Who’s next? We need to stop gaslighting the energy transition
Last week it was questions about methanol, this week it’s the safety of ammonia. The arguments against hydrogen are well rehearsed; LNG needs to fix its supply chain emissions. What’s next one wonders, the downsides of wind-assisted propulsion?
Given the shipping industry’s inbuilt scepticism towards anything that can’t be remedied with some blokes (yes they are mainly), a few bent bits of metal and some caulk, it’s easy to understand the trepidation around new fuels.
The shipping industry suffers among other things from a terrible case of exceptionalism, which it displays most vehemently when questioned on its environmental record. This ranges from the straightforward ‘everyone should be grateful for the job we do’ (they are) to the more complex ‘we can figure out solutions to all our problems’ (see above).
Operational efficiency? Yep that’s achievable. Digitalised operations? Yes again, though this is more about commercial opportunity than sustainability. Geopolitics? Let’s perhaps say that the divergent attitudes shown by different sectors to the current crises are a chilling demonstration of how they measure risk to people and property.
The trouble is that the energy transition is not like any of these.
The energy transition is about the gradual disappearance some major cargo groups and their replacement with other commodities. It is also about reducing carbon emissions to the point where the net balance is zero.
Big tickets no doubt. This is perhaps why a large portion of the industry is looking the other way or gaslighting the alternatives – and with markets as strong as they are, who can blame them?
The trouble is, this isn’t a technical fix, even when carbon capture is available, cost efficient and doesn’t consume more energy than the equivalent carbon it saves.
No, this change is primarily about regulation itself. If the IMO is an organisation quietly and slowly assembling rules that may (or may not) enable the industry to achieve net zero carbon emissions by 2050, then the EU is the tearaway bent on ensuring that shipping settles its tab.
The critical point is that the EU’s regulatory instruments were created to apply across multiple industries of which shipping is one. They are designed to exert market pressure using policy levers, making conventional fuel more expensive and renewable fuel more competitive over time.
Either way, call at the EU and you pay. Pass that cost on if you like but it will continue to rise and become more punitive. It’s not a case of setting a 2050 target and hoping for the best (what will the sanction be for ‘con-compliance’ one wonders?). Nor is it about creating a mechanism that means a choice between ships of differing energy efficiency and hoping people do the right thing.
Alternative fuels are available but they are all fossil-derived, even if they offer emission reductions in service. Renewable options are coming onstream but slowly, meaning that actual reductions in carbon emissions are happening slowly too. Progress like that is far too haphazard for an industry used to an unending supply of the world’s dirtiest fuel at low cost and a fondness for placing huge bets on assets against a business as usual scenario.
The technology for both LNG and methanol as fuel is proven; one is complex and expensive, the other straightforward and expensive. LNG ships have been on the water for years, as have methanol powered ones, so far without incident. Other options are following, notably ammonia which looks attractive from an emissions point of view but technically highly challenging. Nuclear? Yes one day. Fuel cells? Available now and getting bigger by the day.
But shipping doesn’t have the field all to itself. Far from it in fact. Other, more customer-facing industries are in the queue for cleaner fuels and they are more than happy to pass on higher costs.
As a result, it seems at times as though the industry’s position is that because it will have to compete with others for new sustainable fuels, it would rather not bother adopting them at all. Every piece of bad news is greeted as a vindication of this approach.
In a business as usual scenario, that might be OK. Regulators would spend years developing standards, procedures and technical solutions to a given problem and quietly get countries to apply them.
IMO 2020 was the first indication that we didn’t live in that world anymore and the efforts made at the time to alternately ignore, delay and obfuscate reflect increasingly poorly the more time passes. ‘World trade will come to a halt’ remains my favourite – something that didn’t happen until 21 years later for reasons unconnected to sulphur content of fuel.
Perhaps the most distasteful aspect is how some advocates appear convinced that shipping’s zero sum game competition model should apply here too. It doesn’t. The energy transition is a change so fundamental it requires collaboration, transparency and flexibility – oh and investment – on a scale that the shipping industry has no prior experience of.
There is no pent-up supply of any renewable fuel ready to meet demand if only the industry would see sense and adopt it. Instead, you start with the fossil version, progress to blue as carbon capture increases and to green as renewable production grows. That’s the orthodoxy, whichever fuel you choose.
Perhaps the problem is that, like climate change itself, the transition is a challenge so existential, that some might believe if you close your eyes and can’t see it, it therefore can’t see you. That worked for many issues over the years, but it won’t work this time.
* This article is a personal opinion, it was not written in co-operation with any of my clients and does not reflect their views. Tell me if you agree or disagree with my ideas in the comments.
Image: Photo by Philippe Mignot on Unsplash