Decarbonisation leading to sustainable shipping future

Decarbonisation for the marine sector is a voyage, much like the evolution from sails to steam to bunker oil, according to a leading marine insurer. And understanding risk, sharing knowledge and staying at the forefront of the latest developments are key, said Krester Krøger Kjær, senior vice-president and head of Skuld Copenhagen. In a recent article, Krøger Kjær acknowledged that it can be a little frustrating that some people assume that alternative fuels, green technology and new solutions automatically mean there is more risk involved, which he said is not the case. “We’ve had, and continue to have, excellent experiences with members supporting and adopting decarbonisation – and that ranges from insuring battery-powered ferries to methanol-fuelled containerships, and ships using transition fuels like LNG and biofuel, through to vessels with carbon-reducing technologies on board like rotor sails. The real risk is in resisting the transition,” he said. He added: “There’s been a tangible change in the past decade. We’ve gone from tentatively talking about solutions to active involvement in supporting the industry transition. There are a lot of member vessels out there now with cutting-edge technology tailored to reduce emissions, operated by rightfully proud shipowners. And this is just the start. This is an evolution – in the same way as we moved from sails to steam to bunker oil, we’re voyaging towards decarbonisation. We and our members have a vital role to play in that.” He highlighted the importance of having an in-depth knowledge of new fuels, solutions and technologies to ensure accurate risk modelling. “Having the expertise to understand the risk is absolutely fundamental for our underwriters to setting the right premium and terms, delivering a tailored package that is fit for purpose for everyone. There’s a real danger of inadequate pricing if you don’t possess adequate knowledge, and that can create another barrier on what is already a challenging path to decarbonisation,” he said. Krøger Kjær noted that regulations are increasingly complex, leading to additional member needs. “If we take two of the most recent examples – the EU Emissions Trading System and FuelEU Maritime – into consideration, these are extensive, complicated frameworks creating new demands for both owners and charter parties. So our members need assistance navigating that evolving landscape, particularly with regard to clauses, which we and the IG Clubs work extensively on.” He added: “Each new regulation is created with the best intentions, but these can get lost in the resulting storm of adoption. So it can be helpful to clarify these intentions and purposes and communicate them to members. For example, FuelEU is intended to accelerate the supply and demand for green fuel. If no ships buy green fuel, there’s no market, but if there’s a clear incentive to do so, the supply side has to respond. Do nothing and nothing will happen.” Krøger Kjær said he and his colleagues are committed to building internal knowledge, data and understanding, which can then be shared with members, industry bodies and through collaborative initiatives to help lay a stronger foundation for a sustainable shipping future. He concluded: “The speed of developments – from regulations to technology, commodities, new cargoes and next generation blue and green fuels – requires constant awareness and effort. But it is a privilege to be at the front line of this transition, playing our part in helping our members and our industry embrace change and reap rewards.”

Decarbonisation leading to sustainable shipping future

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