The shipping industry’s response to the risks and opportunities presented by climate change saw the sector introduce, in 2013, the first ever internationally agreed CO2 reduction plans - The Energy Efficient Design Index and Ship Energy Efficiency Management Plan. Achieving international unity is a huge achievement and needs to be applauded. This has triggered a wave of interesting technological responses.
This focus on energy efficiency has a positive impact improving operational performance through innovative use of data, improved ship management and leaves room to further improve. Great brains in large corporations are rising to the efficiency challenge focussing on big new ideas. Rolls-Royce heralds the rise of the autonomous ship – eliminating crew costs; fossil fuel companies develop hybrid fuels suitable for Emission Control Areas enabling maximum cost efficiency whilst remaining compliant.
But what if this enormous effort is working really hard but solving the wrong problem?
The industry needs to muster the courage to address the huge disconnect between climate science and our collective response to it, we need to stop thinking about the ‘climate’ part and focus on the ‘change’ bit. If we seriously think about how we need to ‘change’ then we must recognise we are facing an enormous adaptive challenge; we are required to rethink deeply held, and seemingly unshakable, beliefs, values and world views; pretty much everything we are confident we ‘know’.
We now need to talk about ‘energy’, rather than ‘efficiency’ in shipping.
Our current belief about ‘energy’ is its a commodity and we have no viable alternatives. It follows then that all we can do is make this commodity work more efficiently. We struggle to see past a belief that fossil fuels will always underpin the global economy because they have for the last 100 years or more and this reinforces our deeply ingrained world view. But in the end, the fossil fuel companies can have no strategy that involves fossil fuels which makes long term business sense.
We are witnessing the rapid emergence of renewable energy and smart thinkers recognise it’s creating a very different dynamic. The renewable energy sector behaves more like a “technology” business, where prices keep falling, quality keeps rising, change is rapid and market disruption is normal. When we make the mental shift to see energy as technology we can only conclude that more demand for renewables means lower prices and higher quality for a long time to come. The fossil fuel commodities they compete with follow a different pattern. If demand keeps increasing, prices go up because newer reserves cost more to develop. Market shifts, like the one we are currently witnessing, mean they may become temporarily cheaper, but they can’t keep getting cheaper and they can’t ever get better. Renewables are already competitive without market subsidies and will just keep getting cheaper. And better.
Shipping’s focus needs to shift. We need to identify the real changes that can be made and apply the great creativity embedded in the sector to solving the right problems really well.