NBAS, in partnership with Maritime and Port Authority Singapore, the Norwegian Embassy and Innovation Norway, is hosting a special insights panel on decarbonization in the maritime industries in conjunction with Singapore Maritime Week. DNV is our gold sponsor for the event. This op-ed is written by Cristina Saenz de Santa Maria, Regional Manager South East Asia, Pacific and India, Maritime at DNV.
As global transformations continue to shape the future of maritime, Covid-19 is challenging business as usual. Once again, the maritime industry has proven resilient in the face of crisis. The shipping market has been impacted by the pandemic but has not been hit as hard as initially anticipated. Decarbonization of the industry has also continued despite the challenges of Covid.
Travel and gathering restrictions during the pandemic have served to accelerate digitalization greatly. We in DNV and many others who were already underway with digitalization processes were able to ramp up our levels of digital activity rapidly, raising the share of remote services to our customers. It has been more than a year now since the pandemic first surfaced in the region. In this article, I would like to share my key reflections on the maritime industry in South East Asia, Pacific and India.
1) A humanitarian crisis for seafarers
The pandemic has led to a humanitarian crisis for seafarers stranded by travel restrictions. There are about 400,000 crew that have had to work beyond their contractual agreements, with fatigue and stress creating a critical safety threat. Despite this, seafarers are still without “essential worker” status one year into the crisis. This is a situation that must be resolved as quickly as possible. One positive development toward relieving crew distress is the progress on vaccination, with Singapore among the leading nations.
We are working to mitigate the impact of Covid-19 on our workers, including taking all necessary precautions to protect our surveyors, who are on the frontline of exposure when they board ships. In this regard, it is very positive that all our surveyors in Singapore have been vaccinated already, thanks to the great support from MPA. Fortunately, we have had zero cases of Covid amongst our regional staff to date. Despite changes in the way we work, the pandemic has not impacted DNV’s ability to deliver our services.
2) Helping cruise handle the crunch
Cruise was the segment hit hardest by the pandemic, and we have been active in devising and helping to implement measures to allow continued activity in the industry. In late spring of 2020, we introduced CIP-M, a unique certification in infection prevention adapted for the maritime industry first implemented by Genting Cruise Lines on their Explorer Dream vessel. We also helped to introduce the CruiseSafe audit and certification program developed by the Singapore Tourism Board and DNV, now mandatory for cruise lines sailing from Singapore, allowing Genting and RCI to offer “cruises to nowhere” since November 2020. More than 100,000 Singapore residents have set sail since the programme started, with not a single Covid-19 case on board to date.
When I look at the overall shipping market, newbuilding orders were down by 20 percent in 2020, despite a strong upturn toward the end of the year. DNV was nonetheless entrusted with a wide range of complex projects over the course of the year, giving us a 25 percent global market share in contracting and 38 percent in the region. Some of the highlights in Southeast Asia, Pacific and India were three FPSOs, a series of innovative 15,000 TEU container vessels running on LNG, duel fuel shuttle tankers, LPG fuelled 40,000 cbm gas carriers, and a manned 6km deep-sea research submersible.
Our Maritime Advisory unit has also been busy with cruise infection prevention, digitalization, and decarbonization projects – a proof that owners trust DNV to help them navigate in challenging times of transformations.
3) Emissions drop, but pressure to change remains high
On a positive note, Covid-19 has led to a five-year leap forward in emissions reduction, with approximately eight percent reduction in global CO2 output. However, these levels must be continued to mid-century if we are to reach the 1.5-degree warming goal.
Reflecting this, the pressure on maritime stakeholders to make the change to sustainable power sources is still high. Both the finance industry and charterers are keen to set a green agenda for the maritime industry, but the uptake of alternative fuels in maritime is still not quick enough. Less than one percent of ships in operation are operating on battery, LNG and methanol combined. Of ships on order, we see the percentage is up to nearly ten percent if ammonia, hydrogen and LPG are included in the mix, which is an encouraging trend.
4) A diverse approach to complex issues
Use of LNG continues to rise, primarily in the US and Europe, but with several promising projects emerging in Asia as well, not least due to charterers stipulating LNG fuel in more of their tenders. This led to a promising growth in LNG as ship fuel, making up almost one third of total newbuilding orders in gross tonnage.
Source: Alternative Fuels Insight
Stakeholders across the board are taking a stronger look at ammonia and hydrogen as well, both for newbuilding and retrofits. We have also seen that the scrubber retrofit spike has passed, with orders peaking in early 2020 and returning to normal levels by the start of this year.
The transition to cleaner fuels must begin in earnest now. DNV believes the fuel mix of the future will be diverse, but we will need to see a higher proportion of zero-carbon fuels made available on the maritime market in the near future in order to reach industry goals for the green shift.
In summary, the ‘maritime renaissance’ we have spoken of recently in DNV encompasses four elements that are shaping the future of shipping: digitalization, innovation, openness, and collaboration. An exploratory mind-set and willingness to challenge the old order of things are key to this way of thinking, supported by the spirit of cross-industry collaboration. I believe these strong traits in the character of the maritime community will allow us to reach the critical environmental goals and help guide our industry through what I hope will be the last stages of the pandemic.
Written by: Cristina Saenz de Santa Maria, Regional Manager, South East Asia, Pacific and India, Maritime at DNV.
NBAS is collaborating with upcoming artists in Singapore and Norway to showcase their work, while we get a creative take on our graphic profile. In April 2021, NBAS features Doodle twins. Learn more here and purchase their art here.