A very challenging question! A good start is that shipping, as an industry, is sustainable by itself as there is no substitute able to accommodate the transportation of something like 90% of the world’s trade in an equally cost-efficient and safe way.
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?
Therefore, the focus of sustainability is on the vessels and not on shipping.
Undoubtedly, investment decisions today are hugely influenced by environmental considerations. Specifically what bunkers should ships use for the next, say, 20 to 30 years? A very challenging effort to read the future, especially as the Delphi Oracle closed long ago. Shipping, being a very capital-intensive industry, is very dependent on those considerations.
If we follow a risky approach, I would recommend dry cargo and tanker newbuildings based on dual-fuel engines (fuel oil and LNG or methanol).
If we follow a conservative approach, I would recommend middle-aged secondhand dry cargo and tanker vessels, to take advantage of the fact that their useful life will expire just as very strict environmental regulations kick in.
And now it is time for a break, to find the $1bn!
Best wishes to your readers for the coming year.
