Box lines hit by rising fuel costs as OPEC cuts supply
As global freight rates continue to fall, container shipping lines are being hit by a ...
© Vladimir Serebryanskiy
While the impact of Covid-19 has disrupted the maritime industry far more than the implementation of IMO 2020, the former has exacerbated difficulties with the latter. The maritime industry has seen many delays in ports, disruptions to testing, and bunker delivery authorities suspending sulphur checks so far this year.
With compliance enforcement plans for this year on the back foot, we have seen fragmentation in fuel supplies as more fuel is blended to meet compliance. This, and other supply chain issues have led to problems with IMO 2020-compliant fuel, with a number of shipping companies suffering quality issues, according to a recent survey conducted by BIMCO.
The survey found that more than half of its respondents had received results indicating off-specification properties, and 22% said low-sulphur fuel oil had been de-bunkered as a consequence of 0.50% sulphur fuel oil properties.
The dual impact of Covid-19 and the IMO 2020 sulphur cap has led to speculation on whether the pandemic, and its knock-on effects, have put decarbonisation initiatives on hold.
At the same time, however, the current world health and economic situation has reinforced the urgency of the need for transformation to reduce international shipping’s greenhouse gas (GHG) emissions, as navigating the challenges caused by Covid-19 has revealed how quickly society and businesses can adapt plans.
The goals laid out by the IMO do require a transformation of the industry, arguably similar in scale to the transformations that have been necessary to combat Covid-19.
Given the limited timeframe to meet these goals, shipping will have to innovate and look at future and alternative fuels to ensure the industry is compliant with IMO 2020 and future regulations. We must not derail our efforts in collaborating and testing new technologies.
Many shipping companies are now intensifying their GHG initiatives, and more collaborations are happening across the industry, with new partnerships forming and existing ones growing. This includes AP Møller-Maersk and eight other global corporate powerhouses recently launching the Transform to Net Zero initiative to achieve net-zero emissions no later than 2050; and BunkerTrace’s partner, GoodFuels, which continues to collaborate with many companies, such as Stena Bulk, Jan De Nul Group and Norden A/S, to accelerate the energy transition within shipping by supplying its advanced marine biofuels.
As summarised by Morgan Stanley: “There may be some short-term delays in climate policy. But decarbonisation remains an attractive investment theme for the decade ahead, with a low or zero carbon recovery likely.”
This suggests that first movers in decarbonisation remain committed to sustainable investment.
While some think the pandemic might distract shipping from achieving its GHG emission targets by 2050, there is an argument that the lessons learnt from Covid-19 may prompt an intelligent recovery, therefore galvanising shipping to meet these objectives. This can be achieved when stakeholders find new methods of collaboration – and, in turn, the technology and platforms to facilitate this collaboration.
Providing compliance and sustainable credentials will be a growing priority in the next few years, so to achieve this, the industry will need a means of proving source-to-wake traceability of sustainable fuels.
Blockchain is known to be a powerful tool that has an integral role to play in enabling collaboration and providing assurances. It can improve the way we document compliance and will support shipping’s transition and ability to reach emissions targets.
And this is why we created BunkerTrace. Developed in 2019, with input from a broad consortium via BLOC, BunkerTrace is a turn-key solution for tracking marine fuels. Its combination of blockchain and synthetic DNA provides shipping with the assurance of accurate reporting and authenticity of fuels for actionable insights and compliance.
After the first pilot with Cooperative Bebeka in 2019, and scaling with first mover clients, BunkerTrace successfully proved that this technology can transform marine fuel compliance and that the data can be used to make the bunkering supply chain safer.
Essentially, BunkerTrace can solve fuel quality issues, because the solution has an immutable chain of custody, tracking each bunkering transaction so it can easily build up a secure picture of what fuels to avoid, and acting as a neutral intermediary for recording information by leveraging its nature as a permission-based, privacy-oriented means of storing data.
By incorporating synthetic DNA with blockchain technology, BunkerTrace has a second layer of truth within the solution, which can identify and flag inaccuracies in fuels.
As the world continues to navigate the uncertainties caused by Covid-19, 2020 so far has taught maritime that collaboration and innovation can boost the momentum needed to achieve the IMO’s targets. Embracing available solutions and championing new ones within our intelligent recovery will be vital for shipping and will help steer the journey towards decarbonisation. BunkerTrace will be part of that journey.
Deanna MacDonald is co-founder of BunkerTrace and chief executive of BLOC
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