THE IMPLICATIONS OF DECARBONIZATION ON

THE SHIPPING INDUSTRY’S COMPETITIVENESS

21st CARIBBEAN SHIPPING EXECUTIVES’ CONFERENCE (CSEC)
Fort Lauderdale, FLORIDA
May 1-2, 2023
Capt. Sukhjit Singh
Master Mariner, MS (Oil and Gas), PGDip (Maritime Energy Management)
Technical Adviser, MTCC Caribbean.
Head of School (Maritime Science) – University of Gibraltar

1
 Outline
• Maritime Emissions
• Understanding mitigation
strategy
• Implications in short term
and long term
• Role of Ports in Maritime
Decarbonisation
• Port Competitiveness
perspective

2
 Maritime Emissions
Covered under National
Stationary 1.A.3.d.i International
Emissions

Inventories Water-borne Navigation

1.A.3.d Water-borne
Navigation
IPCC Water-borne
Mobile
Navigation Categories 1.A.3.d.ii Domestic
1.A.3 Transport Water-borne Navigation

1.A.4.c Agriculture/ International Port

1.A Fuel Combustion Forestry/Fishing/ 1.A.4.c.iii Fishing
Activities 1.A.4 Other Sectors Fish Farms (mobile combustion)
ergy Fuel on board
Manovering and
Cruising / Voyage
Hoteling within Port
1.A.5.b.ii Mobile (water-
1.A.5 Non-Specified 1.A.5.b Mobile borne component) International
marine bunker fuel.
Bunker fuel

Domestic Port
Domestic
navigation fuel
3
 Mitigating Maritime Emissions
Strategy on emission reduction consists of 3 consecutive steps:
• Monitoring, reporting and verification of CO2 emissions
The First IMO GHG Study : 1.8% The Third IMO GHG Study : 2.2%
(Tier 1)
2007
2000
The Second IMO GHG Study : 2.7%
(Tier 1 & Tier 2)
Estimated percentage of the global
total anthropogenic CO2 emissions.
(Tier 2)
2018
2012
The Fourth IMO GHG Study : 2.89%
(Tier 1, Tier 2 & Tier 3)

• Greenhouse gas reduction targets

Initial IMO Strategy Ambitions to • Total annual GHG emissions by at least 50% by 2050.
reduce (compared to 2008). • CO2 emission per transport work by at least 40% by 2030 and 70% by 2050.

• Measures to achieve targets • Short Term

Candidate Measures • Mid Term
• Long Term
4
 IMO regulation and ship technology trend
Short Term
Candidate Measures
• Technical and operational energy
efficiency measures for both new and
existing ships including review of
regulatory framework
Mid Term
• National Action Plans considering
uptake of low/zero carbon fuels
• New emission reduction
mechanism(s), including Market-
based Measures (MBMs), to
incentivize GHG emission reduction
Long Term
• Development and provision of zero-
carbon or fossil-free fuels
• Facilitate the general adoption of
possible new/innovative emission
reduction mechanism(s)

(Source: Initial Imo Strategy On

(Source: Joung, T. H., “Initial IMO Strategy on Reduction of GHG Emissions from Ships and Its
Reduction Of GHG Emissions
Follow-up Actions.” Europe-Korea Conference on Science and technology (EKC) 2019, Austria)
From Ships, 2018)
MARPOL Annex VI IMO framework for GHG emissions control from ships

Chapter 1 – General EEDI : Energy Efficiency EEXI : Energy Efficiency

Design Index Existing Index

Chapter 2 – Survey, certification and

means of control

EEOI: Energy Efficiency CII : Carbon Intensity

Chapter 3 –Requirements for control of
emissions from ships
Operational Indicator Indicator

Chapter 4 – Regulations on the carbon

intensity of international shipping
SEEMP : Ship Energy
Data collection System
Efficiency Management
(DCS)
Plan
Chapter 5 – Verification of compliance
with the provisions of this Annex
 Understanding Implications – Short/Mid Term
measures – CII case
CII is a measure
It is developed
of how
in line with The CII measure
efficiently a ship
Initial Strategy & is applicable to
transports
results of the all
goods or
Third & Fourth internationally
passengers in a
IMO GHG trading cargo,
year and is
Studies and data RoPax and
expressed in
collected cruise ships of
grams of CO2
through the 5,000 GT and
emitted per
IMO Data above, from 1st
cargo-carrying
Collection January 2023.
capacity and
System (DCS).
nautical mile.

The Carbon Intensity Indicator (CII)

7
 Understanding Implications – CII case

Operational energy efficiency performance rating scale

(Source: CII Rating Guidelines, G4, Resolution MEPC.339(76))

The rating scale are expected to become more stringent towards 2030, specially after the review proposed in 2026.

CII will ultimately change how owners and charterers approach voyage planning and vessel optimization.

8
 Ship Owners - additional
impacts of a “poor” CII potential impact
rating beyond the on ports
corrective action

Understanding
Implications –
Short/Mid Term
measures – CII case

9
 Numbers of vessels using different fuels, and ready to use different

Understanding fuels, either already in service or on order (Source: Clarksons, 2022)

Implications – Long
term measures
Shipping sector’s
use of fuel

Availability of fuel at serving routes and

ports.

Opportunity to develop port

infrastructure and serve as Energy
nodes.

10
Shipping’s transport of fuels - Phasing out fossil fuel use globally
will reduce traded volumes of energy products by ship
2020 2050
15,000
%age
Billion tonne
2020 2050 change
10,000 miles/yr
(avg)
Coal 5,563 1321 -76
5,000 Oil 13,561 2622.5 -81
Gas 1,781 2160 21
0
Coal Oil Gas

Projected Transport Work (billion tonne miles) in IPCC 1.5C emissions pathways
(Source: SSP1_RCP1.9 and SSP2+RCP1.9, table 19, p372, IMO, 2020)

11
 Reducing air pollution and As partners in facilitating green
other externalities solutions

Vital role of Energy audits and port

assessments
Act as catalyst for greening

Ports in Commit to renewable energy

Maritime Emissions inventory and baseline solutions
of emissions within the port
Decarbonisation Green considerations in
procurement
Strategy to reduce emissions
Develop a green plan for the port

Monitor key port emission Include climate adaptation

performance indicators considerations in infrastructure
planning
 Reducing the time of ship stay in port

Vital role of Provision of cleaner fuels to the ship

Ports in
Provision of shore connection to ships (OPS) or
Maritime alternative energy resources
Decarbonisation
Ship loading / discharging with due consideration for
air emissions

Environmental oriented incentives for ships

 Reflecting on Competitiveness
Porter Framework – Market driven
• Market Position - Performance is a function of
Industry and Organisation interaction
• Industry Structure – affects the sustainability
of organisation’s performance
• Organisation’s Position – Positioning reflects
the organisation’s ability to establish
competitive advantage
• Adaptive decision patterns
• Prospector
• Analyser
• Defender
• Reactor
Resource Based View -
Organisation driven
• Strategy selection is based on careful
evaluation of available resources
(strengths and weaknesses).
• Organisational strategies are based
on
• Opportunities in the market
condition
• Constraints due to the asset base
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 Blue Economy: Driven by ports
The blue economy and the aim to move towards a sustainable blue
economy offer the ports several opportunities which can be
integrated with decarbonization activities.
• Ports are unique interface between land and sea
• Ports are essential nodes in the transition to sustainable
development
• Ports can facilitate, enhance and reinforce, blue economy sectors
that by definition contribute to delivering the green ambitions
• Ports can also be directly involved as investors and drivers of the
blue economy.
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 Regional Focus and Co-operation required to
Include Maritime Technology uptake in National Action Plans

Invest in Infrastructure to support Green ships

Invest in digitalisation to obtain efficiencies across maritime supply chain

Explore transition pathways by narrowing on technology and fuel options

Create enabling market for technology uptake (motivate first movers)

Close the competitiveness gap between alternative fuels and traditional fuels
+350 5705 2000 | +350 5600 3977
www.sim-sols.com |sukhjit.singh@sim-sols.com

Thank You !

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