Lookout Maritime News

LR2’s in particular are impacted by the Red Sea attacks - this is due to a lack of middle distillate substitutes from the Atlantic basin.
Data from Vortexa shows that LR2’s sailing around the Cape increasing sailing distances by 4,400nm, sped up between 0.5 and 1.0 knot on average.

Using the Baltic standard ship description at 12.5 knots on a TC20 voyage, fuel costs increase by $325k in ballast and $407k laden. The additional carbon emitted would be 1468 and 1836 tonnes respectively, thereby increasing the EU ETS compliance costs.

The commencement of the EU ETS will increase the cost of trade disproportionately for many nations, through the long shipping distances involved and Euro pricing of the required allowances. Many importers and exporters on the continent are unaware of these costs and who will be required to pay them.

Early feasibility studies point to the great potential Africa has in harnessing abundant solar and wind resources through the two leading Green Corridor initiatives, to produce zero emissions fuels in Namibia and South Africa. Both projects will require significant investment.

Changing trade patterns introduce new operating risks, which must be mitigated to remain a preferred supplier to key customers.

Changing trade patterns through geopolitical tensions, such as those we have witnessed in the Red Sea lately, introduce new operating risks for all stakeholders. These include ensuring safety and operational reliability of shipping, whilst not adversely affecting emission metrics and emissions.

Incidents and any adverse metrics remain in risk databases forever and this may negatively impact access to new business or to remain a preferred supplier to key customers. This screening often takes place at a distance and without the knowledge of ship operators.

Lookout Maritime was invited to join this workshop and facilitate a session, to build a new alternative fuel confidence index. This index measures the current state of readiness of the alternatives like Ammonia, Methanol, LNG, Biodiesels, Nuclear and Hydrogen in a consistent and repeatable way.

Confidence levels were scored across these categories for each major ship segment: technology, infrastructure, commercial and environmental impact (as of today).

Biodiesel and LNG were the only two options which scored highly. For the remaining fuels, gaps and changes needed were identified to reach similar confidence levels.

The ICMA convened in Dubai for the first time to exchange professional views and insights on arbitration.

As part of the panel on carbon regulation and sustainability, Lookout Maritime contributed to explanation of reasons for growing misunderstanding between contracting parties. One of these is the trend towards more aspirational and goal-based targets without a clear understanding of what good looks like in the process.

Industry leaders gathered in Athens to discuss and align on the actions needed to support the energy transition and in particular deliver emission reduction in the near term.

Four action areas were defined across contractual design, data and transparency, ports and terminals and pilot projects. Building the right culture through leadership is an essential requirement to make meaningful progress. Through a better understanding of what good looks like we can initiate a better quality of conversation between market participants. Lookout Maritime collaborates with key stakeholders to deliver these outcomes.

The aviation and maritime sectors share many of the same challenges and opportunities, given the global nature of our respective operations.

At the Carbon Forward Conference recently, exchanging insights with Michael Evans, Group Sustainability Insights Manager, International Airlines Group, was mutually beneficial.
Attention was called to the fact that the aviation industry will generate around 60 Mt of CO2e to shipping’s 90 Mt of EUA demand at 100% obligation once their free allowances are phased out in 2026. With sustainable aviation fuel (SAF) the only realistic option for airlines the competition for green transport fuel will only intensify in the coming years.

Today no company is too big to avoid the perils of reputation and brand damage.

A recent example of this is Rio Tinto’s destruction of the Juukan Gorge in 2020. This single act had a significant impact on the company, its shareholders and its ongoing ability to mine iron ore or renew its community or 'social licence' to operate.

Day 2 of The Saudi Maritime Congress opened with a keynote presentation by our CEO, Martin Crawford-Brunt, titled “ESG, reputation management and licence to operate".

Our CEO triggered a lively debate and Q&A on why too little real collaboration is happening and how we can enable these key market participants “to play better together”.

The need to improve the IMO Carbon Intensity Indicator(CII) was recognised by the IMO’s incoming Secretary General, Arsenio Dominguez, who shared valuable perspectives on the role of the regulator in near term emission reduction.

Utility customers in Japan have a growing interest in supporting lower carbon energy products, which provides a demand for greener shipping as outlined by Masato Otaki of Jera.

Poonam Melwani, conveyed the opportunities under English law for lawyers and leaders to better align the interests of parties contracting ocean freight.

Pressure to reduce emissions in global supply chains continues from end users, consumers and investors who want to understand the provenance of the products and materials they are using better.

In this innovation led week in Oslo, the focus seemed primarily to be on utilising alternative fuels and technology to solve our challenges.

The opportunity to reduce emissions by around 15% today through operational measures alone, was strangely absent from the many events and conversations during the week. Industry leaders seem content to continue to waste both energy and money, by burning fuel unnecessarily.

Lookout Maritime collaborates with both charterers and ship owners, to increase the willingness of contracting parties to act in a more logical way to reduce operating emissions.

Global industry leaders reiterated this important message during a panel on finding near-term opportunities to improve the efficiency and emissions from ocean transportation.

How we can make better use of the tools we have was also looked at during this year's TradeWinds Shipowners Forum, held at the Marina Bay Sands as part of Singapore International Ferrous Week recently.

Reducing emissions in ocean supply chains by operational measures alone is feasible around 15% on average in major commodity supply chains. This cost and emission saving requires no capital investment to unlock.

In the production of steel by conventional methods, the iron ore and met coal are transported by ships over great distances to the steel mill. The final steel product is then shipped to steel mills customers, who may distribute the steel further to their customers. In most cases each step above, to reach the end customer, requires ocean transportation.

This executive briefing provided a summary of the outcomes of a market consultation to identify suitable performance metrics to assess the efficiency of round voyages.

Benchmarks based on reference with the standard Baltic ship descriptions and routes were provided for EEOI, CII and estimated EU ETS voyage compliance costs from 1st January 2024.

Some of the common misconceptions around the introduction of new environmental regulations were examined by industry experts during the Carbon Emissions Outlook Panel discussion and the lively Q&A which followed.

At this forum, valuable insights were given on operational measures, the maturity of the alternative fuels in the journey towards decarbonisation and also recommended steps to position yourself more favourably in order to mitigate your risk.

At the recent Baltic Exchange Tanker and Gas Markets Insights forum, held in London, this topic was covered extensively.

EU ETS regulation applies to fleets, not individual ships, which means that any sanctions or penalties will be levelled against the ISM DOC holder. Should sanctions follow it will be the entire fleet of the operator that will be banned not just offending vessels.

The ISM DOC holder is responsible for surrendering the required number of European Union Allowances (EUA's) for the preceding year by the due date. The time gap between individual voyages and when the allowances must be surrendered is significant as this introduces pricing risk on the EUA's, which requires expert mitigation.

The focus point at the recent MEBC in Dubai was Unlocking Potential: Identifying and Commercialising New Market Opportunities.

Our CEO, introduced by the moderator as "a bit of a Renaissance man", gave some of his insights into the looming changes in environmental regulations and the effects of global markets in flux and what this means for the marine fuels industry and other stakeholders.

Many alternatives have been proposed to reduce emissions in ocean transportation supply chains, but he reiterated the importance of operational reliability and safety. We can deliver absolute reductions in emissions today, through small changes in CP clauses, to provide the option for vessels to slow down to enable this to happen.

The industry needs to look at how it can remove split incentives and contractual bottlenecks. A lot of these are preventing us as an industry from doing better.

We need to improve the indicators, the data, the metrics, so that we are aiming for the right thing – we need to be clear on what green really is.

The market will continue to play an important role, particularly as the regulatory environment becomes increasingly complex to navigate.

Read this thought piece by our CEO on delivering operational reliability in a more data driven world and why it is imperative to prioritise and approve the ongoing investments required to support a culture of ongoing learning and development, both at sea and ashore, in order to run more successful and sustainable businesses.

We are moving towards a multi-fuel future - not only hydrogen or methanol or others, but quite a range of fuels are being developed. Shipping will be competing with all other industries for those green fuels.

Blue-economy companies must take cohesive actions to transform their value chains, move towards a circular economy, and enhance their business models to help achieve long-term sustainability of the seas.

As part of HK Maritime Week, the Hong Kong Maritime Arbitration Group hosted a seminar which provided a very useful and concise explanation of coming regulation.

Expert panellists from Lookout Maritime, BIMCO and HFW share valuable insights on how to navigate associated risks.

Delivering operational reliability will require colleagues, both ashore and at sea, who are respected and supported through ongoing competence development in their daily activities.

This is becoming business critical when chartering decisions, business partners and suppliers are increasingly selected using software and data platforms, which provide easy access to benchmarking and scoring tools. Your “digital emissions”, the data used to evaluate your performance in reliability, safety and sustainability, remains in data bases forever.

One of the key conclusions of the seminar was that navigating this landscape successfully will require authentic leaders who respect and support their colleagues in meeting these challenges through ongoing competence development and learning.

Considerable confusion remains while discussions continue between the European Commission, the European Parliament and the European Council to finalise the legislative text for the EU ETS.
It is recommended that care should be exercised with any interpretation until this process has formally concluded.

At the Baltic Exchange Dry Freight and Commodities Forum held in Geneva, the role of carbon offsets and their responsible application in shipping was discussed. Companies must implement all other efficiency and emission abatement measures before deploying offsetting as part of their overall strategy.

If we can agree to work together, shipping emissions can significantly be reduced now, through a combination of operational and onboard technical measures.
In parallel, the work to produce and scale low carbon and zero carbon fuels can be accelerated. The massive investment and ongoing R&D effort in Saudi Arabia, in alternative technologies, will support this important journey.

For more insights, access the link to the complete 'Decarbonisation and the Fuel Revolution to 2050 ' panel recording here: https://vimeo.com/755116767/1bc801ceb7

Many of the world’s largest cargo owners have publicly said they will only charter zero-emissions ocean transport services by 2040.

Shippers will therefore start to favour container ship operators who are able to demonstrate that they have credible plans to rapidly decarbonise shipping. This journey starts with refining the existing fleet, through deploying new technology together with more efficient operations in novel and joined-up ways. Improved efficiency will assist in the adoption and scaling of the alternative fuels which are expected to be more expensive to produce.

Our CEO provided a simple explanation of the key differences between the IMO EEXI, a design standard, and CII, an operational standard as well as the dangers of relying on the latter in isolation, at the 5th Baltic ICS lecture series.

The unintended consequences of using the CII as measure of relative efficiency reinforces the need for a more reliable indicator of the actual transport work done. This understanding has led the Baltic Exchange to engage Lookout Maritime to lead an industry consultation to produce a voyage carbon emissions benchmark, based on the standard Baltic route descriptions and the EEOI.