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Part 2: The dilemma of short-term Maritime Decarbonisation

by Alex Routledge, CEO Armada Technologies

I worked for many years for a multinational energy company with one of the largest chartered fleets in the world. Throughout this time, I saw the slow but steady transition from maintaining the shipping status quo (e.g., leveraging superior buying power and driving ‘off the shelf’ approaches to ship specification) to more of a pragmatic approach whereby business cases were built to provide evidence of the financial superiority of non-standard, but ‘greener’ ship design specifications. My concern then and still today is that the majority of ship owners may, in part, look to the large multinational charterers for fast tracked technical due diligence when researching new technologies. Taking the, “if it is good enough for them with their inflated technical and data analysis teams, then it must be good enough for us”. These shortcuts may help spread the idea of short-term maritime decarbonisation to the furthest parts of the shipping sector, but they don’t seem to materially impact decision making, investment and, by extension the environmental impact of shipping.

So where does the broader industry (energy efficiency technology) investment decision get derailed? For me, there are two points of departure:

  1. A general split incentive that exists between ship owner and charterer (generally fuel buyer) on who should fund installation of the technology versus who should realise the fuel saving benefit. This theory is supported when we consider that the large proportion of energy efficiency technology investment decisions comes from owner-operators, and not pure owners on long term time charter.
  2. A fundamentally different tolerance to risk and repercussion if they bet on the wrong ‘energy efficiency technology horse’. Whilst charterers would only have to see out the impact of a poor investment decision over the tenure of the charter party agreement, the owner holds the mistake for life, unless they chose to sell the vessel with serious impact on ship resale value.

So, what is needed to expedite adoption and enable true maritime decarbonisation in the short term? There are a few options that may help and help fast. These include, novel business models and technology financing approaches, cost/ benefit sharing between owner and charterer and ecosystem development to share unbiased and best in class knowledge of next generation technology performance. These are just a few of the levers we have to keep investment decisions on track right through to installation. Whilst the industry develops these levers, Shipping can rely on the genuinely fantastic ‘green’ initiatives being driven by certain maritime leaders in the charter space e.g., Rio Tinto’s Pioneer programme which invests significantly in “unproven” technologies whilst also providing a test bed/ pilot opportunity to ensure the upside and downside risk is independently assessed and properly recorded.

All of this said the responsibility of maritime decarbonisation cannot sit squarely with the charterer. Technology providers must develop their product and innovate. The owner needs a solid case to justify investment and there are certain product attributes that will assist in this. For instance, shipping needs a technology solution that is proven to work, and work well across the full operating spectrum. Shipping needs a technology solution that requires little to no in-service operational disruption and ongoing system maintenance. Finally, Shipping needs a technology that supports regulatory compliance not just at the point of installation but through progressive system optimisation in step with increasingly stringent CII compliance requirements. 

It is my opinion that Armada Technologies can provide those benefits through their soon to market second-generation Air Lubrication system that uses the vessel’s own forward motion to drive water through a series of openings in the bow region of the vessel, these openings direct system water to venturis and injectors that then passively deliver an optimal air/water mix (rather than simply air) for hull lubrication of unparalleled efficacy. The system’s active air/water mix injection mechanism design enables the matching of bubble production to ship type and operating condition allowing for tight control of bubble dynamics. There is no need for the 24/7 use of multiple, high-energy compressors and therefore, needs significantly less power to achieve the optimal effect. This means that the net benefit of PALS (savings minus the cost of operation) is significantly higher than traditional ALSs whilst being significantly easier to install and maintain.

“Author: Alex Routledge is the CEO and Co-founder of Armada Technologies, Ltd. He has over 10 years of experience working as a Naval Architect with Royal Dutch Shell and an Assist Technical Superintendent working on behalf of Qatar Gas. Mr. Routledge holds an MBA from Said Business School, University of Oxford and a Master of Engineering Hons Naval Architect from Newcastle University.”

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