Decarbonisation And New Trade Lanes - The Big Trends In Shipping

Eleanor Sa-Carneiro

The big trends to watch are “decarbonisation”, new fuel sources, and the technology around those efforts, according to shipping expert and co-principal of Interunity Group. The other trend concerns the new world order’s need to “anticipate trade lanes”.

George G. Mangos tells The Qonversation that within the prism of security and national interests, new and “unanticipated trade lanes” are developing due to a fractured or multipolar world, which in turn is causing an “increase in demand for global shipping”.

With shipping accounting for 3% of global carbon emissions, decarbonisation is on the global agenda, across all industries, shipping included. “Our carbon footprint as an industry is very positive compared to the amount of goods that we transport around the world.”

“Not many people know that global shipping was producing about 50% of the NOCs (network operations centres) of the global car fleet and ten times as much SOCs Security (Operations Centre) as the global car fleet”, which Mangos attributes to dramatic regulations in 2020 surrounding the control of sulphur in the fuel used.

There were a range of different approaches to it, he recounts, including “everything down to having to build mini refineries onboard the ship to actually separate out the sulphur from that from the fuel,” which he concedes is an extreme consequence for shipping, when he believes that could be dealt with at the refinery level in a therefore much more efficient way.

When it comes to overall reform, the structure of the market being near “perfect competition”, according to Mangos, makes collaboration difficult which, in light of the overhaul at hand, would be optimal in his view. However, the industry is “subject to very different regulatory regimes all around the world, and that is a legacy of maritime law effectively being centuries old”, Mangos concedes. Aviation law, in comparison, due to its relatively young existence, has a well-integrated regulatory framework around the world, he explains, “it’s a duopoly of production between Boeing and Airbus, it’s much easier to effect regulatory change in a consistent way”.

Despite the challenges to the industry “there have been some very significant strides in shipping over the last over the last decades. Oil spills are down to about 5% of where they were in the 1970s and latterly since 2020”. With regards to decarbonisation, Mangos predicts that is “going to be difficult”, more difficult than it need be in his view, that collaboration would ease. “Everyone has their targets, and everyone should be looking to try and improve”.