A digital ecosystem accessible to all stakeholders is emerging to enable the transition to a circular economy in shipping, but new global regulations are needed to drive the shift as the industry lags other sectors in realising huge value creation potential, according to Varuna Sentinels.
“There is a growing awareness among shipowners of the need to adopt circularity in their business by taking a lifecycle approach to assets as they realise this is important for their ESG profile, given the heightened focus on sustainability across the shipping value chain,” says Varuna Sentinels director Rakesh Bhargava.
“While ESG is a big commercial driver for circularity, a major barrier to adoption is the lack of clearly defined global requirements and standards. This means there are no criteria for benchmarking to measure performance in this area in order to determine a company’s ESG score, which is needed for stakeholders to make the right investment decisions.”
The circular economy is based on principles of reuse and recycling to increase the circular flow of existing materials and use fewer natural resources, thereby curbing waste and pollution from carbon-intensive manufacturing processes, as opposed to the linear model of buy, use and waste.
In the case of shipping, this means incorporating circularity throughout a ship’s lifecycle from design, construction and operation to end-of-life recycling to promote reuse, repair, refurbishment and repurposing of materials to extend the lifetime of the vessel and its components.
This will require lifecycle assessments of newbuilds to determine their carbon footprint from sourcing of raw materials such as steel, through design, manufacturing, operations, logistics and end-of-life management.
Varuna Sentinels, a Netherlands-based fleet management, IHM and sustainable ship recycling consultancy, already has such a system in place with its so-called VSIMS software platform that is presently used to track hazardous materials throughout a vessel’s lifetime, in line with the IHM Maintenance requirements of the Hong Kong Convention and EU Ship Recycling Regulation.
Varuna Sentinels director Sanjeev Weweinke-Singh believes this platform could serve as an enabler for the maritime circular economy as it can easily be expanded to track all product inputs and outputs on a vessel across its lifecycle.
The software’s blockchain technology can map the origin and journey of each ship component to provide transparent sustainability data for product benchmarking from cradle to grave, offering a global database of compliant products and suppliers for multiple stakeholders able to access the system via a unique user ID.
“This can be a model for the rest of the supply chain to include circularity by design in every single product used during the build and operation phase of the ship’s lifecycle,” Weweinke-Singh says.
The company is pursuing an open-source project based on its proprietary software, which he says could ultimately be hosted by a neutral party such as an NGO given the complexity of such an ecosystem with a diversity of stakeholders as “this is too big for any one party to handle alone”.
Varuna Sentinels is already working with several shipowners seeking to go beyond current ESG requirements by incorporating circularity in their businesses.
