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During a visit to Norway, ahead of Nor-Shipping, Torvald Klaveness, CEO, Ernst Meyer talked of four solutions to decarbonisation that do not include alternative fuels: do not go empty handed; minimise laden distances; do not race to wait; and maximise cargo intake.
Torvald Klaveness, through Klaveness Combination Carriers, has a profitable business model in the ‘do not go empty handed’ scenario. Minimise laden distances and maximise cargo intake are self-explanatory, but ‘do not race to wait’ is a plea to remove the incentive from the current system of shipping contracts and charter parties for shipowners to steam quickly to port.
Once there, the counterparty can become liable to pay for the waiting time. There is a separate industry concerned with claiming demurrage, and when freight rates are in the peak phase of the shipping cycle, the advantage is to the owner.
Mr Meyer does not think this is sustainable in the long term and it makes the supply chain inefficient. It would be better for the planet and for shipping to reach its sustainability goals if owners and charterers were to share the profit and pain and reduce the internal competition within the contract. To this end, Torvald Klaveness has the CargoValue tool, which provides transparency on days in port.
“Less time in port would radically alter shipping’s carbon emissions profile, even before the application of alternate fuels”
According to Mr Meyer, data from the system for four unnamed ports shows that over 1,300 days of waiting could be saved if all port calls were limited to five days. This would radically alter shipping’s carbon emissions profile, even before the application of alternate fuels. It begs the question as to why IMO is fixated on technological solutions when a simpler, if commercially radical, solution exists.
Other areas of debate include the EU Emissions Trading Scheme (ETS) and FuelEU Maritime. In a paper recently released by Lloyd’s Register, LR, its technical manager – maritime commercial markets, Luke Shu, finds that while the EU ETS will have an initial punitive impact, between 2030 and 2040 this is overtaken by FuelEU Maritime, which will come into effect in 2025.
There is a mechanism in the EU ETS for owners to pass on or share the burden with operators and charterers. FuelEU Maritime, points out Mr Shu, is geared toward the new fuels scenario and he has spotted an interesting ‘loophole’. If vessels operate as a pool, as so many tankers do, then the emissions penalties and surpluses are shared. One or two zero-emission vessels in that arrangement could counter-balance the higher emissions of others.
It is an intriguing concept and, coupled with a change of attitude over ‘race to wait’, could go a long way to help decarbonise the industry without too much effort.
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