THE LINK BETWEEN TRADE AND TECHNOLOGY CHOICES
T
he wide range of vessels in the global fleet and their diverse trade routes create unique opportunities and challenges for shipowners as they set a course to decarbonization.
Both short- and deep-sea vessels can be used for international trade and carry similar types of goods. However, the markets are distinctly different in terms of ability to adopt new technology, available resources and the complexity of their regulatory frameworks. These differences and commonalities will greatly influence the pathways that owners choose to reach the International Maritime Organization's (IMO) greenhouse gas (GHG) reduction targets for 2030, 2050 and beyond. Short-sea vessels are primarily used in environmentally sensitive areas, such as the Baltic Sea, inland rivers or lakes located close to urban areas, where emissions are strictly regulated. About 60 percent of the European sea trade is handled by short-sea shipping across areas such as the Mediterranean, the North and Irish Seas, the Baltic and throughout the continental countries served by rivers. Similar national and regional trade clusters exist in Africa, Asia, North and South America. Also, the short-sea trades tend to be governed by local and regional regulations, rather than global ones. Ownership of short-sea vessels tends to be distributed among small- to medium-sized companies that usually have limited resources to spend on new technology. Therefore, they tend to be supported by government initiatives that incentivize the adoption of any new technologies designed to benefit the public. Examples of such initiatives are the European Union’s (EU) Connecting Europe Facility2 and Horizon 20203. The trade and regulatory landscape of short-sea vessels make them ideal candidates for early adoption of the new technologies that promote environmental sustainability. Some examples include low- and zerocarbon fuels such as liquefied natural gas (LNG), methanol and ammonia, as well as hybrid-electric power generation and propulsion systems. Fuels such as methanol and ammonia have strong potential to lower the carbon footprint of shipping; but one of their challenges is their low energy content and the comparatively lower amount of energy they can store in the tanks of a ship. Short-sea shipping can accommodate the use of fuels with low energy content — such as methanol or ammonia — that require more frequent bunkering.
Trade Factors and Technology Adoption Short Sea
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Access to frequent refueling Often travel on a fixed route May benefit from government subsidies Good early adopters of technology
Deep Sea
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Purpose-built; designed for a function Follow a holistic approach High capital cost for new equipment Built new or retrofitted
9 | SETTING THE COURSE TO LOW CARBON SHIPPING | ABS
