Podcast transcript: How do we switch to low carbon travel with jet zero and green shipping

Ed Reed

Hello and welcome to the 10 Point Pod, a special podcast box set from Energy Voice Out Loud in which we assess point by point the UK Government’s plan for a green industrial revolution. We’re drawing this together with expertise from our sponsors for this series, EY, and leaders from across the energy industry. My name is Ed Reed, I’m an editor at Energy Voice where we are leading the global energy conversation, and I’m delighted to be joined for this conversation by my co-host, Mike Parr, EY-Parthenon Partner, Jacob Sterling, Head of Decarbonisation at AP Møller-Maersk, and Chris Gear, Project Director for the Aerospace Technology Institute’s FlyZero.

As you may gather from that impressive roster of guests we’re going to be looking at point six of the Government’s 10 point plan on Jet Zero and green ships. Ships and planes are crucial to how we experience modern life, from the goods we consume to the family we can visit. But shipping and flying each account for around 3% of the world’s CO₂ emissions and with both industries likely to continue growing, controlling emissions is going to play a significant role in our net zero aspirations.

The UK Government has said it intends to put the country at the forefront of R&D for shipping and flying, whilst also pushing for more global solutions. And another area of interest flagged in that 10 point plan was the impact on the economy. The Government has said a domestic sustainable aviation fuel, SAF industry might support more than 5,000 jobs and future proofing the aerospace industry is worth £12bn. So, there are some pretty big numbers, but the scale of the challenge is also pretty significant. Maybe we could start with you, Chris. The Government named JetZero in the 10 point plan. Maybe you could set out in broad terms what the decarbonisation challenge in flying is.

Chris Gear

Decarbonisation in aviation is a big challenge. Today, as you said, 3% and I think it’s about £885mn tons of carbon is put into the global atmosphere on a yearly basis, based on 2019 flight schedules. And what we’re looking at is what we can do to reduce that number. Just the UK alone puts in 37 million tons of carbon into the atmosphere on a yearly basis, again based on the 2019 flying situation. Obviously with COVID a lot of the flying hours have dropped drastically, and JetZero was all about looking at the net zero strategy for 2050 for the UK. And it’s focused on two primary areas.

One of them is sustainable aviation fuel and the other one is a zero emission aircraft. And what I’m doing on FlyZero is focus on the zero emission aircraft and looking at the different fuels that we could use to actually fly those vehicles. It is a big challenge, because the energy required to get a plane into the air and flying for quite long distances of 2,000 to 3,000 nautical miles is a step change away from the cars that you see on the road today which are fully electric. And so our biggest challenge is where do we find the energy source, similar to kerosene, which doesn’t put out carbon emissions into the atmosphere.

There is in sustainable aviation fuel several different fuels, either a biofuel or a synthetic fuel, and both of those have quite complex processes to manufacture them. And in the other, the zero emission, you’re really looking at either battery or electric or liquid hydrogen to get you to zero carbon emission. But if you have a gas turbine you will always get some form of emission out the back into the atmosphere.

Ed Reed

Jacob, the scale seems similar in shipping but clearly there are some different challenges. How do you see decarbonisation progressing?

Jacob Sterling

Yes. In Maersk we set ourselves a target a couple of years back that we wanted to fully decarbonise our shipping operations by 2050. And since then we’ve spent quite some time looking into what are the options, but also realising that the emergency is actually growing. Not only the public perception of the climate emergency but also we believe that as shipping, and probably also as aviation, we need to get going on this pretty soon if we want to stay around as businesses, as industries, also for the future.

So, we’ve been looking into what can we do now, and we can see that a fuel like methanol can actually be scaled today, whereas then in the future we will probably also be looking into ammonia and other fuels. But the big question is really how do we get started on this. Because we can see customer demand picking up, we can also see a lot of fuel producers, or I would rather say potential fuel producers, are gearing up for this challenge. But we have this chicken and egg dilemma. Who comes first? Because as a shipping line it’s pretty hard to decide to build a ship with an engine where you cannot get any fuel for it.

And likewise, why would you scale up fuel production as a fuel producer if there’s no customers for your fuel? We have nevertheless decided that now we will start, we will build our first carbon neutral vessel for operation in a couple of years from now, running on methanol. And we’ve done that because there is an engine out there that can run on methanol. We have taken that engine and basically built a ship around it, that fits the size of the engine. Then we can get started to get some experiences now rather than waiting 3, 5, 10 years before we can start with the carbon neutral operation.

Of course that’s just a start, and the scale of shipping is more or less, as you said, the same as for aviation. And like aviation we have also been blessed for the last 100 years or so with just having one fuel. One type of fuel that we could all use and one type of engine basically also, the two stroke engine in our case. And that’s definitely going to change. So the future is going to look much more complex than the past has looked. So we are betting on several fuel options, both the biodiesels, the methanol and the other alcohols, the ammonia, and other options might also be out there.

Ed Reed

And bringing you in, Mike, what’s your view on these two sectors and how they should pursue that decarbonisation challenge?

Mike Parr

Yes. I thought it was very interesting, hearing Jacob say that actually 2050 felt too far out, and aviation’s got similar ambitions. I would agree. I think it’s too far away, I think what’s happened recently with COVID has accelerated a lot of these trends and both the consumer but also the government intent is going to be to accelerate that process to carbon neutrality. But the challenge in aviation, which is a sector I’m more familiar with than shipping, is similar. The chicken and egg analogy that Jacob talks about is there as well.

But these need global solutions. For an aircraft to fly transatlantic you need to be able to fuel up on both sides of the Atlantic with that same fuel, and the supply’s not there in a consistent manner globally yet for that to work. US seems to be a bit further ahead on some of the sustainable aviation fuels, but the UK has got some catching up to do.

Ed Reed

Sure. And so Mike, sticking with you, what does this next step… Obviously as you say, that 2050 target looks pretty far away. So just breaking it down into more incremental steps is I suppose what we need to do to start trying to make some progress. So, what does that first step look like?

Mike Parr

Yes. Great question. I’m not sure I’ve got a great answer, by the way, and I’d love to hear what Chris and Jacob say. He says, buying himself time. But I think in reality there’s a technological step, and we’ve got to be comfortable that the fuels are going to work and know how that works. There’s then an infrastructure step, so we’ve got to know that the fuel will be made available. And then there’s a commercial step, where the airlines themselves have got to be able to adapt their processes, operationally, and their equipment to work for that.

Now that’s easier said than done, because each of those are pretty monumental challenges in their own right, in my view. But then putting that in a context, let’s take the aviation industry right now. You’ve got an industry that struggled with capital anyway. You can do the maths all the way back to when we first flew and work out whether actually the airline industry has ever delivered the return on capital for its investors. And the answer’s questionable. But then you overlay COVID on top of this.

This is an industry that has no capital. It’s dependent on government support. Its customers aren’t flying. And when you look at the projections going forward as to how the recovery comes back, its golden goose that was business travel is going to come back in lower numbers and that means really a lot less profitability. So they’ve had this seismic shock that they’re going to have to adapt to, and they’ve also got this big headwind called sustainability coming their way, so how can they really get the capital together to invest in this? That’s really tricky.

So I think the case for government support in particular for this aviation recovery and green recovery at that, the JetZero agenda, is really critical because this isn’t an industry that could get there on its own right now. So there’s a real funding angle that needs to be thought through as well.

Ed Reed

Sure, and I suppose that is playing right into Chris’ henhouse. Obviously this is the big JetZero dream, isn’t it? About that first step, government money coming in. Chris, how’s it going?

Chris Gear

The funding I think is really a big issue about all this. I think within the UK, JetZero is started and there’s work going on to try and build both of those equations around sustainable aviation fuel or a zero emission vehicle. But as Mike said, the infrastructure to support them once they get up to a standard that are mature and could enter into service is a big gap at the moment. So producing the fuels and building the infrastructure to manufacture fuels in the UK and across the globe is a big challenge.

Globalisation, because aviation is not located in a central area, it is around the world, is also going to be the other challenge. You see two different camps going on at the moment, the US are very much focused on sustainable aviation fuels, European is really focused on hydrogen fuels, and both of those create complex problems. So at the moment we have some interesting technology but how to get that into a vehicle and get the infrastructure around it to make it happen is going to be a real challenge for anyone involved with this.

And I think government support and government legislation in some ways to try and push some of these agendas, because without a doubt sustainable aviation fuel will cost more than the kerosene. And as Mike quite rightly put it, the aerospace industry, if you looked at the cost of airlines the biggest cost they have is the fuel. So tremendous issues for us to deal with.

Ed Reed

Jacob, obviously interesting talks about fuel and obviously in the shipping industry you’re going to be going through similar things, although obviously in different ways. How do you go about making those first fuel choices? As you say, at a point when you don’t have necessarily the infrastructure in place or the assured supply and demand. How do you take that first step?

Jacob Sterling

Yes, I mean if we start in the commercial space, I think we have seen some interesting developments in shipping over the last couple of years. Which is that some of our largest customers are actually now willing to pay extra for carbon neutral shipping. And we are fulfilling that demand by using biodiesel. Biodiesel is the only fuel, more or less, that we can use in our existing engines. For more advanced fuels like methanol or ammonia we need different type engines and different type fuel systems on the ship. So the most obvious would be to go for different ships, new ships with these types of engines.

But for the biodiesel we can get started and we can build demand as the customers get more interested in this. And then of course we need to switch to the longer-term solutions at some point, because biodiesel cannot be scaled enough to cover all of shipping, not even all of Maersk. So we need to switch to methanol in the first case and maybe later to ammonia if we could get that to work in shipping.

And for methanol, there’s no green methanol out there today, at least not at any relevant scale. So that’s the first step. We need to make agreements with potential suppliers so that they can go out and build the factories and produce the methanol. It is really that concrete, what needs to happen. And that is the first step and we then hope to be able to make offtake agreements from these potential suppliers, based on the fact that we have a customer base that are willing to pay more for green fuels. And then that can get the ball rolling. That is how we see it.

And we can actually see ourselves go quite far down that route, because we see customer demand for green shipping picking up quite exponentially right now. But at some point of course we will need regulation to kick in because it will not be all our customers and it will not be all shipping companies that will want to go down the green route voluntarily. And today there is quite a significant price difference between the new green fuels and the old fossil fuels. And that difference needs to be levelled out by regulation at some point, and hopefully sooner rather than later because that could really also help the transition.

Ed Reed

To chip in on that, Jacob, it was quite interesting because there’s a similar dynamic in terms of the price differential in aviation. It’s anywhere from double the price to seven fold increase on price compared to kerosene. So it’s a big difference currently. What’s the difference in shipping? Is it similar?

Jacob Sterling

I think to begin with it would probably be a factor of three, but I think that’s not really the interesting part. It’s clearly a barrier but what I find quite interesting is that there’s many of those developers that we talk to that are aiming for price parity with the fossil fuels within a decade. So we just need to bridge that gap. And I think it’s interesting to look back at offshore wind for example, where in the beginning it was super expensive and needed all sorts of subsidies. I think the same will go for the fuels we need in shipping.

But at some point these fuels will probably be less expensive because it’s based on sun and wind primarily, and that’s a more or less indefinite resource. And the cost is going down of these new technologies, whereas you would think that for the fossils then there’s less and less of it so the price would go up. So it’s a quite interesting dynamic that at some point these lines will cross and then it’s one of these situations where it’s like, okay it’s not because there’s no more fossil fuels, it’s just a really bad idea to buy it because it’s way too expensive. That would be fantastic.

We need regulation to help that, but I would like us to come to the point where it’s a bit like the stone age didn’t end because of the lack of stone. It ended because something better came up, and if we could do the same with the fuels for shipping and maybe for aviation, I think that could be really cool.

Mike Parr

The regulation point is quite interesting because that is I think a difference in many ways between aviation and shipping. Aviation has very strong national regulators where everything is about safety but you’ve got the different dynamic, not totally different in shipping, but you’ve got this flags of convenience trend and things like that. How does that play out? I find that quite interesting in shipping.

Jacob Sterling

Sure. Shipping has this unique situation I think that we are globally regulated, truly globally regulated, through the International Maritime Organisation and that’s I guess a double edged sword. Because on the one hand it means that when we regulate it’s quite effective and it works globally and it’s a level playing field and all of that. We saw that with the sulphur regulations a couple of years back where we reduced the sulphur content of fuels quite significantly and that was done globally and it worked and you can see the impact.

The downside is that it often takes the IMO ages to get to that point, and quite frankly we are getting a little bit impatient with it. Because as you said it’s made out of flag states and without saying too much some flag states put a little less emphasis on the environment than others.

Ed Reed

And, Chris, do you face similar challenges in aviation in terms of consensus?

Chris Gear

Absolutely. Obviously aviation fuels are heavily regulated and specified by the airlines as to what you can operate. And you do get variations around the globe in terms of what those fuels may or may not contain. And one of the issues that we see with sustainable aviation fuel is the mixing of sustainable aviation fuels with kerosenes to try and put some of that value into producing a low carbon or decarbonised fuel into operation.

So today there’s about six different ways of processing sustainable aviation fuel that’s going on in the US and there’s two I know of in Europe. And those are being tested on various types of gas turbine engines. So the benefit we do have is we can still stick with a gas turbine engine here, but the downside is that the kerosene fuel is used to cool a lot of the engine components and also used to oil some of those components based on the oil based products inside it.

So we have a challenge of not only redesigning and recertifying the engine or its cooling systems, but also how do we install those fuels in a global area and qualify them against all the regulations. I think today the EU is proposing that by 2030 we may only see about 10% of the fuels in use having sustainable aviation fuel mixed in with them.

Ed Reed

I think that’s probably a good point to take a short break, but we’ll be back to talk more about regulations and threats and opportunities after this break.

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Ed Reed

So Mike, looking at that ecosystem of supply and demand, how do you see that growing? Is it a question of government intervention?

Mike Parr

Well I think government intervention is going to be an absolute requirement here, but there is quite a lot that industries, both on aviation and from what I hear from Jacob as well on the shipping side, can do themselves. On the sustainable aviation fuels, the challenge I observe is just the inability to generate sufficient volumes at the moment. So creating that supply chain. And also from an airlines perspective, having sufficient confidence in that supply chain, and not to say control over that supply chain, is going to be a key driver of being able to get the next steps really mobilised.

So being able to put the infrastructure in place, put the supplier agreements in place and move that forward so you can really operate on a routine basis with sustainable aviation fuels, that needs concerted effort. So there are areas where we can see some success. British Airways has had partnerships and operated flights using it, but that’s more on a test basis rather than a full-scale operational basis. So, they need to keep accelerating and focusing on that, and I think British Airways, EasyJet, the Ryanairs of the world will be able to do that. Maybe other airlines will find it a lot more challenging as they fight for survival.

Chris Gear

I think that point you’re raising, Mike, is really important because what you see is that Airbus are developing 100% sustainable aviation fuel and they’re flying it on a 320. They’ve flown an aircraft over the Atlantic with sustainable aviation fuel. But the key point here is the volumes. On a typical day in 2019, Heathrow used 22 million litres of kerosene and today the infrastructure to manufacture that sort of volume does not exist on sustainable aviation fuels. And that’s one of the key infrastructure challenges.

Ed Reed

And, Jacob, in terms of the government role in the maritime, driving innovation. Obviously as you said you’re taking that plunge already, but are you looking to link up with a government, a number of governments? How does change factor in, in that way.

Jacob Sterling

Well I think that we need to look where we can for anything that can bring down the cost here in the beginning. We are part of calls within the EU that will subsidise or help fund some of these projects that we’re looking into. Also, in Denmark where we are based, research programmes and so forth. And I think that will be needed in the beginning, as we also saw with offshore wind, that you need that kind of government support to get started. Not for a long, long period of time but just because we’re getting into new technologies here and new technologies are always expensive to start with and then they get cheaper and cheaper. And typically they get cheaper a lot faster than you imagine.

So we need to just get over that technology introduction and innovation bump and then get to the scale we need. And I might make it sound easy but of course it’s not, because as you also said, Chris, it’s the same for shipping. The scale is huge. If we were to fuel a big container ship with methanol for example, we would need a medium-sized tanker to do so. And that’s just one vessel out of many thousand vessels that would need to run on these new fuels. And today there’s no production.

So we need to accelerate, but I also think what we are trying to tell ourselves and say to everyone who wants to listen is that we need to think of this as a real emergency situation. It is a real emergency situation with the climate and we need to act accordingly. So we will need to bet on a lot of things. Also things that might not turn out to be good solutions. But it’s not like if your house is burning that you spend a lot of time making business cases, laying the pros and the cons. Should I both use the hose and also call the fire squad? What should I do? You will probably do both and as fast as you can, because there’s no doubt it’s an emergency.

And I think that… I spoke about the IMO before but I think the same can be said about many national governments, that they look at it a bit too academically. They need to look at it more as if it was an emergency. As it is.

Chris Gear

Can I just go in there Jacob. Totally agree with what you’re saying. This is an emergency, we are late to the game and we need to accelerate the process. Everyone’s talking about getting to a net zero position by 2050, I feel you can’t do that, you need to actually accelerate not only sustainable aviation fuel, which is still putting carbon into the atmosphere and if aerospace grows at the 4% rate it’s going to actually that’s still putting quite a large volume of carbon into the atmosphere.

So you need to have that going at full speed as well as chasing zero emission aircraft at the same time if you’re going to succeed in bringing down the carbon levels that you’re putting into the atmosphere. Because net zero does not in my mind give you that true solution where you have reduced the carbon in the atmosphere. I think it gives you a benefit without a doubt, but you’ve got to weigh that about where are you getting your net zero benefits from? Because you’re still putting carbon into the atmosphere with a sustainable aviation fuel.

I think the other point is sustainable aviation fuel will be expensive and it is focused purely on the aviation market. The process to make it is quite complex and you will end up having to produce green hydrogen before you produce some of that sustainable aviation fuel. So, there is the other alternative which is going straight for the hydrogen solution. All I’m suggesting is that we need to do both if we’re going to protect the planet.

Mike Parr

I agree with that, and I really like the analogy of saying it’s an emergency. It feels to me, just the level of coordination that’s required, and I’m certainly not old enough to know this from living memory, but it’s akin to when Kennedy said, we’re going to get to the moon by the end of the decade. But it needs that level of ambition and coordination and I think the 10 point plan that the UK Government set out, and I’m really politically neutral on all these things, but I think it’s a step in the right direction.

What it really needs is the steps beneath that, the roadmap on how to implement that in a sustainable manner, and that’s what we’re missing at the moment I feel. But that would be the right way to then mobilise an industry around this, and that’s really what needs to happen. Feels like the same is true in shipping, and the additional challenge is it needs to be done on a global basis.

Ed Reed

And just picking up on that idea about that sense of an emergency. Obviously it’s a topic that’s clearly getting more and more public interest and we’re seeing protests and whenever people talk about expanding Heathrow or whatever there are protests and legal challenges and that sort of thing. So there’s clearly a shift in terms of public opinion around carbon emissions and I think there does seem a sense that there are going to be more restrictions coming in various forms through emissions tradings or whatever. Do you think that the industry has to try and take steps to demonstrate that it’s doing enough to cut carbon before the actual regulations come?

Jacob Sterling

Well to look at it a bit more broadly, actually, we made an analysis last year of what is the climate perceptions, what are we faced with from our customers and their customers, the consumers? And we basically came to the conclusion that if we haven’t fundamentally changed the way we run our business when it comes to carbon emissions in say 10 years’ time, we might be at risk that it will be no longer socially acceptable to run the global economy as it’s run today where you have production where it’s cheapest and then you have consumption where consumption is.

Obviously that’s a model that is very, very important for shipping. That’s the model we live from. But if it becomes socially unacceptable to get your goods produced at one end of the world and then ship them to the other end of the world to have them consumed, then we are in big problems. And it’s quite fair, because we do emit quite a lot of CO₂, as do aviation and other transport modes. And even though we are very efficient and so forth on the shipping side, it still adds up when it’s these volumes. So I think that’s the challenge we’re up against and whether regulation comes before consumer pressure, I don’t know.

But there’s no doubt that when we look at the big brands that we serve, the big brands that ship goods around the world, they see this trend very clearly and they want to act on it now. Because they see a lack of action on the sustainability front as a key risk to their existence. And again I’m trying to talk to the sense of urgency here, and I think this is just another example of this. We also see it from investors and financial institutions, that if you want to borrow money you’d better be sustainable. If you want to have a reasonable share price, the share price that you think you deserve, you’d better be perceived as a sustainable company.

And we are way beyond the days where you could just have a glossy sustainability report and then all is good. It needs to be very, very specific what you’re doing and very measurable. When the financial institutions get into this game, they will measure you like they’re doing with everything else and so they will with this. So there are a lot of things coming at us. The good thing is that it’s all pointing towards the same solution. We just need to decarbonise as fast as we can. And we don’t mind that, we want to do that.

Mike Parr

I agree. I think the point you make about measurement is absolutely spot on. We’re going to find that, whether it’s revenue growth, EBITDA, earnings announcements that went out from corporates, there’s going to be as much focus on emissions data for corporates going forwards as there has been on this. Otherwise you’re not going to be sustainable and that long-term value that investors see from a business is going to be measured in those terms. So that key performance indicator of emissions is really shooting up the radar on those metrics.

And the other piece, I think the airline industry has got exactly the same challenge you described. The pressure isn’t necessarily in the court of public opinion, it’s actually combing through from corporates on a B2B perspective as well. So, I’ll give you an example. We at EY set out this ambition to be carbon negative, and if you think about how we spend money and where our emissions come from, okay they come from our buildings. But they actually come from how we travel.

And we’re looking at going back to, on a sustainable basis, 70% reduction in our corporate travel. That’s a huge amount, it’s a huge effort to do that and control that and we’re going to rely on technology like this to make that work. But that’s actually going to play itself out in a lot of corporates and how they look at buying travel and what travel they’re prepared to commit to. And that is going to mean a real sustained reduction in business travel going forwards.

So if you are an airline and you want to win in that market, you have to demonstrate that you have a commitment to carbon reduction that’s going to help your corporates, because they’ve got to demonstrate that as well in their earnings announcements and the rest going forwards. So the airlines that win will have a scientific based target, they will have a plan to commit to it and they will deliver on that. But it’s not going to be good enough to say it’s 2050’s problem. It’s going to be 2030’s problem.

Jacob Sterling

Completely agree.

Chris Gear
And I agree with both of you. I can see this in the technology roadmaps that we’re doing in FlyZero, where we’re looking across industry to see how it’s producing its products and how much carbon is that generating. Example being taking some of the materials in the aircraft structure and where is it dug out of the ground, how does it get to where it gets machined, how does it get put into a plane, how does that plane operate. So we’re trying to build those CO₂ models right now to show exactly what Jacob was describing.

Actually what you want us to do is stop moving things all round the world and you want to keep them local and you’re going to want to generate a capability to do it local. So clearly the carbon that we emit doing that whole process you need to minimise, and it’s one of the big challenges I see for the globe again in terms of how we do that and also make it economically viable for everyone. So that’s one of our challenges, as well as you can see things like flight shaming came into play I think last year and the year before.

So that’s another key parameter that might impact whether airlines would get passengers, because they don’t want to fly on say an airline that’s not trying to come up with sustainable ways of operating. There could even be a taxation by governments on carbon emission, so you can only emit so much carbon a year otherwise you get heavily taxed on it. So, I can see lots of things like that, maybe by legislation or by changes into requirements that are going to impact the way we work today and the way we go and enjoy ourselves on holidays.

Ed Reed
Chris, just picking up on one of those points you raised, about local capabilities. Do you have a sense, obviously as I said in my introduction there is a drive to create local jobs through this point six. Do you have a sense about what skills we might need or which we may need to gain to succeed in this new phase?

Chris Gear

Yes. One of the roles of FlyZero is to look at, within the UK, what is our technology capabilities, what’s our industrial capabilities and what’s our skills with the people. And what we can see with some of these new solutions in terms of the fuels and also the equipment that might be used on an aircraft, say if you’re using liquid hydrogen or some other unique thing like a fuel cell or a battery, there’s a lot of requirements around the system integration of all that. There’s a lot of requirements around the cryogenic processes in there. And there’s a lot around the infrastructure of how you install that and make sure you can operate these aircraft safely.

One of the other areas we’re looking at is how long would it take an aircraft which lands, to turn it round and get it back in the air again. Because clearly people like EasyJet will want to use their capital investment and they typically allow 25 minutes to turn round a single aisle aircraft. To refuel with maybe a different fuel like a liquid hydrogen or maybe a sustainable aviation fuel, there will be different requirements. And so we’re trying to analyse those impacts as well, as well as all the infrastructure needed at the airport to allow you to operate on different fuels.

So there’s a lot of challenges, but just talking on the capability and the skill set, we need to retrain quite a few of our engineering community but we also need to develop new engineering capabilities in the chemistry side and also some of the technologies and materials in that to allow us to use some of these very difficult to utilise materials into the aircraft. So some big challenges for all of us.

Ed Reed

And Jacob, do you feel a similar… Where do you see those skill sets? I suppose as a global company your outlook might be slightly different from Chris.

Jacob Sterling

Well I think the infrastructure challenges and the bunkering challenges that Chris also talked about are also something where there’s a lot that needs to be developed. For something like methanol, it takes up twice the amount of space in a ship that normal fuel would do. Maybe even a bit more, with the safety measures and so forth. And just to bunker that… We are used to bunkering in Rotterdam for example and then go all the way to Asia and back on a tank and then bunker in Rotterdam again.

So we ask ourselves the question, is that doable? Can we bunker twice the amount? When we bunker a ship it doesn’t take 25 minutes, it takes more like 18 hours. We bunker maybe 500 litres per second for 18 hours which brings us to 6,000, 7,000, 8,000 tons. So how do we do that if it’s twice the amount? We cannot just stay in port forever. Should we bunker two places and then have smaller tanks? Or should we do the same? It’s very difficult to say and right now we just don’t know. We need to figure it out.

And then if you want to bunker something like ammonia that is highly toxic and a gas and everything, then how do you do that? And are you even allowed to do that near cities where you could actually kill a lot of people if there was an accident. So there’s a lot of questions out there but I think what we all need to consider is we might have to operate our ships in a different way. And again it comes back to this emergency situation. When you are in an emergency situation you’re quite okay that you have to change stuff. It’s okay that you need to leave the house and stand in the rain without an umbrella because that’s just the way it is.

And likewise maybe we need to bunker two different places. Maybe we need to make an extra stop on the way. We don’t know yet and maybe Ryanair needs to change their business model because it’s not possible to get all the liquid hydrogen on board within 25 minutes and things like that. And I think a big part of this is that, for now, while we are all still in innovation mode we just need to be as open as we possibly can to also changing the things that are around shipping and aviation.

Because imagining that we can go from one fuel to maybe a set of different fuels with completely different properties and then saying we would like to conduct our business in exactly the same way as before, I don’t think that’s going to happen. If it will happen down the line, cool, but not in the transition phase. We will have to be creative and do stuff differently.

Ed Reed

Fascinating. Well listen, I think that’s probably a good point at which to wrap up, so I’m going to just say thank you so much to all of you, Mike, Jacob and Chris. I think there have been some really interesting points, and I think that first step, as you say, that transition, what does it look like, how does it feel? I think that’s going to be a really interesting one to watch in the coming months and years I suppose. Looking out 2030, right through to the 2050 targets.

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We’ll be digging through the rest of the 10 point plan over this year leading up to COP26, so please do look out for those. Continuing our theme of greener, next month we’re going to be talking about greener buildings. But for this, the sixth episode of the 10 Point Pod, I’ve been Ed Reed, thank you for listening.

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