MEDIA

Speeding up the transition to sustainable shipping

This opinion piece from Pollination Singapore-based Managing Director Diego de Sartiges was originally published in The Business Times.

It is no exaggeration to say modern Singapore has been built on shipping. The city-state’s port is the world’s second-largest in terms of freight handled; since 2015, Singapore has been ranked as the world’s top maritime capital.

Singapore Maritime Week gets underway this week, amid major challenges in a global industry that is facing significant upheaval and needing to step up the current pace of change.

A decade ago, few outside of the laboratory would have heard of sustainable aviation fuel. These days, the term is ever-present across the business and sustainability communities, and global airlines are competing to reassure customers and shareholders that they are well-prepared for the change that’s taking place.

While around 700 million tonnes of sustainable aviation fuel will be produced this year – not enough to meet rising demand but a promising start – it’s a different story in our ports and shipping lanes.

Global progress has been slowed by a series of challenges, ranging from a fragmented market structure that means no universal sustainable marine fuel has yet emerged, to lack of financing and regulatory reforms needed to ready global ports and retrofit ships to run on alternative fuels.

If shipping were a nation, it would be the sixth-largest greenhouse gas emitter in the world, according to the International Maritime Organization. And while shipping contributes 3 per cent of current total emissions, that number could balloon to 10 per cent by 2050 unless alternative fuels are rapidly developed, commercialised and scaled.

Analysts predict that demand for lower-carbon marine fuel will spike in coming years as changes such as the recent European Union inclusion of shipping emissions in its Emissions Trading System begin to bite.

Work is underway on a variety of alternative fuels, with methanol, biofuels and liquid hydrogen all potentially part of the solution set. It is ammonia that appears to have the edge, with the International Energy Agency envisaging it will be the leading sustainable marine fuel by 2050, supplying around 44 per cent of total energy for shipping in a 1.5 degrees Celsius-aligned scenario (more than double any other sustainable fuel source).

If such fuels are to become widespread (as they must) it seems Singapore is determined to be at the forefront. In March, we saw the world’s first use of ammonia as a shipping fuel – as a dual-fuel vessel was loaded with ammonia at Vopak’s terminal on Jurong Island.

This came just days after Singapore signed a memorandum of understanding (MOU) with the Australian government to work together on creating a “green shipping corridor” between the two nations. Under the deal, both countries pledged to work with industry on sustainable fuel supply chains for the maritime industry, including building infrastructure, formalising standards, and developing and implementing new training.

In the same month, the Singapore subsidiary of U-Ming Marine Transport of Taiwan and Itochu Corp of Japan revealed plans to jointly develop a fleet of ammonia-fuelled bulk carriers; meanwhile, another MOU was signed with the city of Tianjin late last year to cooperate on a green shipping corridor between China and Singapore.

So what does the city-state need to do to continue positioning itself for success? And what should Singapore corporates that rely on shipping as part of their supply or value chains do to make sure they are well poised?

As the MOUs with Australia and Tianjin make clear, there is substantial innovation and upskilling work that must be carried out in order to commercialise and scale sustainable marine fuels, as well as store and transfer them safely. Singapore is well-placed to play a leading role.

With its vibrant innovation and research and development capability and its history as a globally significant port, there is ample opportunity for Singapore to lead with the software, storage technology and retrofitting solutions needed for this global shift.

The Maritime and Port Authority of Singapore and the Infocomm Media Development Authority are fast-tracking such innovation via the Sea Transport Industry Digital Plan, which aids small and medium-sized businesses working on digital solutions in these areas. The nation’s Maritime Decarbonisation Blueprint charts seven key areas, including being ready for a multi-fuel bunkering transition and port terminals, to achieve net-zero emissions by 2050.

Singapore is currently the global port with the greatest capacity for fuel storage, which makes it uniquely placed to lead on “bunkering” – a central challenge for a speedy transition to ammonia-fuelled shipping. It has begun positioning itself by developing storage facilities where ammonia can be kept and loaded onto ships that have been fitted out to run on it. Ammonia advocates plead for other global ports to commit to what Singapore already has underway.

Singapore’s corporates are on the lookout for opportunities as the nation strives to lead in creating a scaleable supply chain for ammonia-based shipping.

But it is not only those directly involved that should be paying close attention this week. So much of the city-state’s prosperity has been built on receiving raw materials through its port, adding value through processing or manufacturing, and then sending new products back out to the world.

For companies in sectors such as agriculture and manufacturing, it will not be possible to fully decarbonise supply chains without greening shipping. And as shareholders, consumers and regulators increasingly expect and prioritise low-carbon products, these Scope 3 emissions will need to be addressed.

As well as a thriving innovation sector that is incentivised to tackle the problems that need solving for sustainable shipping, Singapore also has the edge by way of its strategic positioning and relationships with key actors such as Australia, Japan and China. It is no accident that the Jurong Island trial and the recent MOU were with an Australian company and the Australian government, respectively.

Green ammonia – which can be produced using hydrogen obtained using 100 per cent renewable electricity – is a key part of Australia’s aspirations to become a future hydrogen superpower. Our company, Pollination, is developing a facility in the East Kimberley that will create such green ammonia to be shipped for export to trading partners across Asia. Potential future uses include fertiliser for agriculture but could also include marine fuel.

As the local shipping industry welcomes guests and experts from around the world for Maritime Week, there is a clear opportunity for Singapore to both listen and lead. It may be an area of decarbonisation that doesn’t always grab the headlines the way others do but it’s one that is vital for delivering Singapore’s net-zero transition.

 

share

Stay informed

CONNECT WITH US