London: The shipping sector could save $70bn in fuel costs each year through relatively minor adjustments, claims one of the founders of the Carbon War Room. Peter Boyd, coo of the think tank, is a big believer in retrofitting the existing fleet, he tells Maritime CEO in a wide-ranging interview today.
“Just 30% efficiency savings through the adoption of clean technologies and operational measures, at current bunker fuel prices, would equate to a US$70bn saving across the industry,” he says, adding: “With sustained high fuel prices and low levels of income, all players, whether environmentally progressive or not, have a shared objective – to reduce bunker fuel consumption and its associated costs.”
The 2009-founded Carbon War Room, inspired in large part by British entrepreneur Richard Branson, focuses on accelerating solutions to climate change that can be profitably achieved today, under existing policies and using proven technologies.
Although there is an appetite to finance newbuild ecoships at the moment, Boyd says market conditions point to retrofitting the existing fleet as a more beneficial and sustainable solution for the industry.
“It offers,” he says, “a low-cost, high-value alternative to bolstering an international fleet already at overcapacity. Retrofitting the existing fleet in order to compete with newbuilds would avoid a two-tier market, and balance out the supply and demand of vessels.”
However, in a market with little capital and credit, and with so many vessels effectively owned by banks, securing the finance for retrofitting comes with challenges.
To confront those challenges, Boyd explains that the Carbon War Room has formed partnerships with a number of key stakeholders “to push the boundaries of perceived wisdom” in shipping finance.
“By linking shipowners, managers and charterers to third-party funders who can finance the technology retrofits, the industry can create new financial mechanisms that will drive further progress,” he claims.
Carbon War Room’s vessel efficiency drive is probably best known in the industry through the development of the ‘A-G’ vessel greenhouse gas rating index developed in partnership with RightShip and hosted on www.ShippingEfficiency.org.
“With this information available to the market, and charterers, ports and banks holding the ability to identify an efficient ship from a less efficient ship, we are helping to accelerate the demand for more efficient vessels by highlighting the commercial benefits of using these ‘A-G’ ratings,” Boyd claims. Currently, 20% of the non-container fleet is using the ‘A-G’ index to choose more efficient vessels, and ports are offering incentives to higher-rated vessels.
Shipping has a long way to go in the battle to be green, but Boyd believes it is on the right path. Market conditions, he reckons, are a more powerful incentive than the threat of regulation. [05/09/13]
