News / LISW: Green fuels ‘stutter’ amid regulatory friction and global tension

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External volatility and “fragmented regulation” have pushed investment in green shipping technology to the backburner, delegates at London International Shipping Week heard yesterday.

Paul Jennings, managing director of insurer NorthStandard, warned that the “big challenge” for shipping will be the pace of change required for adopting alternative fuels and the accompanying technology.

“It’s already occurring, faster than anything we’ve seen before,” he said.

And while Mr Jennings observed that the industry is making progress, he noted that the pace of adopting new fuels or technology “has taken a bit of a stutter”.

“Given what we’ve all experienced over the last five, six, seven years, through the pandemic, and now we’ve moved on to conflict and geopolitical tensions, that has had a stutter,” he said.

According to him, one of the main reasons for this is a drawback of investment in light of complex regulatory changes and geopolitical headwinds.

“To have fragmented regulation is horrible friction for the ship owners. It’s not effective, it’s not efficient. And we’re seeing more and more of that.

“And on top of that, we are also seeing shipping being weaponized through sanctions for governments to enact their foreign policy aims,” he said.

“Whilst shipping is up against all of that, it inevitably has a dragging impact because of the additional resource and cost that has to be invested to deal with all of that,” Mr Jennings explained.

“Can we please all just help shipping to take away some of that friction so that they can take advantage of the technology that’s out there and move to that utopian world?”

Emanuele Grimaldi, chairman of the International Chamber of Shipping, added: “Things are happening, but of course, if we talk about 90,000 vessels in the world and two million seafarers, there is a lot of work to be done. And probably, it’s very hard to reach this in 2050.”

He suggested that financial incentives are needed to encourage adoption.

“We are moving. But of course, we need to be encouraged by the reward that might be there,” said Mr Grimaldi.

“Rewards are needed for the production of new fuels. Because today, the real problem is that those new fuels are not produced at scale, and they are very expensive,” he explained.

“We have to cover the difference of the expense to encourage people to use them more… and to do it in a short period of time, we need a reward for the pioneers, for the one who are taking this decision.”