BTJ Booklet 2024

Dear Readers,

Twenty years. Is it much or but an eyeblink? It, like many things, depends. Though, it does seem that the Baltic Sea region and its transport & logistics landscape have truly changed over the past two decades. But don’t take my word for it! Instead, The voice of an industry column gathers nearly 40 opinions that both reflect on the past and try to put a finger on the future. Several motives interweave the voices that come from all around our beautiful corner of the world: sustainability, digitalisation and innovation on the brighter, full-of-challenges but also richwith-opportunities side, with armed conflicts, all-too-frequent disruptions to shipping, and the consequences of climate change on the other. Be they good or bad, at least the sector is well aware of what needs to be done and what measures are there in the solutions toolbox. What is encouraging is that the stakeholders who shared their thoughts with us, who come from diverse nooks and crannies of the transport & logistics domain, are by far and large optimistic when it comes to tackling whatever the next 20 years will throw at them. They are also not alone in supplying the future demand for all-round development, so to speak, as one can sense a firm commitment to fostering cross-country and pan-regional partnerships in the opinions.

We would, too, like to add to this level-headed confidence by continuing our journey of delivering the latest & greatest from across the world of transport & logistics – to the benefit of our readers, partners who make it all happen, and the industry at large. Thank you for sailing with us for the past two decades!

Przemysław Myszka

Baltic Transport Journal

Publisher

BALTIC PRESS SP. Z O.O. Address: Aleja Zwycięstwa 96/98 81-451 Gdynia, Poland office@baltictransportjournal.com

www.baltictransportjournal.com www.europeantransportmaps.com

Board Member BEATA MIŁOWSKA

Managing Director

PRZEMYSŁAW OPŁOCKI

Editor-in-Chief

PRZEMYSŁAW MYSZKA przemek@baltictransportjournal.com

Roving Editor MAREK BŁUŚ marek@baltictransportjournal.com

Proofreading Editor EWA KOCHAŃSKA

Contributing Writers

KISHOR ARUMILLI, NEIL DALUS, PAUL DELOUCHE, BERTIL DUINHOWER, DAN EICHELSDOERFER, MARK FALINSKI, ALBRECHT GRELL, ALEXANDRE HARRY, ALEXA IVY, PETER JAMESON, MAURICE JANSEN, EWA KOCHAŃSKA, PANOS KOUTSOURAKIS, LAURA LARKIN, ALISTAIR MACKENZIE, SIDDHARTH MAHAJAN, KEVIN MALONEY, OSSI METTÄLÄ, ALEKSANDAR-SAŠA MILAKOVIĆ, SIMEN DISERUD MILDAL, HELGE A. NORDAHL, TORILL GRIMSTAD OSBERG, KUNAL PATHAK, MARIELLE REMILLARD, MONIKA ROGO, JULIANA SANDFORD, ARE SOLUM, DAVID YOUNG

Art Director/DTP

DANUTA SAWICKA

Head of Marketing & Sales

PRZEMYSŁAW OPŁOCKI po@baltictransportjournal.com

If you wish to share your feedback or have information for us, do not hesitate to contact us at: editorial@baltictransportjournal.com

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PRZEMYSŁAW

Photo: Canva

3 REGULAR COLUMNS

3 Editorial

8 Safety news by TT Club

12 The voice of an industry

32 The new (sailing) bridge for trade & tourism – BTJ Trip 2024 / Finnlines’ Malmö-Świnoujście ferry service by Przemysław Myszka and Przemysław Opłocki

36 Ready to rock

– BTJ Trip 2024 / the Port of Jakobstad-Pietarsaari by Przemysław Myszka

40 Events: Radicalism and/vs realism

The Grimaldi Group’s XXVI Euromed Convention From Land to Sea by Przemysław Myszka

42 SUSTAINABILITY

42 We don’t need a winner – Why a single shipping company won’t turn the tide of the fuel market – but the industry at large can (if it only wants to, with the help of policies and other sectors) by Ewa Kochańska

46 Understanding the whole picture – How to bunker liquefied hydrogen – safely by Simen Diserud Mildal, and Torill Grimstad Osberg

48 Insetting doesn’t have to be upsetting – How carbon units can help to decarbonize supply chains by Bertil Duinhower

50 The hidden dynamics of the energy transition by David Young, Laura Larkin, Alexandre Harry, Dan Eichelsdoerfer, Mark Falinski, and Juliana Sandford

56 Biogas can help global shipping go green by Peter Jameson, Maurice Jansen, and Kevin Maloney

64 Navigating decarbonization trajectories – Practical solutions and collaborative strategies for the shipping industry by Paul Delouche

68 Beyond the horizon –

Robust value chains are critical to decarbonization and the energy transition by Panos Koutsourakis

The Power of Networks

Connecting Europe

– with seamless logistics solutions.

Credits: Martin Elsen

72

LEGAL

72 It pays to be safe!

– Interview with Laurence Jones, Director Global Risk Assessment, TT Club by Przemysław Myszka

76 High waves, high claims

– New study on container losses by Kunal Pathak, Siddharth Mahajan, Are Solum, and Helge A. Nordahl

80 As safe as ports?

– Advances in technology aiding seaport and terminal security by Neil Dalus

82 MARITIME

82 Shifting priorities & drivers – Highlights from ESPO’s latest port investment study by Ewa Kochańska

86 The price of pooling – Market- & data-based approach to FuelEU Maritime by Albrecht Grell

88 The (critical) cost of carbon – CII is about to get more expensive – here’s how to prepare by Aleksandar-Saša Milaković

90 TECHNOLOGY

90 The image of health – Overcoming obstacles in AI-based container damage detections by Kishor Arumilli

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A NEW BALTIC WAY

Ever since humanity began conquering the oceans, ports have stood as symbols of peace, brotherhood, and safety. Ports worldwide connect nations, enabling trade, tourism, and cultural exchange.

As we commemorate the 35th anniversary of “The Baltic Way,”we celebrate unity and opportunity. History has shown that lasting peace is best secured through meaningful and sustained cooperation between nations and people. Let us draw inspiration from this legacy and further strengthen the ties that have long linked our shores.

94 Sailing blind? – Fuelling the transition to new fuels and greener fleets with data by Ossi Mettälä

96 Never compromise – Interview with Fredrik Rönnqvist, Segment Manager for Material Handling, and Gustav Stigsohn, Product Manager, Fogmaker by Przemysław Myszka

100 Well, duh!

– Can a single maritime artificial intelligence (AI) research project cut 1% of total global emissions? by Alexa Ivy

102 Floating on air – How all vessels can cut their emissions thanks to air lubrication by Alistair Mackenzie

104 Baltic Ports Conference 2024 – the future of ports is now; let’s get strong on it together! by Monika Rogo

SPYDER NETTING WINS TT CLUB INNOVATION IN SAFETY AWARDS 2024

Out of 28 entries and then three shortlisted candidates, the judges decided to distinguish the product that came from the partnership between Cross Currents 88 (the solution’s developer) and G2 Ocean (a break-bulk shipping company wanting to increase the safety of vessel loading). The winning Spyder Netting is a thin layer of plastic film netting – a fall barrier system – that can be rolled out across gaps and secured between layers of cargo. The challenge stems from when paper reel products are loaded in the cargo holds of break-bulk vessels, with stowage resulting in gaps between the cargo (particularly along the hold edges where the freight meets the bulkheads). These gaps present a significant fall risk to stevedores working in the cargo holds. The gaps can extend many metres down through the cargo, and, unfortunately, falls into these gaps have resulted in fatalities and severe injuries. “Falls from height during cargo operations is a vitally important risk to be managed. Spyder Netting […] has already saved lives. Cross Currents 88 has been personally thanked by a stevedore whose fall was arrested by the netting,” Richard Steele , CEO of ICHCA International , commented on presenting the award to Cross Currents 88-G2 Ocean. The two other shortlisted parties were Royal HaskoningDHV and Trendsetter Vulcan Offshore . The former entered Smart Mooring into the competition, a system addressing the safety of moored vessel operations in sheltered and exposed ports by predicting excessive ship motions and mooring line forces. The latter came with the Next Generation Lashing System that reduces container motion and controls the dynamics of container stacks. A detailed overview of all the entries can be found in an online digest prepared by TT Club and ICHCA Mike Yarwood , TT Club ’s Managing Director, Loss Prevention, underscored, “We want to nurture widespread and varied advances in safety innovation, so we seek to give all entrants the oxygen of visibility in the marketplace to help develop and grow their initiative to benefit cargo handling operations globally.”

COUNTERING SHIP FIRE PROLIFERATION

Prompted by the recent spate of container ship fires – two in port (including an explosion in the Port of Ningbo-Zhoushan) and two at sea within the last couple of months – the international freight and logistics insurance provider TT Club stresses the greater need for all players in the global supply chain to recognise their responsibility for accurate and effective communication between all parties for the transport of dangerous goods. “The causes remain under investigation,” says Peregrine Storrs-Fox, Risk Management Director at TT Club, about the four incidents, furthering that, “However, there are strong indications that potentially explosive chemicals and fire accelerators, such as lithium-ion batteries, may be involved in at least two of the cases. As with historical incidents, it is likely that various errors occurred as the shipments were initiated and the exact nature of the cargoes was communicated to supply chain counterparties, giving rise again to ‘perfect storms.’ Every participant in the process needs to act in the best interests of safety at every point in these cargoes’ journeys.”

According to TT Club, the exact number of containers carrying dangerous goods that are shipped annually is difficult to estimate due to mis- and non-declaration. Partly in response to the issues around inaccurate declaration, the International Maritime Organization amended in 2022 the Guidelines for the Implementation of the Inspection of Cargo Transport Units to urge governments to inspect all unit types, regardless of the declared cargo. The recently released consolidated results for 2023, from just eight countries (or 5% of the signatory states), evidence continuing safety concerns. Among others, TT Club points to a rapidly worsening trend in stowage and securing (within units) over the last five years and the worst position since these reports began in 2001. The insurer also notes the five-year worsening trend relating to errors found in documentation. “This spike in serious container ship fires is reminiscent of the spate in 2019, although the 30-year average frequency may remain one every 60 days – but any life-threatening event is one too many,” TT Club warns.

TT CLUB JOINS TFG

The freight insurance specialist has become a part of the UK’s Department for Transport industry-led Task and Finish Group (TFG), set up to explore raising standards in truck parking facilities to improve driver welfare and cargo security. “TT applauds the UK Government’s initiative and is grateful to add its experience of trends in cargo theft and the modus operandi of criminals in order to encourage adoption of standards at truck stop facilities,” said Mike Yarwood, TT Club’s Managing Director of Loss Prevention, who chairs one of the working groups looking at parking standards. In recent years, TT Club has ramped up its campaign to increase awareness of the risks associated with overnight parking of trucks, not just in the UK but across Europe as a whole. The insurer emphasised in a recent report, penned together with BSI, that over 70% of cargo thefts in 2023 around the world were from trucks. TFG offers an opportunity for a unique gathering of

individuals from industry bodies, truck park and motorway service operators, the police force, standards organisations, insurers, and users to explore, identify and understand the blockers to and opportunities for better security and safer rest facilities for those dubbed the ‘knights of the road.’ TFG will survey why those operators of secure facilities adopt current standards, identify the highest crime locations across the last four years, explore greater use of automatic number-plate recognition/closed-circuit television equipment, and map violent crimes against drivers. “The extent to which the UK and EU economies rely on trucking is staggering. As industry stakeholders, we must strive to both increase the safety of drivers and decrease the loss of cargo. That is why it is hoped that this TFG will result in longer-term strategies to improve the current truck parking landscape in the UK, and, in addition, that useful guidance can be offered to EU legislators,” added Yarwood.

GUIDELINES TO DEVELOP AND IMPLEMENT A SAFETY MANAGEMENT SYSTEM FOR ALTERNATIVE FUELS ON BOARD SHIPS – PUBLISHED

The Maritime Technologies Forum (MTF), an organisation of Flag States and Classification Societies established to provide technical and regulatory expertise to benefit the maritime industry, has released the Guidelines in question with recommendations for developing and implementing the Safety Management System (SMS) under the International Safety Management (ISM) Code for safe onboard handling of the potentially more hazardous alternative fuels. “Safe operations with alternative fuels will require an assessment of the competency, training, familiarisation and resources relevant to the specific alternative fuels. The human element in the operations associated with the handling, storage and utilisation of alternative fuels is critical and should be considered

to ensure safe operations,” MTF underscored in a press brief. Nick Brown, CEO of Lloyd’s Register, added, “These guidelines and recommendations from the MTF are an important step forward to achieving safe and sustainable operations and a great starting point to begin preparing for the use of alternative fuels. The ISM Code provides a top-down approach to safety and is the ideal vehicle through which to drive training and skills for the safe handling of these fuels, not only under routine operations but also during emergencies such as equipment failures, fires, collisions, and malicious attacks. Our biggest strength, however, will be learning from each other throughout the energy transition, ensuring we have a solid foundation to promote safety for our people at sea and in port.”

IMPROVING SEAFARER WELL-BEING:

PRELIMINARY FINDINGS FROM THE DIVERSITY@SEA PILOT PROJECT

The report , produced by one of the Global Maritime Forum ’s initiatives (and within the All Aboard Alliance), urges the global shipping industry to improve working conditions, better seafarer well-being, make life at sea safe and inclusive, and future-proof against the changing needs of the maritime labour market to attract future generations of seafarers. These conclusions come from a 10-month global collaboration involving 400 seafarers from 12 ships (each belonging to a different shipping company) that generated over 50 thousand data points. “It is our hope that these preliminary findings and learnings will be embraced by stakeholders across the maritime industry who are looking to make working at sea more attractive and considered by policymakers as valid input for a discussion on minimum standards to ensure that rules and regulations not only keeps pace with the evolving nature of maritime work but also increases inclusivity and safety at sea,” underscored the report’s authors.

THE EUROPEAN PORTS ALLIANCE PUBLIC PRIVATE PARTNERSHIP

The cooperative has been launched to fight organised crime and drug trafficking by leveraging the collective resources and expertise of multiple stakeholders to enhance security measures and enforce stringent controls within port facilities. Praising the initiative, the Federation of European Private Port Companies and Terminals (FEPORT) warned that “[…] we are reaching a situation where criminal networks are using extreme violence, corruption and intimidation that require exceptional mobilisation from public and private stakeholders in ports, national authorities, and law enforcement agencies. Seizures of cocaine in the EU have reached record levels, with more than 300 tonnes seized on an annual basis in recent years.” The Federation also notes that

many effective solutions are already in place, such as screening, intelligent cameras, virtual fences, port worker identity checks, and others. Still, closer international cooperation will be needed as we “[…] should also be aware that the creativity on the side of drug traffickers is huge and that it is going to be a race, a long marathon.” Ylva Johansson, European Commissioner for Home Affairs, stresses, “The vast majority of illicit drugs into the EU are trafficked along maritime routes. 70% of drug seizures are in EU ports. That is why cooperation between national & EU authorities and EU ports is vital. Organised crime is adept at moving from one port to another as opportunities rise and fall. To challenge this network, we must build a network. The violent consequences of drug trafficking are as big as the threat of terrorism.”

TRAINING SEAFARERS FOR A DECARBONISED FUTURE

The Maritime Just Transition Task Force has launched a collaborative project tasked with creating a framework to equip seafarers with skills as shipping transitions to zero-emission operations. Research commissioned by the organisation identified that 800 thousand of seafarers may require additional training by the mid-2030s in order to operate vessels running on zero- or near-zero emission fuels. The project will be run by the International Maritime Organization (IMO) and the Maritime Just Transition Task Force Secretariat. Lloyd’s Register (whose Foundation will fund the framework alongside IMO) will develop the training framework for seafarers and officers, as well as an instructor handbook for maritime training institutions. The World Maritime University will provide academic expertise, while a large number of organisations will be involved through a global industry peer learning group to provide knowledge-sharing. “Moving towards a low-emission future will require new green jobs and re-skilling, and the global maritime industry is no different.

Future alternative fuel technologies, such as hydrogen, ammonia and methanol, means there is a vital need to up-skill all seafarers,” highlights Ruth Boumphrey, CEO of Lloyd’s Register Foundation. Sturla Henriksen, Special Advisor Ocean of the United Nations Global Compact , adds, “Decarbonising shipping is essential to combat the climate crisis. The global nature of this transition means that no one is alone in tackling this issue, and the Maritime Just Transition Task Force is committed to providing resources to support stakeholders making this journey.” Stephen Cotton , General Secretary of the International Transport Workers’ Federation , shares, “We have heard the message loud and clear from seafarers around the world: they are ready to lead, they are ready to shape the training frameworks for the zero carbon fuels of the future.” In light of these future demands, IMO is reviewing and revising the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers , with input from the industry and seafarer unions.

CARGOES OF CONCERN

The Cargo Integrity Group has identified 15 commodities, commonly carried in containers, that, under certain conditions, can cause dangerous incidents. While these are usually transported safely when regulations and guidelines are followed (such as the Quick Guide to the CTU Code), the Group has created this list to highlight cargoes that can become hazardous if mishandled. The industry bodies forming the Group emphasise that cargoes that are mis-declared or have incomplete or incorrect information about their identity are more likely to be involved in incidents. The Cargoes of Concern list is not exhaustive, but each item illustrates a common type of hazard, divided into three categories. First, reactive hazards: these can catch fire and cause significant damage and casualties in specific circumstances. Second, spill or leak risks: these commodities can present a risk if not packed properly or if they are damaged; spills or leaks from such cargoes can harm the health of people cleaning up the spill as well as the environment. Third, improper packing: cargoes that are poorly or incorrectly packed or secured in the container can lead to injuries to personnel or damage to nearby containers, property, or other shipments; such incidents can cause severe accidents at sea or on land, like truck rollovers and train derailments. The Cargo Integrity Group also plans to publish additional guidance on the identification and safe handling of these cargoes. “The combined experience of our organisations has been harnessed to identify these categories and result in pin-pointing some commodities where the risks are perhaps less obvious. While the potential dangers of transporting, for example, calcium hypochlorite or lithium-ion batteries might be more widely appreciated, the combustible qualities of seed cake or the hazards associated with cocoa butter or vegetable oils, will be less well-known,” shared Peregrine Storrs-Fox , Risk Management Director at TT Club. Lars Kjaer, Senior Vice President of the World Shipping Council, added, “Every actor in the global container supply chain is responsible for the health and safety of not only their own people but also those at any onward stage of the container’s journey. Complying with regulations and following the advice in the CTU Code saves lives, and we appeal to everyone shipping, packing and handling commodities that fall within the categories of these Cargoes of Concern to be particularly diligent.”

CTUCode–aquickguide

THE JOINT INDUSTRY GUIDELINES FOR COMBATTING ILLEGAL WILDLIFE TRAFFICKING – RELEASED

The initiative – led by the World Shipping Council and supported by the United Nations Development Program, the Global Environment Facility, and the Global Wildlife Program, in collaboration with TRAFFIC and WWF, and co-sponsored by BIC, the Global Shippers Forum, the International Fund for Animal Welfare, and TT Club – saw the release of the Guidelines in question. This toolbox for all supply chain participants includes advice on measures to take, questions to ask to help identify criminal wildlife trade, and guidance on reporting suspicious activities. An accompanying Red Flags document serves as a daily reference for all individuals involved in the supply chain. “Maritime traffic, in particular, remains vulnerable to the trafficking of illegal goods. With the vast volume of trade carried by sea, the demand for faster, just-in-time deliveries and the increasing complexity of intermodal supply chains,

criminals increasingly exploit weaknesses in global maritime supply chains to traffic contraband items,” the parties said in a press release. They also stressed, “Wildlife crime continues to pose a significant threat to biodiversity, local and national economies, as well as national and international security. The illicit trafficking of wildlife not only endangers countless species but also undermines the stability of ecosystems and jeopardises the livelihoods of communities worldwide. […] Illegal wildlife trafficking is not only decimating endangered species worldwide but also fuelling organised crime and threatening global security. The coalition’s joint effort underscores the shared responsibility of all stakeholders in combatting illegal wildlife trafficking. By uniting their expertise and resources, these organisations demonstrate their commitment to protecting wildlife and promoting sustainable trade practices.”

MANDATORY REPORTING FOR CONTAINERS LOST AT SEA

During its 108 th meeting, the International Maritime Organization’s (IMO) Maritime Safety Committee adopted amendments to the International Convention for the Safety of Life at Sea (SOLAS), mandating as of 1 January 2026 that all containers lost at sea should be reported. “The new regulations, specifically amending SOLAS Chapter V Regulations 31 and 32, mark a significant advancement in maritime safety and environmental protection. By ensuring prompt and detailed reporting of lost and drifting containers, these amendments

will enhance navigational safety, facilitate swift response actions, and mitigate potential environmental hazards,” commented Lars Kjaer, Senior Vice President at the World Shipping Council . His organisation, in anticipation of introducing mandatory reporting requirements, has since 2008 gathered information from its members on the number of containers lost at sea. The latest report speaks of 221 boxes lost in 2023 (with a recovery rate of about 33%), a reduction from the previous lowest-ever loss of 661 the year before.

THE WSC WHALE CHART

The World Shipping Council ( WSC ) launched a navigational aid called the WSC Whale Chart , the first worldwide mapping of all mandatory and voluntary governmental measures to reduce harm to whales from ships. “With the WSC Whale Chart, seafarers will, for the first time, have a comprehensive global resource offering critical navigational coordinates and concise graphics to identify

routing measures and areas subject to static speed restrictions designed to protect whales and other cetaceans. We hope that by compiling this unique navigational aid, keeping it updated and making it available for free to all navigators, we can help reduce ship strikes and safeguard endangered whale populations across the globe,” highlighted John Butler, President & CEO of the WSC.

A YEAR IN FOCUS – A FOCUS ON SAFETY CULTURE FOR THE YEARS TO COME

TT Club released its latest review of current and ongoing risk trends. The publication includes a variety of studies and reports, including, among others, an analysis of the insurer’s own claims data, as well as detailed research into and advice on mitigating invasive pests in containers, increased cybersecurity risk as ports automate, increasing customs documentation errors; clandestine immigration threats; dangers of plastic micro pellet spillages; and what safety & security aid can drone technology provide. “TT has recently witnessed a renewed focus and commitment towards loss prevention activities, with additional emphasis placed on the Club’s mission statement to make the industry safer, more secure and more sustainable,” comments Mike Yarwood , TT Club’s Loss Prevention Managing Director. He furthered, “Greater safety goes hand-in-hand with enhanced security and consequently sustainability. TT’s mutual ethos demands that we guide those we insure – and indeed the wider industry – in all aspects of risk through the container transport and global logistics supply chain. Via our latest Year in Focus , we aim to add to the large cannon of knowledge and guidance.” Josh Finch , TT Club’s Logistics Risk Manager, also underscores, “The importance of culture within an organisation, particularly where safety is concerned, cannot be underestimated. Safety is everybody’s responsibility, and everyone has a voice in safety matters. A strong safety culture will positively impact safety performance.”

Photo: Canva

KAIDA KAULER Chairman of the Board, Saarte Liinid

Saarte Liinid is also celebrating its anniversary in 2024 –30 years of dedicated service in the transport & logistics sector. As a key provider of regional passenger, cargo, and small craft port services, we have established ourselves as an essential hub in Estonia’s local transport & logistics network. Additionally, the SL Marinas network, which includes marinas on islands and the coastline, offers a unique tourism product, providing sailors with a distinctive opportunity to explore Estonia’s beautiful islands. Looking towards the future, we will meet challenges in three

In our experience, flexibility is a key element for success and growth in the transport & logistics industry: flexibility in thinking, in processes and their management, and in finding new solutions. Fortunately, the sector attracts people capable of coping with challenges, people who, as they gain experience, invariably also gain the ability to solve problems. It will be easier for them the more time the industry has to prepare – an example being the expected effects of the introduction of SO2 regulations in the Baltic, which did not happen, because there was enough time to get ready. On the other hand, the breakout of the coronavirus pandemic was virtually unpredictable. That said, we managed to deal with it in a cost-effective manner, though, of course, we had to change some processes and monitor the situation closely. Military conflicts, perhaps the least predictable events, required action even from entities in countries not directly involved, as sanctions, new

main areas. First, digitalisation, where we are committed to advancing digital port services, improving infrastructure management, and implementing the smart port concept. The demand for high-quality IT solutions is critical as we embrace the expanding digital possibilities in the sector. Second, environmental sustainability, where we aim to be more adaptable to changing energy needs, such as accommodating electric or hydrogenpowered vessels, and ensure the long-term durability of our port infrastructure. Environmental considerations have already become a vital factor in our investment decisions. And third, evolving customer and partner needs, where understanding and adapting to these changes will be crucial for maintaining our relevance and competitiveness in the dynamic transport landscape. Finally, many thanks to the Baltic Transport Journal for its coverage of these issues. We wish you nothing but success for the future!

cargo flows, and additional transshipments of military equipment drastically changed the situation. Although some segments of transport & logistics will feel the side effects of the war for years to come, for others (including our terminal), it was also an opportunity to showcase flexibility and help the sector continue delivering on its services to industries and the society at large. The future will bring new challenges. Some of these are already becoming clearer, such as the shortage of staff in the labour market, perhaps most evident at present in the case of truck drivers. These can be countered, for example, with training, incentive systems, or solutions based on artificial intelligence or autonomous systems. There are also challenges that we know will happen, but it is not clear what specific form they will take. We know that due to the requirements of the EU and International Maritime Organization’s climate policies, the energy system in seaports will have to change. As an industry, we have only just started on the path to finding suitably efficient and cost-effective solutions. There are also bound to be new, less predictable challenges – the postulated nearshoring and friendshoring could drastically change freight exchange routes, while artificial intelligence and autonomous systems will change the economic landscape.

DANIEL SAAR

President of the Management Board (CEO), DB Port Szczecin

JÖRGEN NILSSON

CEO, Port of Trelleborg

The Port of Trelleborg, the Baltic Sea’s largest ro-ro port for freight traffic, enjoyed a fantastic development in all areas over the past five years. Among others, we moved the port eastwards and built 500,000 square meters of land where there was previously sea – all to create the best conditions for a modern port and the most efficient internal logistics in Europe while being the most sustainable European ro-ro port. We are convinced that sustainability and creating green corridors will be extremely important now and in the future. For example, the Port of Trelleborg will produce more green energy than we use in our own operations. We encourage other seaports to play their part in the eco game. At the same time, we are absolutely convinced that the European logistics landscape will change in several areas, such as moving home part of the production from, among other countries, China. We also believe that we will see a greater flow of transport and manufacturing coming into Europe from Algeria, Morocco, and Tunisia. Given the persisting lack of truck drivers, we will also see a greater need for intermodal solutions, making sure each mode of transport has its attractive place in the logistics chain – and what’s also crucially important, that intermodality is accessible to all.

HAMBURG YOUR PORT

CAROLINE SÄFSTRÖM

CEO, Port of Karlshamn

The Port of Karlshamn, located in Southeastern Sweden, stands as a pivotal logistics hub in the Baltic Sea region. Known for handling a diverse range of goods, including forest products, unit loads via ferry and container, together with energy products, the port’s strategic location makes it a crucial node for trade routes between Scandinavia, Europe, and the Baltics. With extensive facilities for storage and transhipment, as well as a sizeable yard, the port is well-equipped to manage large and heavy freight volumes efficiently. The Port of Karlshamn has numerous opportunities for growth and development. A recent memorandum of understanding with RWE to explore offshore wind energy logistics in the Baltic Sea marks a significant step towards diversifying the port’s operations and contributing to sustainable energy initiatives. Karlshamn’s deep-water harbour and advanced logistics infrastructure provide excellent conditions for attracting new business and expanding existing operations. The ongoing development of the intermodal terminal and improved rail connections with Sydostlänken will enhance the port’s connectivity, making it an even more attractive option for international trade. The Port of Karlshamn is well-positioned to capitalize on its strategic location and robust infrastructure. By addressing current challenges and leveraging new opportunities, the port can continue to play a vital role in the

PER FREDMAN VP Sales and Marketing, Member of the Management Team, Port of Södertälje

With my over 40 years within transport & logistics, I have been able to follow trends over the years. When I worked in aviation, we had already seen how companies formed alliances three decades ago as smaller firms otherwise risked being knocked out. Fast forward to our times, and we can witness the same with the creation (and subsequent de-creation and re-creation) of alliances in global container shipping. It is all about getting as low a cost per unit as possible because the competition is

PIIA KARJALAINEN CEO, Finnish Ports Association

As we celebrate the 20th anniversary of the Baltic Transport Journal, it’s a perfect time to reflect on the Baltic Sea port industry’s journey. Over the past two decades, the region’s ports have evolved from traditional cargo hubs to advanced, sustainable logistics centers, setting benchmarks in efficiency, environmental responsibility, and innovation. Today, our seaports are dynamic nodes in the global supply chain, crucial in handling the rise of e-commerce and embracing new energy sources to meet carbon-reduction goals. The Baltic Sea serves already several green corridors, highlighting the region’s commitment to sustainability.

CAESAR LUIKENAAR Managing Director, WEC Lines

With 11 owned vessels, a large container fleet, 17 local offices, and a large worldwide agent network, WEC Lines is a proud container shipping line that has been in operation for 50 years. Headquartered in Rotterdam, it today serves destinations on three different continents, with the aim of connecting Northeast Africa, the Red Sea and Southern to Northwestern Europe and the UK with frequent and environmentally friendly container shipping solutions. With roads being more clogged up on European and UK roads and recent EU directives on reducing CO2 emissions, it’s becoming difficult to ignore that even companies who had in the past been shipping by road are looking into short-sea or intermodal

nothing but fierce. The ships have also become bigger and bigger. The question is when we will reach the maximum size. Already today, the largest vessels can call at a limited number of ports due to draught restrictions. Personally, I already speculated 20 years ago that the largest ships and the biggest alliances would operate east-west and west-east, with several ‘smaller’ shuttle ships feeding the volumes to and from the bulk trades. This speculation is now taking shape following the break-up of the 2M alliance between Maersk and MSC, with the former abandoning direct Far East Asia calls into the Baltic, instead choosing to feed the region with 6,000-7,000-TEUcapacity carriers. Maersk’s Gemini alliance with Hapag-Lloyd will, in essence, do the same to the 26 of their main liner services around the world. We are curiously following how this reorganisation will develop in the future. Will other shipping lines/alliances follow suit?

Going forward, investments in alternative fuels and onshore power will drive emission reductions in ports and shipping, aligning with global climate goals. Simultaneously, the industry faces challenges from geopolitical uncertainties. Automation, AI, and data-sharing will streamline operations, but robust cybersecurity measures are essential, too.

In 2023, 96% of Finland’s foreign trade moved by sea, making the nation entirely dependent on maritime transport through the Baltic Sea. But the region is similarly vital for the EU, as it connects the block’s Member States and acts as a crucial transport corridor both for goods and people. The Baltic’s year-round navigability is essential for the whole of Northern Europe. By focusing on sustainability, digital transformation, and resilience, the regional ports will continue to serve as vital, responsible links in the global movement of freight and people, ready for the challenges and opportunities of tomorrow.

options. In addition, we’ve seen over the years an increase in the demand for reefers with a shift from refrigerated trucks to container transport. In our view, the reefer container market still has enormous potential, and we anticipate cold store operators becoming more integrated into the cold logistics chain – creating potential to help us move cargo from road transportation to sea shipping with potentially various integrated solutions. We expect to further strengthen our presence in the Baltic States, Poland, and the European hinterland thanks to our collaboration with long-time WEC agent, Kontransa from the Arijus Group. They have opened a new office in Gdynia this year and added a new Hamburg call to our services in the autumn of 2024. We will also serve our clients even better with the addition of onward rail connections.

In our view, the future of transport & logistics is in intermodal container transport as it is a reliable, predictable, and costcompetitive alternative to road transport with high – scalability, payloads, and CO 2 savings.

In the past, ports primarily focused on expanding their physical infrastructure. However, the emphasis has shifted towards integrating sustainable solutions, such as green energy, digital logistics, and automation. It is clear that innovation and sustainability are shaping the future of transport.

The Port of Tallinn’s strategy is centered on advanced digital solutions, green initiatives, and multimodality. The industrial parks at the Muuga and Paldiski South harbours are setting new standards by utilizing multimodal connections via sea, rail, and road for efficient access to the European markets. With the new quay development at the latter, the port will be able to accommodate larger vessels and support the growth of offshore wind farms. Additionally, the Rail Baltica freight terminal, set to be located within Muuga – the only port in the Baltics with this opportunity – will further enhance the initiative. Looking ahead, the industry faces increasing environmental challenges, regulatory changes, and the need for more streamlined operations. The Port of Tallinn’s strategy includes adopting alternative fuels, advancing digitalization, and simplifying bureaucratic processes to ensure that the movement of goods and people remains agile and sustainable across the entire logistics

chain. Key areas of focus include further investments in renewable energy hubs, expanding green energy solutions, and continuously developing smart digital tools for port management. As a Nasdaq-listed company involved in passenger and shipping services, as well as real estate development, the Port of Tallinn is taking novel approaches across all sectors and is committed to its goal of achieving carbon neutrality by 2050. A major project in this regard is promoting climate-neutral sea transport in the Gulf of Finland. To achieve this, the port and its partners have endorsed 19 joint projects aimed at reducing the carbon footprint of the entire customer journey along the shipping routes between Estonia and Finland through the Green Corridor initiative. As part of this green passenger journey, the port has already implemented automooring and shore power systems, and the soon-to-be-open tram line will connect the port with the city center and airport, improving regional accessibility through sustainable transport options. In its real estate development at the Old City Harbour, the port remains committed to environmental sustainability, with a particular emphasis on green mobility solutions. The goal of the real estate development is to create a versatile, welcoming urban space at the Old City Harbour, blending port activities with high-quality public areas for a safe and enriching experience. Through these forward-thinking approaches, the Port of Tallinn is not just adapting but shaping the future of logistics in the Baltic Sea region, helping businesses scale efficiently while minimizing their carbon footprint.

Ports of Stockholm establishes Stockholm Norvik Port as a hub for CCUS development

Ports of Stockholm is working on establishing Stockholm Norvik Port as a central hub in Sweden for the emerging carbon capture, utilisation and storage (CCUS) logistic market.

With a strong infrastructure and access to both quayside and storage areas, there are great opportunities to establish an efficient logistics solution that can attract companies that strive for climate neutrality and see carbon management as part of their business strategy. The establishment of such an infrastructure opens the door to a third party system, helping to create a marketplace where cost efficiency and competitiveness are paramount.

The potential capacity to transport carbon dioxide from eastern Sweden is estimated to up to 9 million tonnes per year, which would make Stockholm Norvik one of the largest players in the Swedish carbon management market. This would not only contribute to climate goals, but also strengthen Ports of Stockholm as a strategic partner in the development of sustainable transport solutions for the green business landscape of the future.

VALDO KALM

CEO, Port of Tallinn

FRANCIS GOH

COO, X-PRESS FEEDERS

The transport & logistics industry is undergoing rapid change, driven by a combination of evolving market demands, technological advancements, and environmental considerations. At X-Press Feeders, we see the future of shipping shaped by innovation, collaboration, and a shared commitment to sustainability.

One key area of focus is improving operational efficiency. With rising global trade volumes and heightened expectations for faster, more reliable deliveries, we are leveraging data analytics and digital tools to optimize shipping routes, reduce fuel consumption, and enhance overall fleet performance. This not only helps us deliver better service but also supports our environmental goals. Sustainability remains a critical priority. The shift towards cleaner

SÖREN JURRAT CEO, Port of Stralsund

Congratulations to the Baltic Transport Journal for its 20-year anniversary, and many thanks for successful and true maritime journalism! I am very glad and proud to be a part of a very special industry in one of the most beautiful regions in the world: the port business around the Baltic Sea! For almost three decades, I have had the opportunity to get in touch with like-minded people and business stakeholders to create a fruitful partnership. Ports are not only logistical hubs for the exchange of cargo and different commodities; they also connect people and bring them together. Cooperation across borders is an accelerator to forming a common,

fuels and energy-efficient solutions is necessary, not just due to regulations like the EU Emissions Trading System and FuelEU Maritime, but because the industry recognizes the importance of reducing its carbon footprint. As part of this effort, X-Press Feeders has already launched two green methanol-powered feeder services, positioning us at the forefront of green shipping. Green Baltic X-Press (GBX) and Green Finland X-Press (GFX) are strategically linking the Baltic with Rotterdam and Antwerp-Bruges. But these initial services mark just the beginning of our journey. As we take delivery of more dual-fuel vessels throughout 2025, we plan to steadily expand our green network across Europe.

The future of the industry also depends on effective partnerships. At X-Press Feeders, we collaborate closely with key stakeholders, such as terminal operators, fuel suppliers and regulators, to stay ahead of evolving environmental and safety standards. These partnerships enable us to maintain a competitive edge in a rapidly shifting industry landscape. We encourage like-minded carriers, forwarders, and shippers to join us in driving this sustainable transformation. Together, we can build a greener, more efficient future for global trade.

prosperous society. Starting with big enthusiasm 35 years ago after the fall of the Iron Curtain, which for so long separated Europe and the Baltic region, we all have achieved a lot mutually. Nowadays, we live in turbulent times, and we are looking towards a challenging future as well. Faced with global climate change and the need to stop it, huge efforts are necessary to transform our core business by creating green ports and sustainable logistic chains. On the other hand, personally, I never would have imagined that in 2024, we’ll be living in a world that faces a revival of political blocks and new borders between them, something that affects the flow of goods and people tremendously. More than ever, we need optimism, confidence, and strength. But I’m firmly convinced that we will cope with all the matters of our times successfully if we continue our unifying strategy to come together, to share experiences, and to cooperate on a high level as we did in recent years! One of the connectors is professional media – good luck for the next decade, dear team of the Baltic Transport Journal!

PETER STÅHLBERG

Managing Director, Wasaline

The future of logistics is changing due to new technology, better transport methods, and a focus on sustainability. Shipping, a key part of global trade, is evolving to become greener and more efficient. New ship designs and alternative fuels are helping to cut emissions and reduce harm to the environment. Multimodal transport, which combines different types of transportation, will, too, be essential for creating smoother, more efficient supply chains. This approach picks the best transport method

for each part of the journey, cutting down travel time and costs. Digital tools, like automation, also improve coordination between different transport types, making deliveries faster and more reliable. Eco-friendly logistics are also becoming more important for businesses. As people and companies care more about sustainability, the logistics industry is moving towards a future that balances efficiency with environmental care, helping the global economy grow while reducing its impact on the planet.

The transport & logistics sector, including the port industry, is undergoing significant changes driven by the global focus on sustainability and supply security. Shipping is a greener alternative to other forms of transport and crucial for ensuring the delivery of goods and raw materials that local communities and industries depend on. To play their part in this dual transition, ports have to offer robust infrastructure, like a deep-water quay

wall and efficient transit facilities. Recently, a national port partnership was announced in Denmark to secure the future of commercial ports. This initiative focuses on improving port capabilities while contributing to sustainability goals. As the sector adapts to new environmental demands and the need for reliable supply chains, collaboration and innovation will be key to its success.

HENRIK THYKJÆR

Port Director, Port of Aabenraa

DITTE GERSTRØM SØRENSEN Head of Marketing & Public Relations, Port of Hirtshals

The transport & logistics sector in Denmark and Northern Europe has experienced rapid growth over the years, shaped by both technological advancements and changes in traffic patterns. Innovations in shipping technology, including smart port systems and eco-friendly vessels, will transform operations and provide faster and more reliable transport. The Port of Hirtshals continues to adapt to this evolving logistics landscape. The port has long been a crucial gateway for transport & logistics in Denmark and the North of Europe. Established in the early 20 th century, it quickly became a key ferry and freight hub, facilitating trade and passenger travel across the North Sea. Its strategic location has made it vital to connect Denmark with Norway and the North Atlantic. Today, Hirtshals, like other ports, must embrace digital technologies and sustainable practices to enhance efficiency

CEO, Port of Gdańsk

This year, it will be 50 years since the Northern Port, the deep-water part of the Port of Gdańsk, started its operation. The infrastructure that was created, aimed at servicing the largest vessels passing through the Danish Straits to the Baltic Sea, opened significant opportunities for the Port of Gdańsk. This ambitious project was vast in both scale and vision for those times, enabling the transport of hundreds of thousands of tonnes of cargo via large ships and ensuring a steady supply of liquid

and reduce environmental impact. With an increasing emphasis on green logistics, initiatives such as eco-friendly shipping options and improved cargo handling processes are becoming standard.  Looking to the future, the transport & logistics sector in Denmark and Northern Europe faces challenges in terms of rising fuel costs, regulatory pressures, and the need for infrastructure upgrades. The Port of Hirtshals wants to lead this transformation. By focusing on sustainable development and embracing multimodal transport solutions, we can effectively address future demands while maintaining our status as a critical logistics hub. By proactively tackling challenges, fostering innovation, and supporting regional connectivity, Hirtshals can secure a positive future for transport & logistics in Denmark and Northern Europe, ensuring that the movement of goods and people continues smoothly – and in an increasingly greener way.  To ensure that the transport & logistics industry remains robust, stakeholders must embrace collaborative approaches, investing in multimodal transport solutions and smart technologies. Enhanced partnerships between port authorities, logistics companies, and government entities will therefore be crucial.

fuels for Poland. Apart from its immediate logistical benefits, this investment also played a transformative role in developing the Gdańsk region, making it a major maritime and industrial hub. The decision to start such an important investment, made in the 1960s, has proven wise, as our port has seen continuous growth over the years. Today, this expansion continues with several ongoing projects at the Port of Gdańsk, including the conversion of water areas into land as part of the Baltic Hub’s operational growth with the T3 and T5 terminals, the construction of new fuel transshipment stations at Naftoport, and the development of the LNG floating, storage and regasification unit, all of them expected to enhance the port’s future potential and competitiveness. Moreover, we are also developing a new long-term strategy, one based on the vision of Gdańsk as a sustainable, economically efficient seaport operating in the blue and green economy.

DOROTA PYĆ

ISABELLE RYCKBOST

Secretary General, European Sea Ports Organisation (ESPO)

Let me first congratulate the Baltic Transport Journal on its 20th anniversary, which coincides with the two decades of adhesion of the Baltic States and Poland to the EU. I must say that I cannot think about Europe without the Baltic Sea as much as I also cannot think about ESPO without the region’s ports. The European Union was created in the aftermath of WW2 and was the start of a long period of stability and peace in Europe. But with the Russian aggression against Ukraine in February 2022, the geopolitical landscape has changed drastically, with ports finding themselves in the middle of that. That said, even if geopolitical affairs are coming more and more to the forefront, the climate crisis still remains by far the most important and unprecedented challenge humanity has been facing. What does this all mean for Europe’s ports? As a positive thinker, I would say that challenges also mean opportunities. During the recent pandemic and amidst the current geopolitical context, including the energy crisis the latter brought about, European ports were able to show their role as ‘the’ indispensable nodes in the supply chain by displaying a remarkable level of resilience and flexibility in responding to sudden changes and demands.

At the same time, while ports and their areas are places where a lot of activity and, hence, a lot of emissions are coming together, they will also be the nodes through which new and clean energies will be coming to and from the land; the place where new energies will be produced, converted, and stored. Consequently, ports will be more than ever also part of the climate solution and partners in the energy transition. Moreover, evolving towards net-zero and pollution-free areas, ports and cities might again get closer to each other as economic and societal clusters that strengthen each other. Ports can and will contribute to building a strong, net-zero and resilient Europe, but they will need the policy and financial support to do so.

ELME Spreader was born this year. So was the disco. Follow us in 2024 - we are celebrating it our way, by manufacturing world-leading spreaders.

1974 - 2024

Photo: Canva

MATTHIAS HANSEN

Senior Vice President Ocean Freight, GEODIS

This year was another challenging one. With the aftermath of the pandemic, wars, geopolitical tensions, terrorist attacks, natural disasters, and strikes, the logistics industry had to respond to turbulence on an unprecedented scale, leading to disruptions in global supply chains and extraordinary price fluctuations, particularly in global air and ocean freight. As a global logistics provider, GEODIS has to cope with these challenges by offering flexible and resilient logistics solutions to its customers with a strong focus on decarbonization, digitalization, and

Over the past 12 years, Odense has undergone an impressive transformation. We have shown how a former shipyard can be converted into a modern production port and a hub for the wind energy industry, supporting both the green transition and energy security in Europe. However, the future demands even more space for offshore wind production to meet the market needs of 2030 and the political ambitions of installing 300GW of offshore wind in the North Sea by 2050.

Although Odense is Denmark’s largest port, covering 8.5 million m 2 , we launched a development plan earlier this year to expand the port’s fairway and area by an additional 1.0m m 2 . This, along with our allocation of 3.0m m 2 to offshore wind, will ensure that essential offshore wind components can continue to be produced and

OVERSEAS PORT OF ROSTOCK

The intermodal hub

derisking. Taking 2022 as the baseline year, the company is targeting a 42% reduction in greenhouse gas emissions from its fleet and buildings (scopes 1 and 2) and a 30% reduction in the carbon intensity of subcontracted transport (scope 3) by 2030. GEODIS has invested in innovative technologies such as artificial intelligence, blockchain, enhanced allocation tools, more customer-specific dashboards and API connections to strengthen the resilience and security of the supply chains, as well as increased its focus on risk management and cybersecurity. To improve productivity and competitiveness, investments have also been made in automation, such as robotics. We expect that 2025 will continue to be challenging. There does not appear to be any real recovery in global freight volumes. Ongoing geopolitical and economic tensions require us to remain flexible and resilient to support our customers through these complex and critical times.

shipped from the country’s largest seaport. Our goal is to become a port where all major components of a turbine are manufactured and pre-installed. This initiative is expected to save the industry hundreds of millions of euros on intermediate transportation costs. By consolidating all component production and pre-installation at the Odense Port, we anticipate achieving savings of 2 to 3% on turbine supply agreements, giving manufacturers based here and the developers they work with a significant competitive edge. In addition to being a competitive port of choice, perfectly situated between the North Sea and the Baltic, we see it as essential that Odense is not only a wind but also a knowledge port. We have on-site some of the most highly renowned test centers specializing in wind energy – and now, also the world’s first robotics center for large-scale constructions. The combination of production and research makes us a powerhouse for wind, knowledge, and growth, contributing to increased innovation, competitiveness, and product quality. With this set-up, we have created a unique hub where heavy industry meets deep knowledge to develop new solutions for future challenges collaboratively.

OLE HAUGSTED JØRGENSEN

Head of Sales & Marketing, Odense Port

MAGNUS GRIMHED

Marketing & Sales Manager, Port of Norrköping

“We better go big or go home,” was the answer from a senior executive whom I asked, “How will we make sure we stay competitive in the future?” This was during a town hall meeting at the beginning of my career some 15-20 years ago. Back then, this was very much ‘the’ answer to any issue for any player in the maritime industry. One just cannot underestimate what ‘size’ and ‘scale’ have meant for the shipping industry in the last decades. Growing in size and bringing down unit cost has been the overriding theme. No matter if we look at shipping lines, feeder operators, forwarders, ports or terminals, this has been the name of the game for more or less everyone: the closest thing to a silver bullet. Trying to understand what will determine the future successful actors in our industry, I believe this attitude will change, at least to a certain degree. The challenges that we face are many, likewise different from each other. Complexity, the speed of change, and the unpredictability of events characterise the new playing field. Firstly, each and every actor needs to embrace flexibility. The fittest will survive! Secondly, and equally important, will be to find common solutions to common problems. So, I would answer my younger self by saying, “Go together, or go home.” We have known for a long time that being adaptable, rather

than just big or strong, ensures success in transport & logistics. Over the last decade, we’ve seen major changes – from global market ups and downs to fast-moving technology; these have shown us the importance of being flexible and having foresight in our industry. Today, we’re not just moving goods; we’re building smarter, more resilient routes to meet current demands and future needs.

Looking forward, we see an opportunity for sea transport to play a bigger role in sustainable logistics. By using digital innovations and forming partnerships, we believe the maritime sector can lead in efficiency and environmental responsibility. As we mark this milestone, we’re dedicated to evolving with the industry, ensuring we are ready for both challenges and opportunities ahead. This forward-thinking view highlights the need for adaptability and innovation in logistics, positioning the Port of Norrköping as a proactive player in the industry’s evolution.

Photo: Port of Norrköping

JOHANNA BOIJER-SVAHNSTRÖM

Senior

Vice President

Corporate Communications & Land-based HR & Sustainability, Viking Line Viking Line is involved in two green corridor projects: between Turku, the Åland Islands and Stockholm, and on the Helsinki-Tallinn crossing. The ports and cities of Helsinki and Tallinn, Viking Line, and other major shipping companies that operate between them signed in October 2023 a mutual understanding agreement to create a sustainable and environmentally neutral maritime transport route between the two destinations. This Green Corridor is a shipping route and an umbrella for several projects at sea and in-shore operations in both capitals, which aim to reduce emissions and increase the use of zero or near-zero emission solutions. Next, Viking Line and the ports of Stockholm and Turku signed a memorandum of understanding to create a green maritime corridor between the two seaports. The goal is for the corridor to be 100% carbon-neutral by 2035. The partnership will serve as an innovative platform for developing scalable solutions for the phase-out of fossil fuels. Work is underway, but a concrete example of green transport has already been introduced: Orkla Finland, Scandic Trans, and Viking Line have launched

a scheduled freight service that runs on biofuel. Specifically, the Felix ketchup, produced by the Orkla Group, began to be shipped to Finland using green biofuel in July this year. The transport chain starts at the ketchup factory in Southern Sweden, with Scandic Trans’ lorries driving to Viking Line’s terminal in Stadsgården in Stockholm. Then, they cross the Baltic Sea on the climate-smart Viking Glory and Viking Grace, delivering their load to Orkla’s logistics centre in Turku. Thanks to biofuel, CO2 emissions along the 683-kilometer-long transport chain are reduced by 90% vs the fossil fuel alternative. Scandic Trans refuels its lorries with biofuel produced from hydrotreated vegetable oil, while Gasum supplies Viking Line with liquefied biogas made from organic waste. “Viking Line is a shipping company with its roots in this sensitive archipelago. For us, the work to protect and preserve the Baltic Sea is in our DNA. We are ambitious pioneers in this industry and are proud to take this step in order to get closer to providing zero-carbon cruises and transport,” adds our President and CEO, Jan Hanses.

Over the past 20 years of publishing, the Baltic Transport Journal recorded and detailed major milestones of the shipping industry in the Baltic Sea region, including those of Finnlines and its parent company, the Grimaldi Group. It has been a valuable source of information as well as a platform for discussions about important issues concerning market trends, technology developments, and the sustainability of shipping and logistics. The publication has followed closely the changes in vessel routes and changes in the tonnage sailing on the Baltic waters, with ships getting larger, more efficient and operations getting more sustainable and environmentally conscious. This trend has been the main driver of the past decade, with disruptors like the COVID-19 pandemic, as well as wars

AXEL MATTERN CEO, Port of Hamburg Marketing

Continuity and change do not necessarily exclude each other. This can be seen in the example of many ports. In recent decades, many trade routes have remained constant. In particular, the many connections between the ports of the Baltic Sea region and the Port of Hamburg are a clear sign of continuity. For the Baltic Sea countries, the Port of Hamburg is considered a stable logistics hub in the global supply chain – whether by ship, rail, or truck. Social and political conditions also affect the ports. For example,

and military conflicts around the world, only proving the importance of the role shipping and logistics play in the global economy. During the past few years, Finnlines has built large and environmentally friendly vessels, recently completing a half-a-billioneuro investment programme that saw the delivery of three ro-ros of the Finneco Class and two Superstar cruise ferries. The Group also expanded its route network with new ports in the Bay of Biscay and the North Sea – services to Bilbao and Vigo, as well as to Rosslare. The latest addition is Świnoujście, where, since 10 April 2024, the freight-passenger vessel Finnfellow has been operating a daily connection to Malmö in Sweden. The next investments are already around the corner: the Neapolitan shipowner group will order nine more new ro-paxes that will be used in the transport of goods and passengers in the Mediterranean and the Baltic. Three of these newbuildings, the Superstar+ ferries, will join Finnlines’ fleet on the Baltic Sea as the company continues its investments in new eco-friendly vessels and works hard to support its customers in growing during those challenging times.

increasing digitalisation is also leading to the automation of many work processes. Many companies in the port industry are providing their employees with further training and preparing them for future job profiles. At the same time, the types of goods also change at regular intervals. With the current energy transition, the ports are once again facing new tasks. In Hamburg, some companies are creating storage capacities for alternative fuels, some are building production capacities for hydrogen, and others are preparing the necessary transport infrastructure. The Port of Hamburg is not alone in experiencing such developments; rather, it is one of many such ports in the region and around the world. The Baltic Transport Journal has successfully covered this change and continuity over the past 20 years. The Port of Hamburg Marketing warmly congratulates the Journal on behalf of all companies in the port industry.

RAFAŁ KWAPISZ

Managing Director, Finnlines Poland, and Member of the Executive Board, Finnlines

ADAM HOPPE Acting Director, Bureau of Strategy and Market Analysis, Port of Gdynia

The Port of Gdynia owes its creation to the visionary engineer Tadeusz Wenda, who designed it with the foresight to accommodate growth for over a century. Since its creation, numerous modernization projects have been undertaken to adapt to the evolving shipping market. Nowadays, the Port of Gdynia Authority operates under the landlord model, focusing on the maintenance and expansion of infrastructure, thus creating a conducive environment for businesses engaged in the maritime sector. We are now standing at a pivotal moment for the Port of Gdynia, preparing to expand beyond its original boundaries. The construction of the Outer Port is set to transform the port’s potential for generations. Notably, the new handling quay will be accessed from the berth named after engr. Tadeusz Wenda, symbolically linking past ambitions with future possibilities. Crossing the existing breakwater represents not only a physical milestone but also a historical and sentimental journey, echoing Wenda’s vision from 1922.

Recent years have presented significant challenges, including the COVID-19 pandemic, the war in Ukraine, and global

geopolitical tensions, all of which have impacted the Polish economy and international supply chains. Despite these hurdles, terminals operating in the Port of Gdynia have demonstrated remarkable versatility, showing the capability of handling a diverse range of cargoes. This adaptability is vital in navigating market fluctuations, enabling the port to adjust its handling operations to meet changing demands. Recent trends have seen fluctuations in various cargo groups, such as containers, coal, and agricultural products. Strengthening the universal character of the Port of Gdynia is our primary goal. The ongoing development of internal infrastructure is crucial for the port’s efficiency, relying heavily on the modernization of land and sea accessibility. Collaboration with entities responsible for the development of national roads and motorways, railway lines, and maritime accessibility is essential, as their investments directly influence the port’s ability to increase its operations. Key initiatives currently underway, including the construction of the Outer Port, dredging, modernizing quays, and enhancing road and rail connections, will redefine the port’s landscape for decades. The Port of Gdynia is dedicated to strengthening its universal character to effectively serve its clients as well as the economic, energy, and military safety of the Polish economy. A distinctive aspect of this development is a strong emphasis on environmental sustainability and the social surroundings of the port.

BJÖRN BOSTRÖM CEO, Port of Ystad

The map is being redrawn…

The need for transport & logistics has been a necessity since long before the wheel was invented (which just made it more convenient!).

Many countries depended on trade; trade for selling goods to other countries and trade for buying what the country did not produce itself. But when trade began, we had merchandisers that, of course, had to trade for trade itself, namely to make money themselves. This is sometimes a bit peculiar as we can even import and export the same type of goods – and make money out of it both ways. The pattern for transport & logistics has more or less been the same

As BTJ celebrates its 20th anniversary, it’s time to reflect on the many important and timely themes regarding the developments in logistics markets in recent years. The industry has undergone significant changes, with polarization being one of the key trends. Large companies benefit from economies of scale, which can displace medium- and small-sized operators. This can lead to market concentration and reduced competition. Hopefully, collaboration and specialization will help smaller companies maintain their competitiveness. The COVID-19 pandemic, the war in Ukraine, and other global crises have highlighted the importance of information flow and the flexibility of supply chains. Digitalization and real-time tracking can improve the transparency and efficiency of supply chains,

FRIDJOF OSTENBERG Vice-President, Mukran Port

Dear Baltic Transport Journal team, on behalf of Mukran Port, we would like to congratulate you on your 20 th anniversary!

For two decades, you have enriched the maritime industry in the Baltic Sea region with your passionate commitment and intensive work. During this time, the Baltic Transport Journal has become an indispensable companion to the industry. With one exception, the Baltic Sea region has developed into an inland sea of the European Union in recent years. The countries bordering Eastern Europe, in particular, have undergone impressive economic development, which has led

for many, many years. Since WW2, trade in Europe has developed and found its way, oftentimes the same today as in the past.

Peacetime is the key to human survival, and trade is a necessity to have food on the table, a job to go to, and money to spend. Europe has been spared for many years, but now the war in our closest vicinity affects all the values we have – trade included.

The need for quick and reliable transport and movement of people calls for new investments. Modern and bigger highways are built, while bridges and tunnels substitute ferries. At the same time, we have more charges and taxes to deal with the environmental impact of climate change. What was a perfect trade route will no longer be commercially passable. Cargo will have to find new ways to flow.

The map will be redrawn…

For all of us in the transport & logistics industry, we must face that the ways of transporting freight and passengers are changing. We simply must adopt – and do it better than ever. We can do it by sticking together.

which is crucial in the current uncertain world. The other major challenge is driver shortage. Attracting new talent to the industry is difficult, especially when wages and working conditions are not competitive. Solutions could include improving the working environment, raising salaries, and developing training programs. The strengthening of the green transition and the clarification of EU regulations are guiding the logistics sector toward more sustainable solutions; this requires investments in renewable energy sources as well as improving energy efficiency. The growth of e-commerce, in turn, has transformed the transport market, especially in terms of parcel delivery; this requires flexible and efficient delivery solutions, such as automated warehouses and robotics, which can meet the growing demand. Intensified cooperation and optimization of logistics chains in the Baltic Sea region have improved the security of supply; this underscores the importance of regional cooperation and the development of joint solutions, particularly in the current global operating environment. We would like to thank BTJ for their long and excellent collaboration and congratulate them on their 20th birthday!

to a significant increase in traffic volumes in the region. This positive dynamic shows how important the Baltic Sea region has become for the entire European logistics and economy. However, the future also brings challenges. Mukran Port must adapt to the increasing competitive pressure in maritime logistics and, at the same time, manage the transition to sustainable, climate-friendly solutions. The digitalization and automation of processes, as well as adapting to new geopolitical conditions, are further key issues that we must face.

In times of global upheaval and constantly changing supply chains, a reliable medium such as the Baltic Transport Journal is indispensable. It offers important insights into developments in politics, the authorities and companies. For us at Mukran Port, it is particularly important that you accompany our work and report on the changes and progress in our industry. We wish the Baltic Transport Journal continued success for the next 20 years and look forward to working with you in the future!

ERIK SÖDERHOLM

Managing Director, Port of Turku

DR KIMMO NASKI Chairman, Baltic Ports Organization (BPO)

In 2004, the Baltic Sea region was reunited with Western Europe for the second time, so to speak, with Estonia, Latvia, Lithuania and Poland joining the EU. Borders lifted, making way for new opportunities also for the regional seaports. It was just two decades ago, but it truly feels like an entire century.

The Baltic Ports Organization saw the development of the Baltic Transport Journal throughout those years filled with ups & downs (oh, the 2007-2008 financial crisis…), eventually trusting the publication to become its official media partner. The BPO is grateful for the Journal ’s continuous coverage of the latest from across the diverse world of transport & logistics, showcasing and sharing the sometimes more than pioneering works of the regional players with people from all over the globe, at the same time not shying away from putting the spotlight on affairs that, at first glance, go beyond the Baltic. If transport & logistics teach us anything, it is that events and trends are interconnected, and no region is a self-sustained island. The Baltic certainly isn’t!

As such, the past 20 years were rich in countless positive but also

not-so-good happenings, bull and bear markets, regulations covering the entirety of Baltic shipping (remember SECA?), and developments that came here to stay, just to mention the uptake of liquefied natural gas, investments in cold ironing region-wide, or the arrival of direct deep-sea container services with the Far East. Though we are living in “interesting times,” rest assured that the Baltic – transport & logistics stakeholders, including the port business, the closer and farther regulatory landscape, energy transition, digital revolution, war just outside its borders, etc., – won’t hibernate despite achieving so much in so little time. As always, there is plenty of work –modern infrastructure won’t set up itself, services and operations won’t digitalise overnight, and shipping won’t get greener on its own. Likewise, those offshore wind energy farms will need assistance during and post-installation.

The Baltic Sea region is as diverse as it gets, with the same holding for its seaports – big and small alike. But while anybody who has ever been in a few of them knows they are nothing short of being unique, there are also a lot of points of contact where we can learn from and help each other. Knowing more surely won’t stand in the way of making the Baltic greener and even more innovative, future-fit in short, and here the BPO would like to thank the Baltic Transport Journal for keeping its finger on the transport & logistics pulse as well as for sharing our works and contributing to the Organization’s events.

MAGDALENA OGONEK

Marketing and Sales Manager, COSCO Shipping Lines Poland

On behalf of COSCO Shipping Lines Poland, we extend our congratulations to the Baltic Transport Journal on its 20th anniversary. Over two decades, BTJ has been instrumental in providing insights and fostering dialogue within the transport & logistics industry – a true testament to its value and to the resilience of our sector.

On a personal note, BTJ holds a special place in my career. Years ago, as a graduate student, I based my thesis on data from the Baltic Transport Journal – an invaluable resource that shaped my research and boosted my hunger for economic & maritime industry knowledge.

“Navigare necesse est, vivare non est necesse.” This Latin phrase from the 14th century – translated as “sailing is necessary, living is not” – was the slogan of the Hanseatic League when the shipping industry was using sailing ships. Well into the 21st century, it still expresses the essence of seagoing trade. Shipping is one of the oldest businesses in the world, and it has not changed a lot since we learned that the world is indeed round. The most important way of moving cargo across the globe is still by sea, and that is probably one of the reasons why this business is so conservative and stuck with old habits. And why not?

Although there are many challenges that transport, including its maritime part, has to deal with, I would like to draw particular attention to issues related to the sustainable development of the industry and its impact on the environment. Faced with climate change and tightening environmental policies, the sector needs to reduce its carbon footprint, as maritime transport accounts for a not insignificant percentage of global CO2 emissions. The International Maritime Organization’s regulations set increasingly stringent standards for reducing these from shipping, which forces shipowners to invest in technologies that reduce fuel consumption, explore alternative energy sources, and opt for more environmentally friendly engines. Significant measures to reduce CO2 emissions in maritime transport are also being taken by the European Union.

Reflecting on the past, we recognize the challenges that have shaped us: the COVID-19 pandemic, geopolitical uncertainties, rising energy costs, high inflation, and complex transport demands. Through these pressures, COSCO Shipping Lines has focused on maintaining stable, trustworthy relationships with its partners. Looking to the future, we anticipate profound shifts driven by current industry trends. The rise of autonomous ships, digital route planning, and advancements in data analytics are set to redefine shipping’s efficiency and safety. At COSCO Shipping, we envision a connected ecosystem where predictive insights improve delivery accuracy and risk management. With decarbonization a global priority, we are investing in new technologies – from cleaner fuels to energy-efficient vessel designs, pioneering two 700-TEU battery-powered feeders in the Yangzi River –that will support net-zero goals and reduce environmental impact. As we look ahead, COSCO Shipping Lines remains committed to building a more stable, sustainable, and innovative future alongside our partners.

The habits work as well now as many hundreds of years ago. “If it ain’t broke, don’t fix it,” a nugget of folk wisdom captures the attitude perfectly.

Yet, things have started to change in the 21st century. The green transition, automation, and digitalization are pushing the maritime world a big leap forward in the belief to be more efficient and environmentally friendly. All these movements are mega-trends of our times and promise/threat to influence almost everything that is happening in the developed world today.

BTJ has followed the maritime industry for 20 years with a broad perspective and interesting articles from all kinds of angles. The Journal provides interesting readings not only from the Baltic but also from a wider European, likewise global, perspective. It is essential to have the latest information from this business available, and BTJ has done well in doing so. The readers certainly wish the Journal another 20 insightful years to come!

Alternative fuels, such as methanol, hydrogen and biofuels, have the potential to revolutionise maritime transport (including trading them globally), significantly reducing emissions and meeting new, stricter regulations related to the impact of transport on the climate. However, it is important to remember that all alternative fuels known today have their specific limitations, many solutions are not yet mature, and there is no obvious choice of one fuel for the global fleet. New fuels and ship power technologies also pose challenges for seaports, among others, the need to set up new bunkering infrastructure (if not infrastructures, given the future mix of green bunkers). In addition, ports are also investing in shore-side power supply facilities, which allow ship engines to be switched off while berthed, reducing emissions and pollution. Whether it is possible to ‘fully’ decarbonise maritime transport can be thrown into question. Certainly, this process will require significant effort, investment and time, as well as the involvement of various stakeholders from across the maritime transport market, including shipowners and operators, suppliers of propulsion technologies, ports, and also institutions that will financially support the green transition.

PATRIK HELLMAN CEO, Port of Kaskinen

MONIKA ROZMARYNOWSKA-MROZEK Head of Consulting, Actia Forum

NINA LILJEQVIST

Marketing Manager, Cargo Business, Port of Helsinki

As we mark the 20 th anniversary of the Baltic Transport Journal , I find myself reflecting on the incredible journey we’ve all been a part of. Over the past two decades, the transport & logistics industry has undergone a remarkable transformation. From the early days of manual tracking to today’s sophisticated AI-driven logistics solutions, it’s been an exciting ride!

Twenty is a significant figure, not only for a publication like the Baltic Transport Journal but also in maritime terms. The 20-foot container, or TEU, serves as a global measurement for capacity and volume, symbolizing efficiency and standardization in shipping. Personally, 20 (years) also marks a milestone in my journey within the maritime sector, a journey spanning over two decades.

Reflecting on 2004, my younger self had just embarked on an international maritime career, starting as a trainee account manager at Finnlines UK in London. It was thrilling to be part of a city steeped in shipping tradition. Back then, maritime

traffic appeared more predictable, with established (and mostly safe) seafaring routes and a strong sense of mutual respect among operators. While the industry and market were more stable back then, they were perhaps also somewhat stagnant. Fast forward to today, the logistics & transport landscape has transformed dramatically. The sector faces unprecedented challenges: heated geopolitics, digitalization, sustainability pressures, and global trade disruptions. Yet, these challenges bring opportunities. The future of logistics lies in embracing technological advancements, such as AI-driven supply chain management and automation in ports, which promise to streamline operations and enhance efficiency. Sustainability will, too, undoubtedly shape the industry’s future. Green shipping initiatives, alternative fuels, and stricter environmental regulations are pushing the sector towards a more sustainable model. Collaboration across the supply chain will be crucial to achieving these goals.

Of course, the above-mentioned will come with their own set of challenges. We’ll need to navigate regulatory hurdles, tackle cybersecurity threats, and ensure our workforce is ready for the future. My wish is that the younger generation also finds the same inspiration in logistics that I have experienced. Let’s shape the future of Baltic transport together, ensuring it remains a robust and adaptive industry, ready to face whatever challenges lie ahead!

The transport & logistics sector in the European Union has undergone significant transformations over the years, adapting to changing economic, technological and environmental demands and facing unexpected crises like the COVID-19 pandemic. International freight transport by road was liberalised long ago inside the EU, regulations harmonized, and cross-border rail and road infrastructure built. The rise of containerisation, alongside the establishment of the Trans-European Transport Network, facilitated more streamlined and cost-effective goods movement. Today, new and complex challenges arise in energy and ecological transition, digitalisation, security, and the workforce. Achieving the goals of the European Green Deal implies fully embracing the energy mix and technology neutrality principles and making significant investments in infrastructure and technology. From a company perspective, particularly small

The Baltic Sea region is accelerating efforts to establish Green Shipping Corridors, with the CBSS pushing for a unified approach to decarbonise maritime transport and with Estonia leading discussions during its current Presidency of the Council. This initiative aligns with the Clydebank Declaration’s vision for zero-emission maritime routes, a critical component of the global climate agenda. Adopted at the UN Climate Change Conference in Glasgow (COP26) in 2021, the Clydebank Declaration aims to decarbonise international shipping through dedicated routes equipped with clean fuel and energy solutions. Discussions on localising the Clydebank Declaration began during the German Presidency of the CBSS in 2022 and remain a top priority. Estonia is now focused on solidifying a common regional approach, which was a central topic at the recent Baltic Ports Organisation Climate Conference 2024 in Tallinn. The event underscored the urgency of transitioning to clean fuels and modernising port infrastructure to support zero-emission vessels, a sentiment widely echoed by stakeholders across the maritime sector. The CBSS Expert Group on Sustainable Maritime Economy (EGSME), established in 2009, is spearheading these efforts. Originally created to support sustainable growth and coordinate maritime activities, the Group is now instrumental in addressing the urgent environmental and economic challenges facing the shipping industry. EGSME has a history of fostering collaboration among various actors, including policymakers, shipping companies, port authorities, and service providers. Engaging directly with businesses has remained a preferred and effective

and medium enterprises, investments will be challenging to manage. This implies the need to provide financial incentives and scrappage programmes, tax deductions and breaks, and access to energy products at affordable prices. The shortage of drivers is one of the main challenges for road transport, with a clear impact on supply chains. Ensuring fair and favourable working conditions is paramount: addressing issues such as driver fatigue, job attractiveness, adequate parking areas, and compliance with EU legislation like the Mobility Package. Looking forward, the sector will be more and more influenced by the adoption of automation and artificial intelligence, which is expected to address labour shortages and drive productivity. Cybersecurity will have to be included more and more in EU policies and practices. Key trends might also include a more balanced reliance on multimodal transport to reduce emissions and enabling new solutions like longer and/or heavier lorries. Investments in infrastructure, a constant collaborative approach between policymakers, all supply chain actors and technology providers, and supportive policies can ensure that the EU transport & logistics sector adapts to new demands while maintaining fair competition and fair transportation cost, shared liability, and attractive and quality jobs.

working method for achieving practical outcomes. This strategic push reflects the Baltic Sea region’s leadership in advancing the sustainable development agenda. The region has long been recognised for proactive measures in mitigating climate change and shifting from fossil fuels to renewable energy. The coordinated approach to Green Shipping Corridors illustrates the region’s commitment to balancing economic growth with social and ecological responsibility, setting an example for global maritime practices.

MARCO DIGIOIA

Secretary General, European Road Hauliers Association (UETR)

1 The views expressed in this article are those of the author and do not necessarily reflect the opinions or positions of the Council of the Baltic Sea States (CBSS), its officials, or its Member States

UGIS ZANDERS Adviser at the Council of the Baltic Sea States (CBSS)1

Photo: CBSS

DENNIS JUL PEDERSEN CEO, Port of Esbjerg

Around 80% of the world’s goods are shipped by sea today. Stating that maritime logistics have been instrumental in shaping the modern world is evident, but so have the various countries’ shifting competitive advantages. Although some states have a comparative advantage by possessing multiple commodities, the manufacturing capabilities change over time. In continuation hereof, world trade is both political and complex. Political intervention can be sudden and imply swift change, while the complexity of a country’s economy is intertwined with the learning and competencies of the industries. The Economic Complexity Index is closely linked to the prosperity of countries, and, therefore, it is a good indicator of future logistic flows. Simplified, countries ranking high on the complexity index should have more export capabilities than countries placed lower on the list. In addition, more goods should flow to those with the highest buying power. Conversely, assumptions on trade balances, complexity, and economic capability must consider social-economic aspects which drive the green transition. The goals established by the International Maritime Organisation, the Fit for 55 package from the European Union, and other instruments nudging the industry will profoundly affect the future of maritime logistics. The availability of greener ships and fuels is pivotal for any strategy developed by the echelons of shipping companies and ports. Still, the main challenge is maintaining competitiveness on course for sustainable logistics. The scarcity of green fuels has already resulted in shipowners considering their own production of e-fuels, and port administrations view green bunkering as their new revenue stream. Shipowners producing green fuels will allow more certainty on operational costs, which should be beneficial from a financing and risk perspective. This would constitute a competitive advantage, albeit only when social norms dictate that transport should be greener.

As a leading ferry operator, Stena Line has been present in Poland on the Gdynia-Karlskrona route for nearly 30 years. The crossing is operated by three vessels: Stena Spirit as well as Stena Estelle and Stena Ebba, two new 240-metre-long E-Flexer class (cruise) ferries. The relocation of operations to a new terminal in Gdynia in 2022 offers greater capacity for handling cargo traffic but also enables modern solutions, such as a smart gate system and drawing power from the shore, reducing emissions while ships are docked. Through these solutions, Stena Line Poland aligns with the company’s global strategy of reducing its CO2 emissions significantly.

The company continuously invests in modern technology. Investments in artificial intelligence, like the Voyage Optimization system, highlight the importance of data-based process optimisation. The system analyses key shipping factors, which allows for reduced fuel consumption and supports the crew in decisionmaking, making AI a ‘partner’ in daily operations. However, the future of Stena Line is not only about artificial intelligence but also about investments in modern vessels. The development of the NewMax ferries, such as the methanol-powered Stena Futura , demonstrates the company’s commitment to alternative energy sources. Plans to implement battery propulsion and shore power supply showcase a zero-emission vision. As a leader in its category, Stena Line constantly sets new standards for the shipping industry. The example of Poland shows how local operations can reflect the company’s global strategy while also serving as a model for other operators in the Baltic Sea. Investments in modern technology, alternative fuels, and solutions that are not only a response to market needs but also an expression of long-term commitment to sustainable development are crucial for the future of maritime shipping.

STENA LINE

Photo: Port of Esbjerg

TORBJÖRN WITTING

CEO, Port of Kokkola

A functioning Europe needs functioning logistical connections. For the Baltic Sea coastal countries, trade with the rest of Europe automatically means logistical connections and their continuous development. Here in Finland, we are essentially talking about maritime traffic and good marine links to neighboring countries, as most of our foreign trade takes place via the Baltic Sea. In light of recent crises, there has been a widespread realization of just how critically important ports and sea transport are for both the country’s foreign trade and the security of supply. When discussing Europe’s internal interactions and the free movement of goods and transport within the European Union, logistics

The past 20 or so years brought about a lot of changes for our seaport, just to mention the shifting export-import relation, in which there were years when the former dominated only to be overtaken by the latter for a decade – and then back again to exports prevailing the trades we serve. But by looking at the port’s history, change is indeed in our DNA. How we look and operate nowadays stems from the continuous investments we made – starting in 2009, when the half-a-kilometre Laukko was added to the quay wall. In 2015, we

is the most essential foundational element. That is why we must pay particular attention to logistics chains, maritime, rail and road transport, and their maintenance and development. So, how does the Port of Kokkola contribute to the smooth flow of Finland’s foreign trade and efficient, cost-effective port logistics? The key word for us is versatility. The Port of Kokkola consists of three separate harbours, enabling us to handle a wide range of traffic. We handle, among other things, raw material shipments for large Panamax and Capesize vessels, container transport in liner shipping, and project cargo for large and heavy wind turbine components. In the project cargo sector, our port serves as a vital hub, where ships carrying wind turbine components arrive and from where the components are transported by road to onshore wind farms. We are continuously expanding new port areas toward the sea and investing in other port infrastructure so that we can serve various industries even more broadly in the future. I would like to warmly congratulate the Baltic Transport Journal on its 20th anniversary!

completed the 2011-launched 9.0 to 11-metre max ship draught fairway dredging project, which allowed us to welcome freighters with up to 90% more cargo on board. Since Pietarsaari-Jakobstad is a seaport strongly focused on handling forest products, with pulp and sawn timber being the main good going over our berths, we also saw the addition of storage capacity: 4,000 and 18,000 m 2 in 2016-19 and 16,000 and 28,000 m 2 in 2021-22. In between, we strengthened the Buskö and Laukko I quays in 2020, which made it possible to handle even heavier project cargo, most notably components for wind energy projects. On the front of eco-investments, SITECO finished replacing the port’s lighting with LEDs three years ago, plus we set up an intelligent system that keeps the lights on when and where they’re needed. Looking ahead, we plan to prolong the Laukko quays by 200 metres, also adding a yard area capable of handling high and heavy cargo, as well as, likely, the third ro-ro ramp. The new infrastructure is planned to also have a jetty for liquid chemicals.

The Port of Pietarsaari-Jakobstad expects to continue efficiently serving the nearby forest products industry in the years to come, at the same time eyeing new business areas, like potential local e-fuel production or offshore wind energy, where we plan to build an operation and maintenance (O&M) base. We are also investigating the installation of photovoltaics atop the warehouses we manage to green our own operations.

That we’re not necessarily the biggest seaport out there in the Baltic, with limited physical space for infrastructural growth, motivates us to do things smartly and to invest in a well-conceived manner. The example of Pietarsaari-Jakobstad demonstrates that there’s room for smaller ports on the market; ports that can effectively serve global export industries as well as shipping lines with modern tonnage, such as Wallenius SOL’s ‘Enablers’ that weekly connect the Northern Baltic, including us, with mainland Europe.

We are also happy that there’s room for publications like the Baltic Transport Journal, its maps and the Baltic Yearbook , which spread the word on the many a development taking place in our region. Congratulations on the anniversary!

JUHA HAKALA CEO, Port of Pietarsaari-Jakobstad

Photo: Port of Pietarsaari-Jakobstad

DR KIMMO NASKI CEO, Port of HaminaKotka

In the past, logistics mainly focused on moving people, goods and raw materials, but the current concept of logistics is much wider and also refers to the comprehensive management of material and information flows. The logistics industry of today is highly global and technological, and information is largely transferred by digital means. Digitalisation is actually very important for improving production efficiency, reducing costs, and, also, managing environmental impacts. Climate change and everstricter requirements in environmental policy are putting pressure on developing sustainable logistics, and maritime transport, in particular, has focused heavily on the green transition in recent years. The green transition is currently the most significant factor affecting the logistics industry. The International Maritime Organization (IMO) has set an objective for maritime transport to be free from greenhouse gases (GHG) by or around 2050, taking into account national circumstances. By 2030, GHG emissions from ships must be reduced by at least 20% as compared to 2008, and the interim target set for 2040 is at least 70%. There are several ways in which to achieve these objectives, such as developing green transport chains and investing in alternative fuels. The FuelEU Maritime Regulation will also introduce environmental obligations related to issues such as onshore electricity provided to ships, and the Port of HaminaKotka has conducted a study on this. The electrification of the logistics industry is an essential component of the green transition and will bring changes to road transport, among other things. Electric trucks, delivery vehicles, and work machinery are becoming increasingly common because they offer the opportunity to reduce CO2 emissions and improve energy efficiency. The Port of HaminaKotka is committed to this development and promotes charging stations for heavy-duty transport. The development of electrified transport creates demand for the battery industry, and battery plant projects are also underway in the Kotka-Hamina region.

Nowadays, 96% of Finland’s foreign trade is carried via the Baltic Sea, which is why it’s of great importance to Finland. Baltic Sea transport must run smoothly and sustainably in order to retain Finland’s competitiveness in the global operating environment.

The Port of HaminaKotka would like to extend a warm and sincere ‘Thank You!’ to the Baltic Transport Journal for their relentless work on putting the spotlight on the Baltic Sea region’s transport & logistics, and especially the port sector. We wish you nothing but the best and a lot of sisu!

JAROSŁAW SIERGIEJ CEO, Port of Szczecin-Świnoujście

The maritime industry is a dynamic sector of the national economy and its barometer to a large degree. The role of entities operating in it is to achieve goals and respond to constantly changing market realities. The ability to effectively predict trends and make decisions quickly are the basic factors that allow for development. Ports, as point infrastructure in the system, primarily play the role of an intermediary in transport chains. We carry out our basic tasks by constantly developing, including through strategic investments and acquiring new contractors. In addition to these, ports must perform many other functions, and the latest trends pose new challenges for us. To meet them, we strive to be leaders in sustainable development and innovation; we lean towards green energy and the blue economy – friendly, lowemission, and responsible. Both at sea and on land. In such a dynamic environment, communication, reliable information, and exchange of ideas are the basic values necessary in the context of the industry’s development. That is why we are happy that for two decades, we could have relied on the Baltic Transport Journal as a source of information. I wish you many more years on the market, counting on your always upto-date news and articles.

Photo: Port of HaminaKotka

BTJ Trip 2024 / Finnlines’ Malmö-Świnoujście ferry service

The new (sailing) bridge for trade & tourism

by Przemysław Myszka and Przemysław Opłocki

This year’s BTJ Trip season kicked off on Monday, the 27th of May, when we boarded a morning train in Gdynia heading for Szczecin. Destination: Euro Terminal in the Port of Świnoujście, from where Finnlines’ Sweden-flagged ferry Finnfellow sails to & from the Port of Malmö daily as of 10 April 2024. It demanded great patience (counting four-five in years) from the Finnish shipping line to launch the crossing, but here it is finally! Finnlines invited us to get a taste of the new service as well as to partake in the official ribbon-cutting ceremony aboard the vessel on 28 May.

In Szczecin, we rented a car as the service currently requires a vehicle to make use of it. It gave us the opportunity to contemplate West Pomeranian nature en route to Świnoujście (including a rampaging thunderstorm…). At the same time, we had to cope with the heavy road construction works along the way; then again, wheeled

traffic will certainly get smoother on the north-south axis once everything’s done, something Świnoujście’s ferry cargo flows will only benefit from.

Sun welcomed us at Euro Terminal, where we had to wait for a check-in. Two things were immediately visible when we parked near the facility. First, the Malmö-Świnoujście

is a classic Finnlines’ business: focused on freight (the 188.3-metre-long Finnfellow offers 3,099 lane metres of capacity). The parking area was filled with trucks (also meaning that accompanied traffic dominates the route, in contrast to, as we saw on the Swedish side, the company’s Malmö-Travemünde service, whose Finntrader was loaded mainly

Photo: CMP

with trailers the next day). Second, there were just a few private vehicles (including one with a cat, as Finnfellow is pet-friendly, with suitable cabins – and a sizeable litter tray outside one of the decks). That said, more of the latter joined in Malmö, among which one was with a Nor-

wegian number plate (making us wonder whether the couple who drove it was on a road-ferry trip, which sounds like an interesting alternative to flying between Norway and Poland, also from an environmental point of view as the car was electric).

Although we arrived earlier at the terminal than needed and had to wait some time, we received our boarding cards and were guided to our place on board Finnfellow (to park in a safe spot, as we were the only ones not disembarking in Sweden). By coincidence

Photo: Przemysław Myszka

Photo: Finnlines

(probably not), our cabins were located at the very front of the ferry’s bow, which made the porthole view even more impressive (especially when the vessel’s loudspeakers woke us in the morning the next day with the Øresund/Öresund Bridge in close sight). We have already had the occasion to sail between Poland and Sweden on other companies’ ships and can testify that, although Finnfellow is 24 years old, the cabins are very fresh and spacious. The ferry offers room for 440 passengers across over 180 cabins of six

different categories (from 8.0 through 11 m2, with and without portholes, up to 21 m2).

We can also state that Finnfellow ’s kitchen staff doesn’t have to be ashamed of anything: the dining offer is appreciably decent (and unlimited, so nobody should leave the restaurant still feeling half-hungry).

Apart from a small duty-free shop, a piratethemed children’s play area, a conference room, and a few slot machines, Finnfellow has got the thing that makes it a truly Nordic ferry: a Finnish sauna (two to be precise:

for men and women). Without a doubt, a relaxing visit to it was the highlight on Tuesday after the press brief. Curiously enough, the sauna was unoccupied at the moment of our arrival. We ‘blame’ it on culture: saunas are (regrettably) still very much a foreign concept to Poles. That said, a Polish-speaking fellow later joined us, but judging from his accent, he was, in all probability, from a country east of Poland (so from the banya culture, so to speak). Anyhow, the man had with him a bottle of mint oil-infused water to pour

Photos: Przemysław Myszka

over the blistering rocks – now that’s some experienced insighter sauna know-how!

After the steam bath and a hearty meal on a Tuesday evening, we disembarked Finnfellow as smoothly as we boarded it the day before. A late road cruise awaited us, luckily, this time without heavy rain thundering rampantly against the car’s roof. After another sleepover, the first BTJ Trip in 2024 ended with a train ride back to Northcentral Poland.

Tuesday ribbon cutting

Finnlines used the brief span of time after arrival in Sweden on Tuesday morning to host an official inauguration of the MalmöŚwinoujście ferry service. Jesper Axelsson, Captain of Finnfellow, kicked off the meeting by presenting the ferry’s particulars. Next was Tom Pippingsköld, President and CEO of Finnlines, who underlined, “First of all, I would like to thank everyone who came to celebrate with us. With our new direct connection to Poland, we have opened up for new opportunities in trade and tourism. We are proud to secure an important trade route between Malmö and West Pomerania in Poland and, at the same time, contribute to a pleasant travel environment for both business and leisure travellers.”

Katrin Stjernfeldt Jammeh, Mayor of the Malmö Municipality, topped things off by saying, “Malmö is Sweden’s bridge to the rest of the world. With Finnlines’ new maritime connection across the Baltic Sea to Poland, our city’s position is further strengthened.”

Once the speeches were over, the trio cut the Swedish-Polish ribbons. After that, there was still time to chat, including with Antonio Raimo, Finnlines’ Line Manager, and Marco Palmu, the shipping line’s Head of Passenger

Services. Others also offered their comments on the new service. Katarzyna Buława, CEO of Euro Terminal, said, “The new connection is a response to market demand. The inauguration of the new route will strengthen the position of the Świnoujście Port as the main gateway connecting Poland and Sweden. We strongly believe that the new service will enable optimisation of transport and provide added benefits for business and travellers alike. We are pleased to move this service forward together with Finnlines and look forward to further development.” Barbara Scheel Agersnap, CEO, Copenhagen Malmö Port, also stressed, “Finnlines is a long-standing and very important partner to the port, and we are pleased that the cooperation has

now been deepened. With the new route between Malmö and Świnoujście, a large and growing market is opened up, which also creates opportunities for other activities in the port area and for the development of intermodal transport in the port.”

When everybody else left, we stayed to discover other nooks and crannies of Finnfellow. Thanks to buddying up with the crew, we had the chance to enter the captain’s bridge just as the ferry approached the Øresund/ Öresund Bridge (we could also go outside and admire the view from the spectacularly windy uppermost deck). Back inside, we got to know the ship’s firefighting system, including the anti-fire grenades (but with no demonstration, of course). After that, it was sauna time! ‚

Photo: Finnlines

Photo: Canva

Photo: Przemysław Myszka

Ready to rock

by Przemysław Myszka

One could say: another autumn, another BTJ Trip to Finland! When leaves started turning red & gold last year, we had the pleasure of visiting Kaskinen, Naantali, and Helsinki. This time around, we headed even further north to Jakobstad-Pietarsaari. It is a bilingual town that specialised in many trades across the centuries, including tar, tobacco, beer, matchsticks, and chicory. Jakobstad was also known for shipbuilding, with the bark ship Herkules out of Jakobstad-Pietarsaari being the first Finnish ship to sail around the world (1844-1847); making ships is still going strong in the area, especially if you have a spare million euros (or 40 of ‘em!) for a luxury sailing yacht or a catamaran. Nowadays, the Port of Jakobstad-Pietarsaari’s about 1.5 million tonnes of annual cargo turnover is mainly comprised of cellulose, timber, paper, as well as cement, lye, and solid & liquid chemicals. The seaport also takes care of trailers and containers brought & taken aboard Wallenius SOL’s largest ro-ros of the Enabler class. Jakobstad-Pietarsaari is readying itself towards major quay expansion to handle bigger volumes coming to & from the just over-the-fence UPM’s cellulose factory and sawmill (its Pietarsaari Mills is one of Europe’s largest pulp mills), the Alholmens Kraft Power Station (the world’s largest biomass co-generation plant), and other bigger & smaller enterprises gathered under the umbrella of the over-one-billion-euros-of-yearly-turnover co-op organisation Alholmen Industrial Park.

Getting from Northcentral Poland to Jakobstad-Pietarsaari is relatively easy (surely our other Przemek had more logistic hurdles when trying to reach Kaskinen in 2023), though a bit lengthy space- and time-wise. With a long stopover in Copenhagen from Gdańsk, I reached Helsinki via plane in the late afternoon on the 24th of September. Fortunately for anybody who fancies riding on a train (which gives the added benefit of admiring the lovely Finnish nature), there’s a direct one from Finland’s capital to the Jakobstad-Pedersöre station (from which Juha Hakala, the port’s Managing Director, picked me up – thanks again!). The return journey, also by rail, took me to another seaport (and capital) city, Turku, for a return flight directly to the Gdańsk Lech Wałęsa Airport.

En route from Jakobstad-Pedersöre to the Port of Jakobstad-Pietarsaari, Juha and I had the opportunity to chat about the cultural characteristics of the region, with the majority of the inhabitants speaking Swedish, and his background (Juha’s family used to run their very own sawmill). In the port authority office, I also met Johanna Heinoja, the seaport’s Technical Manager. The trio of us then sat for a comprehensive presentation that went through the particulars of the Port of Jakobstad-Pietarsaari’s past, present, and future.

The seaport today…

The Port of Jakobstad-Pietarsaari spans over 93 hectares, of which 55 are on land and 38 on sea. It offers 927 metres of quay wall – apart from the longest 502-metre section of Laukko I (152 m), Laukko II (150 m), and Laukko III (200; all of them 11-metredeep), there’s also the Cement (100 m; now

Photos: Port of Pietarsaari

with an automated ship handling pipe), South (165 m), and Buskö (160 m) quays (all offering 7.4 m of depth). Buskö and Laukko I feature ro-ro ramps, 22.5 and 29-metrelong, respectively. Just next to Laukko III sits the chemical terminal of Wibax, offering 46,100 m3 of tank storage capacity for, among others, caustic soda used by the paper industry. The facility is quay-connected via underground pipes.

As a port heavily geared towards handling all sorts of forestry products, Jakobstad-Pietarsaari is thick with warehouses: 55,000 m2 in total (21k m2 operated by Euroports, 20k m2 – Timberpak, 8.0k m2 – the port authority, and 6.0 m2 – UPM). In 2023, the Port of Jakobstad-Pietarsaari received 253 ship calls, making it possible to handle 1.31mt (+14% year-on-year), out of which exports accounted for 939kt and imports the remaining 370kt. Despite stevedores supporting a country-wide strike this spring, which essentially wiped out an entire month of cargo handling in Finnish ports, the year-end outlook looks promising for Jakobstad-Pietarsaari; likewise, the prospects for 2025 are optimistic. This year, the seaport also welcomed a German NATO visit, which saw one hundred military vehicles going via Jakobstad-Pietarsaari’s quays to and from a ro-ro vessel.

By far, pulp is the prime commodity going out through Jakobstad-Pietarsaari, making for some two-thirds of all export traffic, followed by sawn timber and paper. In the opposite direction, over half of imports are made of pulpwood, with lye and cement, respectively, completing the podium. The export/import ratio changed significantly throughout the years. For example, in 200003, exports dominated, only for imports to reign Jakobstad-Pietarsaari’s freight traffic for the next decade. After an even year in 2013, the balance tilted in favour of exports again.

Also, up in the North of the Baltic, weather can certainly put its two penn’orth in port operations. While Finnish stevedores are accustomed to working when everything around them is thickly covered in snow, the sea ice conditions can limit what ships can call a port. Interestingly, though, in spite of climate change, the conditions can vary sharply from year to year. The previous season was demanding for Jakobstad-Pietarsaari, with shipping lines having to send 1A ice class vessels of at least 4,000 deadweight (dwt) most of the time. In contrast, the 2022-23 winter was far less challenging (1B, 2,000 dwt).

… and tomorrow

While the port authority functions as a landlord, it also takes care of ship mooring,

provides clean water, receives waste, and secures the port area. Euroports Pietarsaari (still referred to as Botnia Shipping by many locals) is responsible for the bulk of stevedoring, forwarding, ship clearance, chartering, and agency services. The company’s machine fleet consists of one 100-tonnelifting capacity mobile harbour crane from Gottwald and three hydraulic gantries of Mantsinen and Sennebogen (another 140t mobile harbour crane, this one a Liebherr,

belongs to the port authority). Kraftline provides pilotage services with the use of two ice-breaking tugs (Bock and Simson) and is also engaged in forwarding, ship clearance, chartering, and agency services.

Apart from the above, the Port of Jakobstad-Pietarsaari is in charge of infrastructure investments, both on- and offshore. The authority recently, in 2021-22, invested in new warehouses (16k and 28k m 2). Three years ago, SITECO finished replacing the

port’s lighting with LEDs (plus an intelligent system that keeps the lights on when & where they’re needed). The year 2020 saw the strengthening of the Buskö and Laukko I quays, which made it possible to handle even heavier project cargo, most notably components for wind energy projects. Years 2016-19 were another period of adding storage capacity: 4.0k and 18k m 2

In 2015, the Port of Jakobstad-Pietarsaari completed the 2011-launched-9.0-to-11metre-max-ship-draught fairway dredging project, which allowed to welcome freighters with up to 90% more cargo on board. In 2009, the half-a-kilometre Laukko was added to the quay wall. On the digitalisation front, the Port of Jakobstad-Pietarsaari uses the Port Activity App for real-time ship calls, which smoothens stevedoring and spares the environment idle-at-anchorage emissions.

Concerning hinterland connectivity, Jakobstad-Pietarsaari witnessed the electrification of the railways going to/from the port as well as the setup of a triangular junction from the nearby trunk line (meaning that trains don’t have to take a 100-km-long roundabout way anymore to directly reach the seaport also from the south). On average, Jakobstad-Pietarsaari handles one train

Photo: Port of Pietarsaari

Photos: Kraftline

Photo: Przemysław Myszka

per day. The seaport also has a special road connection with the nearby facilities of UPM, thanks to which exceptionally long, wide & heavy (up to 100t) trailer transports can swing between the two.

Looking ahead, the Port of Jakobstad-Pietarsaari plans to prolong the Laukko quays by 200 metres (Laukko IV), also adding a yard area capable of handling high & heavy cargo (as well as likely the third ro-ro ramp). The new infrastructure, with a cost of around €50m, will also get a jetty for liquid chemicals. The port authority has already got the design of the new area done & dusted. They will now apply for environmental permits, all in order to be prepared when the port’s clients set in motion their investments.

Whereas the seaport is somewhat restricted when it comes to adding new hec-

tares of operational space (which could, e.g., house a manufacturing and assembly plant), the authority nonetheless is planning to tap into the much-awaited offshore wind energy (OWE) development boom in Finland. To that end, the Port of Jakobstad-Pietarsaari has been eyeing setting up a base for operations and maintenance for the OWE projects off the country’s coasts (such as OX2’s 150-turbinestrong Laine farm 32 km away from Pietarsaari). The port has also been investigating installing photovoltaics atop the warehouses it manages. In the meantime, other companies active in the port are, too, looking into greening their business, like investing in hybrid or electric cargo handling machinery (something that will require extensive testing to see how e-gear proves itself in harsh Finnish winter conditions, especially the batteries).

A walk down memory lane

The BTJ Trip to the Port of JakobstadPietarsaari came full circle when I went up a gangplank onto the 1960-built Bore, a passenger ship-turned-hotel & museum in Turku. It was part of Jakob Lines’ fleet, a ferry company from Jakobstad-Pietarsaari that connected the town’s seaport with Kokkola, Skellefteå, Umeå, and Örnsköldsvik in the times of tax-free ferrying (1969-91). Bore (also under her other name Borea) is commemorated with paintings that hang on the walls of the JakobstadPietarsaari’s port authority (together with other ferries of Jakob Lines). Though the cabin was super small, there’s was no better way to dot the i’s and cross the t’s of this port visit than with a sleepover aboard a veteran Baltic ferry! ‚

Photo: Wikimedia Commonsjpg

Photos: Przemysław Myszka

The Grimaldi Group’s XXVI Euromed Convention From Land to Sea

Radicalism and/vs realism

by Przemysław Myszka

The 2024 edition of the event brought to Athens 800 representatives from across the worlds of transport and logistics, finance, the EU and the International Maritime Organization (IMO), class, and heavyduty marine equipment manufacturing. Decarbonising shipping was by far the topic that garnered the most attention, with a particular focus put on the thorny issue of imposing regulations to give the industry a nudge in the green direction. The other part of the XXVI Euromed Convention was devoted to port development in Southern Europe, with Greece’s new model that hands over port authority duties to private operators under 30-year-concessions taking the front part of the stage.

The conference was kicked off by Paolo Cuculi, Italy’s Ambassador to Greece, and Christos Stylianides, the Greek Minister of Shipping. The former underscored the two countries’ trade relations, totting up to some €12.6 billion by sea. Ambassador Cuculi also spoke of decarbonisation, which not only stands for making global tonnage future-fit but also encouraging a model shift from road to sea. “The sea unites,” he concluded his speech by bringing a quote attributed to the Ancient Greeks.

Minister Stylianides, in a pre-recorded statement, spoke of the need for “radicalism and realism.” He listed some of the most pressing today and future challenges facing the shipping and port businesses, such as the intolerable crisis in the Red Sea to which innocent seafarers fall victim, the need for robust financial backing to decarbonise transport and logistics (among others, demanding low-carbon ferries to be deployed on internal publicly-tendered routes or furnishing seaports with cold ironing facilities), or the urgency to attract new digital- and automation-savvy people to shipping and ports as well as reskill the existing workforce so that they won’t feel left behind the technological curve.

Next on the stage was Emanuele Grimaldi, Managing Director of the Grimaldi Group, who also continued the topic of trade, eco-innovations, and seafarer wellbeing. On the first of these, he devoted much of the attention to the rising wave of protectionism all around the world. In a study commissioned by the Group and carried out by the Harvard Kennedy School, some 3% of global GDP is at stake if that trend continues (and even up to 7-8% of GDP growth could be unlocked for developing countries should barriers to trade lift instead of tighten). Asked later during a press conference about his opinion on the launch of Finnlines’ new ferry crossing between Świnoujście and Malmö, Grimaldi used this example to showcase how protectionism battles free trade. On the one hand, he stressed, it was exactly state-led localism that made it impossible for Finnlines to put the new service

in motion for years. He also underlined that even though there was a political shift in Poland and subsequent change at the helm of the relevant Polish seaport, Finnlines is still treated unfairly. As such, the company is challenging in a court what it sees as excessive dues imposed by the port authority. On the other hand, Grimaldi highlighted, the service has been met with commercial success.

On the topic of decarbonising the shipping sector, Grimaldi didn’t pull his punches when it comes to criticising regional regulations imposed by the EU, with the Emissions Trading System (EU ETS) and the block’s FuelEU Maritime Regulation receiving the harshest backlash. Grimaldi, who also chairs the International Chamber of Shipping (ICS), called these pieces of legislation ineffective and retributive, as they do not reward the shipping sector for its greening effort; rather, they tax the most environmentally friendly mode of transport without reinvesting the funds into helping to accelerate the industry’s energy transition. Here he presented the ICS’ proposal, the Zero Emission Shipping Fund, as a means of a global mechanism for gathering the industry’s contribution to cleaner shipping and rewarding those who actually put the money where their mouths are.

Grimaldi also talked about taking care of seafarers, praising Greece and Italy’s military input to end the Red Sea Crisis as well as underscoring the need to recruit and reskill onand offshore personnel (“making the job more sexy,” as his son, Guido Grimaldi, said later during a panel debate). He also brought forth the works of the Grimaldi Foundation, which has thus far executed 400 social projects, contributing some €50m to local communities.

Grimaldi then detailed the Group’s recent and future investments, including seven new ships delivered in the last two years, with another 20 under construction, including 17 pure car and truck carriers of 9,000-CEU capacity (with the Group placing its bet on the booming car production sector in China, which with an alltime high of almost 31 million manufactured more cars in 2023 that those placed 2-5 did

together; not coincidentally, one of the three new agencies of Grimaldi is seated in Shanghai). Moreover, orders will be placed by end-2024 for nine+two new ro-paxes for traffic in the Med and the Baltic (including three Superstar+ cruise ferries for Finnlines’ Finland-Germany service). Among other developments, the Grimaldi Group has been awarded port authority concessions for the Greek seaports of Heraklion and Igoumenitsa (where Emanuele and Guido will take chairmanship responsibilities, respectively).

Next was the first discussion panel titled Fostering and achieving innovation: a driving force towards net-zero emissions, moderated by Guy Platten, Secretary General of ICS. The participants included Chris Bonnett, the Maltese Minister of Transport, Infrastructure and Public Works, Maja Bakran Marcich, Deputy Director General, the European Commission’s Directorate General for Mobility and Transport, Roel Hoenders, Head of Climate Action and Clean Air, Marine Environment Division – IMO Secretariat, Ugo Salerno, Chairman of RINA, Roger Holm, President of Wärtsilä Marine and Executive Vice President of Wärtsilä, and Dario Bocchetti, Head of Energy Saving, RandD and Ship Design, the Grimaldi Group.

Holm kicked off the debate by underlining that technology for decarbonising shipping is already available, with methanol quickly becoming a business-as-usual solution and ammonia posed for the same before long. “Net zero is doable with tech,” he said, however, with a caveat that green fuel must be accessible. This still isn’t the case, Holm and others stressed, and the demand and supply issue will only get more complicated once other industries also start vying for those green molecules. Salerno added that every fuel, even those aspiring to be netzero, comes with a carbon debt (of production, transport, infrastructure, bunkering, etc.) and that the only truly green energy is one that isn’t used. As such, he underscored the importance of incorporating energy efficiency measures as early as in the ship design process. Grimaldi Group’s newbuilds feature a number of such solutions, just to name photovoltaics, battery

packs, or air lubrication (but, interestingly enough, not wind-assisted propulsion; asked about that, Emanuele Grimaldi revealed he has no confidence in this technology whatsoever – he even added that all those rotors and sails are just for getting EU money). Salerno also noted that owners-operators face many oftentimes confusing options as to what will be the fuel(s) of the future. This is, he continued, particularly troublesome for tramp shipping since opting for a concrete future fuel choice will automatically close the door to calling to harbours that do not offer this particular bunker. In Salerno’s opinion, the future will belong to fuels that either come without carbon at all in their structure or biofuels from non-edible sources (but he wouldn’t be himself if he didn’t even briefly mention the option of installing modular nuclear engines on board ships).

After that, the panel shifted towards regulations. What was even more interesting than what was explicitly voiced, namely the particulars of the EU ETS, FuelEU Maritime and IMO’s own works on global short-/mid-/longterm mechanisms, was the tension caught in between words. The ‘rope pulling’ was between

regional and global rules, with all parties seemingly agreeing that the latter would be the best way forward. That said – or rather unsaid – nobody risked staking a claim that if it weren’t for regional regulations, most notably those set in motion by the EU (including sulphur and nitrogen emission control areas), the shipping industry would be more than happy to sail on heavy fuel oil until kingdom come (and one day more for that matter). As such, the compromise the EU is willing to do in favour of the IMO is to review the block’s ETS once the global regulator (finally) comes up with a(n) (enforceable) solution of its own. At the same time, some IMO Member States already feel resentment towards the EU as its measures also tax trade by sea outside the block’s borders and that money it collects will only go to greening European shipping (with the subsequent threat of ‘exporting’ the most polluting ships to other corners of the world).

Before the second panel, The role of the public and private sectors in enhancing port activities in the Euro-Mediterranean Region, the Grimaldi Group presented the first row of its Excellence Awards 2024 (the remainder was awarded during the gala dinner), with Hans Ahola from

the Kokkola-based Ahola Transport receiving the Career Award. The debate itself, moderated by George Xiradakis, Managing Director of XRTC, included Minas Papadakis, CEO of the Port of Heraklion, Pino Musolino, Chairman of the North-Western Ports of Italy, Andrea Annunziata, Chairman of the Central-Western Ports of Italy, and Guido Grimaldi, Chairman of the Igoumenitsa Port Authority and President of Associazione Logistica dell’Intermodalità Sostenibile (ALIS; the Sustainable Intermodality Logistics Association).

The discussion was initiated by Musolino, who said that decarbonisation is as much a public as it is a private goal that is best realised by better services that, in turn, stem from constant research and development. Musolino’s words were echoed by his fellow port colleague from the Central-Western Ports of Italy, who underscored that business is what drives investments. Next was Guido Grimaldi, who went at length (and without mincing his words) why, in his opinion, the shipping business became the regulatory ‘whipping boy.’ After giving the EU ETS and FuelEU Maritime a hammering, he reiterated his father’s assertion that “what comes from the sea should go back to the sea.” It makes no sense, Guido Grimaldi expressed, to tax shipping and give nothing (or a trickle) in return. EU regulations as they function now will, in his view, result in a modal backshift, with cargo flows increasingly going by trucks, a transport sector that’s not forced to account for its externalities that negatively impact the environment, infrastructure, and people. Musolino took up the baton and warned Europe to stop spinning its “eco fairy tale” and instead focus on sound (publicprivate) investments that tackle global issues in a global manner. This topic – and the assertive way of talking about it – was later also present during the press brief with Emanuele Grimaldi, who blamed the EU for decreasing its own competitiveness and blunting the edge of the continent’s industries through ill-thought-out policies as well as protectionism (“the last breath of a dying man,” as he vividly described any doomed to fail actions to stifle free trade). ‚

Photos: Grimaldi Group

Why a single shipping company won’t turn the tide of the fuel market – but the industry at large can (if it only wants to, with the help of policies and other sectors)

We don’t need a winner

by Ewa Kochańska

Wärtsilä’s Sustainable fuels for shipping by 2050 – the 3 key elements of success report outlines what actions are needed to ensure that green fuels become mainstream in the maritime sector within the next three decades. “The future is in our hands,” states the report, pointing to decisive policies, industry-wide and multi-sector collaboration, and individual action as necessary for positive outcomes in decarbonising maritime transport. The report underscores that even though future fuel timelines can be provided – based on data collected and careful analysis – the outcomes will be most influenced by action or lack thereof today.

Presently, most vessels are powered by heavy fuel oil (HFO) or marine gas oil. A 2020 study by the International Maritime Organization (IMO) estimated that, without intervention, CO 2 emissions from shipping could rise by over 45% by 2050. On the other hand, achieving net-zero emissions by that year would require about $5 trillion in investments for fleet renewal and equipment upgrades. It is clear that full electrification is not a viable solution for all maritime transport, as long-distance travel would require a lot of energy without refuelling options. While measures like reducing vessel speed by 30% and maximising energy efficiency could cut energy demand by 15-27%, the sector cannot completely decarbonise without transitioning to sustainable fuels.

Viable fuels and their cost

According to the market analysis conducted for the report, biofuels (derived from inedible plants, organic materials like wood, or leftover agricultural products) are first in availability and are expected to see substantial expansion by the 2030s. This category includes biofuels

similar to diesel, biomethanol and biomethane (as well as bioethanol, which is already produced in large quantities, particularly in Brazil and the US). For biofuels to remain environmentally friendly, they must be derived from sustainable biomass sources such as waste fats, oils, and greases, ensuring they do not compromise food security or land availability.

Following are blue fuels, such as blue ammonia, emerging as transitional options due to their easier scalability compared to zero-carbon alternatives. These are made using fossil fuels, but the carbon generated during production is captured and stored. Blue fuels are fit for the existing infrastructure and resources of the oil and gas industry.

Last will be green synthetic fuels, which are expected to become more widespread by the late 2030s or early 40s. These fuels, produced from hydrogen generated via electrolysis and powered by renewable energy, hold strong potential. Production is likely to be concentrated in regions with ample space and beneficial environments for solar and wind energy.

However, it is worth noting that for operators to seek the one best fuel among

the ecologically sustainable choices could be a mistake. “Shipping doesn’t need a [fuel] winner – it needs a mix of fuels to cater to the different requirements of the whole industry,” underscores the report.

Concerning the financial aspect, Wärtsilä’s projections suggest that by 2030, sustainable fuels will be 3-5 times more expensive than currently are fossil fuels. Nonetheless, it is important to keep in mind that comparing future sustainable fuel costs to today’s fossil prices does not account for new regulations (already being implemented) that raise fossil fuel costs. Policies, such as the EU Emission Trading System and the block’s latest sector-specific Regulation, FuelEU Maritime, could create price parity between fossil bunkers and sustainable fuels as early as 2035. That, combined with the impact of efficiency measures and increased investment in sustainable fuel supply chains, should result in a change in cost dynamics in the sector.

The report also highlights that to achieve full decarbonisation by 2050, the shipping industry will require approximately 270 million tonnes of alternative fuels equivalent to HFO. Aside from the

sizable fuel supply, the sector will also require significant investments in fuel infrastructure, new ships, and equipment upgrades across the global fleet. DNV estimates that annual spending will need to range from $8 billion to $28 billion on ships and $28 billion to $90 billion on scaling up production, fuel distribution, and bunkering infrastructure to meet the demand for carbon-neutral fuels by mid-century.

To help achieve carbon-neutrality in maritime, there needs to be a coordinated effort between policymakers, industry, and operators to drive the systemic changes needed for advancing production, infrastructure, supply chains, and technology for sustainable fuels. The shipping industry can learn from the global power sector’s shift to clean energy, where collaboration helped scale new solutions. For instance, photovoltaics were considered the costliest way to reduce carbon emissions in 2014, but it became the cheapest source of electricity just six years later. Solar and wind have rapidly become the most cost-effective electricity sources in just a decade, driven by clear and ambitious policies that enabled largescale development and cost reductions. Investment in sustainable fuels, regulatory incentives, and growing demand can stimulate supply and reduce fuel costs.

There is no ‘I’ in ‘team’

One of the biggest challenges to shipping’s decarbonisation efforts is ambivalence. Operators struggle to choose a fuel due to limited production and uncertainty over which technology will scale more efficiently. Simultaneously,

fuel producers hesitate to increase production without assured demand. This uncertainty leaves shipowners, fuel producers, and other transport and logistics stakeholders in a state of inaction. However, with proper policies that aim to provide stability and are implemented quickly, sustainable fuel production will accelerate, breaking this cycle. Wärtsilä’s report lists several steps that policymakers can take to scale up sustainable fuel use in the maritime sector. First, to deliver certainty and stability, they should establish an internationally agreed upon, science-based pathway to phase out fossil fuels in alignment with IMO targets. This will provide operators with a consistent global timeline for planning investments and signal suppliers to ramp up sustainable fuel production.

Second, adopting a global standard for marine fuel carbon pricing and reinvesting CO2 tax revenues into the shipping industry will boost cost competitiveness, eventually achieving parity with fossil fuels and encouraging the development of sustainable alternatives.

Finally, increasing global collaboration between governments on innovation and infrastructure is essential to the widespread delivery of sustainable fuels. This can be achieved by participating in initiatives like the global Zero-Emission Shipping Mission or by working closely with the IMO to set global standards, ensuring a level playing field and avoiding regulatory disparities.

Industry collaboration is of pivotal importance, too. The report underscores that no single ship operator can generate enough demand to scale

sustainable fuels; collectively, however, the industry can influence global markets. Owners-operators need to unite on the importance of low-carbon options. Additionally, decarbonisation requires the involvement of the entire ecosystem, including carriers, ports and terminals, manufacturers, shippers, investors, and energy suppliers. While smaller operators, who form a large part of the industry, often lack the resources to invest in sustainable fuels, larger fleet owners have the means to do so.

There is an opportunity to merge resources to scale sustainable fuels across the industry rather than just in isolated areas. Although some smaller carriers are advancing in areas like electrification, the broader sector risks falling behind if they are not included in decarbonisation plans. By pooling purchasing power through sector-wide procurement agreements, multiple operators can combine their demand, leading to lower fuel prices, reduced supply chain costs, and streamlined administrative responsibilities. Further, the industry should focus on sharing skills and knowledge by creating a centralised knowledge hub. Such a centre, supported by global maritime organisations like the IMO or the Getting To Zero Coalition, would allow smaller operators (who may not be able to have dedicated sustainability teams) to access the tools and expertise to plan for sustainable fuels.

This collective approach will also help build consensus on preferred fuels and signal demand to producers, ensuring that shipping secures a significant portion of the limited supply. This is important

Blue fuels Green fuels

Biofuels

2040

Produced from hydrogen made through electrolysis, using renewable energy.

Produced

Photos: Wärtsilä

because the sector will compete for sustainable fuels with other sectors, like aviation, industry, and long-distance trucking, all of which are on their own decarbonisation paths, too. This competition could limit fuel availability for shipping and keep prices elevated for an extended period. However, if the shipping industry is proactive, it can position itself as a leader by quickly establishing infrastructure and supply chains and adopting cleaner fuels on a large scale.

At the same time, collaboration with the mentioned sectors can increase fuel supplies for everyone. These relationships should not be competitive since they all share a common goal of establishing low-carbon fuels as the norm and

should work together to build supply chains. The report gives an example of cooperation between the aviation sector, which requires the highest grade of fuel, and shipping, which can use lower grades while still reducing emissions. With proper guidelines, producers could create both fuel grades in the same production process, benefiting both sectors and generating demand while encouraging suppliers to invest with confidence in the growing demand from both industries. By working together with agendas like the International Civil Aviation Organization, the shipping industry can help establish a globally recognised framework for the production and distribution of sustainable fuels. This

framework would clarify the fuel grade requirements for each sector, optimising production (and hence adding to producer profits) and increasing availability across international markets.

Acting now

Even though the report uses its modelling to offer the most accurate forecast, it is not possible to foresee all potential disruptions affecting the sector, such as supply chain issues, pandemics, global conflicts, and natural disasters, to name but a few. Therefore, the report includes key steps that individual operators can take to reduce emissions and prepare for future fuels.

First, it is crucial to prioritise efficiency by assessing each vessel’s capacity to implement measures that quickly lower fuel consumption and emissions. Short-term actions, like optimising ship speed and performance, can significantly reduce carbon footprint and prepare for the eventual use of more expensive zero-emission fuels. Combining efficiency measures with technologies like improved propulsion, wind-assisted sailing, and weather routing can further increase savings. This approach is the most straightforward way to meet emission targets and could achieve the entire 20% reduction required by the IMO by 2030 while also protecting against future fuel cost increases.

In addition to that, the IMO’s new Carbon Intensity Indicator (CII) rating scheme, effective from January 2023, makes efficiency a financial necessity. Vessels above a gross tonnage of 5,000 must annually submit ratings based on CO 2 emissions per cargo capacity and distance travelled. A poor CII rating decreases the vessel’s commercial value, makes it difficult to win contracts, and increases its fuel costs. Additionally, new regulations like the Energy Efficiency Existing Ship Index and the Energy Efficiency Design Index set minimum energy efficiency standards for existing and newbuilds, respectively. The FuelEU Maritime goes a (crucial enforcement) step further by penalising non-compliance and awarding those who invested in emission-reduction solutions.

Second, the report warns that investing in the wrong technology could lead to stranded assets if a more competitive fuel or solution emerges later on. That is why investing in fuel-flexible engines that can operate on multiple bunkers or be converted later can pay off in the long

run. Already, with alternative fuel supplies still limited, many operators are opting for engines and fuel systems that can run on both sustainable and fossil fuels, allowing them to continue using traditional bunkers until a moment when the switch is necessary. The technology is rapidly emerging, too. In November 2023, Wärtsilä Marine introduced the world’s first four-stroke ammonia engine, which can immediately reduce greenhouse gas emissions by over 70%. According to the report, ammonia, as a key alternative fuel, is now at the forefront of the push toward zero-carbon emissions.

Similarly, in 2022, the Wärtsilä 32 Methanol engine and MethanolPac storage and supply system were launched –the first commercial solutions for using methanol as a marine fuel. By December 2023, four additional methanol engines were added to the lineup, all capable of significantly cutting the carbon footprint compared to traditional fuels while also

greatly reducing nitrogen and sulphur oxides plus particulates.

And lastly, operators should “think upstream” – consider the entire supply chain when planning for future fuel needs. They can ensure sufficient fuel availability and protect their assets by applying their knowledge and expertise in future fuels to upstream supply challenges. For example, the container sector can leverage its experience with methanol engines to enhance fuel supply chains, boosting confidence across the industry.

When policy, industry, and individuals come together

According to Wärtsilä’s report, shipping will decarbonise with strong policies, industry collaboration, and proactive efforts from owners-operators. Effective policies will enhance the cost competitiveness of sustainable fuels and signal the demand needed to increase production.

The proliferation of skills and knowledge through industry-wide cooperation is crucial, as it will empower individual companies to turn uncertainty into a competitive edge and reduce operational costs by investing in efficiency and adaptable technologies concerning fuel options.

It is undeniable that sustainable fuels are on the horizon, driven by the IMO’s Marine Environment Protection Committee’s recently revised regulations as well as the EU. While energy efficiency measures offer immediate benefits, they will not suffice for long-term goals. The industry must quickly adopt sustainable fuels, with the success of this transition depending on current actions undertaken by stakeholders.

Lessons from the energy sector show that rapid scaling and cost reductions are possible when policy, industry, and individual actors collaborate to create predictable demand.

Photo: Wasaline

Understanding the whole picture

by Simen Diserud Mildal, Lead for Green Shipping Technologies, Norwegian

Maritime

Authority, and Torill Grimstad Osberg, Senior Principal Approval Expert, DNV

As the maritime industry seeks to reduce its greenhouse gas (GHG) footprint and transition to zero-emission fuels, hydrogen emerges as a promising option. The Maritime Technologies Forum (MTF), comprising leading classification societies and flag state administrations, has developed draft guidelines to address the complexities and safety concerns associated with liquefied hydrogen (LH2) bunkering. The latest report covers key aspects of the safe and efficient use of hydrogen as a marine fuel, and particularly how bunkering can be done in a way that minimizes safety concerns. The report has also been submitted to the 10 th meeting of the International Maritime Organization’s (IMO) Sub-Committee on Carriage of Cargoes and Containers to support the discussion on completing the body’s guidelines for using hydrogen as a fuel.

IMO has set ambitious targets to reduce GHG emissions from ships, aiming for net zero by 2050. Hydrogen, with its zero-emission potential, is a viable candidate to help achieve this goal. However, the maritime sector has limited experience with hydrogen, both as cargo and fuel. The MTF’s project aims to bridge this gap by drafting the first version of guidelines for the safe bunkering of LH 2 .

Hydrogen itself – and its impact on materials and other particles

Hydrogen’s unique properties present both opportunities and challenges. It is highly flammable, with a wide flammability range (4-75% in air) and a high flame speed, increasing the risk of detonation. Hydrogen is also colourless and odourless, making leaks difficult to detect. Additionally, its small molecular size leads to high permeability and the risk of hydrogen embrittlement in metals. The extremely low boiling point of liquefied hydrogen (-253°C) necessitates careful material selection and extensive insulation to prevent equipment damage and ensure safety.

At -253°C, both oxygen and nitrogen in the air can condense and freeze. As such, one of the new aspects associated with LH 2 , compared with the bunkering and operation with liquefied natural gas (LNG), is the risk of condensation and freezing of air both inside and outside the piping systems. If oxygen or nitrogen is present inside when LH 2 is introduced, it can freeze and clog the systems, causing valves or other components to fail. The extremely low temperature of liquid hydrogen can also cause air to condense on the outside surfaces of piping and equipment. This can result in the formation of liquid oxygen, which poses a significant fire hazard due to its high reactivity. In addition, the accumulation of ice can lead to mechanical stresses and potential damage to the equipment.

These risks require meticulous design and operational procedures to mitigate. The use of more automated bunkering processes is one way to avoid air ingress. It may also be necessary to avoid the use of nitrogen for inerting after each bunkering operation. To prevent the condensation and freezing of air on the outside of the systems, more extensive

use of vacuum insulation will be necessary. Liquid oxygen is highly reactive and can cause materials that are normally non-flammable to ignite and burn, so drip trays for collection of any frozen air is another relevant safeguard to help make sure that it does not reach organic materials.

The critical components & considerations

Currently, there are no specific international standards for LH 2 bunkering. However, ongoing developments in ISO standards and experiences from the Norwegian ferry Hydra provide valuable insights. Hydra has been successfully conducting LH 2 bunkering operations since April 2023. The solutions applied there offer practical reference.

IMO is also working on guidelines for the safe design of ships using hydrogen as fuel, with a target completion date of September 2024. These guidelines will focus on ship installations up to the bunkering manifold, but the details of bunkering operations are not within their scope. The work conducted by MTF aims

GUIDELINES FOR THE DEVELOPMENT OF LIQUEFIED HYDROGEN BUNKERING SYSTEMS AND PROCEDURES

to fill this gap by providing relevant recommendations for safe bunkering of LH 2

An LH 2 bunkering system consists of several critical components. First, the bunkering station: open facilities are preferred to allow for rapid dispersion of hydrogen in case of leaks. Dry disconnect type of bunkering connections should be used, like for LNG. Second, the bunker piping system: the high permeability of hydrogen

leads to a need for careful material selection to prevent embrittlement and leakage. For handling the low temperatures, the piping system requires more extensive use of vacuum insulation, not only for the pipes but also for valves and hoses. Third, safety equipment: gas and fire detection systems of diverse types, as well as rapid emergency shutdown systems, are essential to ensure safety during bunkering operations.

The bunkering process for LH 2 is more complex than for LNG due to hydrogen’s unique properties, requiring taking into account a few key considerations. First, emergency shutdown: rapid shutdown capabilities are crucial to prevent accidents. The emergency shutdown system should be activated from both the supplier and receiver sides and should not cause gas or liquid release. Second, purging: unlike LNG, nitrogen may not be a good choice for purging LH 2 systems due to its freezing point. Instead, vacuum pumps and helium gas can be used to ensure the system is free of air and hydrogen before connections and disconnections. If nitrogen purging is applied, the complete removal of nitrogen traces will be a necessary part of the bunkering process. Third, personal safety: personnel involved in LH 2 handling must wear appropriate personal protective equipment to protect against extreme cold and potential leaks. Automated processes are recommended to minimize human intervention.

Given the complexities of LH 2 bunkering, crew training and certification are paramount. The safety management system should be updated to address the additional safety aspects of LH 2 bunkering. Training programs should emphasize the unique properties of hydrogen, including its cryogenic temperatures and flammability.

Moving forward – in a safe manner

The use of LH2 as a marine fuel presents significant challenges but also offers substantial benefits in reducing GHG emissions. The newly proposed draft guidelines provide a framework for the safe and efficient bunkering of LH2, addressing the unique properties and risks associated with hydrogen. The main learning is that the bunkering systems and procedures as applied for LNG-fuelled ships cannot be copied directly due to the different properties of LH2.

The development of vessel-specific procedures, enhanced safety measures, and rigorous training programs are essential to mitigate the risks associated with LH 2 bunkering. By fully understanding the special risk picture with LH 2 and taking care to move forward in a safe manner, the maritime industry can pave the way for a cleaner, more sustainable future, and these guidelines will support the safe adoption of LH2 in maritime operations. ‚

MTF is a forum of flag states and classification societies established to provide technical and regulatory expertise to benefit the maritime industry. The role of the MTF is to work together on research that it publishes for the maritime sector and draw on regulatory expertise to be able to offer unbiased advice to the shipping industry. The flag state administrations include Maritime Bureau, Ministry of Land, Infrastructure, Transport and Tourism, Japan; the Norwegian Maritime Authority; the Maritime and Coastguard Agency, UK; and the Maritime and Port Authority of Singapore (MPA). The classification society members are ABS, DNV, LR, and ClassNK. Visit maritimetechnologiesforum.com to learn more.

GUIDELINES FOR THE DEVELOPMENT OF LIQUEFIED HYDROGEN BUNKERING SYSTEMS AND PROCEDURES

How carbon units can help to decarbonize supply chains

Insetting doesn’t have to be upsetting

by Bertil Duinhower, CEO and Co-founder, CarbonLeap

There is no quick and easy solution that all companies can implement to decarbonize their supply chains. Not every owner-operator can afford to invest directly in proven technology to reduce emissions from their vessels. Zero-carbon alternatives to hydrocarbons are not widely available across transport networks, making it difficult to switch to using technology that supports them. For manufacturers, retailers, and their shippers, using alternative clean energy sources for heavy road and marine transport in their supply chains could help them cut emissions. Yet, today, these are too frequently difficult to access, in the wrong place, or too expensive for a single operator to develop on their own.

Faced with this challenge, efforts by forward-looking operators to find ways to reduce the carbon footprint of their supply chain operations have run into two problems. First, there is a credibility gap, where stakeholders simply do not believe the claims made of effective decarbonization. Second, there is a barrier to wider action on decarbonization by the whole industry at a scale that could be effective.

Sharing the costs & benefits

Decarbonizing supply chains needs to move forward more quickly, but the limited availability of clean energy for transport has hampered progress so far. Carbon insetting offers a way for the sector to work together and share the costs and benefits of action on decarbonization. Carbon credits that are secured in their own (or an adjacent) supply chain offer cargo owners and shippers an effective and low-cost way to lower their net carbon emissions and progress their energy transition. However, trust and transparency are essential to the success of this system.

Carbon insetting creates a mechanism to share the responsibility and cost of decarbonization across the market so that investments in technology and fuel can be made where they are the cheapest. Businesses that have invested in technology can monetize the carbon reductions they have achieved over and above their statutory obligations and corporate objectives by selling them as carbon credits. This reduces the cost of their investments, allowing the customer to claim emission reductions in their supply chain.

As part of a market in voluntary carbon credits, insetting can be a highly efficient route to decarbonization that allows

organizations to support the reduction of their scope 3 emissions. But, it is essential that businesses buying monetized carbon reductions can trust that the carbon units they purchase are verified, well-sourced, and do not double-count reductions. The carbon units need to be credible, offering value for money. Without these assurances, customers will reject carbon insetting as an approach, reducing investment available to first movers and hampering progress towards decarbonization.

Choosing in confidence

Carbon units must be independently and transparently verified, assured and witnessed by a third party. In addition, such a verification process should be standardized to transparent and universal rules to ensure carbon units are assessed to the same standard in the same way. For many carbon units, however, this isn’t the case.

Simply creating the carbon unit for someone to invest in is a hugely complex process. For buyers who want to be able to compare carbon units from different suppliers and be confident that they are getting what they pay for, sourcing and buying carbon reductions can be daunting. At CarbonLeap, we recognize this challenge for buyers; by making carbon units more transparent, we aim to simplify a complex process and help businesses drive forward their decarbonization ambitions.

A standardized set of rules for verifying carbon units would bring greater transparency to the market. It would reduce the information asymmetry between the suppliers of carbon units, low-carbon energy suppliers and users of clean technologies, and the buyers of carbon units who want to reduce

their environmental impact. While suppliers of carbon units will have invested in technology to cut their emissions, accurate verification of the carbon reductions achieved, measured against a standardized counter factual baseline, is essential for building trust and transparency in carbon units.

Carbon units need to be packaged and securitized to allow customers to trust that they are getting value for money. At CarbonLeap, we connect the supply and demand sides of the market, helping to build trust across the parties. Our team of experts act as intermediaries, supporting the supply of carbon units by applying their knowledge, specialization and skill to identify and build a deep and wide network of carbon unit suppliers from among the global transport industry. We have built a network of carbon unit suppliers that includes clean energy suppliers and clean technology OEMs, as well as shipowners, freight forwarders, cargo owners and vessel charterers. Working with independent experts to provide verification and assurance of the carbon saved by each of these suppliers, we have created a pool of carbon units that the buyers we work with can choose from in confidence. Our independence in this process is an important part of our ability to work with all parties to bring affordable carbon units to market that help facilitate the energy transition.

Tech-secured

Our knowledge of high-quality carbon units available in the market means we can securitize carbon units and provide reassurance to buyers, who may have limited time and resources to research for themselves, that they are not paying exaggerated prices for their carbon units.

It is important that carbon unit buyers make sure that the price they pay and the volume of carbon units they purchase are accurate and verifiable. This can be a complex process. At CarbonLeap, we have recruited blockchain to make this simpler and more reliable by providing a secure digital record of your transaction from end to end.

All carbon unit transactions we complete for our clients are recorded using blockchain-enabled technology in an unalterable and transparent ledger,

which means the emission reductions that a carbon unit represents cannot be duplicated. The units are delivered to the buyer in a secure digital transaction, and a certificate for proof of reduction is issued, helping to build trust and confidence in voluntary carbon markets and the use of carbon units from insetting.

Faster and at a lower cost

Carbon insetting allows companies operating in related supply chains to collaborate

to realize a faster and lower-cost route to decarbonization. Globally, transport relies on fossil fuels for over 90% of its energy. For the sake of the planet, we must act now to reduce transport’s carbon footprint. CarbonLeap is working with suppliers, buyers, and independent verifiers to bring essential accountability and transparency to the market. By creating confidence that carbon units are fairly priced, we can carry forward the fight against climate change more quickly.

Seeking to reduce your scope 3 emissions? Look no further, as CarbonLeap is committed to guiding you through this journey. We will work closely with you to understand your specific needs and align them with appropriate sustainability solutions. Our strategy involves collaborating with a network of partners who facilitate CO2 reductions in parallel to your supply chain. The beauty of this approach? You benefit from these carbon savings without needing to alter your operational processes. Go to carbonleap.nl to learn more.

The hidden dynamics of the energy transition

by David Young, Managing Director & Senior Partner, BCG Henderson Institute Fellow, Laura Larkin, Project Leader, Marielle Remillard, Principal, Alexandre Harry, Consultant, Dan Eichelsdoerfer, Principal, Mark Falinski, Consultant, and Juliana Sandford, Consultant, BCG

What is commonly referred to as the energy transition actually consists of dozens of discrete transitions that span industries such as power generation, transportation, and agriculture. These various pathways to net zero are often tightly connected, with overlapping value chains, technology innovations, adoption rates, and feedback effects.

Given this complexity, using first-order analysis or toy models to shape corporate strategy, policy, or investments will lead to dangerous blind spots and poor decision making. Leaders won’t know how to stack or sequence critical initiatives, nor will they be able to identify hidden risks and opportunities.

Instead, leaders must adopt a holistic, integrated systems lens. A systems approach can inform action by creating deeper insights and realistic scenarios, including the following.

A view that goes beyond the silos of any one industry, technology, value chain, or

geography and considers the many stakeholders and factors at play.

The ability to understand and assess the intricate interconnections of supply chains, materials, production capacities, labor, capital, and regulation, among other factors – which in turn allows us to identify potential synergies, avoid unintended consequences, and gain perspective on where technological innovations and substitutions are likely or essential.

Guidance on predicting how energy and industrial systems may change over time due to their cascading impacts – and an understanding of the conditions under

which certain transition pathways are economically feasible and can deliver a more sustainable, adaptable, and resilient future.

BCG’s proprietary Systems Workbench for Insight on Transition Change-Green Transformation (SWITCH-GT) enables such an approach by allowing us to examine the dynamics of various energy transition pathways across sectors. (See the sidebar “Modeling the Complexity and Dynamics of the Energy Transition.”) To illustrate the value of this high-fidelity computational workbench, we’ve used it to explore how companies in one sector – wind turbine OEMs – can apply a systems lens to their business.

Modeling the Complexity and Dynamics of the Energy Transition

This latest research from the BCG Henderson Institute is aimed at widening the aperture and increasing the resolution on the complexity and dynamics of transitioning our industries and society to a nature-positive reality.

BCG is developing its Systems Workbench for Insight on Transition Change-Green Transformation (SWITCH-GT) to help stakeholders across the public and private sectors understand the industrial requirements for the ongoing energy and sustainability transition. Stakeholders need that insight if they are to successfully accelerate the development of clean energy, sustainable transportation, and other technologies required to achieve global net zero.

The workbench includes a high-resolution network model of the materials and technology supply chains and their

interconnected dynamics that draws on other BCG proprietary models – for a sense of magnitude, BCG has a dozen proprietary models for renewable hydrogen alone – along with more than 400 external data sources, including the International Energy Agency, US Energy Information Administration, International Renewable Energy Agency, US National Laboratories, academic papers, analyst reports, industry reports, and expert interviews. Currently, the model covers 134 subtechnologies within power, buildings, and transportation and roughly 300 materials.

In addition, more than 125 experts across BCG contributed to the development of this systems workbench. Their inputs were instrumental to the development of SWITCH-GT.

Although our wind OEM example focuses on a small slice of the overall energy transition, it underscores the vital importance of the systems approach. As corporate leaders, policymakers, and investors reshape companies, industries, and economies to avoid the worst effects of climate change, this systems lens offers them the broadest possible view of energy transition dynamics – which in turn will help them make better decisions for businesses and for the planet.

Breaking out of silos

Many companies begin their decarbonization journey by looking within the immediate boundaries of their own business – their operations, product development, supply chain, and sometimes their industry’s ecosystem. This industry-specific view misses the potential interconnections and dynamics across sectors that may impact a company’s plans and returns over time.

To demonstrate the risk of this limited perspective, we compared a sector-based view of demand for 18 materials used in wind turbine manufacturing to a broader cross-industry view (see Exhibit 1). Our comparison uses a base scenario roughly

aligned with a 2°C warming projection under the IEA’s 2022 Announced Pledges Scenario (APS) and assumes the requisite deployment of various technologies to meet that target.

Looking only at demand from the wind industry, it is unclear which, if any, of the materials face supply constraints in this decade. Taking a cross-industry view –integrating demand from industries such as solar, storage, auto, buildings, and aviation – completes the picture.

At least 13 key materials used in wind turbine manufacturing – including carbon fiber, copper, cobalt, neodymium, dysprosium, praseodymium, and terbium – face scarcity by 2030 under the cross-industry analysis. While potential shortages of some of these materials (particularly the rare earth elements) are well recognized and have been identified as a potential obstacle to the pace of the energy transition, possible supply dynamics for other materials are less well known.

The real-world implications of scarcities are significant , whether in driving up raw material prices, contributing to project delays, or even forcing operational or technical redesigns. In the wind industry, for example, scarcity drives higher

project delivery costs; in the worst cases, it causes developers to park their projects at a time when the world desperately needs more capacity.

These constraints can be further shaped by several factors. Geopolitical developments, for example, can exacerbate shortages, with countries scrambling to secure supplies in a global economy where control of mining and processing is increasingly concentrated. Moreover, the demand for materials will change depending on how the numerous discrete transitions that are underway track above or below the APS trend in our base case. A different deployment trajectory for major transition technologies, such as EVs, wind power, solar power, and building efficiency improvements, would substantially shape the scarcity of various materials.

Understanding the underlying drivers

For the wind industry in our case study, the potential shortage in carbon fiber shown in Exhibit 1 is not widely recognized, and thus worthy of deeper investigation.

Carbon-fiber-reinforced polymer is replacing glass-fiber-reinforced polymer (fiberglass) as the dominant composite material used in the spar cap, which spans the length of

SUSTAINABILITY

a turbine blade and serves as a structural support. While carbon fiber is more expensive than glass fiber for wind applications, at more than ten times the cost, using a higher share of carbon-fiber-reinforced polymer in the spar cap creates lighter and stronger blades. As a result, wind OEMs can build longer blades capable of producing energy

more efficiently – a particularly important factor in the offshore wind sector. The upshot: a potential shortage of carbon fiber could delay technology-based efficiency improvements in the wind industry.

Under our base case, demand for carbon fiber is expected to grow at a compound annual rate of about 20% through 2030 (see

Assumptions in Our Base Case

The base case uses demand projections for wind energy aligned to IEA’s Announced Pledges Scenario, published in 2022, which calls for 2,251 gigawatts of installed capacity by 2030.

We assume that the share of total wind power generated by offshore wind turbines will increase from 7% in 2022 to 20% in 2030. Our model further assumes that wind turbine power capacity and blade length increase over time and that the blade design (including the use of fiberglass versus carbon fiber) is related to wind turbine size. The size distribution of onshore and offshore wind turbines, as well as the share of fiberglass versus carbon fiber blades, roughly aligns with Brinckmann’s Global Wind Technology Forecast from February of 2023.

The material composition of each wind turbine blade aligns with either reference blade SNL 100-00 (fiberglass) developed by Sandia National Laboratory or a modified IEA 15 MW turbine blade (carbon fiber) from the Offshore Renewable Energy Catapult (the modified IEA reference blade is referred to as “carbon fiber”

the sidebar “Assumptions in Our Base Case”). This will create a sizeable gap between supply and demand, even considering production expansions underway or planned to date. In fact, meeting the projected carbon fiber demand in our base case would require building out new capacity at roughly three times the historical rate (see Exhibit 2).

due to the use of that material in the spar cap, but it also includes fiberglass in its design). The material mass was scaled using a relationship between blade length and weight; the scaling factor was 2.2, per Lawrence Berkeley National Laboratory

We assume wind turbine blades use fiberglass blades in 100% of 50-meter blades, 80% of 70-meter blades, 22% of 90-meter blades, and 5% of 110-meter blades; we assume 100% of blades longer than 130 meters use carbon fiber designs.

This analysis assumes waste in wind ranges from 5% to 15% depending on the turbine blade component and material (fiberglass versus carbon fiber) and applies a 15% waste factor to carbon fiber in aviation, automotive, and other sectors. It also assumes that procurement of materials occurs in the same year as the installation of new wind capacity.

Supply figures are based on aggregation of available supply projections and, where available, include production expansions underway or announced to date.

If we look at even more bullish demand scenarios within the wind sector and for other technologies like EVs, the predicted supply-demand gap is wider still. For example, based on the IEA’s projections for wind and EV demand aligned with a 2050 net zero scenario, total carbon fiber demand increases at a 28% compound annual growth rate through 2030.

Already, soaring demand has contributed to a 15% jump in carbon fiber prices since 2019. And critically, expanding carbon fiber production is laden with challenges beyond the capital requirements and time lags common to industrial project planning. For example, obtaining permits takes longer and navigating workplace safety regulations is harder due to the toxicity of certain precursor materials for carbon fiber, ultimately causing delays that deter expansion. It can take two or more years to build a new carbon fiber production facility.

Moreover, 77% of carbon fiber production occurs in the Asia-Pacific Economic Cooperation region; this geographic concentration of production further complicates supply dynamics, as it exposes supply chains to potential geopolitical disruptions.

Looking at the forecast above, wind OEMs will likely ask the following questions. First, is a pathway that relies heavily on carbon fiber in wind turbine manufacturing really feasible? If so, under which scenarios would carbon fiber supply meet demand? Which factors do we need to consider to better inform our decision making? For example, how do we weigh the tradeoffs in design choices that will impact carbon fiber demand? And for which industries can carbon fiber easily be replaced with an alternative?

In the face of potential carbon fiber shortages, wind OEMs will likely search for ways to limit future supply chain disruptions. This may include changing blade composition or delaying the deployment of larger turbines. If these choices are adopted industry-wide, that will alter both the demand for carbon fiber across the wind industry and the timing of that demand (see Exhibit 3).

Beyond wind OEMs, automakers and aviation OEMs will also make engineering and sourcing decisions that will shape carbon fiber demand. Similarly, the extent to which carbon fiber manufacturers expand production in the face of this bullish forecast will further shape the risk of scarcity. The wind turbine manufacturer

in our case study must consider different scenarios for carbon fiber demand, including those from other industries, as well as scenarios for the possible expansion of carbon fiber supply, and then map out how these changes would affect the underlying economics of their business. That will help them select the best strategy to assure profitable growth.

If a wind turbine manufacturer concludes that using carbon fiber is too risky without further action, then it may aggressively commit to pursuing long-term production contracts, strategic coinvestments, or even acquisition and further corporate development. Alternatively, the company may shift its material mix toward fiberglass over carbon fiber where feasible. In fact, some manufacturers still use fiberglass designs for turbine blades greater than 100 meters in length.

Examining cascading effects

So, what are the implications of a decision by the wind turbine OEM in our example to rely more on fiberglass for its blades? To answer this question, a good starting point is to create a systems diagram (see Exhibit 4). Even this simplified version illustrates the interconnections between demand for

carbon fiber, glass fiber, and other technologies and materials in the energy transition. We also include boron here as an example of the roughly dozen materials added to glass fiber to tailor its material properties. Each bubble in the diagram has its own dynamics that can be modeled.

This systems map helps identify relationships the wind turbine OEM in our example should explore, including what actions could potentially prevent a supply crunch in carbon fiber and the ramifications these actions would have for closely connected materials like fiberglass and boron.

To bring these dynamics to life, we crafted two scenarios to examine what interventions in the wind industry could bring the carbon fiber market to a more stable supply-demand equilibrium. Starting from our base-case projections, we gradually increased the share of small and medium turbines using fiberglass spar caps in Scenario 1. In Scenario 2, we applied the same conditions as in Scenario

1 and layered in a slower deployment of carbon-fiber-intensive larger turbines.

In Exhibit 5, we show how each scenario plays out for carbon fiber, glass fiber, and boron. The blue line shows the base-case supply for each material, with the shaded area indicating a reasonable range on the high and low side.

If demand shifts away from carbon fiber, the knock-on effects for fiberglass producers will be immediately apparent. What was a nearly balanced market for glass fiber shown in Exhibit 1 is now supply-constrained.

The mismatch between glass fiber supply and demand reveals a weakness in the way companies often assess supply constraints. Industry supply forecasts typically rely on projecting past trends into the future using industry rules of thumb, often built over years of predictable growth. That means that companies may miss a large structural change in demand, in this case driven by the confluence of multiple green transitions

– which can create risk for those companies looking to secure scarce materials and opportunity for those that can step in to meet demand.

Let’s assume that glass fiber producers are able to rapidly expand capacity by securing permits, engineering and building facilities with furnaces and refractories, and obtaining the license to operate within two years. After all, history has demonstrated a fairly resilient fiberglass market given its geographically dispersed production and its varied end applications. Even in this case, reverting to more glass fiber creates different cascading effects and another challenge emerges: a surge in demand for boron, an already scarce material that is an additive in the production of the most common formulation of glass fiber.

Boron is required for the manufacture of more than 300 products. This includes well-established industrial uses in products such as detergents, fertilizers, and insulation as well as newer clean energy uses,

such as neodymium magnets for directdrive wind turbines and select EV motors, boron steel, solar applications, and neutron absorbers in nuclear power plants. Already, prices for boron have doubled since 2020. Our projections in Exhibit 1 suggest boron demand could exceed supply by roughly 20% by 2030 – and that doesn’t account for the potential volatility of supply and demand in the meantime. On the supply side, boron mining and processing are geographically concentrated, and the world’s largest known deposits are already being mined today. Opening a new boron mine has historically taken upwards of 20 years. Increased reliance on glass fiber could therefore increase a producer’s exposure to potential price spikes and supply bottlenecks for boron. Certainly, innovation could help mitigate the impact of boron scarcity. For example, we may see substitution, with intermediate glass fiber producers

swapping out boron for another material – or two, or three – depending on how well the other material(s) can mimic boron’s chemical contribution to the product. These new glass fiber formulations could ripple through the market, with implications for production utilization, time lags, and prices. This in turn would cause a different cascade beyond wind, extending to other value-added fiberglass applications like automotive and aviation.

Integrating systems thinking into green transition strategy

This exercise examines the uncertainty, complexity, and cascading effects surrounding just a few factors affecting raw materials for a wind OEM. A holistic, integrated systems lens would not only consider the full range of material inputs but also assess other factors such as: the labor required to manufacture and assemble the

wind turbines; costs and externalities of expanding mining, refining, and manufacturing; infrastructure and logistics limitations for scaling bigger turbines; policies and regulation impacts; trade flows and geopolitical vulnerabilities; and adoption and integration rates into the grid.

The transition to net zero is the challenge of our time. We are struggling to push decarbonization quickly enough to avoid the most dire impacts of climate change; a primary reason is the sheer scale of the undertaking and the fact that we cannot decarbonize everything everywhere simultaneously.

The good news is that we now have the tools – including extensive data, advanced analytics, AI, and systems-dynamics and agent-based models – to meet that complexity head-on. Through platforms such as SWITCH-GT, business and government leaders can leverage these tools to shape a systems approach to the energy transition. There is no time to waste. ‚

Boston Consulting Group is a global consulting firm that partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Our success depends on a spirit of deep collaboration and a global community of diverse individuals determined to make the world and each other better every day. Go to bcg.com to discover more. The authors would like to acknowledge Marek Davis, Joshua Chakravarty, and Sandra Starkey for their outsized contributions to the development of SWITCH-GT. Additionally, we would like to thank Jens Gjerrild and Lars Holm for their contributions as experts on wind energy.

Biogas can help global shipping go green

by Peter Jameson, Managing Director & Partner, Maurice Jansen, Partner, and Kevin Maloney, Project Leader, BCG

The global shipping industry carries 80% to 90% of global trade, yet the industry has not yet begun to decarbonize in any meaningful way. While sea transport is relatively efficient compared to air or road transport, the shipping industry still emits roughly 1 billion tons of CO2e annually. Meanwhile, trade tonnage is set to grow as much as 130% by 2050, according to the International Maritime Organization (IMO). About 99% of the industry’s energy needs are still filled by fossil fuels, despite intense pressure from customers, policymakers, and society at large to accelerate decarbonization.

Efficiency improvements can help reduce the shipping sector’s greenhouse gas emissions. Yet it is widely acknowledged that the largest reduction must come from replacing fossil fuels with low-carbon alternatives such as e-fuels (made with captured biogenic CO 2 and clean hydrogen), biofuels, or battery-electric propulsion. Choosing the optimal low-carbon alternative for a given route depends on many factors beyond cost and emissions intensity, such as fuel availability, performance, safety, and supply security. The shipping industry’s future is expected

to include a tapestry of different fuels. Many low-carbon alternatives to current marine fuels exist (see “Power to Spare”). While e-ammonia and e-methanol have garnered most of the attention from shipping players seeking to decarbonize, we make the case for biogas-pathway fuels, which include biomethane (called renewable natural gas, or RNG, in North America) and biomethanol derived from biogas. These two fuels are the most mature and affordable low-carbon alternatives today and we believe they represent the best nearterm decarbonization options for many in the shipping industry. Under the right

conditions, biogas-pathway fuels have the potential to decarbonize up to 15% to 30%1 of global shipping by 2050.

If use of biogas-pathway fuels is to reach its potential, industry stakeholders must work together to overcome several hurdles. These include the availability of sustainable feedstocks, lack of production and transport infrastructure, competition with other sectors, and the potential for fugitive emissions from upstream and onboard leakage. Such challenges can be overcome and biogas-pathway fuels can play a meaningful role in the effort to decarbonize the marine shipping industry.

1 Assumes available feedstock of 40-80 EJ (lower end in line with availability from waste and residues). Assumes 2-4 EJ of biogas-pathway fuels as fair share for shipping, from global biogas supply of 25 EJ in 2050.

Power to spare. Several low-carbon marine fuels are currently under development in addition to biogas-pathway fuels. Each has advantages and drawbacks in terms of cost, sustainability, scalability, technical and market maturity, and safety.

Photo: Unifeeder/Elbdeich Reederei

e-Ammonia

Offering the potential for near zero-emission shipping with no feedstock constraints beyond the need for cheap renewable power, e-ammonia is the favored low-carbon fuel of many in the shipping industry. However, enabling the broad use of ammonia as bunker fuel will require major updates to health

and safety equipment and protocols on vessels and in ports to protect human and aquatic life. Currently two to four times more expensive than heavy fuel oil, its affordability depends on the broad availability of low-cost renewable power and green hydrogen.

e-Methanol

Like e-ammonia, e-methanol can deliver near zero-emission shipping, but methanol is easier to handle than ammonia and is less toxic to humans and aquatic life. There are now over 100 methanol-ready vessels on order. The first vessel was recently delivered to shipping giant Maersk, which recently announced the formation of a new company to develop e-methanol projects to supply green fuel for its fleet. However, e-methanol itself will be difficult to scale affordably due to the limited availability of the sustainable CO 2 needed to produce it. Like e-ammonia, e-methanol also depends on cheap renewable power and green hydrogen to reach the forecast 2030 cost of between $40 and $60 per GJ.

Liquefied e-Methane

As a drop-in replacement for fossil LNG, liquefied e-methane can leverage existing LNG transport and storage infrastructure. CMA CGM is rapidly building vessels equipped with dual-fuel engines and plans to have 77 ships capable of using either bio- or e-methane by 2026 (and recently hedged

its bet with a large order book of 24 methanol-powered ships). However, due to dependence on scarce sustainable CO 2 and a more expensive production process, the fuel is forecast to be consistently more expensive than the other two favored e-fuels.

Blue Ammonia

Blue ammonia is derived from blue hydrogen, made from a process using natural gas and capturing the resulting CO 2 , rather than through electrolysis powered by renewable energy. Although the carbon intensity of blue ammonia is higher than the green variety, it can still deliver meaningful reductions in

well-to-wake emissions compared to heavy fuel oil. And its affordability does not depend on rapid improvements in the cost of renewable power or electrolyzers. However, it is not clear whether regulators will allow long-term use of blue ammonia due to its inferior carbon intensities.

Other Biofuels

These fuels, which include biodiesel, bio-oils and biomethanol derived from biomass gasification, are generally more affordable than e-fuels today but face challenges regarding their sustainability credentials and available supply. Biodiesel is commercially available today but still releases between 20% and 40% of the emissions of equivalent fossil fuels; moreover,

supplies are likely to be constrained due to competition from other sectors. Bio-oils can be produced with a broad range of carbon intensities and is likely more affordable than biodiesel, but the production process is not yet mature and feedstocks also face supply limitations. Biomethanol from gasification is promising but faces similar technical and supply hurdles.

Marcin Jędrzejewski Partner and Associate Director, Downstream Oil & Gas, Boston Consulting Group

The shipping industry is increasingly turning to liquefied natural gas (LNG) as an alternative fuel to heavy fuel oil, primarily due to its low sulfur oxide emissions. This shift is in response to the stringent restrictions imposed by the International Maritime Organization (IMO) on sulfur emissions. Currently, about 6% of the global fleet can operate on LNG, but a significant shift is on the horizon. Orders for new ships reveal that 55% of vessels under construction are designed to utilize LNG as fuel. This is a significant increase from 2021 when 31% of the fleet on order was capable of using some form of alternative fuel, signaling a growing commitment

toward alternative fuels in the maritime industry. While the adoption of LNG helps address the emission of sulfur and other toxic substances, it does not eliminate CO2 emissions. Full decarbonization of the fleet running on LNG requires a shift to green sources of natural gas. This is where biogas emerges as a promising option. Combined with regulatory measures and discipline within the maritime sector, biogas offers a pathway to the real decarbonization of maritime transport. However, biogas is not the only potential source of LNG for the maritime industry. The sector is also exploring e-NG or e-LNG – electric natural gas produced

through the synthesis of green hydrogen from electrolysis and renewable sources of CO2 and carbon. This approach highlights the industry’s broader interest in innovative solutions to achieve sustainability. Beyond LNG, the shipping industry is considering other alternative fuels, such as ‘clean’ ammonia and methanol. Each of these fuels has its own production pathway and requires different adaptations within the fleet. Nevertheless, both are undergoing significant development, underscoring the maritime sector’s commitment to exploring diverse and sustainable energy sources to meet future environmental challenges.

Photo: Vordingborg Biofuel

to as biogas-pathway fuels. Liquified biomethane (LBM) can directly replace liquefied natural gas in suitable marine engines, while biomethanol is a liquid at room

Maturity

The production process for these fuels is fully mature and useful quantities are already available. Between 0.3 and 0.4 exajoules (EJ)2 of biomethane are

Compared to other biofuels, a broad range of feedstocks can be used. Anaerobic digestion is a suitable waste treatment method for feedstocks as diverse as corn

Biogas-pathway fuels offer the potential for reductions greater than 100% in wellto-wake emissions compared with typical fuel oil. This is because in the production

Biogas-pathway fuels are far less toxic to humans and aquatic life than ammonia. Ammonia is toxic to aquatic life at concentrations of 0.07 mg/liter, making

currently produced and used for a variety of applications, and the supply could potentially grow to between 2 and 5 EJ by 2030. 3 These volumes are significantly

Feedstock availability

husks, sewage sludge, and everyday trash. It provides a larger pool of feedstock supply (up to 40 EJ from waste and residues alone) 5 than feedstocks for other

Emissions reductions

of biogas, GHG emissions that would have occurred from the natural decay of organic material are captured and diverted. Materials that naturally emit large amounts of methane

Lower toxicity

it 1,000 times more deadly than current heavy fuel oil, and raises major concerns about the environmental impact of spills. Methane is of similar toxicity as heavy

2 Consistent with Cedigaz Global Biomethane Market 2022 Assessment (7.4 bcm or 0.3 EJ in 2022).

temperature that can be used interchangeably with e-methanol. Biogas-pathway fuels offer several advantages as low-carbon alternatives for the shipping industry.

larger than other low-carbon fuel supplies and could help considerably in meeting the global shipping sector’s 13 EJ4 final energy demand. Biogas is a mixture of methane and CO2 that is produced via the anaerobic digestion of biomass. It can be further processed into biomethane or biomethanol, which we refer

biofuels such as biodiesel, which can only be produced from a narrow set of oils and fats (estimated at just 2 EJ).

during decay, such as animal manure, offer the largest reductions in GHG emissions when used for biogas – assuming the successful management of fugitive emissions.

fuel oil to fish, and methanol is much safer. To reach the same toxicity to fish as a spill of heavy fuel oil, it would require 200 times as much methanol.

3 Lower and upper range represent Stated Policies and Sustainable Development Scenarios, respectively, as cited in IEA “ Outlook for biogas and biomethane” (2020).

4 Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping Position Paper: Fuel Option Scenarios

5 The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR6) cites a range of bioenergy potential of 5-50 EJ from wastes and residues, while IRENA estimates a total potential from wastes and residues of approximately 45 EJ, in 2020. Excluding forestry residues, the energy potential relevant for anaerobic digestion is estimated at up to 40 EJ, excluding sustainable purpose-grown crops.

Photo: Port of Gothenburg

The case for biogas-pathway fuels

Finally, these two fuels are the most affordable low-carbon fuels. Liquefied biomethane costs between $17 and $31 per gigajoule (GJ) today 6 and biomethanol from anaerobic digestion can be produced for between $25 and $45 per GJ. By comparison, the production cost of e-ammonia is forecast to fall only to between $30 and $55 per GJ by 2030,

Affordability

while e-methanol costs are forecast at between $40 and $60 per GJ in 2030. Furthermore, the long-term affordability of these two e-fuels is contingent on the broad adoption of low-carbon hydrogen over the next 20 to 30 years.

Many low-carbon fuels will likely play a role in the effort to decarbonize the shipping industry. The Mærsk Mc-Kinney Møller

6 Values represent average global production costs, not sales prices. No taxes or incentives are assumed.

Center for Zero Carbon Shipping estimates that the deep sea shipping sector in 2050 will use four different main fuel types (produced from multiple production pathways), and no matter which low-carbon fuel becomes dominant, the most commonly used fuel will account for no more than 54% of the total. By then, biogas-pathway fuels could account for 19% to 37% of the overall mix.7

7 Upper bound for biogas-pathway fuels (37%) assumes all biomethanol is produced via the biogas pathway, i.e., none is produced via biomass gasification.

Photo: Electrochaea

Four obstacles

If biogas-pathway fuels are to reach their full potential as low-carbon alternatives for the shipping industry, shipping companies, policymakers and industry associations will need to work together to overcome four obstacles to their broader adoption (see Exhibit 1).

Feedstock availability

Will there be enough biomass feedstock available? It depends. The most optimistic estimates of the energy potential of today’s global stock of sustainable biomass relevant to biofuels are approximately 50 EJ. 8 This includes only second-generation biomass (“waste and residues”) that does not compete with food, does not cause adverse changes in land use, and is practical to collect. It comes primarily from agricultural residue but also from other organic waste, not all of which (such as forestry residues) can be used for biogas production. The energy potential from waste and residues available specifically for anaerobic digestion is estimated at up to 40 EJ.

Today as little as 6% of relevant feedstock is being captured for biogas production. Only around 20%12 of biogas is upgraded to biomethane, resulting in a global biomethane supply of 0.3 to 0.4 EJ.13 Improving this will require a major global expansion of the means to collect

Only about 3 EJ9 of biomass is currently being captured and converted to biogas. After conversion losses, the total energy content of the biogas produced today is estimated at just 1.8 to 2 EJ.10 This is well short of the volume needed to address the energy needs of the shipping sector of around 13 EJ, particularly when considering the many other uses of biogas.

Several actions can be taken to boost the global supply of sustainable biomass.

In the near term, developing markets such as Brazil offer tremendous potential to capture under-utilized feedstocks and encourage the sustainable treatment of organic waste.11 Due to the global nature

Production and transport infrastructure

unutilized feedstock, produce biogas, upgrade it to biomethane or biomethanol, and transport the fuel to ports.

In Europe and North America, companies are already making use of the most easily accessible feedstocks. Getting more will require improvements and

of the shipping industry, shipping companies have unique access to such resources. Investing in upstream fuel production now could ensure an adequate supply of feedstock at stable prices in coming decades.

Technological innovation will also be needed to increase the energy potential of existing feedstocks, such as straw, and to optimize the energy yield from the anaerobic digestion process by customizing reactor conditions to the feedstock mix. Finally, there is additional longer-term potential from new technology-enabled feedstocks such as sustainable and ecologically safe purpose-grown crops, and even algae.

expansions to infrastructure and innovations to the feedstocks themselves (such as briquetting straw to enable more efficient transport). The industry must also support investments outside of Europe and North America, where there is often an additional unmet need for natural gas.

8 50 EJ is consistent with the upper end of the range of energy potential from wastes and residues (5-50 EJ) cited in the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR6).

9 Estimated from global biogas production based on production efficiency of 62-64%, as cited in Biomethane production via AD and biomass gasification, Li et al. (2017).

10 Consistent with World Bioenergy Association data (1.46 EJ in 2020) assuming similar 9% CAGR to 2023 as observed over past 20 years.

11 Sustainable potential assumes no deforestation or adverse indirect land use changes (ILUC).

12 A very small share (<1%) is converted to biomethanol today.

13 Cedigaz Global Biomethane Market 2023 Assessment cites a 2022 production volume of 7.4 bcm or 0.28 EJ, and observes a CAGR over past five years of 20%, resulting in an estimated 2023 value of 0.34 EJ.

LNG facilities and pipelines can also be used to transport biogas.

Modern biogas production facilities should build synergies with other emerging low-carbon infrastructure, specifically those where the waste stream of CO2 from biogas production can be used in the production of e-methanol and e-hydrocarbon fuels. These include solar, wind, green hydrogen, and e-fuel production facilities. This is particularly relevant where low-carbon fuel production is being subsidized, as it is in the US through the Inflation Reduction Act.

Governments and industry associations must work together to create fundamental policy mechanisms to transport biogas-pathway fuels to where they are most needed. To ensure that the final fuels have been sustainably produced and thus meet their GHG abatement goals, global systems for guaranteeing their origin and certifying their low-carbon status must be developed. Existing schemes are limited by country or regional boundaries and hampered by legitimate local requirements and complexities.

In addition to being a promising fuel for shipping, biomethane is a flexible fuel that can be used as a drop-in replacement for any existing use of natural gas. Like natural gas, most biomethane today is used to produce power and heat. Even in the most optimistic case, supplies of biomethane will fall well short of satisfying all existing demand for natural gas and new demand from transport applications, including shipping and heavyduty transport. To maximize its societal

Mass balancing lets biomethane producers sell their fuel into existing natural gas grids and allows fuel consumers to purchase this biomethane from the grid via a certificate, much like renewable energy certificates in the energy sector. It is essential if existing infrastructure is to be used to connect buyers and sellers. As mass balancing becomes available more broadly, industry associations can encourage shipping companies to take part through endorsement and education. Together, these policies enable ships sailing in international waters to buy certified low-carbon fuels at any port they visit.

As societies around the globe work to decarbonize, biomethane (either compressed, or liquefied to be delivered as bio-LNG) is also attracting interest for use in heavy-duty transport. However, low-carbon hydrogen is also an attractive fuel for this sector. In addition, as batteries improve, electrification is becoming a feasible solution for a broader set of on-road vehicles, which could potentially include heavy-road trucking in years ahead.

Biomethane is particularly good for shipping because of its energy-dense

Competition with other sectors

benefits, biomethane should flow towards applications that offer a strong fit and few promising decarbonization alternatives.

Heating, for example, accounts for a massive 50% of global final energy consumption, according to the International Energy Agency (IEA). Natural gas is the most common heating fuel, meeting 42% of demand in 2021. Most of the demand for heat, however, is addressable today with electric heat pumps, which can generate

Greenhouse gas impact

Methane is a potent greenhouse gas. Its warming impact is 30 times greater than CO2 over a 100-year period, and 85 times greater over a 20-year period. Due to its potency, even small methane leaks must be avoided. The beneficial GHG impact of biogas-pathway fuels could be seriously eroded by methane leaks during their

Maritime industry stakeholders should immediately pursue five key actions to accelerate the adoption of biogas-pathway fuels in the shipping industry:

First: stimulate biogas production development, especially in regions with

production, transport, or use on board ships. Concrete actions can be taken to mitigate the risks of methane leaks. When preparing regulations, policymakers could consider the full lifecycle emissions of biomethane and biomethanol, including their 20-year global warming potential, and require measurement and tracking of methane leaks

Five actions

large amounts of untapped feedstock.

Second: vertically integrate biogas production development to ensure volume security and price stability.

Third: use globally-recognized certificates or guarantees of origin to enable

portability, affordability, maturity compared to other low-carbon fuel options, and compatibility with existing LNG infrastructure. Yet very little biomethane or biomethanol is used in the shipping sector today. Raising awareness of the benefits of these fuels for shipping is a necessary first step towards increasing their adoption. Policymakers could ensure that biogaspathway fuels receive the same support as other low-carbon fuels, subject to sustainability requirements and the treatment of shipping as a favorable end use for these fuels. This may require updating existing legislation such as REPowerEU, which does not include transport applications in its 2030 target for EU biomethane demand.

The shipping industry can generate further momentum for the adoption of biogaspathway fuels by integrating upstream and producing the fuel themselves. An integrated supply chain would eliminate the need to compete with other sectors for biogas. It would also reduce the complexity of developing and marketing green shipping products, which in turn could generate additional revenue to fund the development of fuel supply chains.

heat three times more efficiently than gas-based assets. Some demand for heat cannot be electrified today, such as hightemperature heat for industrial processes. However, this can also be met using lowcarbon hydrogen or, in the near future, with emerging electrified solutions such as electric furnaces. Hastening the adoption of these alternative decarbonization technologies will make more biomethane available to the shipping industry.

along the entire value chain. Shipping players should implement methane tracking and visualization tools to find and plug leaks onshore and on board their ships. Finally, engine technologies that reduce methane slip – methane that escapes unburned from engines – such as hybridization and exhaust gas recirculation, should be developed.

development and marketing of biogasbased green shipping products.

Fourth: educate the shipping industry and ensure that policy can enable the fundamental merits of biogas.

Fifth: invest in innovation and use

regulation to speed adoption of technologies to limit onboard methane leaks and slip.

Exhibit 2 offers specific activities for shipping players, policymakers, and

shipping industry associations to promote the use of biogas-pathways fuels today.

Conclusion

Despite little progress until recently, the shipping industry is finally building momentum towards decarbonization. With the IMO’s recent agreement to achieve net-zero emissions by or around 2050, and the publication of the final FuelEU Maritime legislation, the legislative framework supporting

decarbonization has never been stronger. Increased investment in low-carbon fuels and supporting infrastructure is sure to follow, with renewed debate regarding the merits of each low-carbon option.

Promoting biogas for investment and development will accelerate progress towards the full decarbonization of the

sector. And it need not slow investment and development in other green fuels, all essential to the future of the shipping industry. Moving towards net zero must be a collective pursuit.

Like all fuel pathways, there are challenges to be overcome for biogas-pathway fuels to realize their full potential ‚

Boston Consulting Group is a global consulting firm that partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Our success depends on a spirit of deep collaboration and a global community of diverse individuals determined to make the world and each other better every day. Go to bcg.com to discover more. The authors would like to thank Roberta Cenni, Head of Biofuels at the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, and Mike Tupy, Principal Engineer at Cargill, for their contributions to this article.

Navigating decarbonization trajectories

by Paul Delouche, Strategy, Acquisitions, and Advanced Services Director, Bureau Veritas Marine & Offshore

The fight against climate change is one of the most pressing challenges facing humanity. However, achieving meaningful progress for the shipping sector requires a nuanced understanding of the main drivers and opportunities that will influence future decarbonization trajectories for the industry. This extends beyond purely technical considerations: it is essential to consider key factors across the entire value chain, accounting for the broader economic context in which the transition is taking place.

To address this multifaceted challenge, Bureau Veritas Marine & Offshore (BV) has developed a bottom-up model. It is built on the premise of the micro-attributes of the global shipping fleet, accounting for the different segments and vessel types, to simulate the overall effects at a macro level. By reflecting the dynamics and inertia of the global shipping industry under different drivers, we can calculate how the fleet’s greenhouse gas (GHG) emissions might fluctuate according to key influences. This enables us to understand the various potential decarbonization trajectories in the shipping industry – and, from there, outline the practical solutions and collaborative strategies that will be necessary to navigate this complex voyage.

Rather than reiterating the broad significance of decarbonization, BV’s Decarbonization Trajectories study looks at what the journey may look like in practice. By acknowledging the intricate interplay of market dynamics, economic considerations, and technological advancements, we aim to provide actionable insights for stakeholders seeking to integrate sustainable practices into their corporate strategy.

We must start by asking which key measures can have the most impact on addressing climate change. Drawing on BV’s wideranging expertise, our study has identified actionable levers toward decarbonization.

Over/under budget

A fundamental starting point for any calculation of climate impact is to consider shipping’s ‘GHG budget to 2050’ instead of solely focusing on emission levels at the end of the journey. In short, we need

1 IMO announced that its ambition after MEPC80 is to “reach net-zero GHG emissions by or around, i.e. close to 2050.” In this graph, the most ambitious of the two IMO trajectories reaches zero emissions by 2050 while the trajectories representing the minimum ambition of IMO reaches zero emissions by 2057. Emissions are calculated for international shipping on a well-to-wake GHG emissions scope

2 Tank-to-well from 4th IMO GHG Study and well-to-tank estimated based on fuel share from 3rd IMO GHG Study Source for figs. 1-3: BVS bottom-up model

to focus on the total amount of CO2 that can be emitted up to the point of carbon neutrality. This is essential because climate change is directly linked to the total quantity of GHGes present in the atmosphere, not only those emitted annually.

Our results show that if we are to keep shipping within its 2050 GHG budget, operational measures and energy-saving technologies must be prioritized, especially early on when emissions are at their highest. The significance of reducing speed and minimizing waiting times cannot be overstated, as a ship’s fuel consumption typically adheres to a cubic law in relation to its average speed during sailing time. BV’s simulations show that without action to

reduce speed or waiting time while ocean transportation volumes grow moderately to reach a 50% increase by mid-century, GHG emissions would be 92% higher in 2050 – with 44% more emissions over the period from a GHG budget perspective –than if these levers had been actioned. The pathway to 2050 is just as crucial as the emissions remaining by that time.

These actionable levers offer hope for substantial emission reductions globally. By exploring the various facets of this transition, we aim to provide insights into how stakeholders can navigate the complexities of decarbonization while balancing the need for sustainable practices with economic viability.

Fig. 1. International shipping well-to-wake GHG emissions1

Compounded gains

Prioritizing operational optimization and energy efficiency not only reduces emissions but also enhances cost savings and operational performance. By decreasing vessel speed, minimizing waiting time in ports, and adopting energysaving technologies, shipping companies can lower fuel consumption per voyage, thus curbing their carbon footprint while reducing costs. The proven long-term economic viability of these measures – especially when compared with options relying on the use of alternative fuels – aligns decarbonization efforts with financial objectives and market dynamics, ultimately providing a strategic advantage.

Digitalization emerges as a central facilitator, enabling enhanced data monitoring at both a vessel and fleet level for optimization purposes and facilitating the modeling of technology impacts. Moreover, energy-saving devices and technologies, such as low-friction hull coatings and autonomous hull-cleaning robots, offer favourable avenues for efficiency gains. Wind propulsion also presents a promising option for emission reduction, with increasing interest and adoption observed in recent years.

By focusing on operational optimization, companies can lower fuel consumption and emissions per voyage. Our report underscores that even small reductions applied to a large portion of the global fleet can result in substantial fuel savings and emission reductions, having a bigger influence overall than larger overhauls that may take place gradually over a longer period. Widely adopted measures with immediate – even if smaller – impacts will likely see their effects amplified over the run-up to 2050, showcasing the effectiveness of operational measures in driving decarbonization efforts.

Failure to act swiftly risks impeding progress toward global targets and exacerbating atmospheric and oceanic GHG accumulation. While long-term decarbonization goals rely on renewable and low-carbon fuels, embracing existing technologies and efficiency measures today is essential for steering the maritime industry toward a sustainable future.

However, amidst the array of available solutions, proven results remain paramount. Shipowners seek clarity on performance, safety, crew training, and return on investment before committing to new technologies. Collaboration between classification societies and technology developers becomes even more crucial in

demonstrating the technical viability and safety of innovative solutions.

Energy insetting: everybody can move the needle

Decarbonizing the maritime industry requires more than just advancements in alternative fuels and propulsion technologies. It demands a holistic approach encompassing the entire value chain. Moving the needle on fuel production requires pragmatic solutions to unlock the necessary investment to reach the required scale. New mechanisms will have to be implemented to transmit signals from buyers to sellers to create the conditions for shipping’s decarbonization to take place.

In addition to the upstream production of renewable and low-carbon fuels, we should focus our efforts on both ends of value chains. Developing shared platforms to aggregate the demands of stakeholders who wish to decarbonize their supply chains and thus form sufficiently large end-markets to sustain green shipping services will be pivotal.

This highlights the critical role of energy insetting – investing in interventions within an organization’s own value chain – in bridging the price gap between conventional and renewable or low-carbon fuels in the shipping industry. All projections show that running shipping on renewable and low-carbon fuels will be significantly more costly than using fossil bunker. Unlike other market mechanisms, energy insetting directly reduces GHG emissions by implementing interventions throughout a company’s value chain.

Verified by third parties, robust quality frameworks and certification schemes can enable the monetization of emission reductions achieved through renewable or lowcarbon marine fuels. By utilizing blockchain technology for security, digital platforms ensure secure and traceable transactions, creating a transparent marketplace through the exchange of digital tokens representing emission savings. This approach not only addresses economic challenges but also connects stakeholders from both the supply and demand sides, stimulating the production of sustainable fuels at scale.

Fig. 2. Importance factors of each input for Scenario 2A

Fig. 3. Different GHG trajectories – study of the impact of speed and waiting time reductions on Scenario 2A

Source: BVS bottom-up model & IEA WEO 2022

Energy insetting made in the Baltic

One recent example from the Baltic Sea region includes the Swedish coffee maker Löfbergs, which has contracted the logistics company Scanlog (also from Sweden) to carry its shipments by vessels using bio-liquefied natural gas (bioLNG) per the massbalanced approach. This move is said to reduce Löfbergs’ sea freight carbon footprint by 100%, with the company (importing some 36 thousand tonnes of raw coffee each year) paying for bioLNG. Kajsa-Lisa Ljudén, Head of Sustainability at Löfbergs, commented, “Biogas costs more than fossil fuels, but we think we cannot afford to do otherwise. We have to reduce emissions across the entirety of our value chain. That we are financing the fuel switch 100% means that we see a functioning solution, which will hopefully contribute to others making a change, too.” Matilda Jarbin, Scanlog’s Chief Sustainability & Communications Officer, added, “Sea transportation has long found itself under the radar. It is, therefore, important that companies like Löfbergs dare to go further, seeing it’s possible to reduce emissions here & now. We hope this will inspire other firms, speeding up the necessary transition within the transport sector.”

No universal solution

The shipping industry comprises diverse segments, each facing unique requirements and economic pressures, resulting in differing capacities for decarbonization. Varying in vessel size, type, routes, public scrutiny, and autonomy needs, these sub-sectors experience distinct exposures to market conditions and regulatory frameworks. Moreover, companies within each segment differ in size, business model, and financial standing, influencing their ability to adopt sustainable practices.

One should also remember that the shipping industry is a deeply fragmented market. While it greatly depends on the segments under consideration, a significant portion of the global fleet is owned by a myriad of smalland medium-sized companies, many of them operating in fast-evolving markets. In addition, these companies may only keep their assets for part of their service life and have relatively modestly sized technical departments (all adapted to their needs and operating model). There are

also the diverging priorities of shipowners and charterers: whereas the former might prefer to, e.g., slow steam to gain a better Carbon Intensity Indicator score, the latter might be inclined to speed up to carry out more sailings.

Decisions on emission reduction strategies must thus be tailored to each vessel, considering factors like fuel options, technological limitations, real-world market conditions, and operational requirements. There is no universal solution due to the industry’s diversity and complexity. Understanding these varied challenges is crucial for progress in the shipping industry’s decarbonization

efforts – and this is why our research takes this diversity into account to outline realistic decarbonization scenarios.

Ambition: practical, collective, and nuanced

As the maritime industry progresses toward decarbonization, stakeholders must optimize business and operating models to align with evolving market conditions and regulatory expectations. Collaboration remains pivotal, shifting from adversarial contractual frameworks to benefit-sharing models that incentivize emissions reductions.

Moreover, gaining visibility on long-term regulatory expectations and fostering international consensus is essential for informed decision-making and effective industry-wide decarbonization efforts. Despite the challenges posed by differing national priorities and means, there is growing recognition of the need for collective action toward carbon neutrality.

While consensus may be challenging, universal goals for environmental preservation transcend individual interests and necessitate global cooperation. Ultimately, addressing the complexities of decarbonization requires a nuanced approach that balances ambition with practicality and embraces collaborative efforts across the maritime sector. ‚

Bureau Veritas is a world leader in inspection, certification, and laboratory testing services with a powerful purpose: to shape a world of trust by ensuring responsible progress. With a vision to be the preferred partner for customers’ excellence and sustainability, the company innovates to help them navigate change. Created in 1828, Bureau Veritas’ 83,000 employees deliver services in 140 countries. The company’s technical experts support customers to address challenges in quality, health and safety, environmental protection, and sustainability. Visit bureauveritas.com to discover more.

Fig. 4. Global share of renewable energy production

Robust value chains are critical to decarbonization and the energy transition

Beyond the horizon

by Panos Koutsourakis, VP, Global Sustainability, ABS

The maritime industry is heading towards a technological revolution driven by decarbonization. Powered by improved collaboration and propelled by developments in clean energy, digitalization and applied research, this future will offer greater sustainability and much higher efficiency. The latest update to the Low Carbon Outlook sees ABS explore how broad efforts to reduce emissions can help navigate towards a net zero shipping industry.

The revised International Maritime Organization (IMO) Greenhouse Gas (GHG) Strategy (IMO GHG Strategy) indicates a time of transition for the marine industry, with a focus on sustainability and efficiency. Rather than simply adapting to the green energy transition, the maritime sector also actively influences it.

The shipping, ports and logistics businesses are propelling the global shift towards sustainable energy solutions by transporting its critical elements: carbon, ammonia and hydrogen. These and other issues are examined in detail in the newest release of our Low Carbon Outlook, this time going under the title Beyond the Horizon: View of the Emerging Energy Value Chains – which focuses on the

impact of decarbonization in a global context and examines the solutions by sector.

Heads up: challenges!

The transition to greener technologies will require substantial investment. New safety measures will need to evolve, especially when considering the characteristics of the alternative fuels being currently

considered by the marine industry. For example, ammonia, one of the alternative fuels under scrutiny nowadays, has unique handling and storage requirements.

One of the critical components of the global decarbonization challenge is the evolution of the energy industry, which will support the creation of an alternative, low-carbon fuel supply chain. The Outlook comprehensively analyses the current energy sector and highlights the upcoming challenges and possibilities. Not unsurprisingly, we find the global energy market at a crossroads. With energy consumption rising to meet greater consumer demand and a pressing need to simultaneously reduce carbon footprints, a definitive shift toward renewable and low-carbon energy sources is required.

ABS carried out extensive research in support of the updated publication to evaluate the potential effects of using alternative, low-carbon fuels in the shipping industry. Based on this extensive research and the most current information from Q3 2023, we looked at different scenarios up to 2050 and their effect on the forecasted fuel mix.

Another layer of complexity in the equation is the current geopolitical events that will likely impact the future fuel mix.

Overview of the Carbon Value Chain

Whereas these have had a distortive impact on mature energy markets, their ability to impact a transitioning energy market is disproportionally smaller.

The regulatory backdrop

The 2016 Paris Climate Agreement was a historic point in global environmental policy. With nearly 200 nations ratifying it, almost all of the world has collectively pledged to address the growing risk of climate change by reducing anthropogenic GHG emissions. The Agreement established a specific target: limit the rise in world average temperatures to below +2°C above pre-industrial levels, with an aspirational goal of +1.5°C. The ways to achieve this goal, however, were open to interpretation and change.

The International Maritime Organization took an important step in this direction in 2018 when it introduced the IMO GHG Strategy. It reaffirmed the maritime industry’s commitment to significantly lowering its carbon footprint during the 21st century. This step not only indicated increased regulatory ambition but also emphasized the need to improve the efficiency of global transport services, which are essential for modern commerce and trade.

In the following years, IMO has developed and put into effect a number of new regulatory measures by working with other bodies that set regulations. These policies aimed to reduce GHG emissions from maritime activities while promoting the development of advanced fuels and technologies that could further reduce the sector’s footprint.

The 2023 IMO GHG Strategy reaffirmed IMO’s commitment to accelerating the reduction of GHG emissions from maritime operations and established the ambitious net-zero goal by or around 2050. As revised at the IMO’s 80 th meeting of the Marine Environment Protection Committee, this strategy will lead to significant changes in the maritime industry. Vessels will need to switch from traditional fuels to greener alternatives, which might involve engine upgrades and the development of new fueling infrastructure. Improved energy efficiency measures, such as better hull designs and operational changes like optimized routing, will be essential.

Additionally, vessels may need to be equipped with real-time emission monitoring and reporting systems (and in the EU, they certainly will have to do so in order to find themselves within the block’s Emission

Trading System), which will require crew training for effective implementation and compliance. Older ships may also see challenges with retrofitting, thus potentially putting them at a commercial disadvantage. However, new, more efficient and compliant ships might see an increase in market value.

Emission reduction

The transportation of carbon, ammonia, and hydrogen as cargo highlights the maritime industry’s significance in bridging the gaps between production, storage and consumption in the global energy landscape. As the maritime sector looks ahead and dives deeper into the complexities of these three value chains, it becomes clear that shipping is more than a spectator in the global green energy revolution. Instead, it serves as a critical facilitator and enabler.

While intriguing, the research into alternative fuels and their development in volumes required by the shipping industry presents its own set of obstacles in terms of supply, cost, infrastructure and safety. Concurrently, energy efficiency technologies (EETs) provide a practical and realistic pathway to improve ship operational efficiency and thus reduce carbon footprint. As a result, EETs are expected to play a broadly

Overview of the Ammonia Value Chain

supportive role in the majority of decarbonization projects. For example, onboard carbon capture, while still in its early stages of development, has the potential to transform the way the maritime industry manages carbon emissions

The carbon value chain – which includes core elements like the capture, utilization, storage and transportation of (liquefied) carbon dioxide – is an integrated step for carbon emissions management, from source to potential utilization or sequestration. The maritime industry can support carbon capture activities worldwide by providing safe and efficient transportation, thereby assisting in efforts to reach a carbon-neutral future. Ships built to transport liquid carbon as cargo are emerging as an essential link in the carbon value chain. These vessels help to ensure that liquid carbon is transported safely and efficiently from capture sites to utilization (e.g., in e-methanol as marine fuel production) or storage facilities.

Understanding and improving the carbon value chain will become increasingly vital as the global economy steps up its efforts to combat climate change. The maritime industry, which accounts for a substantial portion of international

trade, will be at the centre of making this value chain a reality.

New fuels

Investments in liquefied natural (bio)gas, ammonia and methanol dual-fuel vessels continue to grow quickly, prompting industry discussion and debate around which alternative fuels can be produced and provided at the necessary scale and affordable prices.

For the latest Low Carbon Outlook , ABS re-examined the supply and demand data for alternative fuels and updated the future fuel mix to reflect the latest market information. In addition, the study looked at how the recent adoption of the revised IMO decarbonization strategy and the 2050 net-zero targets affect the projected future fuel mix.

By combining the derived ship demand with a forecast for a changing fuel mix in deep-sea shipping, the scenarios for worldwide energy consumption are translated into global fuel consumption by ship type. With the updated findings, ABS sees that by the year 2050, demand for fossil fuels has the potential to be marginally lower than what was estimated in the previous edition of the Low Carbon Outlook , once again underlining the need for carbon capture technologies.

Overview of the Hydrogen Value Chain

With solid potential as a green fuel, ammonia represents a twofold opportunity for the maritime industry. While it can be used as an alternative bunker fuel, it must also be transported as cargo. As countries and industries investigate ammonia-based energy solutions, the maritime industry is at the forefront, ensuring regional supply.

Ammonia will play a major role in the wider energy matrix because of its ability to store and transmit energy effectively, as well as its carbon-free emissions. As the world deals with energy storage and transportation challenges, ammonia’s position as an energy carrier has become increasingly important, providing a sustainable answer to some of our biggest energy challenges. The importance of the ammonia value chain in the global green transition cannot be overstated. As the world works to reduce its carbon impact, ammonia stands out as a potentially viable fuel option and critical cargo.

Commonly referred to as a long-term fuel option, hydrogen will continue to grow as a key component in the worldwide endeavour to build a sustainable energy landscape. Its importance in the transportation industry, as a commodity and likewise a potential (marine) fuel, will increase in step with mounting energy

transition pressures and tightening emission limits. The maritime industry’s acceptance of hydrogen represents a bold step towards a more sustainable future. More than tackling its own carbon impact, shipping’s embrace of the hydrogen value chain positions it as a vital actor in the global green energy revolution. Transportation of hydrogen, particularly its green version derived from renewable sources, is critical to creating a worldwide hydrogen economy. With its huge network and experience, the maritime industry is primed to be a cornerstone of this initiative.

The future

As the maritime industry – and shipping in particular – navigates the challenges of the energy transformation, investing in cutting-edge solutions that can significantly lower the carbon footprint of its operations will be critical. This involves adopting alternative fuels, EETs and novel solutions such as onboard carbon capture systems.

This transition to greener technologies will require significant investment and will incur initial expenses that change the dynamic of shipping’s commercial relationships. But in the long term, shipping operations will benefit not just from lower emissions but also from reduced fuel use and simplified regulatory compliance.

Considering the characteristics of the alternative fuels being investigated by the maritime industry, it is also clear that safety procedures and protocols, as well as seafarer training, will also need to evolve. Despite the challenges, the maritime industry remains dedicated to decarbonization and supporting the broader energy transition.

The investments already being made in energy efficiency technologies, new fuels and smarter operational strategies – as well as evaluations of carbon capture and other new technologies – illustrate the direction of travel. With the support of research, analysis and data produced by classification societies such as ABS, shipping’s journey towards net zero will continue. ‚

Founded in 1862, ABS is a global leader in providing classification services for marine and offshore assets. Our mission is to serve the public interest as well as the needs of our members and clients by promoting the security of life and property and preserving the natural environment. ABS’ commitment to safety, reliability and efficiency is ever-present. Visit ww2.eagle.org to learn more.

Interview with Laurence Jones, Director Global Risk Assessment, TT Club

It pays to be safe!

by Przemysław Myszka

We all know the phrase ‘safety first’ whether it pertains to car driving, sports, or operating heavyduty machinery. But does the port industry, and container terminals in particular, also live by that rule? We are talking with TT Club’s Laurence Jones, a true veteran of championing safety and security, about the history of introducing safety measures in the port business, who supports them (and who doesn’t), why investing in technology matters, as well as about organised crime that wants to snatch your shipment (physically and digitally) and the rationale behind adding minimum safety features to cargo handling equipment tenders (better still, making them a manufacturing standard).

‚ Can you share the story of how you got involved in making port operations safer?

This is my 18th year with TT Club, and it has been fantastic focusing on safety and helping our members save money and lives. Altogether, my career has been a half-century journey of sharing my experience about how to make operations safer. I began as a cadet trainee electrical engineer working for the steel industry. I learned the ropes from the bottom up, so to say, by carrying tradesmen’s tool bags at steelworks, something not seen very often these days if you’re a white-collar worker or a university graduate starting one’s career without practical experience. This ground perspective makes you see things, also safetywise, that the C-suite in their offices don’t necessarily know are even happening. I was then involved in designing, commissioning and operating open-cut and underground coal mines, which also included managing the rail & road side of the business, coal export terminals (including phase

I of what’s today the world’s biggest one, plus privatising another up-till-then run by the government), steel rolling mills; all in all, other heavy-duty activities for which safety should be paramount. After many, many years spent in various positions, I joined the ports arm of P&O as engineering manager of their container terminal in Sydney. After two years, I moved to the company’s HQ, looking after their ports globally. When DP World took over P&O, I helped with the integration, after which I came back to Australia and began my adventure with TT Club. Here, I have been visiting 20-40 terminals a year, not only supporting them in their efforts to make the facilities safer with practices, procedures and technology but learning from them as well.

‚ How does the port sector, especially its container part, stack against other industries safety-wise?

At the steelworks I worked for, the Lost Time Injury Rate (LTIR), an internationally recognised safety key performance indicator (KPI) was 0.5, which is super safe. The figure for the underground coal mine was 30. In 1998, when I asked the people from the container terminal about their LTIR performance, they never heard of such a measure. I therefore I had to calculate it myself: 170! So, we started working hard on getting that number down, among others, by hiring P&O Ports’ first group safety manager. Some seven years later, and their LTIR was 32. This reduction was, of course, achieved through various means, but the single biggest contributor was convincing the top management that safety should be one of their KPIs. It might sound obvious nowadays, but low LTIR is just sound business –it pays to be safe!

Naturally, improving the LTIR also requires good footwork on the ground: training the employees, raising their awareness about the risks and how to mitigate them, and deploying the right technology. I recall a certain global container terminal director who, during a conference a few years ago, highlighted that their most productive facilities are also the safest ones.

That kind of attitude demands a certain culture that flows through the whole organisation. Whereas it isn’t a change that happens overnight – it requires much intentional and well-thought-out work across all tiers – there are really no downsides to embracing it. I mean, who doesn’t benefit from increased safety in the end? That is what I have been advocating for in the last couple of decades at various industry meetings and conferences. I remember the days at TOC when I was placed as the last speaker on the last day – because who wanted to hear about the importance of safety? Now, we have the Safety Village for the third year in a row at TOC Europe, and it has has grown significantly each year. What is more, safety made it onto other panels’ agenda – the tech, supply chain, and economy experts are all talking about it. I wouldn’t mind thinking that I have had a little bit to do with it.

‚ Who is in charge of safety?

It is very much a process. Though safety starts from the top executive, it cannot be left in the hands of safety managers alone for them to shout ‘dos & don’ts’ orders. I encourage managers to go on what I call a safety audit with the operatives. This way, they can uncover what’s below the iceberg’s tip. It also gives the ownership of safety to the entire staff, which can be a powerful motivator for

staying on the safe side and for improvement. One thing was paradoxical to witness over the decades in this regard, namely that trade unions weren’t particularly interested in moving forward the safety agenda – to the point that I’ve heard one facility has only just recently been successful in introducing hard hats! Unions fear (to a varying degree) automation. However, oftentimes, people get redeployed into safer and more comfortable roles, such as operating a quay crane from an office as opposed to sitting in a cabin high up on the crane. That is one reason why you can see more and more women joining the industry – it is getting safer.

Coming back to unions, there are certain events that leave them with no other option but to change their safety culture. There was one terminal where it was an open secret that employees drank alcohol. The union knew and did nothing despite years of me trying to convince them it was dangerous and unacceptable behaviour. Eventually, there came ‘the day’ when one worker was coming home from work and died in a car accident. The blood alcohol test revealed he had twice the limit. It required the death of a member for the union to realise they had to do something. That is a story from the mid-90s, and, fortunately, many modern terminals today have anti-alcohol policies in place. I have ‘colourful’ memories of dealings with unions, like them chasing me across the quayside, “offering” me concrete

shoes, and finally having them accept and trust me that their safety was my main concern. Today, unions and management are, in most places, working together to ensure a safe workplace.

I have done loads of safety surveys over the years. A typical one goes over 180 questions to assess what’s happening in a facility. Every question has its recommended best practices – how to improve things. Not a single terminal in my career ticked off all the boxes. Usually, there were 20-30 areas in need of improvement. No one is perfect – but everybody can get better.

‚ Is container terminal safety different in any shape, size, or form?

Operating a container terminal is a fairly young business compared to other port activities or the coal and steel industries – it still has a long way to go, even though it has made pretty decent safety advancements over the last 50-odd years since containers were developed. “We are different” is a phrase tossed around by container terminals more often than not, while in reality, they aren’t. Looking at the claims handled by TT Club, they are dealing with the same issues worldwide. The thing is – and I cannot stress this enough – that many of these issues are perfectly avoidable by investing in the proper solutions. Operators, at least some of them, are still

Photo: Przemysław Myszka

having a hard time connecting the dots: that you save money by spending money. There is technology available that minimises the risk of, e.g., boom collision. Electronic boom anti-collision technology costs money, sure, but it’s spare change compared to the loss of life and limb, damaging the equipment and cargo, repairs, downtime, not to mention reputational damage and lost business. There are things insurance simply won’t cover for. Being insured isn’t the same thing as being safe and secure. Studies have shown that for every dollar one gets from insurance, there are between eight and 36 dollars of non-insured costs like the ones mentioned above. Similar to the death in the union case, it’s still far too often that terminal operators invest in safety equipment after an accident – not to prevent it.

‚ How about risks outside the operator’s domain, such as organised crime (including cyber) targeting the logistics chain? What can the transport business do to mitigate them?

It is essentially an arms race. Criminal organisations are always trying to be at least one step ahead of their potential victims. Issues like certain instances of theft seem quite manageable via straightforward methods such as ensuring safe parking places, gated fences, lighting and surveillance cameras. These solutions, which aren’t exactly rocket science, go a long way in combating cargo theft from trucks or stealing lorries altogether. Naturally, operators also employ technology to their aid. The tricky part lies in using it properly. One can, for instance, install a zillion high-end cameras but have too few staff to screen them all constantly. Here thermal cameras come in handy, because they can

alert when a source of heat appears and display it front and centre. It may be a fire, an animal walking past the fence, or a criminal cutting that same barrier.

Then again, criminals have far more sophisticated tools in their arsenal. I remember one example where somebody broke into a transport company’s office. Some minor stuff was stolen to hide the true intrusion: installing malware to get into the digital system. Data manipulation (storage relocation, changing the ship-loading plan, ordering a container dispatch, etc.) can enable thieves to access containers directly in a terminal. The system ‘thinks’ it hands over the cargo to the permitted party – the data appears to be correct after all – but what it does is gives the container to criminals.

When it comes to cyber security, it feels like going full circle: 30 years ago, we saw the novelty of employing safety & security managers; today, the same happens with their cyber counterparts. Execs learn that this isn’t necessarily the job of the IT department, whose employees are more concerned with running the TOS or making sure the quay and yard equipment is well-connected so it can transmit data for optimal performance or as a means of predictive maintenance. Here, (cyber) footwork is also needed, like teaching workers that clicking every link they see might not be the best idea. Some employers invest in white hacking, commissioning experts to try breaking into their digital systems. A single employee opening a legitimately looking phishing hyperlink can be what it takes to hijack a company’s system.

Cybercrime has become the lay of the land –and an increasing portion of it, too; as such, everybody should be prepared accordingly. Fortunately enough, public authorities, like the police force, are actively taking up the

cyber challenge as well. Yet, similarly, with insurance, it should be the company’s safety culture that stands watch, so to speak.

‚ What safety advancements would you like to see continuing once you start enjoying your retirement?

A sustained, pronounced focus on safety overall. More specifically, I would love to see certain minimum safety requirements built into machinery purchases or, better still, convince manufacturers to make them standard rather than just optional. TT Club, with the help of the International Cargo Handling Coordination Association and the Port Equipment Manufacturing Association, has released several joint publications detailing the minimum safety features for quay cranes and yard equipment (these documents are available from the websites of the three organisations).

I can recall one boom collision, when the repair cost amounted to two million dollars, plus it was out-of-operation for half a year and there was six million dollars worth of business interruption. The technology that would minimise the risk of that event from happening costs around 30 thousand dollars per crane. Even if you have a giant terminal with, say, 60 ship-to-shore gantries, that’s $1.8 million, so nowhere near the bill for that one incident. Although the probability of boom collision isn’t that high, when it happens, it rockets the damage costs skyhigh. I understand that retrofitting can get costly, that’s why I have been pushing to make safety a standard feature in newly built machinery. A global regulation making these safety features mandatory would be great to witness. As things stand today, the way forward is to break through to terminal operators with the ‘safety pays’ message. ‚

Photo: Canva

The quay to future success

In 2023, we proudly inaugurated the new quay (P10) in our container terminal. Looking ahead to the second quarter of 2025, we will complete the full project. The 830-meter quay, together with the vessel draft of 13.5 meters, will provide a new level of accessibility in the Port of Norrköping. The new setup does not only provide a new berth but also an integrated section for heavy-goods handling. Enabling a more sustainable port stay for our customers has been a cornerstone in this project, and we are prepared to soon offer shore-based electricity. Altogether, this is a great milestone, but more exciting is the work ahead where we look forward to continuing our development - together with our customers.

New study on container losses

High waves, high claims

by Kunal Pathak, Team Leader, Claims, Siddharth Mahajan, Loss Prevention Manager Asia, Are Solum, Team Leader, Dry Cargo Claims, and Helge A. Nordahl, Vice President, Analytics, Gard

In a comprehensive new study, we delve into the impact of weather on container stack collapses. Our findings show the impact of progressively increasing wave height, the quantified risk of high waves, and variance in weather exposure among different operators. Hopefully, the study sets the stage for a deeper dialogue within the industry about mitigating the impact of adverse weather on container safety.

As the world economy develops, the volume of containerised trade increases steadily. Last year, the global container shipping fleet grew by almost 4%, according to UNCTAD, and in Gard’s P&I portfolio, the segment has increased by as much as 16% over the past five years. It currently makes up 18% of our insured vessels.

With more container shipping comes also a higher risk of casualties. Certain incidents, such as stack collapses or containers lost at sea, are closely monitored as they tend to be relatively more severe. Container losses also have the International Maritime Organization’s attention, and they are working on making reporting of lost containers mandatory. Meanwhile, insurers and other key stakeholders are involved in detailed work, such as the Top Tier project , to investigate the causes of stack collapse and seek solutions.

Data analytics

To contribute to the industry understanding and help prevent losses, we have studied all cases of stack collapse where Gard was involved as a P&I insurer. These cases occurred between 2016 and 2021, and we have looked at the weather data to make sure we understand the factors contributing to these incidents. More specifically, we have combined Gard claims data with geographical and meteorological

data from Windward, which includes estimated wave height and wind strength on an hourly basis. Several measures are common when it comes to waves. For this study, we have used the maximum wave height.

Our claims data includes a wide selection of cases, both when it comes to severity, vessel size, and geographical location. For each claim, we have collected meteorological data for the incident date as well as the six days leading up to the day of the incident. This allows us to analyse how the weather progressively worsened over the given period.

Impact of vessel’s size

Weather needs to be seen in the context of the ship’s design and size, of course, although we do see that container stack collapses happen across different-size segments. This just underscores the fact that several causative factors are usually involved in these incidents, as highlighted in our article Why do container ship stacks collapse, and who is liable?

Analysing incident numbers relative to number of vessels in our portfolio provides valuable insights on claims frequency across different size segments, which can range from feeders (less than 3,000 TEUs) to ultra-large container vessels (ULCVs) exceeding 15,000 TEUs where the stack heights can exceed ten-high on deck.

Despite a higher number of incidents on smaller ships, there is a clear correlation between incident frequency (or likelihood) and vessel size, as depicted in Figure 1. The 6-year average claims frequency for stack collapses on feeder vessels is 1%, whereas for ULCVs, it rises to 9%.

Impact of progressively increasing wave height

When looking at a 7-day period before the incident, we noticed that on Day 1, vessels are, on average, experiencing wave heights of 2.5 metres, which corresponds to a wind force of 5 on the Beaufort scale. The weather then progressively worsens, and this increase in wave height is more pronounced from Day 6 onwards – the average wave height peaks on Day 7 at 6.5 m, which corresponds to gale force winds. The duration for which the vessels were exposed to sea conditions with wave heights of 4 m and above (corresponding to near-gale force winds or stronger) was 72 hours.

We underline that these are the average wave heights of all vessels that had a stack collapse incident. If we look at each ship separately, many of them were exposed to these conditions for a much longer duration of time. During the 7-day period we examined (which is also shown in the graph below), the “incident zone” for the majority of the incidents was a 24-hour window on the last day.

It was, therefore, evident that the vessels experienced average wave heights, which progressively increased by two and a half times during the 7-day period. Interestingly, the incidents did not always happen when the wave height was the highest but after the weather had started to subside. This might be partly due to the fact that the time of reporting the incident to Gard may not always coincide with the time of the incident itself.

Higher waves – higher risks

To further study the exposure to high waves, we looked at vessels that are exposed to a wave height of 7 m (corresponding to Bf 8 gale force winds) or above. An observation of interest was that while vessels involved in incidents spent only 5% of their time in wave heights exceeding 7 m during the incident year, half of all incidents occurred during such conditions. Analysing the maximum wave heights

experienced by vessels on the day of the incident, as shown in Figure 3, reveals a similar pattern. Essentially, despite spending 95% of their time in calmer waters, the relatively small percentage spent in adverse conditions significantly amplifies the risk of incidents, potentially up to 20 times higher, as indicated by our study. Another finding we had was that among the vessels that had a stack collapse incident, the share of ships exposed to such high waves increased by almost 12 times from day 1 to day 7. This suggests that these vessels may not have been able to avoid such heavy weather in spite of the advanced weatherrouting tools available.

Examining the global container fleet, roughly 3.4% are exposed to such weather at any given time. Interestingly, among various size segments, the new Panamax 1 segment (8,000-12,000 TEUs) appears to have a higher exposure to wave heights of 7 m and above compared to any other size category. This trend is also evident for wave heights around 4 m.

Differing risk profiles

The variation in exposure to adverse weather is not only limited to different size segments in our container fleet. From our study for the period 2016-2022 for the global container fleet, we also see that some container operators or owners are more exposed to the risk of adverse weather than others. In essence, this discrepancy likely stems from differences in operators’ risk tolerance and the internally defined weather thresholds for the vessels. However, the consequences of decisions made in the chartering or the operator’s desk are pretty evident in the safety of the ship and the cargo.

Reflections

Exposure to progressively worsening weather poses a clear risk, and our studies highlight two crucial aspects in this regard. The first involves the duration of exposure, while the second concerns weather thresholds, such as maximum wave height for a vessel, influenced by factors like stability, stack height, and physical condition of the securing equipment. Based on our study findings, there are key questions to be considered by the various stakeholders working in the liner industry.

Conflicting priorities on weather thresholds

Does the understanding of the weather limiting factors, such as maximum wind and wave height for a voyage, vary among different stakeholders, and if so, why?

Fig. 1. Count and frequency of stack collapse incidents by vessel segment

Source for all figs.: Gard

Fig. 2. Average maximum wave heights during the seven days leading up to the incident

1 This chart shows the maximum wave height experienced by the vessels on the day of the incident, whereas the previous graph showed the average of the maximum wave heights to which the vessels were exposed over a 7-day span

Conflicting priorities may arise between a commercial operator and a vessel’s master regarding voyage routing. While a master might prefer a slightly longer route with less exposure to adverse weather, a commercial operator might prioritise time and fuel savings, potentially pushing the limits. Additionally, we’ve noted that routing advice to a vessel could vary based on whether their principal is a charterer or owner.

Another variable to consider when determining weather thresholds is the vessel’s stability, which may be different from the loading computer calculations, given the misdeclaration of weights and/or a mismatch in stowage location.

Suitable

tools for complex rolling phenomena

Do seafarers have access to suitable digital/automated tools for evaluating the risk of intricate phenomena like resonant, synchronous, and parametric rolling?

The term “adverse weather” is subjective to seafarers. Often, advice on mitigating the risk is either oversimplified (by recommending avoidance of adverse weather altogether) or overly complicated (by suggesting calculations for resonant, synchronous, and parametric roll risks based largely on estimates). While assessing the influence of weather on a vessel’s motions may seem straightforward in theory, it is much more challenging for

seafarers in practice due to numerous unknowns and estimations.

Slackening of lashings in heavy weather

Is there indeed a progressive deterioration of the lashing efficacy that leads to failure beyond a specific period?

The constant motion of a vessel in heavy seas can exert loads on container stacks, leading to the potential loosening of lashings. The loosening process can start early in heavy weather conditions, especially if the ship is navigating through rough seas for an extended period.

In theory, routine lashing checks may seem like an appropriate preventive measure, but in practice, this could pose safety concerns, as the crew would then be exposed to adverse weather during lashing checks. This risk would be even greater aboard larger vessels where there are a lot more lashings to be checked.

Tighter weather routeing for vessels with deteriorated securing equipment

Should weather routing considerations be tightened for vessels with deteriorated container sockets and lashing eyes?

Experience shows that the condition of lashing and securing equipment degrades over time due to usage and inadequate maintenance. It is no surprise that stack collapse incident investigations often emphasise poorly maintained lashing and

securing equipment as contributing factors. In fact, corroded sockets and lashing eyes rank among the top three findings in Gard’s condition survey data for container ships.

Despite these issues, containers continue to be loaded in affected slots, and repairs are postponed until dry dock for commercial reasons. Our recommendation is, of course, that affected slots be taken out of service until repairs are carried out, but from a pure routing perspective, weather thresholds might need to be adjusted for such vessels. We understand that a few liner operators already have such procedures in place for both owned and chartered tonnage.

Impact of weather on cargo securing inside a container

To what extent can the securing of cargo inside containers endure movement caused by adverse weather?

Prolonged exposure of the vessel to rough weather could lead to deterioration of cargo securing within the container, potentially leading to cargo breaking loose and shifting within the container. This, in turn, adds additional forces to the container stack.

The ship’s crew lacks visibility and control over this aspect. The solution involves engaging in dialogue with and educating shippers, along with implementing improved Know Your Customer (KYC) procedures.

Broadening KPIs for weather routeing

Should safe weather routing and avoidance of adverse weather be included as components of internal key performance indicators (KPIs)?

Modern digital tools make it much easier to assess a vessel’s or fleet’s exposure to weather over a specific time frame. This assessment not only helps a company determine if its vessels encountered weather conditions exceeding internally defined thresholds but also facilitates benchmarking against other vessels of similar size and on similar routes, whether under the same management/ownership or different.

Given that most liner operators already have dedicated teams focusing on vessel routing for efficiency and scheduling purposes, expanding their focus to include the aforementioned aspects could enhance safety.

Gard is owned by the industry it serves – working for and with its Members and clients whilst offering the widest choice of marine policies. Founded in 1907 in Arendal, Gard is today the largest P&I Club and one of the largest marine insurers in the world, employing more than 650 people in 13 global offices. We focus on providing the maritime industries with insurance products that offer financial protection and practical assistance when disaster strikes. Head to gard.no to learn more.

Fig. 3. Max wave height experienced on the day of the incident1

The new Electric Empty Container Handler Range

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Advances in technology aiding seaport and terminal security

As safe as ports?

by Neil Dalus, Risk Assessment Manager, TT Club

Security is key for container terminals and ports generally. The threat horizon is vast, incorporating cargo theft and illicit trades alongside operational safety and the prevention of terrorist attacks. Inevitably, land and water interfaces are needed to be taken into account. Let us then consider some fundamental aspects of modern-day port security challenges and offer some guidance.

Acentral reference in the context of security for port operators is the International Ship and Port Facility Security (ISPS) Code, a supplement to the Safety of Life at Sea Convention. It sets minimum security arrangements for ships, ports and governmental agencies.

Dating back to 2004, the ISPS Code ascribes responsibilities to a variety of stakeholders, including port personnel, related to detecting threats and taking preventive measures affecting ships or port facilities used in international trade. The Code also specifies the appointment of a port facility security officer responsible for the development and maintenance of a port facility security plan.

Barrier fundamentals

Physical security will be a primary consideration. Getting the simple things right, such as perimeter fencing, is fundamental. Measures that go beyond that will need to be proportionate to the risks assessed, inevitably influenced by volumes, throughput, the type of cargo being handled, the layout of the terminal and the technology available. There is an array of options and combinations to consider for perimeter fences; some designs may be more secure than others. It is recommended that palisade-style fencing, for instance, be avoided as it may be more easily manipulated, allowing access. A mesh style of fencing is generally thought

to offer greater levels of security. The height of the perimeter fence (influenced by local topography) is another critical factor. A minimum of 2.4 metres is recommended to deter bad actors from scaling or being able to pass items over. Higher fences or topping with electric fencing or razor wire for added security may need to be considered.

Accessibility

Controlling access is a necessary starting point; strict controls will assist in managing the flow of people (legitimate and otherwise) to the facility, together with reducing the number of physical entry and exit points to the minimum necessary. Alongside this, consider how such areas will be monitored and managed. This includes the extent to which security personnel will be deployed, the introduction of physical barriers, and what logs will be kept and for how long.

There will typically be a large number of restricted areas, buildings and rooms within a facility, where locks are utilised to prevent unauthorised access. Regardless of who may have them, robust processes are necessary to ensure that keys are returned and controlled with timely intervention protocols.

The implementation of electromechanical key systems may significantly improve essential control and operational efficiencies; these remove the risk of lost or stolen keys and security compromises while providing valuable user data for management and control. Central programming ensures

efficient and speedy modification of access permissions. Further smart and high-security locks may be appropriate.

Line of sight

The deployment of cameras can add to security provisions and can have multiple benefits. Sophisticated systems monitoring the entry gate can serve not only to record access but also to capture the condition of the vehicle, container, chassis and cargo. All such records might prove invaluable evidence in the event of any dispute.

Cameras can also be linked to a terminal operating system. At the same time, using optical character recognition technology can drive the development of operational efficiencies, identifying and locating individual containers. Automatic number plate recognition cameras can identify expected site visitors, providing both security and efficiency, potentially controlling the release of vehicles and containers with a binary ‘release/don’t release’ prerogative.

Visual analytics software can provide unrivalled insight, including managing the movement of visitors and restricting & controlling the areas of the facility that they are able to access. Additionally, if linked to the relevant authority and national databases, this could serve to identify bad actors and vehicles operating on false registration plates (often used to facilitate theft of cargo).

Thermal cameras are now being used for both security and fire detection.

These may eliminate the need for continuous monitoring of cameras by alerting security personnel at the point of detection due to a fire or a trespasser.

CCTV cameras and software can also provide a deterrent to bad actors. However, take care to ensure that the procured system is fit for purpose, well-maintained and that operators are trained to use the equipment proficiently. And don’t forget simple housekeeping – overgrown foliage or litter can trigger unwelcome false alarms!

Eye in the sky

The supporting use of drones not only helps pinpoint an area of suspicion but also can provide and record additional data, such as thermal imagery and geo-location, which can deliver valuable insights for any ongoing incident or subsequent investigations.

Tethered drones are, in particular, a useful refinement allowing a permanent land-based power supply in the form of a fixed cable attachment. This technique removes the limitations of the flight time due to the capacity of the batteries and avoids battery changeover interruptions. Tethering allows the drone to operate for a much longer duration; it lends itself to use in more prolonged surveillance operations where a high viewpoint from the drone can be used to maximum effect while utilising the camera’s zoom and thermal imaging functions. The collateral limitation is reduced freedom of movement around a facility.

Drones can be further adapted. Thermal imaging may identify and track heat sources over a wide area and in poor lighting conditions, allowing this information to be relayed to the team on the ground, thus supplying them with intelligence that would not be otherwise available.

The object tracking function – available for use with a regular image camera as much as with thermal imaging – allows the drone operator to fix onto an object and then let the drone camera track it. This enables the drone operator to relay/record the data without losing sight of the object being tracked. In each case, it’s possible to relay the thermal image/camera data directly to the ground team so that they can see exactly what is being seen by the drone and its operator, who may be some distance from what is being observed. These capabilities can support the detection of intruders (including clandestine migrants)

as much as give early warning of developing fire risks in cargo or assets.

Interfaces and insider risk

Some facilities might fall under the jurisdiction of the port police; regardless, working closely with local law enforcement will be vitally important. While operation-specific security measures should consistently be implemented, interacting with port police or other local law enforcement agencies will be beneficial in ‘layering’ protections.

Technologies are likely to overcome the human-moral hazard. This can be further enhanced, for example, with forensic coding security solutions: gels, sprays and liquids can be an effective deterrent, remaining on clothing and skin for prolonged periods, and thus increasing the risk of apprehension (this may be during questioning in relation to unconnected crimes since those involved in criminal activity in and around ports will typically be entangled in other crime, too).

Insider risk is prevalent within TT’s claims experience; information is the lifeblood of criminal activity and can be sourced from within an operation. This may be access codes, the location of a particular container or details of on-site security provisions. Information security is, therefore, critical. Carry out a risk assessment of the information that your operation collects, stores and shares. Recognise the value of that information in the wrong hands and consider thoroughly who has access and why, balancing access restrictions with operational efficiency. Prevent workstation sharing or sharing of passwords. The terminal operating system is pivotal in the management of a container terminal. Protecting this key infrastructure is critical to maintaining operational integrity and avoiding business disruption.

Advanced technologies require skill & awareness advancement

The use of automation and innovative technologies – including artificial intelligence, big data, the Internet of Things (IoT) and blockchain – to improve port and terminal operational performance is becoming more commonplace.

Although the industry is often regarded as conservative and resistant to change, this image is fast-changing. However, together with the opportunity to improve efficiency come new risks in terms of cybersecurity,

such as an increase in the potential access points to the valuable data that is being collected through IoT devices. These issues force increased focus and resources into the development of measures to secure the data and prevent unauthorised access.

Cybercriminals often exploit the ‘people factor’ through the use of common hacking tool kits readily available in the public domain. Consequently, an ongoing mandatory awareness programme should be implemented for the workforce to explain the risk of cybersecurity events and set up preventive measures. It is vital to establish an appropriate cybersecurity incident response team along with an assigned contact point.

Further to this, it should be recognised that many elements of operations are likely to be outsourced to third-party vendors; it remains the responsibility of the company to ensure sufficient due diligence has been taken to avoid a cyberincident resulting from the action or inaction of third parties. For example, ensuring information security management standards, such as ISO 27001, are complied with by the third party can reduce the risk substantially. It is essential to develop an appropriate strategic approach and a formal cybersecurity incident response process to tackle cyberincidents effectively and consistently.

Closing the window

The sheer volume of cargo moving through ports and onto their final destinations is staggering – and only likely to grow with the predicted increase in global population. Unfortunately, this makes it a target for criminal exploitation through the trade in illicit commodities and theft of cargo, to name a few.

Therefore, the adoption of ‘smart’ technologies such as IoT and blockchain within ports can increase the ‘visibility’ of the cargo throughout the supply chain. This augmented oversight not only has the potential to improve efficiency, but it can also improve security through transparency of the entire process.

Increasing the visibility of the cargo flow by providing real-time information can reduce the opportunity time window for criminal activity. Likewise, the digital fingerprint that is left through the use of blockchain provides a smaller hiding place for criminals operating in the margins of our industry.

TT Club specialises in the insurance of intermodal operators, non-vessel owning common carriers, freight forwarders, logistics operators, marine terminals, stevedores, port authorities and ship operators. The company also deals with claims, underwriting, risk management as well as actively works on increasing safety through the transport & logistics field. Please visit www.ttclub.com for more info.

Highlights from ESPO’s latest port investment study

Shifting priorities & drivers

by Ewa Kochańska

The European Sea Ports Organisation (ESPO) has released The Investment Pipeline and Challenges of European Ports report to update the state of financial challenges faced by the Europe’s ports in 2024. Based on a survey of Port Managing Bodies (PMBs) in Europe, the study reflects the evolving landscape of port operations, emphasising the shift to sustainable energy and the importance of public funding. The report offers insights into planned investments by European PMBs, discusses their changing roles and motivations, and highlights existing investment obstacles.

The aim of the survey, conducted from December 2023 to February 2024, was to update the same report from 2018, albeit with a few adjustments, e.g., the 2023/2024 data set was collected from 84 PMBs, compared to 60 previously. The general results show that Europe’s ports, in order to live up to the expectations of what they must become within the next decade, need around €80 billion up to 2034.

Pertaining to where the money is going, funding for the energy transition and other sustainability projects has become one of the top two financial priorities for the European PMBs. To handle these and a plethora of different challenges, such as infrastructure and technology upgrades, European ports will increasingly require sizable public funding, relying on specific port allocations within various EU funding programmes, primarily through the Connecting Europe Facility (CEF), as well as the Innovation, the Just Transition, and the Modernisation funds.

Investment pipeline by numbers

Due to a high response rate to the survey, the results provide a detailed picture of the

port industry in the EU, however, without disclosing data on particular ports. Instead, the report focuses on overall results and groupings of the Trans-European Transport Network’s (TEN-T) Core and Comprehensive Ports.

The report identifies 467 projects in 2023, up from 396 in 2018, and 84% of these projects were developed by PMBs, as the survey excluded investments by specialised private companies. Only third-party projects that enhance overall port development were included, such as government infrastructure investments and private contributions under concession agreements. The survey also covers projects managed by private firms in partnership with PMBs or state-owned enterprises, especially in inland waterways (50%), road connections (42%), rail links (33%), and energy transition (33%). Also important to highlight is that the survey focuses on capital expenditures and does not cover operational expenses – which is a significant amount for PMBs needed to maintain existing facilities like quay walls and port basins.

The analysis of the data shows that the second highest expense (after maintenance)

in European ports is the financing of various investments related to sustainability and energy transition, amounting to 55 projects in total. Another major segment includes ‘infrastructure and facilities aimed at lowering the environmental impact of shipping’ with 54 projects, and a smaller portion involves ‘initiatives to lessen the environmental footprint of port operations’ (eight projects).

The expectation that ports become energy hubs and support the transition to sustainability also in their surrounding cities and towns means PMBs must change and expand their services. As such, ports plan to introduce, among others, e-truck charging stations, (green) energy for port businesses, clean fuels in maritime (and pipelines for transporting them), and (digital) energy management services, while nearly two-thirds of all PMBs intend to supply onshore power (OPS) to vessels (most of the remaining ones already offer this service).

Compared to 2018, the ambition for launching these options in the next five years is significantly higher, with plans to triple the number of new services compared

Expansion of port basins, quays, or terminals

Infra/services for the sustainability and energy transition…

Maritime access

Infra. for smooth transport flows in the port

Equipment and superstructure

Intermodal/multimodal terminals

ICT/digital infrastructure

Rail transport connections

Sites for port related logistics and manufacturing

Road transport connections

UrBan functions in port areas

Inland waterway connections

Other

to the past half a decade. In particular, concerning clean energy and decarbonisation efforts, the predominant investment goes to OPS stations, with over 70% of ports reporting plans to invest in this area. About half of the participating PMBs intend to develop facilities for transporting and storing electricity, one-third plan investments in renewable energy production, and around 30% focus on energy management systems.

The projects included in the report are in different stages of completion: partial,

ready for execution, and in the study or idea phase. Here, quite significant progress has been made in five years: in 2018, over half (57%) of the projects were just on the drawing board, whereas this year, this share has decreased to 40%. Also, more projects are in the execution stage in 2024 – some 20% compared to around 14% in 2018.

Concerning port expansion investments, this category has seen the most projects – 123. The significant segments driving this development are break-bulk and general cargo businesses, particularly in the

Comprehensive Ports. Whereas the container segment remains important, its significance declined in 2023 vs. 2018. This shift indicates a larger trend, where the energy transition has become a more pronounced investment driver than general trade growth.

Further, the survey included a question about rail investments: 27 projects in total. The responses in this area underscore that the most common investment concern here is extending or modifying existing links, with fewer plans for new connections. Investments in electrification or safety systems are rare, as rail infrastructure companies typically manage these.

The data points to Europe’s ports having a robust investment pipeline. With the everchanging environment of European harbours focusing now more on clean fuels, clean energy, energy independence, and port resilience, the nature of PMB investments has noticeably changed since 2018.

Source: Port investments survey

Fig. 1. PMBs’ planned investments by type

Source for figs. 1-2 & 4 and Tab. 1: ESPO’s The Investment Pipeline and Challenges of European Ports

Tab. 1. Segments for which expansion investments are made

Balancing the books

Until 2034, the projected investment pipeline of the surveyed PMBs is approximately €45 billion; this amount does not include private company port investments, but only projects developed through joint ventures involving PMBs and partners or by government-owned companies. This amount is higher than the 2018 figure in part because of a different estimation method for investments exceeding €200 million (using additional port-provided data) and because ports were asked to provide their investment plans for the next 10 years as opposed to seven in 2018.

The planned investment pipeline for TEN-T Comprehensive Ports (with an average cargo volume of around 7.0 million

tonnes per year) is higher than for the Core ones. The former tend to handle low(er)volume commodities, such as conventional general cargo and goods in bulk, rather than high-volume trades, like containers. That said, Comprehensive Ports eye earning more money in the future by serving the wellpaying wind energy industry, especially its offshore part (then again, so do Core).

An example given by ESPO of a Comprehensive Port with a significant investment pipeline is Groningen Seaports. As part of its energy sector expansion, this Dutch PMB is dedicating resources to land development, quays, accessibility, and utilities to draw in new energy-focused businesses like offshore wind, hydrogen, and sustainable aviation fuels. There is

a significant demand for additional port areas, necessitating speedy site development to ensure availability and attract both existing and potential investors (yet, our region shouldn’t feel inferior – the Baltic Green Map and its Catalogue round up a wholesome set of all kinds of future-oriented port and port-related projects, while the Baltic Offshore Wind Energy Map does the same for those interested in harvesting wind power regionally).

A significant challenge is to balance making investments before inking contracts, particularly in constructing new quays, adding land, and setting up other heavy-duty infrastructure. In terms of utilities, the main issue is synchronising supply with demand in both timing and location. The financing challenge is tied to uncertainty, potentially causing investment delays and unsatisfactory solutions that can negatively affect the overall business network and sustainability objectives.

Given that the survey response accounts for 72% of EU port activity, the report has provided a “conservative” estimate of total investments in the block’s ports, which amounts to €80 billion from 2024 to 2034. It is also important to keep in mind that besides PMBs, private enterprises operating within European ports will continue to invest substantially in new infrastructure, such as terminals, storage facilities, and industrial plants, aimed at producing clean energy commodities like hydrogen, ammonia, and biofuels. Stevedores will also likely continue greening their machinery fleets.

The survey also sheds light on factors influencing investment projects undertaken by PMBs. There is a notable contrast

Source: ESPO (2018) Port Investments Survey

Fig. 2. Number of projects per investment range

Fig. 3. The case for public funding for investment projects of PMBs

Source: ESPO’s 2018 Port Investment Survey

National/regional grant

CEF Transport grant

Other EU grant

National/regional loan

CEF Energy grant

EU loan (e.g. EIB)

between 2023 and 2018 regarding key drivers. Last year, economic decarbonisation was a much more significant factor than five years earlier. However, the anticipated rise in trade volumes played less of a role in 2023 than in 2018 (although it continues to be an important driver for investment demands). In terms of obstacles to the planned investments by PMBs, the report listed seven potential bottlenecks: insufficient societal support, legal hurdles stemming from environmental regulations, complexity of agreement amongst all project partners, insufficient financing instruments to close the funding gap, lengthy and complex permitting procedures, expenditure increases because of inflation and material costs, and inability to secure funding for the investment projects.

The survey results underscore financial obstacles remain highly significant in the port industry. Also, this conclusion aligns with 2022 data on PMB investments; over 40 PMBs, handling over 1.5 billion tonnes of cargo, reported total investments exceeding €1.5 billion that year. Despite this high level of investment capacity, PMBs’ financing ability is still inadequate to fund all upcoming projects.

Value for money

From a European standpoint, PMBs reduce energy dependency, create sustainable environments, and enhance geopolitical resilience. According to the report, the value generated by the in-the-pipeline investments of Europe’s PMBs is comparable to the value created in their 2018 portfolio.

Through most of their projects, ports prioritise generating high-quality outcomes for both current and future port users, including shippers, shipping lines, and port-operating companies. Additionally, PMBs create societal value by minimising the environmental impact of port and logistics activities and supporting the energy transition – locally by reducing negative impacts (of pollution) and through waterfront redevelopment projects.

The report states that over 85% of PMB projects have a beneficial environmental effect. Firstly, approximately one-third of the investments enhance efficiency in shipping and port operations. Secondly, about one-third of the projects directly lower the environmental footprint of port and shipping activities, such as through the provision of (green) shore power. Lastly, another third focuses on reducing the environmental footprint of the port management itself. Additional actions in this area include attracting zero-carbon industries, e.g., via becoming sustainable fuel production hubs, or shifting cargo to more eco-friendly transportation modes like inland waterways or rail.

The 2018 Port Investments Study emphasised that projects expected to provide significant societal benefits relative to their costs are important from a community standpoint. However, although the societal value created is often considerable, PMBs cannot always translate this into financial revenue, making some projects commercially unviable. National and European policies offer

loans or grants to PMBs to address this issue to some extent.

Because of ongoing financial constraints, PMBs predominantly seek public funding to implement their investment projects. Almost all European PMBs are publicly owned, which drives their focus on user and societal benefits. Approximately 40% of projects aim for national or regional grants, and one-third seek CEF backing. In contrast, only a small portion of projects pursue loans from the European Investment Bank compared to national and regional ones. For projects in the implementation phase with secured funding, nearly one-third have received CEF grants, while very few have got national funding. These results imply PMBs can count on a financial support at the state level only once customised funding mechanisms are created.

Charting a fresh course

European ports have been expanding their role significantly in recent years. Beyond serving as critical links in the supply chain by connecting maritime and inland transport, they are sprouting into centres for sustainable energy and offering circular economy initiatives while also enhancing geopolitical and economic resilience.

These new functions complement their traditional roles but also create new investment needs, yet the most critical bottlenecks identified by PMBs are related to the financing and implementation of projects. To overcome these challenges, ports need public funding from diverse sources at regional, national, and European levels. ‚

CEF Digital grant

Market- & data-based approach to FuelEU Maritime

The price of pooling

by Albrecht Grell, co-Managing Director, OceanScore

FuelEU Maritime represents a whole new level of regulatory complexity for the shipping industry, even as many are still grappling with the challenges of the EU Emissions Trading System (EU ETS). But what is also new about FuelEU is that forward-leaning companies can actually benefit by cutting OPEX and even generating revenue through the compliance pooling option – and this will be determined by pooling prices.

The latest EU Regulation, with implementation less than three months away, requires shipping companies to adopt unfamiliar metrics for bunkers, emissions and energy to measure the greenhouse gas (GHG) intensity of their vessel operations, with well-towake emissions in CO2-equivalent and total energy usage (including shore power and wind) expressed in megajoules (MJ).

As well as these different parameters for analysis of carbon intensity, FuelEU introduces the new concept of compliance balances, with surpluses and deficits, that will entail various options, including pooling, paying penalties for non-compliance, banking, and borrowing.

A balancing act

Compliance balances will be a crucial factor in determining the economic impact of FuelEU as companies seek to meet the initial 2% reduction in GHG intensity from a 2020 baseline of 91.16 CO2e/MJ to avoid the penalty of €2,400 per tonne of very-low sulphur fuel oil-equivalent (VLSFOe). But they must also consider seemingly endless options, such as vessel deployment and fuel selection, to optimise their commercial exposure.

Comparatively, the EU ETS, with issues such as opening of Union Registry accounts, getting access to EU carbon emission allowances (EUAs), and efficiently running the processes between owners, managers and charterers, now seems like a walk in the park!

Much industry attention is now focused on the potential benefits of the pooling option under FuelEU. So what does this entail? When burning bunkers that have a GHG intensity below the threshold stipulated by the FuelEU Maritime Regulation, the so-called ‘compliance surpluses’ are generated. This will be the case for either vessels burning liquefied natural gas (LNG) and liquefied petroleum gas (LPG) or those burning certain biofuels. Vessels running on conventional fossil fuels, on the other hand, will accumulate ‘compliance deficits.’

Pooling power

The pooling mechanism, which is designed to stimulate the uptake of low-carbon fuels, allows over-compliance by greenfuelled vessels to offset compliance deficits for ships burning fossil fuels and thereby generate overall compliance for the combined fleet of pooled vessels – owned as well as third-party ships if these are included in such pools (not to be confused with commercial pools already familiar to the industry).

Through this mechanism, vessels generating a surplus can ‘sell’ this to those with compliance deficits. This means deficit-holders can avoid paying hefty penalties for exceeding the carbon intensity threshold, while those procuring the desired alternative fuels can actually generate additional revenues.

However, the price for selling and buying compliance balances in pools is not regulated, which has attracted criticism from quite a few industry players. Rather, it is left to the individual participants to agree on pricing on a case-by-case basis. If pooled internally within a single shipping company, pricing doesn’t matter much: the penalty avoided will be the benefit generated. But if pooling externally, the financial viability of the pooling strategy will depend on the price agreed for pooling surpluses with deficits.

OceanScore is using a market-based approach to discuss possible price ranges for pools. There are two main aspects here: demand and supply of compliance surpluses and deficits, as well as a cost-based approach to identify upper and lower price limits (within these, demand and supply should move prices in an efficient market).

Supply & demand for surpluses

An in-depth analysis has been conducted by OceanScore of every vessel subject to FuelEU, the fuels burned, and the resulting compliance balances per ship. The results show the initial reduction target of 2% set by the EU has already been partly achieved and effectively reduced to 1.6%.

Most vessels still burn conventional fuels, resulting in a cumulative compliance deficit

of 560 thousand tonnes of VLSFOe for this ‘fleet.’ Only a few hundred vessels, 85% of which are LNG and LPG carriers, generate surpluses, but these surplus volumes are substantial. Their cumulative compliance surplus comes in at 280kt of VLSFOe, leaving a net industry gap of 280kt.

OceanScore data indicates the compliance market likely will be in balance – i.e., the industry-wide threshold set by the EU will be met already in 2025 – based on contracts already entered into for biofuels. Surpluses generated by these operators, plus the LNG/ LPG carrier surpluses, will fuel the compliance pooling markets while at the same time reducing the industry’s compliance deficits. Voluntary emission reduction schemes are expected to have an insignificant impact on the biofuel volumes used for pooling purposes.

This ample supply of compliance surpluses should prevent the pooling market from being purely driven by scarcity of surpluses; prices will likely not be pushing the upper limit. What is more, large operators – found mainly in container shipping and the cruise business that have the highest exposure to FuelEU – will likely focus on securing neutral compliance balances for their fleets, at least initially, further reducing the compliance deficits by looking for external pooling options.

To sell or not to sell, that is the question

To understand where pool prices will land, the cost of alternative courses of action – such as buying compliant bunkers, paying the penalty, banking, and borrowing – needs to be analysed.

In short, no one will pool if the cost of doing so is above the penalty itself. The upper limit of pooling prices will, therefore, be defined by the €2,400 fine, minus some transaction cost and the extra effort to pool, resulting in a price of around €2,300/t/VLSFOe.

In a balanced market, the question is how low those offering compliance surpluses are willing to drop their prices. OceanScore has found that – especially if waste-based biofuels are used – trading compliance

surpluses could still be viable at prices as low as €600/t/VLSFOe. Nevertheless, we should not expect pool prices to drop this

low when introducing a dynamic component with the option to bank surpluses for future periods into the model.

Surplus-holders could expect that in 2030, after compliance thresholds are lowered, the demand for surpluses to pool will increase substantially, making surpluses scarce and met by substantial demand. If they assume that they could then commercialise their compliance surplus for, say, €2,300/t/VLSFOe, they might opt to bank their surplus rather than selling it ‘below value.’ Given a 10% cost of capital, this would move the equilibrium price up to around €1,400/t, increasing towards 2030. It can, therefore, be concluded that pooling prices over the next five years are likely to fluctuate between €1,400 and €2,300 per tonne of VLSFOe, which is a substantial price range.

Solid data = solid market position

The ability to model different pool prices, which is a feature of OceanScore’s newly launched FuelEU Planner, is crucial for informed decision-making to optimise commercial benefits. This web-based tool also simulates different pooling, payment, banking and borrowing strategies, as well as the financial impact of bunker choices, alternative fuel investments, use of shore power, and different deployment patterns. Given fluctuating prices, moving fast to secure commercial agreements (formal ones can only be finalised once the compliance balances have been verified in early 2026) for pool places at favourable conditions –depending on the perspective of surplus or deficit-holders – can be a significant lever on financial performance. And contractual agreements based on sound data need to be in place to cover risk, given thirdparty managers remain the Document of Compliance holders under FuelEU.

Focusing initially on fleet internal pooling is advisable, as it will eliminate the uncertainties of the pooling market. It would be risky to assume there will be a rush of undercompliant vessels seeking to pool with surpluses towards the end of 2025.

Given the analytical complexities introduced by FuelEU, solid and granular simulation of different paths of action is of paramount importance. A deviation of just 0.5% in assessing a fleet’s GHG intensity or picking the wrong fuel can lead to wrong assumptions about one’s likely position in the pooling markets, with severe financial implications. ‚

Founded in 2020, OceanScore is a global provider of compliance and data solutions for the maritime industry, with office locations in Germany, Poland, Portugal, and Singapore. Its suite of digital platforms and services is designed to support shipping to successfully navigate emission regulations, facilitating the industry’s transformation towards sustainability. Beyond emissions, OceanScore tracks sustainability, environmental, and reliability of 130,000+ vessels globally, serving the wider maritime ecosystem. Go to oceanscore.com to discover more.

Photos: OceanScore

CII is about to get more expensive – here’s how to prepare

The (critical) cost of carbon

by Aleksandar-Saša Milaković, Staff Engineer, Bearing AI

The International Maritime Organization (IMO) has set a bold objective for industry emission targets, among others, the ambition to get shipping to net-zero by 2050. However, many claim that the sector may only meet the deadline with proper financial incentives. While the push for a suitable market mechanism is clear, the construction of that mechanism – and its cost to shipping companies – remains uncertain.

The article delves into the potential introduction of a Carbon Intensity Indicator (CII) pricing mechanism. It compares various greenhouse gas (GHG) incentives and, leveraging proprietary calculations, speculates on their impacts and how companies can prepare for the change.

Financial incentives – needed

The maritime industry, responsible for a significant portion of global emissions, is at a pivotal point. Without some form of carbon pricing implemented, achieving climate goals and having a profitable fleet that runs on low- or zero-emission fuels will be difficult.

Debate is ongoing, so nothing is certain regarding a financial impact for CII — or its price tag. However, current emission reduction initiatives offer a glimpse into what the IMO might propose. For instance, the International Chamber of Shipping suggests a carbon price range of $20 to 40 per tonne, whereas Maersk advocates for a more robust $150/t tax.

The World Shipping Council’s Green Balance Mechanism proposal aims to level the playing field between black and green fuels through a novel taxing and redistribution scheme.

Then we already have the European Union’s Emissions Trading System (EU ETS), a pricing mechanism requiring ships (over 5,000 of gross tonnage) to purchase carbon offsets for a significant portion of their emissions. Vessels are financially responsible for 40% of carbon emissions between European ports in 2024, 70% next year, and 100% beyond 2025.

FuelEU Maritime is a new regulation adopted by the EU as part of its Fit for 55 package. It strives to boost the adoption of renewable and low-carbon fuels in the maritime industry to curb GHG emissions. This regulation establishes goals to decrease the GHG intensity of marine fuels progressively, starting at 2% in 2025 and aiming for an 80% reduction by mid-century. Importantly, this and other mandates are set to tighten over the coming years.

Carbon credits – a potential price breakdown

The Bearing AI platform can precisely forecast CII Ratings and EU ETS obligations. Our company has leveraged this capability to calculate the latter’s price comparison to passing and failing CII scores of vessels operating exclusively in the European Economic Area to understand CII carbon costs.

Leveraging industry-leading artificial intelligence, we can accurately predict CII ratings and end-of-year EU ETS obligations for a vessel. Below, we have calculated theoretical CII ratings and EU ETS obligation costs – based on a price of $80 per EU Allowance (EUA) –for a container ship with a nominal capacity of 1,400 TEUs operating on a feeder service. Our calculations reveal a significant cost disparity based on CII ratings. A vessel failing to meet the required CII level (grades D-E) faces a considerably higher financial burden than those receiving a score of A. This discrepancy is projected to widen, with the difference between A and E ratings ballooning from $409,414 this year to $961,089 by 2026 and beyond.

The three figures show the EU ETS costs for each CII score of a 1,400-TEU container ship feedering between Baltic countries. For these examples, we used an EUA price of $80. The calculations do not indicate the CII market mechanism the IMO is set to reveal but are an exercise in visualising

Don’t get yourself caught unguarded by the price tag

No matter the cost of the CII market mechanism, one thing is certain – it’s not here (yet!). That said, the key to mitigating future financial risks lies in preparation and the early adoption of green technologies and practices – the sooner companies begin preparations, the better.

Businesses that seize on tools to reduce emissions proactively – like Bearing AI’s emission optimisation suite – can steer their course toward compliance and sharpen their competitive edge. Such solutions offer an opportunity to keep tabs on emissions,

the cost impact of reducing emissions and identifying the relationship between CII ratings and EU ETS obligations.

While the figures only represent the potential costs of EU ETS obligations in relation to CII scores, they help to illustrate the potential financial impact of a carbon tax

managing and limiting them actively, as well as anticipating regulatory changes and steering a course towards adherence and advantage in an industry landscape that is nothing but shifting rapidly.

The push for a tangibly more sustainable maritime industry is here to stay, with

based on CII, highlighting the urgency for companies to understand and prepare for the forthcoming regulations. While not definitive, this exercise offers valuable insight into the economic incentives for reducing emissions and the financial implications of the IMO’s pending market mechanism.

financial incentives playing a pivotal role in accelerating the transition toward net-zero emissions. While the exact structure and impact of the IMO’s potential CII pricing mechanism remain speculative, the direction is in plain sight: the cost of carbon will be a critical factor in shipping economics. ‚

Bearing is at the forefront of bringing AI to maritime shipping. This is a trillion dollar industry that moves 90% of the goods we interact with on a daily basis, but has traditionally lagged far behind other industries in adopting new technologies. At Bearing, we’re changing that. We’re building AI-enabled products that solve the shipping industry’s biggest pain points and we already have some of the world’s biggest shippers as our partners. Go to bearing.ai to learn more.

Photo: Canva

Overcoming obstacles in AI-based container damage detections

The image of health

by Kishor Arumilli, Vice President – Engineering, ATAI

Freight containers, essential to global trade, are prone to various damages due to harsh environments, frequent handling, and constant physical stress. Assessing the condition of these containers from a damage perspective – also known as their health – is crucial for all entities involved in the logistics supply chain. Typically, container terminal operators conduct damage surveys for all incoming (and sometimes outgoing) containers, a procedure that is time-consuming and also has direct implications for personnel safety. As a result, automated container damage surveys are increasingly seen as a promising solution to this issue.

Container damage is any kind of structural deformity that may reduce the container’s value. The ISO 9897 standards codify these damages, enabling various stakeholders to effectively communicate the damage type, location, and severity.

However, the relevance, significance, and impact of the damage vary among stakeholders, resulting in differing purposes for container damage surveys. Each container terminal has its own criteria/ rules for what they consider as damage to the container (usually, a deep sea port

terminal may overlook surface dents and rust patches). Additionally, the handling procedures for the damaged container vary from terminal to terminal. This variability in implications and procedures regarding what container damage means presents the real challenge.

The why’s and how’s of surveying container damage

Damage to the container may lead to the damage of freight inside and also impair the container’s utility. In the process of transporting cargo from seller to buyer, the box undergoes handling by various entities and is susceptible to damage at each stage. As per the current practice, the liability is with the entity responsible for the damage. Keeping this in view, a terminal conducts the container damage survey when it enters the terminal (entry at the terminal gate, container unloading from the vessel or rail). As a standard practice, clear pictures of the damaged container are taken as evidence, and a sign-off is obtained from the relevant entities.

Besides protecting the terminals against liability claims, the container damage survey also helps in making operational decisions. Specific damages make it unsuitable for using certain container handling equipment. For example, damage to the corner cast may make a container unsuitable for spreaderbased handling, but fork-based handlers can still move such boxes. Based on the cargo type and the damage assessment, the terminal may, too, change the container storage location in the yard. This also leads to a change in procedures for the downstream activities

At ATAI, we have taken a drastically different approach, using computer vision and deep learning algorithms to develop the SMART container damage survey solution,

related to that container. These operational decisions hinge on the container damage surveys performed for the incoming boxes. Initially, damage surveys were conducted manually by surveyors, who physically inspected the container from all visible sides and documented the information on paper. Additionally, pictures of the damage were taken and stored for further reference. An improvement to this method involved providing a live visual feed of the container from all visible sides to the operator sitting at a workstation. Because of the constrained space environment at the terminals, the full container picture was constructed using line scanners or image stitching techniques. Computer vision and deep learning have significantly helped automate container damage detections. A stitched image (from the line scanners) of the incoming container is provided as input to the trained artificial intelligence (AI) algorithms to infer the damages as seen on the container image and classify them according to the damage classification. This process also helps generate a damage report along with the relevant evidence. This minimizes the need for the surveyor

The SMART container damage survey

overcoming the aforementioned challenges. This innovation has helped us address the ground-level, real-world challenges effectively. Seamless deployment of this solution,

to meticulously document all the damages found, resulting in a significant efficiency boost at the container operational points.

That said, the hard reality is that the AI-based solution for container damage survey is less efficient (not able to capture damages consistently and completely) and lacks flexibility (any change in environment or physical conditions, etc., requires huge retraining). The root cause of this problem is a lack of sufficient training data, as well as of the digitalized ground truth for run-time validations. At the terminals, this is generally compensated by implementing stringent operational procedures (e.g., containers should move at a uniform speed and in a straight line while passing through the portal), stringent installation procedures (e.g., cameras need to be installed at a precise location and angle as even a slight change in camera orientation has a huge negative impact on the inferencing results), and investing additional effort in data reconciliation. The complexity of the problem further multiplies due to the lack of consistent, usable damage definitions across the industry, making ground truth definitions during training become less applicable in practice.

even at the container exit points, helps to improve damage liability protection for the terminals. Key fundamental changes in our approach include the following.

The defining framework – driving uniformity in damage definition

Our solution provides a framework, based on the ISO 9897 standards, to define the damages according to the individual needs of every terminal. The framework allows a terminal to define the damage by specifying (a) the types of damages and localized classification names, (b) the significance or impact

Traditionally, the damage detection algorithms were fed with the stitched container side image as an input. Operational space constraints (full container view capture by camera frame requires a larger distance between the camera sensor and the subject or a very wide field of view sensor leading to image distortion) and the need to identify the location of the damage on a container (mapping and localizing) necessitated this approach.

However, stitching images to construct a full container picture is a computationally

Unlike the common usage of AI in the terminal industry, where the focus is on improving the accuracy of the algorithms, the container damage algorithms need a different approach. This is because the damage-related data sets are not a balanced data set (the percentage

of the damage, (c) the rules of engagement for the given type and impact for a damaged container – this and many more.

Such an approach helps the terminals capture all the damages for a particular container and act on them as per their local definitions. This novel approach enables keeping

Raw images vs stitched images

complex operation when we take the onthe-ground operational aspects into consideration (the container may be passing with varying velocities in front of the camera, the horizontal distance may vary across frames of a container, etc). This leads to distortions in the final stitched image if these dynamic variabilities are not compensated for. A distorted container image might lead to damage detection failures, false alarms, or damage misclassifications.

Contrary to this approach, ATAI has innovated in accurately mapping and localizing

Accuracy vs miss rate

of ‘damage’ vis-à-vis the percentage of ‘no damage’ is more skewed towards the latter category). Additionally, the cost of handling false positives (incorrectly inferring damage when none exists) is very high due to the manual nature of exception handling.

the complete history of the container’s health, picking out the boxes that require special handling only when warranted. The SMART container survey framework also offers flexibility, enabling terminals to quickly adjust the damage definitions and operating procedures through configurational changes.

a given captured imagery on the overall container. This novel approach enabled the possibility of feeding the raw damage frames to the algorithms, resulting in more accurate detection and classification. It also allows for the usage of the damage images captured by other cameras from a different angle/perspective. While these images were ignored in the traditional approach (as they couldn’t be used for stitching), ATAI has put these images to work to create a more complete training data set, which also helps to provide damage evidence from multiple perspectives.

Because of the above, the algorithm training for damage detection should be more tuned towards increasing precision or sensitivity rather than accuracy. As such, ATAI’s SMART container damage survey system prioritizes minimizing the miss rate rather than solely focusing on improving accuracies.

Training data set – a realistic synthetic data creation framework

Access to the training data set for container damage poses significant challenges, as it requires capturing vast amounts of raw data, creating the ground truth, and ensuring the availability of sufficient data for each type of damage. This data creation process is time-consuming and sensitive to environmental and location

variations, affecting the algorithm’s outcomes.

Recent advancements in technology have enabled the creation of synthetic data. However, the challenge with it lies in the accurate representation of damage and the loss of useful information in the process of transposition from a 3D to a 2D representation. Environmental and

location factors further influence this loss of data. At ATAI, we focused on creating a 3D data set for damage data that incorporates environmental and location-specific variability. We developed a comprehensive framework for synthetic data creation using AI, image processing, and 3D rendering to generate the most authentic

Photos:

data set for container damage. By not relying on stitched images, our synthetic data avoids certain lossy transformations. Additionally,

our data’s richness is enhanced by utilizing different perspective views of the same damage. The common damage model also enables us to

deploy the SMART container damage survey at the exit points seamlessly, thus providing better liability protection for the terminals.

Damage validation

In general, AI relies on probabilistic engineering and typically requires the digital ground truth to validate its outcome. As container damage detection algorithms cannot depend on the availability of the digital ground truth for

An essential and differentiating component of the container damage survey solution is the framework that enables it to incrementally learn from the accumulated feedback on the outcomes vis-à-vis ground truth.

The benefits of ATAI’s novel approach in addressing the challenges in a container damage survey at customer terminals have reiterated our leadership in innovation and

– absence of the ground truth

exception identification, every instance of detected damage has to be considered for processing.

ATAI’s container damage detection solution overcomes this model by (i) ensuring that algorithms are tuned for precision to ensure no damage is missed and (ii) through the availability of complete history from prior visits regardless of the terminal’s damage definition. This approach helps minimize the handling of false positives.

Static model vs continuous learning

This framework has also allowed us to create common models across various operational points of the container. For example, the damage detection algorithms used for a quay-side container survey are the same as the model used at the gate or rail sides of the container survey. Besides continuous learning, the framework has resulted in providing a consistent outcome across the terminal. It also helps the individual terminals to fine-tune the algorithms according to their specific needs and requirements.

Beyond ISO containers

customer-centric attitude. ATAI has extended this framework to encompass box damages for non-ISO containers, such as swap bodies, semi-trailers, and tank containers.

This novel framework allowed us to deploy and use common models across various types of terminals, including barge, intermodal, ro-ro, and inland container depots. ‚

ATAI is an applied AI company driving digital transformation in the maritime, logistics, and supply chain industries. Focused on improvements in productivity, sustainability, and cost efficiency, ATAI offers end-to-end problem-solving solutions powered by AI algorithms and cutting-edge technologies. Head to atai.ai to learn more.

Synthetic data creation – 3D rendering to environment creation

Damage detection for swap bodies, semi-trailers, and tank containers

mechanism

Świnoujście

Rostock

Trelleborg

Klaipėda

Fuelling the transition to new fuels and greener fleets with data

Sailing blind?

by Ossi Mettälä, Product Manager, NAPA Shipping Solutions

FuelEU Maritime might be the new kid on the block, but it has teeth and will bite. Coming into effect at the start of 2025, the Regulation is part of the EU’s Fit for 55 toolkit to help the block achieve climate neutrality by mid-century. Representing a new age of legislation, FuelEU Maritime provides clear incentives for change, not only through high financial penalties for non-compliance but also by shifting calculations on asset value. If the industry needed any more reason to transition to alternative fuels, look no further.

FuelEU Maritime is poised to succeed where the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) has failed. The former stands apart from the latter with more stringent and enforced penalties, unlike CII, which relies on market acceptance. In other words, FuelEU Maritime wields a stick – but it also offers a carrot.

Penalties for non-compliance are robustly enforced and, at €2,400 per tonne of very-low sulphur fuel oil (VLSFO)-energy equivalent, they are high enough to encourage investment in low-carbon bunkers and alternative-fuel ‘ready’ vessels. A recent analysis by OceanScore also affirms that penalties could reach an average of €520,000 per vessel annually for passenger ships and €214,000 for container carriers. The stakes are high whether the market likes it or not.

The benefits of compliance are tangible. According to an ‘explainer’ by the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS), in 2025 itself, paying the premium for blending biodiesel will generally be cheaper than paying the penalty on a per tonne of abatement basis. Further, vessels that are compliant or in excess will open the door to new business opportunities for their owners through pooling. Ultimately, this could increase asset value and provide access to easier financing.

With the business case for taking FuelEU Maritime seriously now clear, how prepared is the industry? According to DNV, there could be up to seven times more deficit than surplus of compliance

units across the industry when the data for 2025 is finalised. This shows that from year one, the majority of shipowners will have to take some form of action, be it pooling, borrowing, or paying a penalty. The urgency is, therefore, clear: shipping must take immediate action to avoid penalties and seize emerging opportunities.

Shipyard order books show the tides are turning. The latest data from Clarksons Research shows that around a third of all newbuild orders in the first half of 2024 were for vessels capable of using alternative fuels, including liquefied natural gas (LNG), methanol, ammonia, liquefied petroleum gas, and hydrogen.

The importance of preparation

FuelEU Maritime will not exist in a vacuum. When looked at holistically, this Regulation will build on the foundations of the EU Emissions Trading System (EU ETS) to accelerate shipping’s decarbonisation and will help the industry take the leap towards new fuels as it targets fuel greenhouse gas (GHG) intensity. It also comes at a time when the industry has already been exposed to the impacts of the IMO’s CII and the EU ETS. One of the key differentiators of FuelEU Maritime is, therefore, that shipowners and charterers are learning the importance of preparation and the underpinning role of data in informing compliance strategies.

Larger companies, naturally, have an advantage in being able to plan ahead, while smaller operators may struggle to get on the front foot. Faced with resource

constraints and knowledge gaps, many lack the bandwidth to take a proactive approach to FuelEU Maritime and, by this time next year, will end up ‘playing firefighter,’ scrambling to find drop-in fuels or pooling solutions to avoid paying hefty fines. Fleet data is, therefore, a critical asset for making informed decisions. As well as monitoring compliance deficits and surpluses, it also allows owners to weigh the cost-benefit analysis of different compliance strategies.

Simulations based on NAPA’s performance models and pooling cost estimates released by the MMMCZCS already reveal a snapshot of the scale of the potential costs involved – although exact prices will be set by the market. Consider a typical Capesize bulk carrier operating between Brazil and Rotterdam that consumes approximately 16,700 tonnes of fuel annually (both VLSFO 380 CST and low-sulphur marine gas oil). With a GHG intensity of 91.4 grams of CO2/megajoule, the vessel would face a compliance deficit of 703.70t CO2 . This represents nearly €450,750 in penalties for 2025, adding 5.1% to bunkering costs. Alternatively, based on MMMCZCS’ estimates that external pooling will come at the price of around €420/t, the cost increase would instead be 0.9%.

By contrast, a ro-ro vessel equipped with rotor sails and operated between EU ports in the Northern Atlantic can generate a compliance surplus of 1,750/t/year. One such vessel can, therefore, offer significant ‘excess’ through pooling and offset the emissions of nearly 2.5 bulkers from the first example. Considering the €420/t estimate for the

price of pooling, the surplus could generate just under €207,000 in additional revenue through pooling, which represents a reduction of nearly 3% in bunkering costs.

The

missing piece of the puzzle

Going above and beyond compliance with regulations has its rewards. Surplus compliance has value and can create an additional source of revenue for shipowners through pooling.

Early movers who invested in LNG or low-carbon-fuelled vessels or wind-assisted propulsion will benefit from ‘excess’ compliance – while the emission reductions mandated by FuelEU Maritime stand at 2%. This gives these owners a strategic advantage and opportunity to ‘pool’ such vessels with others in fleets that fall short on compliance – or look at opportunities to pool their ships with other companies for a defined period.

As new opportunities arise, markets for surplus exchange are expected to follow. Several new companies have already cropped up to facilitate the pooling option across companies. Tapping into this opportunity depends on being able to quantify the extent of a fleet’s current and future compliance (or non-compliance). The missing piece of the puzzle is data.

While there’s still no definitive test for how prepared the industry is for FuelEU

Maritime, we can see that scale, alternative fuel pricing, and bunker availability all continue to pose challenges to compliance. In this climate, short-to-mid-term strategies to prepare for the Regulation for most owners are likely to be based on either adopting drop-in biofuel and/or wind-assisted propulsion, as well as pooling, borrowing, or simply paying penalties for others. In practice, there are several more variables at play. From vying for and securing the availability of alternative fuels at ports to navigating the cost of pooling, there are many considerations for companies looking to assess those options against the cost of paying penalties.

Digital platforms, like NAPA’s FuelEU Maritime module (part of NAPA Fleet Intelligence), help streamline this wealth of information to give shipowners and charterers all the facts to make decisions based on data and evidence. Using data from noon reports on the quantity and type of fuel consumed on board, the module enables owners to visualise compliance

shortfalls or surpluses for every ship – even on a voyage-per-voyage basis. Critically, it allows shipping companies to test different compliance strategies, including pooling, banking or borrowing, and see how each option would move the dial on their fleet’s compliance status. They can compare these approaches with the cost of potential penalties, as well as gain an accurate estimate of how much surplus they will be able to offer through pooling, be it with other vessels in the fleet or with other owners. The module’s initial roll-out across 1,500 vessels through ClassNK’s ZETA platform demonstrates its potential to help owners-operators understand the carbon and bottom-line impact of the new Regulation on their operations.

The role of digital technologies in shipping’s green transition is to ensure that companies have a robust understanding of their operations and compliance options to avoid sailing blind. As such, digital technologies can ensure compliance, profitability, and strategic advantage during the industry’s energy transition. ‚

With 35 years of operation, NAPA is a leading maritime software and data services provider to enable safe, sustainable and future-proof shipping. With 90% of new vessels built by NAPA customers, NAPA’s design software is the global standard. For ship operations, NAPA provides vessel stability and data management, and its cloud-based solutions for performance monitoring and optimization support shipping decarbonization . Visit www.napa.fi to see more.

Photo: Canva

Interview with Fredrik Rönnqvist, Segment Manager for Material Handling, and Gustav Stigsohn, Product Manager, Fogmaker

Never compromise

by Przemysław Myszka

There is time and place for fire: in a fireplace, a bonfire during midsummer, or as part of an artistic performance. Conversely, one would very much like to avoid property catching fire, including costly machinery engines. We are talking with Fogmaker’s Fredrik Rönnqvist and Gustav Stigsohn about their company’s system, what makes it stand out, and the latest eco-friendly version. We also put the spotlight on Fogmaker’s history, values, and sustainability efforts. In closing, we’re discussing lithium-ion battery fires and what we can currently do about them as a first response.

‚ How did Fogmaker come about?

The company got started in 1995 by the inventor Kennerth Samuelsson in Växjö in Southern Sweden. He was interested in rally car racing and noticed that the fire suppression systems weren’t really fit for the job. Kennerth came up with a new solution that essentially gave birth to Fogmaker. The system we offer today is still based on that initial innovation, refined throughout those nearly three decades. The beginnings were rough, to say the least, and the company struggled to stay afloat. Back then, we sold five-six systems per year versus today’s 32 thousand. The development hasn’t been linear. Things got rolling in 2004 when Fogmaker entered the bus market. The last ten years were a real boom – the business truly exploded. That makes us confident when setting ambitious annual targets, which even if we miss by a small margin of, say, one million euros, it does not throw us off balance.

Long story short, Fogmaker has risen from a handful of people and scant sales to a workforce of 100 and a yearly turnover of 40 million euros. There’s still a lot of room for business growth, in- and outside Europe. Fogmaker will be significantly bigger in three-to-five years.

‚ What makes up the company’s sales base?

Without a shadow of doubt, buses continue to be our sales engine, especially the European market. We are obviously very strong on our home turf here in Sweden, but concurrently see growth potential in overseas markets, particularly North America. Obtaining approvals is the single most time-consuming thing when expanding our offer. We are, after all, talking about safety equipment that simply must work when push comes to shove. That is why different certification authorities take their time to validate the system’s reliability and efficiency. This process may take up a few months; it may consume an entire decade in the most extreme case. Given the legal green light, which on average takes six-to-12 months, it’s mainly footwork, footwork, and even more footwork by us and our dealers. We are also increasingly focusing on attracting customers from other industries, be it material handling, forestry, construction equipment, agriculture, mining & tunneling, and, of course, the port sector. Regarding the latter, we’ve joined the Port Equipment Manufacturing Association. This move gave us greater visibility in the

market and channeled more interest into our work. We have also observed a noticeable rise in safety awareness throughout the port business, not only in fire suppression systems but across the board.

‚ What drives the company at its core?

Fogmaker is driven by expertise, commitment and integrity, the three values that resonate the most with our employees. We aspire to be the most knowledgeable people when one approaches us to talk about fire suppression systems for machines and vehicles. We are committed to doing our best in ensuring that clients get all the information, feedback, and support they need. Integrity is about trustworthiness across everything we do – that the company is a good employer, that customers are taken care of, but also that everything is alright with our supply chain: Fogmaker does not tolerate any dodgy business. Whenever we appoint a new dealer, we always go above and beyond to make sure there’s no workplace mistreatment, bribery, child labour, illegal material sourcing, etc., involved. Luckily, as Fogmaker has grown over the years, it has become easier to vet and distinguish between the partners we want to work with and all the rest.

We have also launched the Fogmaker Academy to help the people wanting to work with the company know us: both the system and our values. In most cases, partners come to us to Sweden, with occasional trips in the opposite direction. Technicians who want to work with our system need to be certified by our trainers.

‚ Can you walk us through what is your solution and how it works?

One could say that we have one product: the Fogmaker fire suppression system. Then again, the solution is so universal it’s scalable and modular, from small to big applications. For the port business, that means it can be installed inside a forklift or on the biggest mobile harbour crane or a quay gantry.

The system is also customisable and our company will be more than happy to assist clients in getting the optimal set-up for whatever is in their machine park. The operational environment plays a crucial role here, too. We recommend our clients from the port and mining businesses to have a system with a higher degree of stainless steel to account for the salty conditions they’re operating in.

Fogmaker is more than keen to assist companies in their fire suppression journey. As we only do machinery and equipment, our focus lies there. Upon client request, we will investigate what and where they’re operating. That step includes risk analysis and designing the particular set-up together with the customer’s team. Here, we are often asked why experts in fire suppression need

help, but the customer’s team are the specialists who know their machines inside out. Their aid is invaluable. Whatever we discuss during these phases is protected by a nondisclosure agreement: all the details and designs are kept safe. Altogether, the port and shipping sectors are well aware of the many perils a fire can bring upon them. We at Fogmaker are ready to help guide them in doing their best to save lives at sea and in harbours, as well as to avoid property damage and costly downtime.

Our solution is an investment for years. First, if checks and maintenance are carried out properly, the system is ready for action indefinitely. There are annual check-ups, small service after five years, and a big one after a decade. We are catering to the automotive sector’s demand of ten-to-15-yearlong serviceability, but there are ‘Fogmakers’ that have 20 or 25 years under their belts and are stilll in excellent condition. Worth adding is that ours is a multi-use system. After suppressing a fire, it naturally needs to be cleaned, refilled, and its parts checked and replaced if need be. But when that’s done, the system can be used again. The aftermarket is well taken care of.

We like to use the fire triangle to explain how our high-pressure, water-based mist system works. Fire needs three components to break out: heat, fuel, and oxygen. As such, Fogmaker’s solution attacks all of them. Water is the best agent one can use for cooling in enclosed spaces, like engine rooms. The water-based mist evaporates, taking off heat by creating a steam that also gets rid of oxygen (one liter of water can create 1,700 litres of steam). High-pressure goes handin-hand with the system’s longer activation time: more heat is taken out through a longer period (typically 45-60 seconds compared to 20 for low-pressure solutions).

Another crucially important feature distinguishing our system is its ‘mechanical’ nature, meaning it’s operational 24/7/365 independent of any source of electricity. Our liquid also contains certain additives, including a foaming one. It functions as a chemical fire blanket over a pool of fuel, preventing it from fuming, hence igniting. There are anti-freeze agents (salts), too, that ensure readiness when it’s cold; and, as an added value, these also increase the overall efficiency of fire suppression.

‚ What difference brings the Eco I version of your fire suppression system?

The liquid in the latest iteration of our system is free of per- and polyfluoroalkyl substances (PFAS). After three or four

Gustav Stigsohn, Product Manager

Fredrik Rönnqvist, Key Account Manager

Photos: Fogmaker

years of development and experimenting with alternatives (neither of which satisfied us), we decided that an in-housemade PFAS-free solution was the way to go. It wasn’t a simple swap, PFAS for environmentally friendly components, and we also had to adjust the nozzles to make systems with Eco I as efficient as the standard version. We burned diesel counted in cubic metres during the final finetuning tests to make sure the new product doesn’t compromise on performance. Eco I was designed with the environment in mind and is GreenScreen Certified™ at the silver level. PFAS are extremely stable, non-biodegradable molecules that make their way into groundwater and then end up in plants and animals – and in humans as we consume them.

The EU is also debating on banning PFAS chemicals, with the decision likely to be made next year. We therefore wanted to be fully prepared for a PFAS-free future potentially coming in 2026-27.

As things stand, Eco I is slightly more expensive, but that’s CAPEX only; operation-wise, the cost is the same. Eco I must also get new certification as the liquid composition is different.

A lot of effort, time, and money went into developing Eco I, but interestingly enough, clients began asking for it faster than we first expected.

‚ And what is the company doing on other sustainability fronts?

We have got the ISO 14001 environmental management certification. Our diesel vehicles run on hydrotreated vegetable oil, while others are hybrid or electric (with all internal transports being electrical, plus bicycling is highly encouraged). We have also changed much of the lighting to LED. Our buildings have the overall B score on an energy efficiency scale from A to G (with the latter given for the worst performance). We also recycle; our system is mostly made of aluminium and we try to source recycled materials as much as possible. We keep air business travelling to a minimum.

The supply chain team checks the suppliers not only for the best price and quality but also scrutinises their environmental practices and footprint. That and the fact our supply network is relatively short, meaning Fogmaker doesn’t have to use air freight to a considerable degree (that’s also because our system goes without electronics). That also had the added benefit of COVID not affecting us all that much. In fact, none of our clients had felt the impact (also because we usually keep our stocks high).

‚ How do battery fires differ from other ones?

As things stand today, it is virtually impossible to suppress a lithium-ion battery fire. We aren’t aware of any solution capable of doing that. Stating otherwise should be a red flag for any client planning to invest in a fire suppression system. Fogmaker has been very upfront and integral in sharing that inconvenient for some message.

Curiously enough, hybrid or fully electric vehicles do not burn so often as those with combustion engines, but if they do, such events immediately hit the news headlines. Statistics show that more than half of the fires start outside the battery packs. The focus in such instances is on suppressing the fire before it reaches the batteries.

Extinguishing a battery fire is so difficult because the whole thing is encapsulated. The source of fire is, therefore, almost absolutely obscured. The best what the fire suppression industry can do now is to cool down the batteries with a waterbased mist for as long as possible to buy time to evacuate people, save other vehicles, or isolate the burning one for firefighters to employ other measures. The long activation time of our system proves very handy in such situations. ‚

Can a single maritime artificial intelligence (AI) research project cut 1% of total global emissions?

Well, duh!

by Alexa Ivy

Be ready to pick your jaw up off the floor as NAVTOR’s Chief Sustainability Officer Bjørn Åge Hjøllo explains how the Green AI for Sustainable Shipping (GASS) initiative promises to transform the ability of shipowners and operators to slash fuel consumption, emissions, and operational expenses (OPEX), ushering in a smarter, greener, and more connected maritime future. Sorry, what did you just say? Hjøllo smiles in recognition of the apparent disbelief. He tries again: “I said that this project has the potential to cut 1% of all global emissions.” Do you mean 1% of all shipping emissions? “No, 1% of total global emissions… For everything!” Sorry. What?!

This may be the first, but it won’t be the last time Hjøllo is met by someone who needs to reboot their brain while struggling to come to terms with the ambition of the Norwegian government-backed GASS research project.

Led by NAVTOR, the initiative is a partnership with Grieg Star, Maritime CleanTech, Scandinavian Reach Technologies (ScanReach), Simula Research Laboratory, SinOceanic Shipping, and Sustainable Energy/SIVA, with support from the Norwegian Research Council, Innovation Norway, and SIVA.

Over the next three years, it aims to champion what Hjøllo calls a “datadriven approach to decarbonization,” enabling shipping companies to identify, analyze, and address inefficient energy use on any vessel, in any location, in any weather conditions, in real-time.

Powered by machine learning algorithms, digital twin technology, and a constant stream of high-quality data, the result will be, says Hjøllo, “a simple, powerful decision-making tool that allows users to maintain competitiveness, achieve regulatory compliance and, in short, unlock more sustainable shipping.”

Although he makes it sound ‘easy,’ there’s much hard work that needs to be done first. And this is where the partnership model comes in.

Teamwork makes the dream work

As in any ambitious team, each GASS player has clearly defined roles. NAVTOR is the world’s leading supplier of maritime

technology for e-navigation and performance solutions, with products and daily services on over 18,000 vessels in the world’s fleet. With expertise derived from building and continually developing an integrated digital ‘ecosystem’ connecting ships, fleets, and entire organizations, it is well placed to design, integrate, and eventually bring this type of innovation to market.

Grieg Star, SinOceanic Shipping, and Sustainable Energy/SIVA provide both invaluable domain expertise and the crucial test vessels required to build, run, and constantly refine the solution for real-world operations.

Meanwhile, ScanReach offers a unique wireless Internet of Things platform that connects sensors, equipment, and systems across complex steel vessel environments to harvest the data needed for GASS’ highpower processing engines.

Simula’s role sees the team leveraging their renowned developer experience to create the machine learning and digital twin back-end to empower the front-end benefits.

Finally, Maritime CleanTech is on hand to disseminate information and encourage interaction with another potential 150 partners through its futurefocused industry cluster.

So, that’s the Big picture, but we have to zoom in to see how this will work in reality. Hjøllo is happy to ‘go granular.’

Richer data = cheaper operations

“At present, there are no systematic data‐driven solutions for improving energy efficiency onboard, and GASS aims to address

that,” he says. “We want to capture granular information from a very wide range of high-frequency data that basically allows us to predict what a vessel’s fuel consumption should be, regardless of ship type, location, weather, and so on. That means integrating precision data from vessel operations and exact operating environments – combining metocean condition and forecast data, automatic identification system data, and a whole range of reporting & performance data gathered in real-time, all the time, from sensors. That can span anything ranging from propeller information to engine revolutions per minute, navigational data, speed, and the like.”

Once they have this building material, Hjøllo explains, it can be used to craft a digital twin of any vessel that, regardless of operational parameters, can be used to demonstrate optimal fuel consumption. If the ‘real world’ ship is failing to live up to its virtual sibling’s performance, then the data can be instantly analyzed to find out why. “Maybe there’s an issue with the trim of the vessel, or a problem with fouling, or perhaps the auxiliary engine has been used in a congested area, so it’s still running when there’s no need,” he says.

“With much richer, real-time data than ever before,” Hjøllo furthers, “we can unlock up-to-the-minute awareness and performance analytics that enable dynamic voyage optimization – as opposed to today’s ‘static’ standard – and allow onshore teams and onboard crews to address issues/deviations from plans as they actually happen. That’s an incredibly powerful advantage to have,

especially in the new regulatory reality of Carbon Intensity Indicator ratings and the EU Emissions Trading System, for example, and the associated costs and investments associated with compliance.” In other words, he says, “This could be huge!”

Once extensive testing and validation have been completed, the AI module will be integrated into NAVTOR’s existing joined-op portfolio. Although it’s early days, Hjøllo suggests that this would be on both NavStation (the company’s onboard digital chart table/planning system) and NavFleet (a shore-based management, monitoring, and optimization solution), allowing both vessel and office teams to make the most of up-to-the-minute insights and enhance decision making.

“We’ve always been focused on developing innovations that simplify life at sea for our customers,” Hjøllo states. “This is the epitome of that: gathering and utilizing vast amounts of complex data to deliver straightforward, actionable, and powerful recommendations. It’s an advisory functionality that we’re constantly building, helping deliver added value for anyone that’s looking to gain advantage.”

As his job title suggests, the key advantages Hjøllo is setting his sights on revolve

around sustainability, which, as he rightly points out, goes hand in hand with commercial benefits. “If we can dynamically optimize voyages and energy consumption, we can also, by extension, dynamically optimize costs,” he says, “helping owners around the world cut down on their greatest OPEX outgoing.”

“But, as you might expect, it’s the impact on emissions that should create the greatest excitement,” Hjøllo notes. That brings us back to the 1% figure. How is that even possible?

No roadblocks

Hjøllo admits that the number is both a best- and worst-case forecasted scenario.

Here’s how the GASS partners arrived at it: today, worldwide shipping accounts for nearly 3% of greenhouse gas (GHG) emissions. However, widely reported research suggests that it could reach as much as 17% (you read that right!) by mid-century as global trade expands while other industries cut their emissions faster than maritime. GASS expects that a machine learning application that dynamically optimizes vessel energy use should be able to reduce consumption, and therefore GHG emissions, by 20%.

So, when the 30%+ of vessels in the world fleet that use NAVTOR products have their breakthrough AI technology powered up, that translates to over a 5% cut in all of the shipping emissions and, assuming the 17% figure, a 1% cut in total global footprint.

Hjøllo can’t suppress a smile but is cautious enough not to get carried away. “I think the important thing is there’s nothing to suggest we can’t do this – we, and our partners, have the track record, technology, and domain expertise to succeed here. The 1% figure obviously depends on a lot of variables that are beyond our control, but the 20% reduction per vessel doesn’t. That is a very realistic target.”

He concludes: “If we can play a part in reducing energy use and emissions by one-fifth on every vessel we serve –regardless of type, age, location, weather, whatever! – imagine how powerful that could be. Imagine the difference environmentally, from a regulatory perspective and commercially. In an industry and a world where every marginal gain is a major win, this is… Well…”

He shrugs his shoulders, temporarily lost for words. Even Hjøllo, it appears, needs to reboot sometimes. ‚

Our e-Navigation and Performance experts don’t follow development, they steer it. NAVTOR is dedicated to being at the vanguard of the industry – working with partners throughout the globe to pinpoint the areas where e-Navigation can deliver the greatest benefits, then finding the solutions to unlock them. Sail to navtor.com to discover more.

Photo: NAVTOR

How all vessels can cut their emissions thanks to air lubrication

Floating on air

by Alistair Mackenzie, Chief Commercial Officer, Silverstream Technologies

The Silverstream® System is an air lubrication technology that harnesses fluid dynamics to reduce the frictional resistance between the hull and the water, cutting average net fuel consumption and greenhouse gas emissions by 5-10%. All shipping segments can take advantage of the system, which is effective in all sea states and suitable for retrofit installations and newly built vessels. Orders for our solution grew in 2023, with proven system performance and collaboration playing an important role. Looking ahead, we see data and digitalisation as key to the broad evolution of clean technology.

From lower fuel costs to superior Poseidon Principles-aligned funding, many factors drive clean technology adoption. Evolving industry regulations – such as the European Union’s Emissions Trading System and its FuelEU Maritime Regulation, along with the International Maritime Organization’s (IMO) Carbon Intensity Indicator – are only set to become more impactful in 2024 and beyond. Long story short, they are all expected to improve the commercial rationale for adopting fuel efficiency measures at the vessel and fleet levels.

At Silverstream, we have already seen an uptick in system orders in the past few years. As of December 2023, there are 183 vessels contracted to have the Silverstream® System installed across all shipping segments, with 54 in-service (our customers include, amongst other prominent industry names, Carnival, MSC, Maersk, Grimaldi, Shell, Vale, Knutsen, and ADNOC L&S).

Of these, 33 are LNG carriers (LNGCs), including 13 that are already operational.

Off the back of our growing order book, we were also featured in the 2023 edition of FT 1000, a ranking recognising the top 1,000 companies in Europe based on revenue growth between 2018 and 2021. Its latest instalment placed Silverstream as the

fourth fastest-growing company in Europe and the third in the UK.

Flat bottoms, spiky gains

The LNGC segment has been, in particular, putting its commercial weight behind clean technology and the Silverstream® System specifically. Most recently, in August 2023, we announced receiving ten orders for LNGC installations. Six of the undisclosed orders are for retrofit projects taking place between 2023 and 2025, and four are for newbuilds to be delivered in 2026-27.

Meanwhile, in January 2023, we signed an agreement with the CSSC Jiangnan Shipyard Group to supply the Silverstream® System for six 175,000 m3 LNGCs, forming part of the newbuild LNGC programme being constructed for the Abu Dhabi National Oil Company.

We also signed an agreement with China Merchants Energy Shipping in January 2023 to install the Silverstream® System on four 175k m 3 LNGCs built by the Dalian Shipbuilding Industry Company (DSIC). The installations will take place over two years, with work expected to be completed by the end of 2024 per DSIC’s building schedule.

Our system is well-suited to the LNGC segment as these vessels have a large flat bottom that maximises our technology’s

friction-reducing capabilities. The system reduces average fuel consumption and emissions for LNGCs by 7-10% net, which typically equates to saving one megawatt of net power.

The system can also help to reduce LNG boil-off and increase delivered cargo volume or cut fuel consumption and associated emissions, depending on the operator’s commercial and sustainability priorities. This is because air lubrication can enable vessels to travel at higher speeds for the same fuel consumption or cut bunker (hence emissions) without sacrificing speed.

According to research based on recent Clarksons data, the global LNGC fleet will exceed 1,000 ships by 2026. So, while the sector’s investment in air lubrication has been positive, plenty of vessels will still require energy efficiency improvements if the shipping industry is to meet its emission reduction targets.

Collaboration has also been vital to propelling the uptake of our clean technology in 2023. To rise to demand from the LNGC newbuild segment, for example, we have collaborated with many shipyards and placed particular focus on the Asia-Pacific region (APAC). In Europe, we recently signed a collaboration agreement with MAN Energy Solutions, whose twostroke engines are the preferred choice of propulsion for large oceangoing vessels,

for which our Silverstream® System is especially effective due to the size and shape of their hulls. With approximately half of the world’s commercial tonnage powered by MAN, the partnership will help further accelerate the adoption of our technology across the global fleet, spanning both newbuild installations and retrofits. Broadly, it will help pave the way for the cleaner, greener, and more efficient vessels needed to achieve IMO’s emission reduction targets. Through this collaboration, we are pursuing the mantra that the greenest fuel is the one you do not use.

From nice- to must-have

The shipping industry increasingly recognises that clean technologies can play a central role in decarbonisation today. However, we must also keep one eye on how they will evolve and iterate to meet the needs of tomorrow and stand up to the rigours of the entire lifespan of a vessel.

Leading solutions have a proven record of emission-saving performance; it is critical to accurately calculate, measure, and report clean technologies’ efficiency level and decarbonisation impact. Access to more and better performance data is now allowing for more precision when calculating and verifying the impact of technology. Essentially, monitoring and measuring performance data, likewise system health, will be an integral component of not just our solution but all clean technologies in the near future.

Clean tech manufacturers will also use data and digitalisation to raise both the floor and ceiling of fuel-saving potential. Like the intelligent systems within modern cars

that tune the vehicle’s engine as it drives, maritime clean technologies will learn and respond to their environment and operate in a way that ensures maximum efficiency.

Because clean technologies are deeply integrated into a vessel, there is the potential for them to identify and unlock efficiencies that others may not even know existed. In other words, they become active and intelligent solutions to maximise the performance of a ship. We can harness data from our system, alongside multiple sensors around the vessel, to gain an in-depth understanding of air lubrication technology and identify factors that could influence the ship’s overall performance and allow us to tailor in-service support.

The shipping industry’s increasing focus on data and the surge of digital solutions in recent years indicates a shift from viewing data as ‘nice to have’ to recognising it as a vital catalyst for driving industry transformation. Many shipowners and operators now acknowledge the significance of the digital journey and the potential of data. It is no longer a matter of whether the industry will embrace digitalisation and data, but rather, when and how rapidly it will do so – and whether one’s ready for it.

We are transitioning from an era where data was collected and stored passively, often leading to valuable insights being overlooked or forgotten, to a phase where data is being actively leveraged to inform business decisions and strategies. This actionable data has become a driving force behind both the industry’s digital transformation and its decarbonisation agenda.

A lifecycle option

The growing uptake of our air lubrication system and clean technology in 2023 makes commercial and environmental sense, and we expect increasingly impactful decarbonisation drivers to propel the uptake of efficiency solutions further in 2024. Collaboration across the clean technology value and supply chains, as well as work in critical segments such as LNGCs and regions such as APAC, have been instrumental in making an impact today.

Meanwhile, looking ahead, a focus on the evolution of clean technology via data and digitalisation is pivotal to reinforcing that these solutions represent a lifecycle option designed to last a vessel’s lifespan. ‚

The London-headquartered Silverstream Technologies is a market-leading maritime clean technology company specialising in hull air lubrication. Its Silverstream® System reduces frictional resistance between the water and the hull surface, reducing net fuel consumption and associated emissions by an average of 5-10%. The system is unique in that it is the only proven air lubrication technology that can be retrofitted in ten days or less, as well as being applicable to newbuilds. It lasts the lifetime of the ship, is complementary to and can be used in conjunction with other clean technologies, and a return on investment is typically between two and five years. Visit silverstream-tech.com for more information.

Photo: Silverstream Technologies

Baltic Ports Conference 2024 – the future of ports is now; let’s get strong on it together!

by Monika Rogo, Communication Manager, BPO

Cooperation, proactive attitude, and taking action were the main ‘battle cries’ that kept appearing regularly in presentations, discussion panels, and behind-the-scene conversations during the latest Baltic Ports Conference (BPC) of the Baltic Ports Organization (BPO) that took place in Klaipėda on 4-6 September 2024. The current situation of the regional ports was analysed against the background of geopolitics, trends in shipping & trade, transport policy development, as well as the overall greening and energy transition push.

Day 1

Gabrielė Burbulytė-Tsiskarishvili (Klaipėda University) discussed the concept of geopolitics from a scientific point of view. She mentioned the principles presented in A. T. Mahan’s The Influence of Sea Power upon History (1890) that are still being taught at universities. The book she called the ‘Geopolitical Harry Potter’ (because of its undying popularity and still valid breakdown of the fundamentals) lists: geographical position, physical conformation (including natural production and climate), extent of territory, population, character of the people likewise that of the government (including national institutions). Burbulytė-Tsiskarishvili also underlined the important role of ports as the actors of history, especially in terms of climate change nowadays. Though perhaps an odd question at first, are ports, for instance, ready for the transportation of drinking water, something that may become an increasingly scarce good?

Sandra Baniak (Centre for Eastern Studies) focused on the consequences of the Russian war of aggression against Ukraine. Before the attack, two-thirds of its exports were dispatched via its ports on the Black and Azov seas, including over 90% of its agricultural (solid & liquid) products.

The Russian invasion has resulted in some Ukrainian ports being occupied and others blocked, triggering the urgent need to find alternative export routes. In May 2022, the EU established so-called Solidarity Lanes, in which Poland and Romania play key roles. The most important elements of these include Ukrainian ports on the Danube River and the transit operations from these to Romania, as well as by land to & via Poland. Solidarity Lanes ensure the continuity of the export of Ukrainian grain, seed oils, iron ore and steel products, as well as the import of fuel, military equipment & supplies, humanitarian aid, construction materials & machines, etc., via overland routes. Baniak also mentioned the Black Sea Grain Initiative, the Ukrainian Black Sea Corridor, and the return of sea container traffic to Ukrainian shores.

A ‘teaser’ of the next BPO report called How the war in Ukraine impacted the Baltic ports market? was presented by Monika Rozmarynowska-Mrozek (Actia Forum). The document will show the impact of the war on Baltic ports, likewise how the energy and transport sanctions imposed by the EU on Russia will alter regional trade (such as that of coal, liquids, containers, Ukrainian cargo going through Baltic seaports, and more). Challenges related to land

transport to Baltic ports and the impact of the war against Ukraine on the region’s cruise market will also be included in the report’s final version.

Numerous threats to critical maritime infrastructure were discussed by Professor Timothy Edmunds (University of Bristol). Among them, he mentioned acts of war, terrorism, grey zones, blue crimes, accidents, and natural disasters. The speaker, however, also gave responses and solutions to these: coordination (including information sharing), rising mutual maritime domain awareness, and balancing between commerce protection and resilience by sharing the risk burden between stakeholders. He also stressed the importance of systematic understanding and mapping of the challenges.

Jörgen Nilsson (Port of Trelleborg) talked about the development of the Swedish seaport, sometimes in an inapparent way. Among others, he stressed the importance of knowing what the actual emissions are in a given port. Trelleborg’s two main climate goals are becoming netzero by 2040 (all-scope emissions are to be reduced by 90% vs the base year 2021; remaining emissions are to be neutralised by carbon storage/offset) and a net producer of green energy (the port must

annually produce more energy from renewables than it consumes until 2035). The speaker encouraged the audience to always think ahead and, what is crucially important, also out of the ‘transport’ box (concerning the latter, the Port of Trelleborg has ‘invested’ in planting trees alongside the truck parking areas and is planning to set up its own bee hives – not because it makes sense from the economic or transport standpoints but because it’s simply good for the environment).

The discussion panel Shipping and port market trends in the BSR and Europe in a short-, medium-, and long-term perspective (2024-2030) opened a debate on current development directions. Vaidotas Šileika (Lithuanian Association of Stevedoring Companies) cited sustainable development and greener logistics as the most important market requirements. Vilius Girkontas (Nordic Investment Bank) marked green transition as an inevitable trend in all fields. Jonas Nazarovas (DFDS) said that sustainability is a challenge for optimists and a problem for pessimists, whereas Jörgen Nilsson highlighted that the future is already here, and there is really no single ‘silver bullet’ solution, but one always needs to have a few cards up one’s sleeve. Jacob Koch-Nielsen (Stena Line) added that collaboration, digital solutions, data sharing, and transparency are crucial for the change to be real. The speakers also shared their experiences about working with young(er) generations and indicated how flexibility, adaptation, and good leadership can help bring out the best in both emerging talents and veterans.

Revision of the TEN-T Regulation and its main takeaways for the Baltic and European maritime transport was presented by Steve Wray (Infrata). The speaker focused on the overall increase in competition between TEN-T Corridors to the benefit of the entire logistics chain. He also stressed the pivotal shift involving cutting strategic transport ties with Belarus and Russia to the advantage of the TEN-T growing towards Moldova and Ukraine.

India-Middle East-Europe Economic Corridor (IMEC): significance for the Baltic Sea region was the title of the presentation by Ambassador Devesh Uttam (Embassy of India to the Republic of Lithuania). In essence, the project is about pulling India closer to Western democracies transportwise, with infrastructure and services that make it easier for the EU and India to trade with each other.

The discussion panel From the Aegean Sea to Estonia – the new transport Baltic Sea-Black Sea-Aegean Sea Corridor (BBA) in context of the new geopolitical landscape saw the panellists trying to predict what will happen when the Russian war ends and Ukraine joins the EU. Gytis Mažeika (Lithuanian Ministry of Transport and Communications) claimed that road transport will be even more important then than it is now and that we should start preparing for this development infrastructure-wise, including by investing in Baltic-Ukraine corridors. Valdo Kalm (Port of Tallinn) noted that we can expect more nearshoring before long, with manufacturing getting back to Europe. This may be, in his opinion, a real game changer for rebuilding Ukraine postwar. The Baltic might as well benefit, especially its Eastern, production-savvy flank. Daniel Jarnea (Port of Constanța) added that Romania is already working on opening the EU market for Ukraine. Alan Aleksandrowicz (Port of Gdańsk) is convinced that Ukraine will be a huge player and will become a strategic transport hub between Europe and Asia. According to Marina Basso Michael (Port of Hamburg Marketing), there is no way back for Ukraine to what it was before February 2022 and we all need to focus on rebuilding it by creating a new Marshall Plan

Day 2

Isabelle Ryckbost (European Sea Ports Organisation) kicked off session I, titled Impact of greening and the energy transition on maritime transport in Europe and the BSR , by going through the multitude of drivers and strategies guiding port energy transition. According to her, ports are bigger players than ever before: they transformed from multimodal maritime hubs to hubs of energy, hi-tech industry, circular and blue economies, and partners in building a net-zero, smart and resilient Europe. Future ports will not only be landlords but facilitators, matchmakers, investors, and (co)operators.

Algis Latakas (Port of Klaipėda) presented this year’s BPC host port and its broad & ambitious vision for (green) development. In short, hydrogen production will start in 2026, while onshore power supply is planned for 2026 for ferry operations and two years later also for container ships and cruisers. The start of land reclamation and construction of the Southport is scheduled

for 2026-28, while the beginning of operations in the offshore wind harbour – 2026. There are also plans to create a new public-friendly cruise ship terminal. Last but not least, this year, the Port of Klaipėda received the Port Environmental Review System certificate.

How ports can be a catalyst for decarbonisation and air quality improvement was a topic raised by Yücel Yıldız (Rightship). The speaker presented his company’s Maritime Emissions Portal designed to support ports in reducing their emission levels through data-driven insights. The tool combines information from the Automatic Identification System and vessels to identify problem areas, hence highlighting opportunities to reduce environmental impact.

The green port strategy: which technologies offer the highest return on investment in terms of costs and benefits? discussion panel topped this year’s BPC. The debate was put in motion by Rafał Zahorski (Szczecin and Świnoujście Seaports Authority), who underlined that from the perspective of developing ports, it’s not only about investing in solutions and technologies that make operations less burdensome on the environment (and here, Rafał would place his bet on hydrogen), but also in ones and in such manner that doesn’t compromise port competitiveness. Asked about where to start a port’s green journey, Eirik Hooper (Drewry) underscored that it’s impossible to move forward in a truly impactful way without first carrying out a thorough analysis of one’s port. Otherwise, he stressed, one might end up investing in something that won’t deliver the expected results. External help, especially for smaller ports that have their hands full with daily hustle and bustle, can come in handy. Einar Marthinussen (Port of Oslo) agreed and shared his organisation’s path towards pinpointing (together with the City of Oslo) a green masterplan that consists of 17 points that the Norwegian seaport has been working on for many years. He also said that it’s a living project, where goals and tools need to be adjusted to hit that green nail on the head in the most optimal way.

See you in 2025!

The Baltic Ports Organization and the Port of Gdańsk have the pleasure to invite You to Poland for next year’s edition of BPC. The event will take place on 6-8 October and will be held together with the Baltexpo trade fair. See you All in the South of our beautiful Baltic! ‚

The Port of Opportunities

The Port of HaminaKotka is a versatile Finnish seaport serving trade and industry. The biggest universal port in Finland is an important hub in Europe and in the Baltic Sea region.

Welcome to the Port of HaminaKotka!