The industry is set for one of the most dynamic periods it has ever witnessed during the remainder of the decade as it grapples with decarbonisation, the energy transition, geopolitical ramifications and the further maturing of the Chinese economy.
This article is part of a series written by people across shipping in response to this question about how to deploy a hypothetical TradeWinds Sustainable Shipping Fund:
How, where and why would you invest $1bn for the best return in sustainable shipping, as the industry grapples with the need to cut carbon emissions, improve efficiency and keep cargoes moving in a world facing multiple economic and political challenges? The investment will be made now and ideally held for the next seven years to the end of the decade. As an added bonus, give one policy or regulation you would like to implement from 1 January 2023 to benefit shipping?
Almost all aspects of the industry along with its myriad of stakeholders will be impacted, either directly or indirectly by a long list of moving parts including regulations, ship designs, fuels, technology, finance, insurance, consumer pressure etc.
At the same time, there has never been so many opportunities to make sustainable investments in the space, though timings and the correct investment vehicle will be even more critical than usual as many new players will undoubtedly fall by the wayside.
In terms of investing in a single sector of the industry, offshore wind is an obvious place to look, especially given the International Energy Agency’s recent announcement that it expects as much renewable power to be installed in the next five years as has been in the past 20.
Foundation installation vessels are in short supply and as foundations for turbines increase in size and weight and turbines also upsize, having these specialised assets is going to be increasingly important.
For something a little more leftfield and focused, repair yards might make an interesting play across the rest of the decade, as the industry looks to fit energy-saving technologies to vessels and engine retrofitting becomes a reality in the second half of the decade.
Identifying those yards that have or are developing the expertise and technology in order to be able to capitalise on this new source of demand would be critical in any investment in the space.
Regardless, as regulations begin to bite and market-based mechanisms increasingly come to the fore, the demand to fit energy-saving technologies to the existing fleet is only going to increase demand at repair yards.
