The automotive industry has faced tremendous pressure from consumers, environmentalists and regulators to reduce greenhouse gas emissions for years.
In addition to producing more electric vehicles, car manufacturers are also asked to reduce the carbon footprints throughout their supply chains.
Vehicle shipping firms, as their logistics service providers, are also feeling the heat.
Hoegh Autoliners chief executive Andreas Enger said: “We see there is massive pressure, and we are constantly asked by customers how we are going to help them reach their climate goals.”
The Norwegian company, which operates about 40 pure car/truck carriers, has aimed to become a business with net-zero emissions by 2040.
“We're doing this because we believe it's the right thing, but we clearly are in the business of serving our customers,” Enger told TradeWinds.
“They're doing so much to reduce their own carbon footprints, and they want to see their suppliers help them reach the goals. Our strategic assessment is that that pressure will increase and not decrease over time.”
To decarbonise its fleet, Hoegh Autoliners plans to build 12 Aurora-class vessels capable of running on LNG, conventional bunkers and biofuels.
The 9,100-ceu vessels, which will have the “ammonia-ready” notation from classification society DNV, can also be retrofitted to run on future zero-emissions fuels.
“They are meant to drive a green renewal for us. It is a major step on the path to net-zero,” Enger said.
“Subject to the fuel availability, we are gearing up to have a substantial part of our fleet running on ammonia or other zero-carbon fuels by 2030.
“We do not intend to build any new vessel that does not have a path to zero [emissions].”
The company is considering going public to fund the newbuildings and has engaged investment banks ABG Sundal Collier and DNB Markets to assist on the listing plan.
But Enger stressed that the decarbonisation project shall forge ahead regardless of how the plan turns out.
“Our strategies are not dependent on the listing,” said Enger, adding that however a listing clearly will allow the company to “move faster”.
The car carrier market has rebounded strongly on pent-up demand, economic stimulus measures and reopening economies in recent months, Clarksons Research said.
Vehicle trade volumes are now just 5% below levels seen before the Covid-19 pandemic.
“We saw the recovery starting quite firmly already. … We're definitely seeing the market coming back,” Enger said.
“The pandemic is not yet over, so we are obviously prepared to see short-term volatility. But I think the direction of travel is quite clear.”