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Shipping sector prioritises five solutions for decarbonisation

80 senior shipping executives set out an industry roadmap to decarbonise shipping in new Shell and Deloitte report.

Shell together with Deloitte Netherlands and Deloitte 麻豆传媒 today published joint research outlining industry perspectives on decarbonising the shipping sector. The 鈥淒ecarbonising Shipping: All Hands on Deck鈥 report sets out the views of senior shipping executives from across the sector and presents a roadmap of solutions to help the industry meet the International Maritime Organization鈥檚 (IMO) ambition to reduce carbon emissions.

鈥淲e know that shipping is one of the harder sectors to decarbonise, which is why we are working with our customers and the wider industry to identify possible solutions,鈥欌 said Huibert Vigeveno, Downstream Director of Shell. 鈥淭his report shows the urgent effort required by industry to reduce carbon emissions. It stems from Shell鈥檚 own ambition to be a net-zero emissions energy business by 2050 or sooner. To achieve that, we need to work with our customers.鈥

An overwhelming 95% of shipping executives interviewed view decarbonisation as important or a top-three priority and nearly 80% noted that its importance had increased significantly over the past 18 months.

  • 85% of interviewees saw market and customer demand as a major factor driving change towards decarbonisation
  • 80% of interviewees saw technology alignment as a major factor in making decarbonisation feasible
  • 65% of interviewees saw ease of replacing infrastructure as a major factor in being able to make change happen at speed and scale

Grahaeme Henderson, Vice President Shell Shipping & Maritime, said "While shipping leaders are rightly focused on the current challenges of the COVID-19 pandemic, our research shows that they still have their sights on the horizon and identify decarbonising shipping as a top priority. In conducting this unique study involving detailed interviews with more than 80 of shipping鈥檚 top executives, we have been able to better understand the views of our customers and the broader shipping sector. The research identified the barriers the industry faces, solutions that will drive progress, and how we can work to help accelerate change. We want to catalyse progress towards a net-zero emissions shipping industry and working together will be crucial to implementing these solutions.鈥

Tarek Helmi, Partner, Deloitte Netherlands, said 鈥淭he insights from the research give us a comprehensive roadmap to unlock decarbonisation by identifying who needs to do what, and when to drive change.鈥

Based on in-depth interviews with senior shipping executives across Europe, Asia and North America, the report presents a consolidated roadmap of how to accelerate decarbonisation of the shipping sector. It prioritises five solutions to be implemented over the next two to three years that could speed up progress:

  • Scale up customer demand: create scale in demand for zero-emission shipping through charterer鈥檚 commitments such as long-term contracts and green procurement criteria.
  • Global regulatory alignment: create a level playing field by aligning decarbonisation targets and timelines between the IMO and major local regulatory bodies.
  • Cross-sector R&D: accelerate company partnering to develop a zero or low-emission fuel through joint research and development (R&D) across shipping, onshore sectors in which change is hard to achieve and the energy industry.
  • Scale up controlled pilot projects: accelerate R&D by running end-to-end green pilot projects involving charterers, operators, owners and ports on specific routes and vessel types.
  • Coordinated industry commitment: increase the reach of existing initiatives and implement independent coordination mechanisms to choreograph action and areas of responsibility.

In addition, operational efficiency, is identified as the foundation for the transition process, enabling reduced emissions from the current fleet through accelerated implementation of operational measures. This includes fuel and lubricant quality, digitalisation, and the use of data and smart navigation strategies.

Other solutions identified in the report would follow to increase the scale of the change.

Download the 鈥淒ecarbonising Shipping: All Hands on Deck鈥 report at www.shell.com/DecarbonisingShipping

Notes to editors

About the 鈥淎ll Hands on Deck鈥 report

  • Deloitte interviewed 82 senior shipping executives from 22 countries across Europe, Asia and North America for this research project. Participants represented key players across the shipping ecosystem and included customers, ship owners, ship builders, operators, charterers, port authorities, regulators, technology providers and financiers.
  • The report outlines 12 solution themes identified by the industry as necessary to unlock shipping decarbonisation: 1) Scale-up customer demand; 2) Global regulatory alignment; 3) Cross-sector R&D; 4) Scale-up controlled pilot projects; 5) Coordinated industry commitments; 6) Flexible and modular design; 7) Port coalitions; 8) Investor pressure; 9) Green finance; 10) Scale-up fuel production; 11) Scale-up bunkering infrastructure; and 12) Operational efficiency. These are all described in detail in the report.
  • The 鈥淎ll Hands on Deck鈥 report is part of a wider project of collaboration between Shell and Deloitte to look at other hard-to-abate sectors and explore views on barriers to decarbonisation, and potential solutions.

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Disclaimer

This press release contains data and analysis from Shell鈥檚 Sky scenario. Unlike Shell鈥檚 previously published Mountains and Oceans exploratory scenarios, the Sky scenario is based on the assumption that society reaches the Paris Agreement鈥檚 goal of holding the rise in global average temperatures this century to well below two degrees Celsius (2掳C) above pre-industrial levels. Unlike Shell鈥檚 Mountains and Oceans scenarios, which unfolded in an open-ended way based upon plausible assumptions and quantifications, the Sky scenario was specifically designed to reach the Paris Agreement鈥檚 goal in a technically possible manner. These scenarios are a part of an ongoing process used in Shell for over 40 years to challenge executives鈥 perspectives on the future business environment. They are designed to stretch management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes.

Additionally, it is important to note that as of July 7, 2020, Shell鈥檚 operating plans and budgets do not reflect Shell鈥檚 Net-Zero Emissions ambition. Shell鈥檚 aim is that, in the future, its operating plans and budgets will change to reflect this movement towards its new Net-Zero Emissions ambition. However, these plans and budgets need to be in step with the movement towards a Net-Zero Emissions economy within society and among Shell鈥檚 customers.

Also, in this press release we may refer to Shell鈥檚 鈥淣et Carbon Footprint鈥, which includes Shell鈥檚 carbon emissions from the production of our energy products, our suppliers鈥 carbon emissions in supplying energy for that production and our customers鈥 carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions. The use of the term Shell鈥檚 鈥淣et Carbon Footprint鈥 is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries.

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