DNV’s Ørbeck-Nilssen on the need for partnership to speed decarbonisation

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Knut Ørbeck-Nilssen, CEO Maritime, DNV, says that while progress towards industry decarbonisation should be applauded, it must be accelerated. Shipping needs to work together, in tandem with other sectors and stakeholders, if we’re to stand a hope of reaching our most ambitious, and necessary, goals. Nor-Shipping, he believes, with its 2023 theme of #PartnerShip, is an ideal platform for progress.

In today’s uncertain times “big decisions can’t be taken alone,” he says. “Everybody needs partners; no one can prosper, or change, in isolation, and that’s especially true when we consider an energy and technology transition of the scale facing shipping. We need one another to navigate the future, now more than ever.”

Partnership is a cornerstone of his, and DNV’s, vision. Ørbeck-Nilssen has been quoted over the past year or two as noting that “collaboration is the true fuel of the future” and 2022, with its unpredictable geopolitical, economic and environmental challenges, seems only to have deepened that conviction.

He talks of “significant barriers” that have to be overcome together, but before addressing the future wants to dwell on the present – recognising achievements so far.

“It’s encouraging to see that some of the key issues highlighted in past editions of our Maritime Forecasts and Reports have been picked up by the industry,” he comments, referring back to previous statements identifying LNG as arguably shipping’s “most feasible transitional fuel”.

“If we look at newbuild ordering there’s now an established trend for alternative dual-fuel propulsion, with LNG as the dominant fuel, especially amongst the larger, deep-sea segments. A third of the vessels on the orderbooks, by gross tonnage, are being built to operate on alternative fuels, with LPG and the first hydrogen-fuelled designs also generating interest. So, we can see concrete proof that the transition is gathering pace, with regulatory pressure, access to investment and capital, and cargo owner and consumer demands as the key drivers.

However, Ørbeck-Nilssen says that “substantial investment” is needed – “and quickly” – in terms of researching safe and economically feasible carbon neutral fuels, as well as developing the optimal technologies to utilise them. And that will be in vain, he stresses, if the main hurdle to progress can’t be overcome, namely fuel availability.

“According to our recent Maritime Forecast to 2050 report, we need to produce 5% of shipping’s total energy consumption from carbon-neutral fuels by 2030,” he says. “That requires huge investment… and it’s just the start.

“And if the IMO strategy is revised in 2023, pushing for full decarbonization by 2050, then we require the means and infrastructure to deliver around 270 million tonnes of alternative fuels, according to our research. That is a massive challenge, and it requires action, now.”

He continues: “It goes without saying, this is an issue that shipping cannot resolve alone. We need to see collaboration in the industry, for sure, but beyond that we have to work in unison with energy producers, infrastructure developers, ports, and, not least, national and international authorities and organisations to enable such fundamental change. This goes beyond working within our ‘tribes’ – it’s a global issue of critical importance.”

But which route to take – should a shipowner today invest in assets running on natural gas for tomorrow, or will it pay to be an early mover on hydrogen, ammonia or any other emerging alternative?

This, says Ørbeck-Nilssen , is where DNVs ‘pathways’ – as featured in the latest Maritime Forecast to 2050 – come in. These detail likely scenarios on the journey towards decarbonisation, considering factors such as fuel availability, costs and the apparent lack of one ‘silver bullet’ solution.

As an example, he picks an owner opting for LNG today. “Now, they know this isn’t a perfect fuel but it enables substantial gains over conventional heavy fuel, utilising proven technology. So, on the ‘gas pathway’ they use LNG as the first step, before switching to bio-gas and then later transitioning to synthetic gas. That’s an over-simplified example, but it shows how you create clarity as you move ahead with business strategy and investments.”

A further example of that, and of DNV’s role as a key enabler for an industry in transition, is the recently unveiled Nordic Roadmap initiative. This follows on the back of the Clydebank Declaration at COP26, where shipping “green corridors” were identified as a key tool for accelerating change.

In a bid to position the region at the vanguard of developments, the Nordic Council of Ministers, with support from all the Nordic nations, set up the project as a “cooperation platform” creating unity of purpose. The result is a joint public and private initiative aiming to bring together diverse stakeholders to enable green corridor infrastructure, start pilots, share knowledge, build alternative fuel experience and, Ørbeck-Nilssen says, “set an example for other regions to follow.”

DNV has been brought in as project manager, recently hosting the first meeting at the company’s Høvik HQ in Oslo.
“When you look at the industry in its entirety, the scale and complexity of change needed can seem overwhelming,” he notes. “But if you take separate regions, and look at establishing individual green corridors, it makes the challenge more manageable. Then, when you bring together diverse partners, it’s suddenly possible to work towards concrete, achievable goals – goals that can form a blueprint for the industry in general.

“It’s a really exciting example of partnership in action,” he concludes, reminding that the 2023 edition of Nor-Shipping,
taking place in Oslo and Lillestrøm, 6-9 June, has chosen #PartnerShip as its main theme.

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