands on Deck’ report and the IMO’s Fourth GHG study. In fact, the International Transport Forum’s ‘Decarbonising Maritime Transport – Pathways to zero-carbon shipping by 2035’ report cites air lubrication as one of the ‘known clean technologies’ that, if deployed across the global fleet could make it possible to reach almost complete decarbonisation by 2035.

Across the market, we now see the demand for proven clean technologies increasing. More specifically, the increase in demand and reputability of air lubrication is directly reflected in Silverstream’s growing orderbook and association with key market leaders including Shell, Carnival and Grimaldi.

Our air lubrication technology, the Silverstream System, has been shown to increase fuel efficiency and thereby reduce emissions by 5-10 per cent (depending on vessel factors). Milestone orders such as the installation of the Silverstream System on twelve Hyundai Heavy Industries-built, Shell-chartered newbuild LNG carriers, reflects not only the change in significance placed on proven and readily available clean technology but a new frontier in relation to our situation in the industry. Likewise, with a number of industry leaders implementing and placing higher value on clean technologies, we believe solutions such as our air lubrication system will become a standard on newbuild vessels in the coming years.

Close up of micro bubbles

For existing vessels, we believe that clean technologies as ours will also have a central role to play. As explored earlier, EEXI, which will ratchet up in strength beyond implementation, will require owners and operators to take both operational and technical means of improving their efficiency. Few technologies are currently recognised to meet the current Energy Efficiency Design Index (EEDI) Phase III requirements – but air lubrication is one of them. This is significant because the methodology for the EEXI is likely to match very closely with the current methodology used to calculate EEDI.

This places technologies such as air lubrication systems at the heart of future EEXI improvements. Crucially, clean technologies like our Silverstream System can be retrofitted during a normal dry dock period, giving owners and operators a simple means of driving efficiency improvements required under the new regulations.

 

The growing interest is further evidenced in the significant expansion of the Silverstream team during 2020, which has doubled in size amidst the economic turbulence of the pandemic, further demonstrating the increasing demand, and changing attitude, for easily implementable clean technologies to increase fuel efficiency and reduce carbon emissions.

As mentioned, the events of 2020 have placed shipping on the precipice of a new era. Beyond all expectation, the upheaval of the pandemic has solidified, in both hearts and minds, the requirement for a radical shift in our operations. With regulatory change on the horizon, it seems clear that shipping will have to rapidly deploy tools from its decarbonisation toolkit. Specifically, this means scaling up future fuels where we can, be understanding that solutions to improve our sustainability already exist – in proven clean technologies and their power to improve efficiency and cut costs.