The main focus of my visit was The International Chamber of Shipping flagship event - ‘SHAPING THE FUTURE OF SHIPPING’ which was dedicated to the shipping industries future transition in our rapidly evolving world. In what was a very enlightening session, important focus was placed on key strategic issues around the efforts required to decarbonise and deliver a sustainable and equitable future for the shipping industry.
Whilst there, it was great to have the opportunity to meet with government representatives, regulators, policymakers, and industry leaders and to be able to seek the high-level political support needed to champion the industry’s decarbonisation activities.
It was also very encouraging to find out that recent policy announcements from the US and the UK have shown that, going forward, there will be a significant focus on the shipping industry.
It’s also worth noting COP26 was the most important COP meeting to be held since the 2015 meeting that gave rise to the Paris Agreement. And one of the most exciting things to come out of COP26 was the ‘Methane Pledge’ - a game changing commitment by world leaders to cut methane emissions by 30% by 2030. The pledge is an international initiative put forward by the US and EU to reduce methane emissions, an effective way to slow down warming in the short term.
Let me share with you some of my insights from the ‘SHAPING THE FUTURE OF SHIPPING’ event.
It was centred around the challenges we face, and the hope we have, but most important of all, it was about people.
Past intentions and plans are no longer workable, people's lives are at stake, and this crisis is a matter of life and death for some countries and communities who will cease to exist if we reach 2 degrees of global warming. Therefore, 1.5 degrees is a target we cannot miss.
And it is not just technology that will solve the challenges we face, we must also rely on people being, curious, resilient and innovative. We need a human centred approach; it’s as much about human transition as anything else.
With more than 90% of world trade still carried by seagoing ships, the shipping industry took centre stage on more than one occasion during COP 26. During the ICS Summit, what was clear is that shipping is a key enabler to decarbonising the world. There were several key themes that emerged including the need for rapid scaling of innovation and technology, the introduction of market mechanisms to make carbon expensive, the urgency to act now, and the need to ensure a just and equitable transition. Here’s my round up on some of the key highlights:
THE ROLES OF INNOVATION, DATA AND TECHNOLOGY
Innovation, data, and technology are key, with accurate data and information available, more structured planning can take place.
The ability to research, develop, deploy and scale technology and infrastructure is a key enabler for the industry and the world. Coined the 4th propulsion revolution, shipping, as much as any other industry, must respond to the influence of global megatrends which are changing the landscape. Technology advancement and digitalisation are central to allowing us to transform the shipping industry and pivot to carbon neutrality.
Data has a significant role to play in creating insight and learning on the global stage and there was a consistent theme that increased data sharing will create powerful effects, including more effective decision making. The industry must be prepared to democratise data to enable a data sharing ecosystem purposed solely by a determination to achieve our objective.
Funding Innovation and Market Mechanisms
It is estimated $5billion is required to support the research, innovation, development, and deployment of technology in the industry.
It is estimated around 70% of total investments will come from the private sector and whilst there are first movers in the industry who have been courageous and taken a leap of faith, many remain apprehensive to commit to new technologies.
Whilst such apprehension exists, the pace of progression required is at risk. Therefore, the industry needs to find a way to incentivise first movers. The establishment of an International Maritime Research Fund (IMRF) administered by the International Maritime Organisation (IMO) was championed as one way to provide support to first movers and to ensure funding is available for research and development, for example through decarbonisation centres located in Copenhagen, Singapore, and London.
Overall, there was an overwhelming position that we must recognise the market as the most effective tool and the conscientious shipping community is calling for the implementation of a market mechanism to support research and innovation. Whether through carbon taxing, emission trading schemes or fuel duties, making carbon expensive will drive innovation and incentivise first movers, safe in knowledge the industry has their back.
Implementing a market mechanism would also allow funding to be accrued and re-directed back to support decarbonisation research and development, thereby creating a self-funding circular economy. Further costs can also be passed back to consumers where marginal cost increases for consumers will make considerable differences in recovering value back to the industry.
However, this is not just an investment in technology development and scaling, it is an investment in people, and investment in ‘brains’ is just as vital as investments in hardware and software.
Let’s Not Wait for the Perfect Solution – because there will never be one!
Actions we could take immediately could reduce emissions by as much as 30% was one message I heard. So why aren’t we acting on this now? It was portrayed there was a sense of reluctance to take action now because these short-term actions do not have what it takes to achieve our industry goal, i.e. they are not perfect.
I have always prided myself on my desire to help people, business or situations move forward and improve. As an industry, the ability for us to not capitalise on these savings now is counterintuitive because no matter how small a difference, it will make the situation better.
And as stated, this is Mission Critical, time is up, and this is no longer a choice for us to make, it is a Mission we cannot fail. Why? Because lives are at stake, and the future of humanity rests squarely on our shoulders. Therefore, we must act now.
It’s time to decide on our choices both operational and tactical. We cannot wait to plan for a perfect solution because it will never come. Instead, we must move forward with courage, poise and agility. We must also recognise the path we tread in the near term, is potentially very different to the future path, but as an industry we must act now and set off on our journey where we will find our way to the longer-term path.
At the same time, policy needs to match ambition, and therefore the IMO as the global regulator for the maritime world are central to success. The industry needs to work at pace to collaboratively prepare and package solutions to present to the IMO for them to push through. If governments introduce more regulation, the shipping community will need to adjust to meet this.
Green Corridors
Of particular interest to myself are Green Corridors. Green Corridors strategically could help to catalyse decarbonisation and can be progressed now. As the industry works to navigate the uncertainties around optimal technology development and scaling (our known unknowns), we must act on what we know now (our known knowns).
As an industry, we have considerable insights into the trade flows of goods around the world. This information can be used to help designate Green Corridors and identify the strategic locations, and stakeholders that will help facilitate them as the industry adapts and evolves.
Engaging on this now is critical to ensure we can identify the requirements needed to enable the Green Corridors and ensure we have the foundations in place upon which to build and scale in the future.
Nonetheless, we are again considerate that this is about people and humanity. Whilst Green Corridors are meritorious, there is a high possibility some countries and communities that will support Green Corridors are facing additional societal challenges. Therefore, the industry needs to be ready to help such communities address and overcome their urgent social and economic needs to allow them to help focus on decarbonisation. The merits of Green Corridors were recognised in COP26 by the implementation of the Clydebank Agreement, although when we consider Green Corridors, we must recognise the fundamental role that the port infrastructure will play as a key enabler.
OUR SEAFARERS
Lastly, and most importantly I would like to pause to think about, and wholeheartedly recognise the individuals that keep the world economy moving, the seafarers, who tirelessly work to ensure the 90% of goods moved around the globe (which we often take for granted), arrive safely.
The Seafarers of the world are the lifeblood of the industry and the global economy, yet they are often unjustly forgotten, taken for granted or exploited. Treatment of Seafarers across the global community throughout the COVID-19 pandemic at large has been a disgrace. Many countries have failed to recognise seafarers as key workers, many being retained on their ships for inordinate periods of time causing significant mental wellness challenges, and many seafarers unable to receive vaccinations.
As the world changes around us, becoming ever more technological and digitised, the training and skills we equip our seafarers with must be adapted to ensure they remain relevant in the world, and continue to operate our vessels safely and efficiently. With the development of potential new fuels comes new risks for our seafarers and therefore it is essential as we drive ourselves along the decarbonisation trajectory, the transition to new fuels is safe.
Ensuring an effective talent pipeline is essential for the long-term survivability of the industry. However, the challenges experienced by seafarers through COVID-19, and more broadly, the substandard conditions that many seafarers are exposed to, such as non-payment of wages or wage shortfalls, lack of nutritious food, inadequate social and mental wellness support, the risk of abandonment, and a lack of diversity and inclusivity, collectively threaten our ability to attract and retain talent to the industry.
As an industry, we have an exciting opportunity to re-write the narrative and highlight what a great industry shipping is, ensure we retain the talent we have, and attract the right talent for the future.
Andrew Roberts, Head of EMEA, RightShip.