Industry-first Sustainable Marine Fuel Confidence Index identifies ‘here and now’ gaps and challenges in evolution of new shipping fuels
The Sustainable Marine Fuel Confidence Index (SMF Confidence Index), launched today (18 January), captures a ‘moment in time’ view of how confident shipping and marine fuel industry stakeholders are that the key components required for maritime’s energy transition, such as technology and infrastructure, are already in place.
There’s no shortage of reports, analysis and opinion on the rate of progress of shipping’s decarbonisation and, more specifically, on the development of new low or net zero carbon marine fuels. However, most of the reporting is focussed on industry’s potential readiness to meet future milestones and timelines aligned, for example, with International Maritime Organization (IMO) targets which were recalibrated in its revised greenhouse gas strategy delivered at MEPC 80 last July or the raft of new EU legislation which supports the ambitions of the European Commission’s ‘Fit for 55’ basket of measures.
Where the SMF Confidence Index stands apart from other industry surveys is that it cuts through some of the ‘decarbonisation hype’ and offers a pragmatic, realistic assessment by industry of the availability and accessibility of the required tools for decarbonisation at a given moment in time.
The inaugural Index was created at the Sustainable Marine Fuel Fest (SMF Fest), organised by uncommon conferences and ship.energy, which took place on 15-16 November 2023 in Valencia. This ‘by industry for industry’ event brought together stakeholders from across the marine fuel value chain who stress tested and then populated the SMF Confidence Index, which is based on a framework developed by SMF Fest industry partners who represent companies that are interested in, and responsible for, the delivery of shipping’s energy transition. They include technology providers (Wärtsilä, GTT), a class society (Bureau Veritas), an industry association (The Society for Gas as a Marine Fuel), a marine energy supplier (Peninsula) and a shipowner (Hapag-Lloyd).
This first Index provides a baseline from which to chart and compare changes in industry confidence in shipping’s energy transition according to four key criteria (Technology, Infrastructure, Commercial and Environmental Credentials) and using five deep sea vessel segments: containerships, dry cargo, gas carriers, passenger vessels and tankers. These criteria/vessel segments are considered in relation to the use of 12 marine fuels (including grey/blue/green variants).
Participants at SMF Fest were representatives of a broad cross-section of industry stakeholders, all of which have a sharp focus on decarbonisation and sustainability within their respective corporate strategies. The Index’s confidence span ranged from ‘not at all confident’ to ‘very confident’ and a key takeaway from the exercise was that the contributors to the index are cautious about the commercial and operational readiness of most of the new fuels and their perception is that there are currently significant gaps and challenges to be resolved in the development of these fuels across one or more of the criteria used for their assessment.
The contributors also provided reasons for their low to no confidence values which should provide a roadmap for the industry on those areas to be worked on order to accelerate the uptake of (and confidence in) the green fuels. This data is being fleshed out and will be made available in a few months’ time.
A comment by one contributor to the Index reflected a significant body of opinion at SMF Fest: ‘It’s very easy to look forward to what is expected to happen, but it’s quite difficult to focus on the here and now.’
This viewpoint both validates the premise that there is a need for a ‘moment in time’ assessment of progress on shipping’s decarbonisation and supports the ambition that the index can fill an information/perception gap that currently exists within the sector.
SMF Fest industry partner Hapag-Lloyd commented on the results of the inaugural SMF Confidence Index: ‘We believe the Index is an important piece of the overall big puzzle on how to decarbonise the maritime industry.
‘Coming up with a joint view on the different fuels, across different shipping sectors, will help to understand and carve out the critical points that need to be addressed in the industry to unlock the required solutions for the different market participants.
‘The constant reiteration of the Index will further sharpen this specific view angle in the future.’
Industry partner GTT said: ‘At GTT we acknowledge the importance of certainty for our customers, and we believe this “here and now” Confidence Index provides a tangible basis for their future fuelling strategy.
‘It’s also encouraging to see the high confidence levels in bio and synthetic LNG as important fuels in shipping’s decarbonisation journey.’
The first SMF Confidence Index is a working document. The decarbonisation landscape is continually evolving – as are the responses of industry stakeholders to it – and the Index will reflect these changes. When we refresh the Index, the goal is to investigate what has moved the needle for a particular fuel(s) and apply those learnings to other fuels, thereby speeding up the energy transition, and moving on from the ‘wait and see’ approach which is currently being taken by many shipowners.
Contributors will revisit its findings in mid-2024 and the Index will be fully updated at the next SMF Fest which will take place in the autumn at a location soon to be announced.
The Sustainable Marine Fuel Confidence Index – Overview
The Sustainable Marine Fuel Confidence Index Report and detailed breakdowns of fuels measured against vessel segments and against key criteria can be accessed here
The following organisations contributed to building the SMF Confidence Index:
Anthony Veder, Avenir LNG, Baleària, Bureau Veritas, COSCO SHIPPING Lines (Spain) S.A., France Gaz Maritime, Fundación Valenciaport, Gasum, Glander International Bunkering, GTT, Hapag-Lloyd AG, HYEX Safety AS (representing ZESTAs), Lookout Maritime, LP Brussels, Naturgy, Oceanbird, OCI Fuels B.V., Peninsula, SEA-LNG, Society for Gas as a Marine Fuel, ship.energy, Sphera, Trafigura Maritime Logistics PTE Ltd, Turn2X, UMAS, Vertis Environmental Finance, VPI Logistica, S.A., VT Group, Wah Kwong Maritime Transport, Wärtsilä Marine and Zero North.