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PE Live: Collaboration key to decarbonisation effort

Shipping is already benefitting from working groups looking into decarbonisation technology, improving safety and creating demand for low-carbon fuels

Shipping is already benefitting from working groups looking into decarbonisation technology, improving safety and creating demand for low-carbon fuels

Stakeholders in shipping need to work together in collaborative groups if the industry is to overcome the decarbonisation challenge, an expert panel of speakers agreed on a PE Live webcast yesterday.

Collaboration is essential,” says Michael Parker, chairman of shipping & logistics at bank Citigroup, noting that historically the industry has struggled to collaborate due to intense competition between players.

Parker was appointed to the board of the Global Maritime Forum, a Copenhagen-based non-profit organisation, in 2017. The forum has become a primary venue to discuss the decarbonisation of the industry, among other big issues, in part because the many trade organisations serving the industry had struggled to come up with viable solutions.

“The background of Covid helped to reinforce the need for collaboration” Parker, Citigroup

The industry has successfully come together before, notably to improve safety in shipping under the leadership of Grahaeme Henderson, vice president, shipping and maritime, Shell.

“That [success] enabled us to create a forum of senior decision makers and influencers from across the whole maritime ecosystem, including ports, regulators and cargo owners, to talk about issues,” says Parker.

The Global Maritime Forum launched the Getting to Zero Coalition at the UN Climate Action summit in September 2019, with the specific aim of accelerating shipping’s decarbonisation and the development and deployment of commercially viable deep sea, zero-emission vessels by 2030.

UN secretary general Antonio Guterres reportedly described it as the single best initiative coming out of industry; it now has more than 150 members, including Shell and Citi, and is supported by 14 governments.

“It actually advanced despite Covid,” says Parker, with the help of video conferencing services. “And the background of Covid helped to reinforce the need for collaboration.”

“There is no one solution,” he says. “So we encourage all ideas, recognising that there is going to be a lot of different things moving in parallel.”

Coming together

Parker notes that the various industry groups “all do come together” when participating in external forums, such as those attached to the UN or World Economic Forum, and “shipping begins to speak as more or less one voice”. The Global Maritime Forum has launched other collaborative industry initiatives, such as the Sea Cargo Charter.

“It is important to move in step with society, which means looking for opportunities as we tackle those challenges around climate change” Henderson, Shell

The reality, for the shipping industry, is that it has not really happened before,” says Parker. “That is a significant change and actually very exciting [and something] I never really expected to see in my lifetime. People are getting used to actually working together on these big issues.”

Shell recently set out an ambition to be a net-zero emission energy business by 2050 or sooner.

“It is important to move in step with society, which means looking for opportunities as we tackle those challenges around climate change,” says Henderson, noting that becoming a net-zero emissions energy business is a huge task. “The business plans today will not get us there. So, plans must change over time, as society and customers also change.”

Shell has called on the International Maritime Organization to reduce emissions to net-zero by 2050. “It would be a tremendous step forward,” says Henderson. “I am now seeing that other groups are following that call.”

Henderson also sees “an enormous opportunity” to collaborate with other industries, to pool research, share expertise and work together.

“This has happened in other sectors where breakthroughs have taken place,” he says, citing “two very important technological areas” of space research and searching for cures to cancer. “We should follow that kind of a way of working.”

Henderson stresses that decarbonisation should not be viewed as a competition. “It requires everyone to work together with each other in what I call 'one global team in shipping' and also working across the other industry sectors, too. This is not [just] a shipping problem.”

“We are talking about like-minded companies coming together to create the scale needed to make the change happen” Helmi, Deloitte

Tarek Helmi, partner at consultancy Deloitte Netherlands, notes that the industry cannot wait for regulators to implement a framework before it begins to act. “Regulation is important, but we cannot just rely on it,” he says.

More needs to be done, specifically around the idea of customers coming together and creating demand,” says Helmi. “Demand-driven change can play a huge role in this transformation, at least in the early parts. On top of regulation, not just by itself. We are talking about like-minded companies coming together to create the scale needed to make the change happen.”

The latest PE Live webcast, Can shipping be decarbonised by 2050?, in association with Deloitte, is now available on demand.

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