Originally published on SeaNews By Shahjahan Ahmed
Shipping’s green transition is caught in a chicken-and-egg problem. Aurelia Leeuw of the SASHA Coalition and Sjoerd De Jager of PortXchange explain why ports, shipowners and fuel producers must move together — and why efficiency, electrification and shore power cannot wait.
Shipping’s transition away from fossil fuels has developed a familiar problem: everybody is waiting for somebody else.
Shipowners want certainty that alternative fuels will be available before committing billions to new vessels and propulsion systems. Fuel producers want long-term demand before financing production. Ports risk investing in infrastructure for fuels that may not achieve scale, while cargo owners remain sensitive to the green premium associated with cleaner transport.
For Aurelia Leeuw, EU Policy Director at the SASHA Coalition, and Sjoerd De Jager of PortXchange, breaking that deadlock requires more than deciding whether shipping’s future lies with methanol, ammonia, hydrogen, batteries or another technology.
It requires the different parts of the maritime value chain to move together.
The SASHA Coalition was established to bring together companies developing solutions for the decarbonisation of shipping and aviation, particularly hydrogen-based fuels and battery-electric technologies.
“The idea is to get those voices and to have a slightly different industry perspective than the bigger incumbent voices that we’re used to hearing,” Leeuw told SeaNews.
PortXchange brings an operational and port perspective to that discussion, reflecting the crucial position ports occupy at the intersection of vessels, fuels, infrastructure and cargo.
Everyone is waiting for everyone else
For De Jager, one of the biggest problems is the absence of a unified approach to the transition.
“There is hardly a unified approach towards this problem within shipping, which is then also not unified with how aviation is looking at it,” he said.
Despite their obvious differences, shipping and aviation face similar challenges. Both require changes to the vehicles themselves and the infrastructure supplying them.
“We need to have both the mobile assets, like the ships and the airplanes, as the immobile assets, like the port and the airport infrastructure, to change,” De Jager explained.
Leeuw sees the same fragmentation across the maritime value chain.
“You need to kind of find a way to bring those voices together, bring an understanding together, and move together, basically.”
The problem becomes particularly acute when alternative fuels are considered.
Ports can argue that there are not enough alternative-fuel vessels to justify new infrastructure. Owners can point to inadequate fuel availability. Fuel producers need firm demand before financing new capacity, while cargo owners may be unwilling to absorb higher transportation costs.
“Nobody’s really getting the right incentives to change into something because there’s always the scapegoat,” De Jager said.
Shipowners and shipbuilders can reasonably ask why they should accept additional capital and operating expenditure if customers remain unwilling to pay the green premium.
De Jager described this as a “business case driven disconnect” between the different participants.
Shipping needs both the stick and the carrot
Leeuw argues that there is consequently no single policy capable of breaking the deadlock.
Mandates have a role because they create demand and provide a regulatory signal. But forcing an industry to adopt significantly more expensive fuels and technologies without simultaneously creating financial support is unlikely to deliver the necessary scale.
“If you want to make this work properly and want to have the market take this on, then you need to have more than just a stick. You also need a carrot,” she said.
Leeuw pointed to the EU Emissions Trading System (ETS), fuel mandates and mechanisms such as double-sided auctions as parts of that policy mix.
A double-sided auction could help resolve another structural problem. Ship operators may purchase fuel on relatively short timescales, whereas renewable fuel producers can require contracts extending for ten or 15 years to provide the certainty investors need.
The intermediary mechanism could effectively bridge that difference.
“There are many tools out there that are available to push in the right direction,” Leeuw said. “The problem is that there is, again, a missing unified voice of innovative industry saying this is clearly what we need.”
Mandates alone, she stressed, will not be sufficient.
“You can’t just do it with mandate. Absolutely not. Both need to be kind of balanced.”
Don’t wait for the perfect deep-sea fuel
One of the most difficult questions for ports is where to invest. A port could potentially spend heavily preparing for methanol, ammonia or hydrogen only to discover that a different fuel pathway ultimately dominates. The prospect of stranded assets inevitably makes investment decisions harder.
But De Jager believes this debate can distract ports from substantial emissions reductions that can already be achieved.
“I think currently there’s still a lot of low-hanging fruit for ports to tackle before getting into the stranded assets discussion,” he said.
Different vessel segments have different energy requirements, and in some cases the technological pathway is already relatively clear.
Short ferry routes and some inland shipping operations can increasingly be electrified. Ships alongside can connect to shore power. Better coordination can reduce unnecessary waiting, while operational data can identify where energy is being wasted.
Deep-sea shipping is a considerably harder problem.
“Before you get to the difficult discussion about the deep-sea energy source — so whether that’s hydrogen or e-methanol or ammonia or any other — you can already do the other things,” De Jager said.
“You can do the inland shipping electrification, you can do the ferry electrification, you can do the onshore power investments.”
Even where conventional fuels remain necessary, ports can reduce unnecessary consumption.
“There’s a lot of inefficiency in port calls. There’s very little just-in-time sailing. So there’s a lot of unnecessary nitrogen and CO2 emissions in the whole port call process.”
Leeuw similarly believes the complexity of the transition can sometimes be exaggerated.
“There’s vested interests, in a way, in making it sound like it’s very, very complicated when it’s really not that complicated,” she said.
“There are some segments that simply have one way forward and not three or four.”
Efficiency becomes increasingly valuable
Improving efficiency also has the advantage of being largely fuel agnostic.
A vessel using just-in-time arrival rather than sailing quickly towards a port only to wait reduces fuel consumption today. If future renewable fuels carry a substantial premium, those savings become even more economically valuable.
“Anything that’s efficiency improving is a double-edged sword because it will help with today’s situation, avoiding emissions and becoming just a more efficient collaboration between the shipper and the ship and the port,” De Jager said.
It will also matter in a future in which cleaner fuels are less abundant and potentially substantially more expensive.
“Making sure your vessels call just in time to any port saves emissions today and it will save money in the future. So it’s a no-brainer, basically.”
PortXchange has, according to De Jager, seen cases where improved operations have produced emissions reductions of “up to 20%”.
Operational data could therefore become increasingly important not simply for measuring port emissions, but for identifying where infrastructure and clean-energy investment should be directed.
Smaller vessels could lead
The SASHA Coalition is also advocating extending the EU ETS to ships between 400 and 5,000 gross tonnes, bringing a much larger population of smaller vessels into the system.
Leeuw believes this segment represents another area of relatively low-hanging fruit.
“These are all ships that are low-hanging fruits in the sense that the technologies are available already now and can be implemented relatively fast,” she said.
The smaller-vessel sector includes ferries, inland-waterway vessels and other operations where batteries and zero-emission technologies can already be technically viable.
“If the ETS includes 400 gross tonnes to 5,000, it creates a clear financial incentive. It creates a clear regulatory signal,” Leeuw said.
Progress in smaller vessels could also help larger shipping segments later.
Battery energy density is improving, potentially expanding the vessel types and routes suitable for electrification. At the same time, the experience of changing propulsion systems, financing infrastructure and developing regulation provides lessons that can be transferred elsewhere.
“All of those can be kind of learning moments that can be used for the larger sector segments down the road,” Leeuw said.
Who pays the green premium?
Even where the technology exists, however, somebody still has to pay.
Shipping’s commercial structure makes that particularly difficult. Ports invest in infrastructure, owners invest in ships, charterers can influence fuel decisions and cargo owners ultimately seek competitive freight rates.
Leeuw rejects the idea that one participant should necessarily be expected to move first.
“There shouldn’t be a first mover, in a sense, because there should be an incentive for multiple players to move together,” she said.
“We’re not going to get out of the chicken-and-egg situation unless we create a kind of parallel step where we all jump together.”
That means combining regulation with financial mechanisms capable of absorbing part of the initial green premium.
De Jager pointed to green shipping corridors as an example of the problem. Such projects can align infrastructure, regulation and supply chains between two locations, but progressing beyond feasibility becomes difficult when the commercial question remains unanswered.
“In the end, nobody wants to pay,” he said.
“There needs to be a pocket of money that is uncontested that will bridge the gap so that you can get to scale. Because when things get to scale, they tend to become cheaper and therefore easier to implement.”
Regional action versus global regulation
For Leeuw, European and UK climate measures should not be viewed simply as additional regulatory fragmentation while the industry waits for global IMO measures.
She argues instead that ambitious regional regulation can push international regulation forward.
“The ETS needs to come up with ambition and IMO is going to follow. It doesn’t happen the other way around,” she said.
Leeuw therefore wants the UK and EU systems to become increasingly aligned and ambitious, rather than waiting for the IMO to establish the ceiling.
“It’s really important for the EU and the UK to work hand in hand in that and to have that common ambition.”
What would success look like by 2030?
Success, according to Leeuw and De Jager, cannot be reduced to one fuel, technology or metric.
It would mean renewable fuel reaching commercial scale, functioning port infrastructure, zero-emission vessels operating commercially, lower port emissions and eventually a market capable of supporting cleaner technologies without exceptional intervention.
But Leeuw challenges the premise that public support for the transition represents an artificial distortion of an otherwise level market.
“Fossil fuels currently get an extraordinary amount of public support,” she said.
“They are not taxed. They have had decades of support, direct, indirect.”
She argues that conventional fuel prices also fail to capture the wider environmental costs associated with their consumption.
“The climate impact of fossil fuels and their use is not being taken into account in its pricing. It should be.”
For De Jager, that goes to the heart of the challenge.
“Let’s make it the level playing field first,” he said.
For ports and shipowners, however, the immediate message is simpler. The industry may still be debating the dominant fuel for deep-sea shipping, but that does not mean decarbonisation has to wait.
Electrification, shore power, better port-call coordination and just-in-time arrivals can already remove emissions and improve efficiency.
The more difficult decisions over global alternative-fuel infrastructure will still have to be made.
But shipping does not need to solve every part of its 2050 energy system before it starts solving the problems directly in front of it.
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