Shippers and carriers are beginning to show their hand in their long-term decarbonization plans, with a recent Request for Proposal (RfP) offered by the Zero Emission Maritime Buyers Alliance propelling the acceleration of decarbonization efforts on a wider scale.
Boosting Green Options
In recent weeks, ZEMBA — which consists of a global cargo owner alliance with the aim of accelerating zero-emission shipping — pushed an RfP for 600,000 TEUs for carriers to place their bids for volume allocation with the wider goal of decarbonizing global shipping services in mind. The RfP, which will be open until Nov. 13 and pushed out over a three-year period, is for BCOs to allocate definitive volumes through a tender that would be shipped on zero-emissions fuels, helping both carriers and shippers decarbonize their supply chains en masse. “This project is intended to give shipping lines exactly what they’ve been saying for years that they need in order to invest in zero emission fuels and technologies, i.e., longer-term offtake at sufficient volumes to create a business case,” ZEMBA CEO Ingrid Irigoyen said in an interview with S&P Global Commodity Insight. “Pursuing this bilaterally is perfectly fine, but basic logic tells me it’s unlikely to amount to the kind of catalytic deal we are offering in one bite.”
In practice, ZEMBA has also left the door open for incorporating methodologies exhibited by carriers’ own bespoke green shipping services, such as book-and-claim systems. “Our core interest is ensuring that our cargo owner members feel highly confident that their premium payment has resulted in a verified emissions reduction through deployment of specific quantities of clean fuel,” Irigoyen said. “Regarding verification and book-and-claim registries, this is in progress and we will work closely with bidders and ultimately the winner to determine the most robust, feasible approach.”
Questions For Premium
ZEMBA’s RfP has come up against a measure of apathy from carriers who are more interested in the near-term pursuit of their own vertically integrated green shipping services. While describing the initiative as a “good idea,” Maersk CEO Vince Clerc suggested the company has little appetite in submitting any bids. “That is not something we’re considering at this stage,” and Maersk would focus on customers “interested in actually following us,” he said.
For the longer term, premiums for green freight could fall or even disappear as regulations introduce pricing mechanisms on shipping emissions, according to Clerc. Until then, questions are still rife among the industry in terms of willingness to steer towards green shipping services, primarily due to the additional costs at play.
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Source: SPglobal
