Time's right to subject the ban on fossil fuels to a rigorous cost/benefit analysis
 Assessing the costs and benefits of what the sustainability crowd has in mind for world shipping, like the banning of fossil fuels, it is far easier to identify the costs than find the benefits.
That is, unless one can see anything beneficial in achieving "net zero carbon dioxide emissions" it shipping. But other than winning plaudits from bureaucrats and greenies, it is pretty much a no-win situation in which the costs are real and immediate and the benefits are distant, illusory if not delusional.
At a gathering of the Vancouver Maritime Centre for Climate, C40 Cities Climate Leadership Group, London's Lloyd's Register readily admitted that the high costs involved blocked the way to ridding the world of fossil fuels anytime soon.
"Work to transition the maritime sector away from fossil fuels has been delayed due to the hard-to-decarbonise nature of activities such as long-range shipping," said Lloyd's Register.
But LR also pointed out that there are other ways to fast-track maritime decarbonisation if one is so inclined.
"For example, ports play a critical role in connecting multiple industrial sectors, energy subsectors, and multiple modes of transport — including road, rail and shipping — and action at ports can unlock decarbonisation opportunities landside and seaside," LR said.
The meeting's initial focus was the Canadian Green Shipping Corridors Preliminary Assessment completed by Oceans North, an Eskimo charity, Arup a sustainable development engineering consultancy and Lloyd’s Register Maritime Decarbonisation Hub, a British environmental charity.
"For the first time, energy producers were brought into the room with other supply-chain actors to discuss solutions to zero-emission energy supply," Lloyd’s Register said.
Goals included putting the shipping sector on the radar of zero-emission energy producers and suppliers as they assess and plan to meet demand and to look for new offtakers and local-use cases, LR said.
(Offtakers in project financings are buyers of the resources produced by completed and operating projects. Offtakers contractually agree to purchase all or substantially all of the future production.)
Goals also included supporting the Green Shipping Corridor Fund and building an ambitious catch-up agenda focused on both increasing demand and clean fuel and technology supply across this sector, said LR.
Google says "a green shipping corridor is a route between two or more ports where zero-emission shipping solutions are demonstrated and reported. This is achieved through the advancement of technological, commercial or regulatory initiatives along the route. A green corridor is not a strict set of rules."
Even Google slips into its definition a reference to "regulatory initiatives", which could well contradict its last statement that a "green corridor is not a strict set of rules". When one suspects that is precisely what it becomes once developed beyond its embryonic stage.
The cost of zero-emission fuels is too high for widespread adoption, concedes the LR report. "Upstream costs associated with the build-out of new infrastructure and renewable electricity are high and will require financing.
"Unlike a gas plant where inputs costs fluctuate with the market, project costs for hydrogen production, for example, are fixed for the lifetime of the project. Industry, government, and the financial sector will need to work together to ensure first-generation zero-emission fuel projects are competitive and profitable."
Discerning the meaning of LR's language such as "offtake" and "offtakers", it appears that market forces will play a minor role in the process, if they play a role at all. It sounds like the role markets play in the EU's Emissions Trading System, which is really driven by a Brussels tax.
Thus, offtakers in project financings are buyers of all or nearly all of the resources produced by a project. Offtakers contractually agree to purchase all or substantially all of the future production of, let's say, low emission hydrogen. It is hard to see a role for the market in such a scheme.
It seems very much like buying eco fuel at a fixed price which bears little likelihood of the cost of bringing it to market because a government edict insist that all must use it, coupled with a lack of supply. It is as if one could not walk the streets unless one wore a diamond ring, but there were not enough diamond rings to go around. The government was able to bring down the price of diamond rings so everyone could buy one. Trouble was, there were not enough them so ended in a classic "stock out". It will be the same with eco fuel as it was with toilet paper in the Soviet Union.
It is distressing how woke culture has dominated the minds of major shipping corporations.
LR continues: "The existing marine fuel supply chain is fragmented. Despite a universal understanding the transition away from fossil fuels will require unparalleled cross-value collaboration, there is a disconnect between energy producers, maritime sector offtakers, cargo-owners and mid-stream players like ports and technology providers."
One questions that there exists a "universal understanding for the transition away from fossil fuels". Really? From where does this imperative spring? Does anyone believe that these measures will have the slightest impact on anything? Does anyone deny that these efforts may well do the substantial damage that was done in the Covid scare? Is there any other expected result other than saving the planet that in all likelihood does not need saving? On that, answer comes there none.
LR goes on: "As the maritime sector accelerates its ambition to address climate change, it is important that there are fora where information can be shared freely and where new relationships can be forged up and down the marine fuel supply chain."
Yes, indeed one can "address climate change" if one does so uncritically, and does not question the legitimacy of the fear itself. But where can pros and cons on the question be shared freely? These fora do not exist. So much of the discussion centres on the unexamined assumption that there is a "climate emergency". It is high time the shipping sector ask whether the proposed cure is worse than the disease. And the best way to find out is rigorous cost/benefit analysis. |
