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Wednesday, January 13, 2021 

The first shipping decarbonisation survey, a collaboration between Lloyds List and Lloyds Register, asked the industry how it saw decarbonisation working out, who will drive it, what impact it will have and where things stand today, with regulatory action shown to be one of the most important factors for shippings decarbonisation prospects.

More than a quarter of the owners, operators and managers that responded identified decarbonisation as the greatest challenge to the shipping industry, followed by the impact of the ongoing coronavirus backdrop. The pivotal role of policymakers and regulators in materialising shipping’s decarbonisation ambitions has been apparent for some while, but the findings of the survey illuminate just how significant it has become. Respondents across the board saw the “lack of clear, detailed regulations” as the single greatest potential barrier to decarbonisation, while the possible lack of proven viable decarbonisation solutions was also among the biggest impediments.

Fleet owners identified the IMO and regional regulators as the two biggest pressure drivers for the decarbonisation of their operations. Investors were the third largest pressure force. Along the same lines, both fleet owners and non-owners see mandatory regulations as the single biggest motivating factor for future action on decarbonisation, with financial incentives following as a close second.

The position reflects the cornerstone of decarbonisation success, which is that regulatory certainty will help boost investment in the development and adoption of cleaner technologies.

The survey’s results come ahead of a defining year that could see regional policies outpace progress made on the international level, with the European Commission soon to unveil its plan for adding maritime to its carbon trading market. Though subject to political negotiations, it should result in a new market-based regional measure for shipping, a prospect widely loathed by the industry that wants global action taken through the IMO.

This year, the IMO is set to finalise short-term operational and technical efficiency requirements that will affect the existing fleet, where regulations thus far have focused on newbuildings. These IMO measures are the early implementation of its overarching commitments to slash shipping’s total annual greenhouse gas emissions.

While 23% of the fleet owner respondents said the industry’s decarbonisation ambitions have had no impact on their fleet investment plan, the remaining 77% said they have had to take relevant action, ranging from changes to their existing fleet to order delays and cancellations. Owners said they are currently relying mostly on fuel optimisation technologies, coatings and slow steaming to improve energy efficiency.

The fleet’s fuel composition will change drastically over the next 10 to 30 years. Some 20% of fleet owners believe their ships will be running on LNG and as many anticipate they will use current marine fuels combined with carbon offsetting in 2030. But those rates dwindle down to 5% for LNG and 7% for the carbon offsetting combination in 2050.

Meanwhile, the share of those owners expecting to be running ships on hydrogen and ammonia grew from 8% and 7% respectively in 2030 to 19% and 20% in 2050.

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