11 April 2018
Investing in green shipping
The sustainability of maritime transport in and of itself is indisputable: ships transport large quantities of cargo in the most efficient manner over great distances.
At the same time, the sector is well aware that there is room for improvement. The shipping industry too must strive for lower energy consumption and reduced emissions. Together with the European Investment Bank (EIB), ING has earmarked three hundred million euros for the financing of green shipping projects.
Since 2016, the international think tank Maritime Industry Decarbonization Council has been studying possible avenues that could lead to an emission-neutral shipping industry. "Clean shipping is feasible," says Wilfried Lemmens, Managing Director of the Royal Belgian Shipowners´ Association. "But it´s a slow process." Ships have a long service life, and today most of them still run on heavy fuel oil. That's something for which the sector is determined to find an alternative ...
The expectation is that in the near future tax levies will be coming on the CO2 emissions in shipping. As of 2020, the use of diesel with a low sulphur content will become obligatory. By 2050, the entire emissions from shipping – including CO2, SOx(sulphur oxides), NOx (nitrogen oxides) and fine dust – should be at least fifty percent lower than they are today.
The reduction of emissions is a concern that goes far beyond the shipping sector, as illustrated by the World Ports Sustainability Program, under which the participating port federations recently signed an international charter in the port of Antwerp. With their commitment, the sustainable ports want to contribute to achieving the United Nations´ seventeen sustainable development objectives.
"Shipping is the most sustainable form of transport," notes Dario Bocchetti, Energy Saving Manager at Grimaldi Group, a logistical company that operates a fleet of over one hundred vessels, a lot of them of the "roll-on/roll-off type" (vessels that are used to carry wheeled cargo, such as trailers). "The transport of a trailer by sea has a much smaller environmental footprint than the same trailer travelling by road to reach the same destination. Co2 emissions are substantially lower, sometimes even more than 50%." In that respect, therefore, the shipping industry already scores well. Cutting emissions will serve to shrink this footprint even more.
"Corporate social responsibility and sustainability are important elements in our business strategy," Dario Bocchetti continues. "At the same time, fuel is our biggest cost" Yet saving on costs isn´t the biggest reason for the efforts the company is making to reduce its consumption and emissions. Amongst other things, Grimaldi has a project running on the use of batteries, following the example of the electric car. Bocchetti: "For us it’s about the customers, the passengers and our own employees. The environment is a vital concern for everyone."
The Belgian maritime operators are also taking the initiative. "Everyone is looking for ways to reduce the consumption and emissions of their vessels," says Wilfried Lemmens. For example, since recently CMB has been transporting its employees in the port of Antwerp using a passenger ship that runs on hydrogen. "That is an interesting project that we can learn a lot from. Possibly in the future we can also use hydrogen for larger ships." The example demonstrates how the entire sector is eagerly searching for alternatives to heavy fuel oil.
"The big difference from before is that all of the stakeholders in this connection are taking part in the dialogue," says Wilfried Lemmens. "That's an essential condition for reaching a successful result." But although the shipowners and ship operators are diligently looking for the application of new technologies in their fleet, that isn´t really their specialty. "In the final analysis, we aren´t the ones who build new engines," says Dario Bocchetti.
Customer is interested party
And that's precisely why it is so important that all of the stakeholders collaborate in the search for sustainable solutions. "We've got to look at the full picture", says Wilfried Lemmens, "from the energy source to the propeller. The customer is also a deeply interested party, one who is demanding that his logistical service providers come up with sustainable solutions. But – and this is a major stumbling block – the same customer isn't immediately prepared to pay a higher price for these sustainable solutions." The fact remains that green shipping isn't possible without extra investment . . .
In order to lower the threshold for the financing of green shipping, ING - in collaboration with the European Investment Bank (EIB) - is offering a fund of three hundred million euros. "The fund focuses on players from the European shipping industry who are looking for financing to make their fleet greener," says Peter de Jong, Director Transportation Finance Shipping at ING. "Thanks to the fund, sponsors of green and sustainable projects in the maritime transport sector can enjoy more favourable financial conditions."
The credit facility is available for projects that focus on the sustainable improvement of ships, including the construction of energy-efficient new vessels or the modernisation of an existing fleet. The agreement with the EIB forms part of ING´s broader sustainability strategy, which is designed to facilitate and finance the social transition to sustainability on the ecological, economic and social levels.