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  • Writer's pictureNikos Doukas

M. Pantazopoulos: Strategies for Resilience and Innovation in the Shipping Industry

Dr. Michalis Pantazopoulos, Senior Vice President & General Manager of the Liberian International Ship & Corporate Registry’s (LISCR) Piraeus office, managers of the Liberian Registry
Dr. Michalis Pantazopoulos, Senior Vice President & General Manager of the Liberian International Ship & Corporate Registry’s (LISCR) Piraeus office, managers of the Liberian Registry

The shipping industry faces numerous challenges, including decarbonization, digitalization, geopolitical tensions, labor shortages, and environmental regulations. To remain resilient and committed to change, the industry will need to adopt a number of strategies.  We briefly present the issues and dealing strategies from the perspective of the Liberian Flag Administration.

Decarbonization, Net-Zero GHG Emissions and Environmental Regulations

The maritime industry is at a crossroad mainly caused by the environmental challenge, and the response to this huge challenge needs the maritime industry to transform to a net-zero Greenhouse Gas (GHG) emission industry by or around 2050, as also required by the revised IMO GHG Emissions Reduction Strategy that was adopted at the IMO MEPC 80 meeting in July 2023. This revised IMO GHG Strategy is a significant strengthening of the initial strategy that was adopted at MEPC 72 in 2018 and was ‘only’ pursuing efforts to reduce CO2 emissions of 70% by 2050. Now the target is 100% reduction of all GHGs by or around 2050 on a well-to-wake basis, i.e. net-zero GHG emissions by 2050.

Fortunately, we are in the midst of embracing the challenges and opportunities of the 4th Industrial Revolution, and this together with an agile and adaptive international regulatory framework from the IMO, we as an industry, stand a realistic chance to respond well and in a timely manner to the environmental challenge.

There is a challenge though as the IMO does not always recognize and provide the desired benefits from adoption of innovative design features, new technologies and alternative fuels.

  Whilst the IMO regulations for ship designs have changed over the recent years from prescriptive rules and regulations to now goal-based standards and risk assessment-based regulations allowing for the much-needed innovation in ship design, the IMO environmental regulations do not always recognize these innovative solutions in terms of their contribution to GHG emissions reduction.  As an example, can be mentioned onboard carbon capture systems that can significantly reduce the GHG emissions from ships but currently the environmental regulations (EEDI, EEXI and CII) do not recognize these systems. Several proposals to reflect onboard carbon capture systems in the regulatory framework have been submitted to IMO but these have not yet been fully discussed and concluded upon, hence the process of identifying and allowing practical solutions to support the GHG emissions reduction needs to be accelerated with the same priority as strengthening the IMO GHG strategy.

To fully utilize the opportunities for innovation and adoption of new technologies that the regulatory framework now allows, we need close global collaboration between all high-quality and forward-looking stakeholders (shipyards, design companies, classification societies, engine manufacturers, innovative technology companies, shipowners/managers and other relevant stakeholders) and thereby unlock the potential to decarbonize international shipping and eventually reach net-zero GHG emissions shipping. To do this we need to increase collaboration and secure funding to undertake research and development projects. IMO has now embarked on developing the mid-term measures of the 2023 IMO GHG emissions reduction strategy, and it is expected that these measures will be a combination of a technical measure and an economic measure. The technical measure will probably be a Global Fuel Standard (GFS) and the economic measure a GHG levy or a feebate mechanism to incentivize increasing the uptake of net-zero or near net-zero GHG emission fuels. It is anticipated that the funding collected from the economic measure will also be allocated to fund the much-needed innovative joint industry research and development projects.

In this context the Liberian Registry has been forward thinking and since 2016 been actively involved in joint industry projects (JIPs) and our involvement is steadily increasing. Over the last 3 years, we have participated in over 35 JIPs and we expect this to increase further until we have developed and approved the net-zero emission vessel of the future and its application in international shipping is feasible and sustainable.

In regard to the net-zero GHG emissions, it should be noted that at the MEPC 80 meeting in July 2023, IMO also adopted the Guidelines on Life Cycle GHG Intensity of Marine Fuels (IMO Resolution MEPC.376(80)), also known as the LCA (Life Cycle Assessment) Guidelines, and these guidelines provide guidance on life cycle GHG intensity assessment for all fuels and other energy carriers used on board a ship. They cover well-to-tank, tank-to wake, and well-to-wake GHG intensity and sustainability aspects related to marine fuels and energy carriers (e.g. electricity for shore power) used for ship propulsion and power generation onboard. The relevant GHGs included are carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The well-to-wake approach is complex and present challenges in terms of accurately reflect and document the GHG emissions as it covers the entire process from feedstock extraction, cultivation, recovery, feedstock conversion to a fuel product, transportation as well as distribution, bunkering, and fuel utilization on board a ship. However, compared to absolute zero GHG emissions (i.e. tank-to-wake) the well-to-wake concept offers theoretically more fuel types with pathways to zero GHG emissions. Especially in combination with onboard carbon capture systems and/or other systems and energy efficiency technologies there could be a variety of pathways to net-zero or near net-zero GHG emissions.

Although international shipping transports about 90% of all global trade and only emits less than 3% of the world’s global emissions, our industry including IMO is committed to decarbonize and reach net-zero GHG emissions by mid of this century. The maritime industry is on the right track to tackle the immense environmental challenge; however, we have just embarked on decarbonization and the journey towards net-zero GHG emissions, and there is a lot of hard and dedicated work ahead for our industry to reach the levels of ambition in the IMO GHG emissions reduction strategy.

Going forward the Liberian Registry is dedicated to continuing to lead the way for Flag Administrations to support our shipowners to decarbonize international shipping through our involvement at the IMO and in joint industry and research projects. These projects can pave the way to find solutions to fully decarbonize international shipping in a sustainable way and ensure transportation of cargo remains competitive.

On the issue of Environmental regulations, the shipping industry must comply with all applicable environmental regulations. This includes regulations on air and water emissions, waste disposal, and ballast water management.

By investing in clean technologies, the shipping industry can reduce its environmental impact by using emission control systems, advanced wastewater treatment systems, and energy-efficient ship designs.

Finally, it is about time that the shipping industry start collaboration with environmental organizations to develop and implement sustainable shipping practices.

On the Digitalization front, the shipping industry can improve its efficiency and resilience by adopting digital technologies such as artificial intelligence (AI), big data, and blockchain. These technologies can be used to optimize ship operations, improve supply chain visibility, and reduce fraud.  At the same time, shipping will need to invest in training and education to ensure that its workforce has the skills to operate and maintain digital systems.  A need for development of digital infrastructure such as high-speed data networks and secure data centers to support its digital transformation may arise in the years to come.

On Geopolitical tensions, while shipping operates under operates under most challenging conditions perhaps shall consider reducing its exposure to geopolitical tensions by diversifying its supply chains. This can be done by using multiple ports and shipping routes, and by sourcing goods from a variety of countries.  Contingency plans development may be required to deal with disruptions caused by geopolitical tensions. These plans should include alternative shipping routes, secure storage facilities, and insurance coverage.

Labor shortages is and would be one of the major challenges for shipping moving forward.  As such, the industry will need to invest in training and education to attract and retain qualified workers. This includes training for seafarers, port workers, and logistics professionals.  Moreover, promotion of diversity and inclusion is required to create a more welcoming and attractive workplace for all employees.  Last but not least, improvement of working conditions to attract and retain workers is most critical inclusive of provision of competitive wages and benefits, safe and healthy work environments, and opportunities for career advancement.

By adopting these strategies, the shipping industry can maintain its resilience and its commitment to change, and continue to play a vital role in the global economy.

A Shipping Partnership

As a final word, shipping is an industry of partnership and not a one-way street, and we, the Liberian Registry, are committed to making sure to share with shipowners our experiences, our networks, our technology, and our global network to ensure their vessels get the support they need to operate in an ever changing and increasingly complicated regulatory environment.   The aim for continuous improvement, innovation, technology utilization to improve existing system for ships to operate efficiently, safely and environmentally friendly is a continuous effort, and Liberia is committed on this continuous effort that will improve not only shipping but the community at large and this is a commitment more than ever now.


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