12 June 2024 (Lloyd's List) - DIALOGUE between public and private stakeholders will be key if clean fuels are to be part of shipping’s future.
This is the view of the Lloyd’s Register Maritime Decarbonisation Hub, which facilitated discussion between government ministries in Africa and Asia-Pacific in a bid to further decarbonisation in shipping.
The initial dialogue took place during Singapore Maritime Week and featured representatives from ministries in India, Kenya, Namibia, Oman, Singapore, South Korea and the Philippines.
In a keynote address to the roundtable, International Maritime Organization secretary-general, Arsenio Dominguez said the industry must be proactive and embrace the opportunities the transition offers.
“New fuels and new modes of propulsion will be on the table,” he said.
“There are great opportunities for countries to build and upscale hydrogen-based maritime fuel production infrastructure.
“This roundtable is representative of the efforts that both the energy and transport sectors need to make to achieve our common goals. I am devoted to supporting shipping’s net zero transition.”
Financing shipping’s green fuel future was a key item on the agenda.
“There is a clear gap between energy infrastructure reaching final investment decisions,” Lloyd’s Register Maritime Decarbonisation Hub senior green initiative lead Ahila Karan told Lloyd’s List.
“What can we actually do to ensure that these offtake agreements are in place? How do we set the landscape?”
She explained that many of the countries in the Africa and Asia-Pacific region face “a very high cost of capital” and so attracting investment would be crucial to getting clean fuels off the ground.
That is why the next step for the dialogue series, Karan said, was bringing in private investors alongside energy and transport ministries to understand the “inertia from the investor side”.
Regional co-operation was also a key aspect of this initial discussion. Karan explained that some ports wanted to become exporters of renewable fuels and some bunkering hubs, echoing a recent Global Maritime Forum report that identified the types of port that would play each role in a renewable fuel future.
“There is a need for a joined-up approach with their energy strategies as well”, she said. Different countries represented at the roundtable are in different stages in terms of hydrogen strategy planning, Karan said, for example India or South Africa, which already have strategies in place.
“There is a clear demand signal emerging from the IMO and from maritime at large. How can we tap into those opportunities from the hydrogen strategies you (the representatives) are developing in the region? And how can we tap into those hydrogen strategies from the demand side from shipping,” Karan said.
Discussions about green fuels are not new. But what Lloyd’s Register’s Decarbonisation Hub hopes will set this one apart is tangible outcomes.
Karan explained that success for the dialogue series could mean several bilateral agreements in place and projects moving into a final investment decision stage.
“What we are really trying to achieve is commitments from these state and non-state actors, rather than have a commercial agreement tied to the initiative,” she said.
Those agreements could resemble green corridors, which Karan admitted attract criticism.
Yet she maintained that while they might not provide all the answers shipping needs to solve its decarbonisation problem, they do represent progress and build momentum.
“We cannot keep going to each COP [Conference of the Parties, meaning parties that are signatories to the United Nations Framework Convention on Climate Change] with announcements. We need something. We need the dial to move as well.”
