Lookout Maritime News

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.

This Baltic Exchange Risk Forum, chaired by our CEO, highlighted the legal, commercial and market risk introduced by the IMO carbon intensity indicator (CII) which enters into force in just over six months' time.

There are valid concerns that efforts to improve the vessels' CCI rating may incentivise the wrong behaviour, for example longer ballast legs, which will actually increase absolute emissions. How to share the risk of poor vessel ratings following time charters with high speed demands was also discussed.

The growing need for a meaningful, clear and evident purpose in our daily work was articulated clearly at Spinnaker's recent Maritime People and Culture Conference in London. Ensuring that an ongoing contribution is made for the betterment of society, is becoming an integral part of a successful business. The social and governance dimensions are often perceived to be less important than the environment in ESG.

We should not forget that solving the many challenges we face will require people who are engaged, motivated and equipped to succeed.

The sustainability panel on day 2 of the 7th World Maritime Technology Conference, chaired by our CEO, discussed the need for energy security as an important part of enabling the delivery of emission reduction. Alongside other energy sources and fuels needed as part of the mix, the panel discussed the role LNG could play with regard to regulations, safety, supply, skills in the gas transport chain as well as other important considerations sometimes overlooked.

The return of Singapore Maritime Week brought industry leaders together again in Singapore, to discuss challenges and solutions through this year's theme of 'Transformation for Growth'.

What is required to succeed with emission reduction in the near term and a more honest conversation across stakeholder groups on how we will get there was one of the key takeaways from the week.

While we are becoming increasingly clear on why emission reduction is essential and what needs to be done to tackle climate change, we are still very far from understanding or agreeing how this will be done quickly in practical terms and who should pay.

Read about what is needed to succeed in the article linked below recently published on Gard Insight.

Lookout Maritime’s CEO, Martin Crawford-Brunt, is honoured to have been selected as after-dinner speaker for this esteemed black-tie event to be held in the Great Hall. Parts of this historic building date back nearly 2000 years, however construction started in 1411.

This in-person dinner and networking event returns after a break last year due to COVID-19 and promises to be a memorable and enjoyable evening in the company of industry leaders. We hope to see you there!

An expert panel chaired by WFW Partner, Alexandros Damianidis, explores key drivers behind the increase in sustainability and ESG reporting.
How you make your sustainability investments more visible and impactful through clear reporting on all metrics, in particular environmental ones, and the market implications of pending EEXI and CII implementation was covered.

Listen to the short clip on how sustainability criteria and needs will evolve in the near term.

This presentation by our CEO explains the growing role of benchmarking in analytics in the way vessels are assessed and selected. It is becoming increasingly critical to understand your own environmental metrics and the role information platforms and software providers will play in making environmental performance visible to decision makers. Find out why it is important to start positioning yourself now or risk becoming positioned by someone else.

Our hope for the year ahead is that we are collectively more supportive and respectful of those on the front line, who will be most exposed to change, through the simultaneous investment in social initiatives as we tackle emission reduction together.

2022 will be a seminal year for shipping, given that impactful regulation will enter into force in January 2023 combined with pressure to deliver meaningful emissions reductions in the near term on the existing fleet. This podcast explores how this might be navigated successfully whilst dealing with tensions between people, planet and profit.

How to go about decarbonising sea transportation is resulting in a great deal of confusion and uncertainty. Part of the solution lies in developing a simple way to understand carbon emissions on a round trip voyage basis.

Lookout Maritime has been engaged to provide strategic support for the Baltic Exchange’s leadership team and to deepen relationships with key stakeholders including governments, interest groups and commercial interests, with a focus to develop mechanisms which will lead to real-world emissions reduction.

Recommended reading on why you need to approach the Carbon Intensity Indicator Regulation (CII) from the IMO differently from any previous regulation.

It is important to note that CII is a global requirement for all cargo and passenger vessels larger than 5,000 gt and it will therefore have a very wide impact across many sectors and trades.

Those who see CII as a compliance matter alone, subject to enforcement in the normal way, may be in for a rude shock at any time.

MCA Chairman, Christopher Rodrigues, and Chief Executive, Brian Johnson, are joined by maritime industry leaders for a discussion on the practical realities facing the industry in 2021. Hear the panel's thoughts on key issues such as decarbonisation, seafarer welfare and safety, autonomy and collaboration.