Reflections on the Global Summit session “Decarbonising Shipping"

Contributors: Morten Bo Christiansen (Head of Decarbonisation, Maersk), Datuk Ruben Emir Gnanalingam bin Abdullah (Group Managing Director, Westport), Marc Nuytemans (CEO, Blauwe Cluster) and Michael Parker (Global Head of Shipping, Citibank).

Moderator: Tarek Helmi of Deloitte, Partner in Strategy and Operations, with focus on Energy, Resources and Industrials. Tarek has a passion for the energy industry with extensive experience in strategy-led transformations in addition to operational experience with an international oil and gas major. Tarek is a leader in Deloitte’s Future of Energy initiative.

In her welcome note, Datin Sunita Rajakumar, founder of Climate Governance Malaysia noted, “to shed light on their pivotal role of guiding companies to overcome climate threats and build an effective climate governance for the shipping industry, we are looking forward to hearing the views from these highly experienced thoughts leaders who are at the forefront of combating climate change.

One of the hardest-to-abate industries is shipping, accounting for about 80% of the volume of global trade and thus considered the backbone of our economies. The increasing levels of carbon emissions generated mirrors our economic growth and attendant demands for goods.

In their report which is available online, Deloitte reminds us that The International Maritime Organization (IMO) has set an ambition to reduce international shipping carbon emissions per transport work by at least 40% by 2030, and 70% by 2050, off a 2008 baseline.

For those businesses which want to be aligned with Paris, they will also need to consider offsetting solutions for deeply entrenched emissions to reach net zero emissions by 2050, Race To Zero is also an international COP26 campaign.

“These ambitions send a strong signal to the shipping industry that immediate action is needed and all parties involved need to be prepared for this sea change”.

Notable quotes from the speakers:

"Decarbonisation of shipping is a proxy for the decarbonisation of global supply chains.”

“If we aren’t climate resilient, ports will be underwater and shipping won’t be able to function!”

“The nature of the shipping industry is that it is historically fragmented and inward looking, weak on self-regulation and slow moving with long-lead assets. Non-executive directors are having to make long-dated decisions on future fuel with uncertain supply chains even for LNG.”

Karen Fawcett, non-executive director based in Singapore, summarised the conversation for us, “This has been a very thoughtful session and I am feeling heartened that shipping is an industry where the leaders recognise the climate challenge and some of the companies are already in transition. The key take-aways are the massive scale of this transition, the necessity to collaborate and change across the industry, plus, considerable hope with large companies like Maersk making climate a strategic imperative with some carbon neutral voyages from 2023 and new vessels enabled to take carbon neutral fuels

The panellists also shared a strong dose of reality by asserting that regulation is likely to be essential with supra-national initiatives such as COP26 needed to instruct the IMO to move faster. Also, that customers will have to bear the extra costs for moving goods around, possibly aided by carbon pricing

Watch the recording of this webinar here.