Julien Boulland, Sustainable Strategy Leader and Head of Bureau Veritas Marine & Offshore’s Future Shipping Team, explores the current deadlock in the maritime industry’s transition to low and zero-carbon fuels.
The introduction of the FuelEU Maritime regulation marks a significant step towards accelerating shipping’s transition to low-carbon fuels. However, despite the push for greener technologies, the industry is grappling with a persistent challenge: the development of supply chains for these new fuels.
Recent developments, such as Maersk’s decision to choose LNG DF propulsion for a substantial raft of new orders after pioneering the world’s first methanol-powered container ship, highlights the complexity and high stakes involved in transitioning to new fuels, and the critical decisions shipowners face regarding fleet retrofits and renewals.
The current landscape
A central issue is the availability of low and zero-carbon fuels like renewable hydrogen, methanol, and ammonia. Although these fuels are essential for decarbonization, their production and supply are still in their infancy. This creates a “chicken-and-egg” scenario. Fuel producers are hesitant to scale up production without the certainty of a strong and steady demand from the shipping sector. On the other hand, shipowners are reluctant to invest in vessels powered by new fuels without assurance of their availability. This dynamic creates a vicious cycle where neither side can make the necessary commitments to move forward, impeding progress and delaying the transition to a low-carbon shipping sector.
The role of carbon insetting
Carbon insetting emerges as a vital tool to bridge the gap between fuel producers and buyers. Unlike carbon offsets, which compensate for emissions through external projects, carbon insetting focuses on reducing emissions within the supply chain itself. This approach involves issuing digital certificates, known as “insets,” which represent the emissions savings achieved by using renewable or low-carbon fuels, compared to conventional fossil fuels.
These insets are verified through proof of sustainability (PoS) certifications issued by independent bodies to ensure the credibility of environmental claims. The certificates can then be exchanged using a book-and-claim methodology, allowing for digital verification and trade on a dedicated registry. This method promotes transparency and trust, providing greater assurance regarding the environmental credentials of the fuels being used and creating a more cohesive and effective market for green fuel adoption.
By providing credible pathways for carbon reduction and reliable verification, carbon insetting builds trust and confidence among stakeholders and encourages investment in green fuel infrastructure. It aligns the interests of fuel producers and shipowners, facilitating the development of a robust supply chain for low-carbon fuels.
Best practices and solutions
To maximize the potential of carbon insetting, the maritime industry must embrace this approach and work collaboratively to overcome challenges related to fuel availability and supply chain development. This requires continued innovation, investment, and cooperation among stakeholders across the entire value chain.
Effective collaboration between maritime and land-based sectors is essential. Shipping must work closely with fuel producers, infrastructure developers, and regulators to build confidence and establish robust supply chains and standards. Key initiatives include improving fuel supply visibility, scaling production, and developing cross-sector partnerships. Furthermore, implementing fuel certification and “book-and-claim” systems will ensure fuel quality and support market growth, while lifecycle analyses of fuels and assets will guide sustainable and informed decision making among shipowners and investors.
However, scaling up green fuel production demands substantial investment and coordination. Fuel producers need consistent demand signals from the shipping sector, while shipowners require reliable fuel availability to make fleet decisions. This is why clear communication and transparency regarding fuel availability, production capacity, and environmental performance are crucial for encouraging investment and commitment.
While new solutions are being developed, immediate action that leverages existing measures to enhance fleet efficiency will also play a huge role in reducing emissions in the short term. As evidenced in Bureau Veritas’ study which models potential decarbonisation pathways, embracing measures such as reducing speed and waiting times could have a significant cumulative impact.
The role of classification societies
In order to achieve the IMO’s ambitious decarbonisation targets, collaboration from across the global supply chain will be vital. As a result, BV recently established the Future Shipping Team (FST) to bring together expertise from both within and outside the maritime sector to address the energy transition challenges. With over 250 experts across 12 workstreams, the FST focuses on emerging fuels, advanced technologies, lifecycle assessments, and ESG progress. Through advancing research, fostering strategic partnerships, and developing new standards, we are supporting the maritime industry’s decarbonization efforts and driving the transition to low-carbon fuels.
Bureau Veritas not only ensures the safety of shipping operations but also supports the adoption of innovative technologies. Our role involves developing rules and standards that facilitate safe, reliable advancements while building trust among stakeholders to accelerate the development of sustainable shipping solutions.
Moving forward
The journey to a sustainable maritime future presents significant challenges, but it is one that can be navigated with determination and innovation. Addressing the “chicken-and-egg” dilemma and leveraging solutions like carbon insetting are crucial for overcoming barriers and accelerating the transition to low and zero-carbon fuels.
Collaboration is key. By developing clear standards, robust infrastructure, and effective partnerships, the maritime industry can tackle supply chain issues and meet decarbonization goals.
Bureau Veritas and our Future Shipping Team are committed to leading this transition, driving the development of integrated and efficient systems for green fuel production and distribution.
Immediate and concerted action is essential. Only through a unified effort can the industry address fragmentation, achieve its environmental objectives, and ensure a cleaner, more sustainable future for maritime transportation.
The views presented are only those of the authors and do not necessarily reflect those of SAFETY4SEA and are for information sharing and discussion purposes only.