Undoubtedly, how shipping manages its environmental footprint was this industry’s news story of the year.
2018 was the year where regulators finally gave shipping its ‘Kyoto’ moment – demanding vessels slash their carbon footprint in half by 2050 compared to 2008 levels.
With ships trading for 25 years, what this new ruling means is that we can expect a dramatic series of tech developments when it comes to propulsion in the coming years whereby we should see contracts signed for extraordinarily green vessels within the next seven years. For me, the smart money is now on hydrogen making a belated, quick run to become the real future fuel for shipping.
As is always, the way, however, with this sector there will be first movers and laggards – and this two-tier mentality is already beginning to take shape.
2018 was not just dominated by long-term commitments to decarbonise – the more pressing issue that took more headlines on a daily basis was how to desulphurise.
Although shipping has known for a number of years that by 1 January 2020 it will have to adopt ways to lower its sulphur emissions, by and large it was only this year, as the months ticked down to regulation implementation, that the industry grappled with how it will tackle this environmental hurdle.
Debate raged all year over the merits of so-called scrubbers, exhaust abatement treatment systems that can be installed within ships’ funnels. Others opted to go for liquefied natural gas (LNG) as their fuel to comply with the sulphur cap. The majority, however, have adopted a wait-and-see approach, ready to accept higher priced, lower sulphur content bunker fuel from refiners.
Whichever path shipping lines choose in their 2020 fuel vision, it’s the shippers who will shoulder much of the burden. Container lines this autumn made it clear that the $60bn in predicted costs associated with sulphur cap compliance will be passed on to clients. Expect a hugely contentious 2019 as customers and ship operators fight over who must pay to ‘green’ maritime supply chains, a debate that potentially could last all the way through the first half of this century.